California Resources Corporation Announces New Midstream Joint Venture and Equity Investment

LOS ANGELES–(BUSINESS WIRE)–California Resources Corporation (NYSE: CRC) announced today that it
entered into a midstream joint venture with a portfolio company of the
Private Equity Group of Ares Management, L.P. The Ares portfolio company
invested $750 million for certain common and preferred equity interests
in the venture. In addition, the Ares-led investor group purchased
approximately 2.34 million shares of common stock of CRC in a private
placement for an aggregate purchase price of $50 million in cash, or
$21.33 per share based on a recent volume-weighted average price.

The joint venture owns the Elk Hills power plant, a 550 MW natural gas
fired power plant, and a 200 million cubic foot per day cryogenic gas
processing plant located outside of Bakersfield, California. Under a new
long-term commercial agreement, CRC will purchase power and gas
processing from the joint venture. CRC has the option to redeem the
common and preferred equity interests held by the Ares portfolio company
at any point during the first seven and one-half years of the joint
venture.

Joint ventures provide an opportunity for CRC to prudently build on its
solid track record of performance and accelerate sustainably profitable
initiatives. CRC will continue to identify opportunities to invest in
high-return projects while also continuing to strengthen its balance
sheet.

Todd Stevens, President and CEO of CRC, said, “We are proud to have Ares
as a strategic partner in our midstream joint venture at Elk Hills, and
believe their equity investment validates the strong positioning of our
world-class assets and flexible business model. With our ongoing focus
on value creation, we intend to deploy transaction proceeds toward the
best available alternatives to drive shareholder returns over the long
term.”

Approximately $297 million of the transaction proceeds is being used to
repay the Company’s outstanding bank revolver balance. CRC will continue
to allocate capital to its project inventory using its disciplined value
creation index (“VCI”) investment methodology, which has generated VCIs
of greater than 1.7x over the last two years that are significantly
above the Company’s cost of capital.

Additional information regarding the transactions described above is
available on the “Earnings and Presentations” page in the Investor
Relations section on the Company’s website at www.crc.com.

About California Resources Corporation

California Resources Corporation is the largest oil and natural gas
exploration and production company in California on a gross-operated
basis. California Resources Corporation operates its world class
resource base exclusively within the State of California, applying
integrated infrastructure to gather, process and market its production.
Using advanced technology, California Resources Corporation focuses on
safely and responsibly supplying affordable energy for California by
Californians.

About Ares Management, LP

Ares Management, L.P. is a publicly traded, leading global alternative
asset manager with approximately $106 billion of assets under management
("AUM") and approximately 1,000 employees as of September 30,
2017. Since its inception in 1997, Ares has adhered to a disciplined
investment philosophy that focuses on delivering strong risk-adjusted
investment returns throughout market cycles. Ares seeks to deliver
attractive performance to its investor base across its credit, private
equity and real estate strategies. The firm is headquartered in Los
Angeles with offices across the United States, Europe, Asia and
Australia. Its common units are traded on the New York Stock Exchange
(NYSE: ARES).

Forward-Looking Statements

This release contains forward-looking statements that involve risks and
uncertainties that could materially affect our expected results of
operations, liquidity, cash flows and business prospects. Such
statements include those regarding our expectations as to future:
financial position, liquidity, cash flows and results of operations;
business prospects; transactions and projects; operating costs;
operations and operational results including capital investment and
expected VCI; and budgets.

Actual results may differ from anticipated results, sometimes
materially, and reported results should not be considered an indication
of future performance. While we believe the assumptions or bases
underlying our expectations are reasonable and make them in good faith,
they almost always vary from actual results, sometimes materially.
Factors (but not necessarily all the factors) that could cause results
to differ include the factors discussed in “Risk Factors” in our Annual
Report on Form 10-K available on our website at www.crc.com.

Words such as "anticipate," "believe," "continue," "could," "estimate,"
"expect," "goal," "intend," "likely," "may," "might," "plan,"
"potential," "project," "seek," "should," "target, "will" or "would" and
similar words that reflect the prospective nature of events or outcomes
typically identify forward-looking statements. Any forward-looking
statement speaks only as of the date on which such statement is made and
the Company undertakes no obligation to correct or update any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by applicable law.

Contacts

California Resources Corporation
Scott Espenshade (Investor
Relations)
818 661-6010
[email protected]
or
Margita
Thompson (Media)
818 661-6005
[email protected]