California Resources Corporation Announces Early Results of Its Exchange and Subscription Offers and Consent Solicitation With Strong Participation

California Resources Corporation (NYSE: CRC) (“CRC” or the “Company”), today announced the early participation results of its private exchange and subscription offers (the “Offers”) relating to its outstanding 8% Senior Secured Second Lien Notes due 2022 (the “8% Notes”), 5½% Senior Notes due 2021 (the “5½% Notes”) and 6% Senior Notes due 2024 (the “6% Notes” and, together with the 8% Notes and the 5½% Notes, the “Notes”).

As of 5:00 p.m. New York City time on March 4, 2020, (the “Early Participation Time”), the Offers and the subscriptions by certain significant holders (the “Supporting Holders”) of the Notes (the “Supporting Subscriptions”) resulted in the participation of approximately $1,056 million in aggregate principal amount of the 8% Notes, approximately $32 million in aggregate principal amount of the 5½% Notes and approximately $83 million in aggregate principal amount of the 6% Notes.

Based on the elections made as of the Early Participation Time, CRC expects to issue $340 million of Royalty Notes, Class B Shares representing in aggregate a 60% equity interest in Elk Hills RoyaltyCo, at least $315 million of New Term Loans and Warrants exercisable for approximately 9%, in aggregate, of the Company’s common stock as of February 14, 2020 (as such terms are defined in the Offering Memorandum and Solicitation Statement, dated February 20, 2020). These elections would result in a reduction for CRC of approximately $836 million in net debt and approximately $59 million in annual cash interest. CRC would also expect to pay approximately $32 million in annual royalty payments at about current prices based on these elections. The final amounts of net consideration to be delivered will be determined as of the settlement date of the Offers. Further details regarding the elections made by participating holders of Notes and the Supporting Holders are set forth on Attachment 1. The requisite consents to adopt the proposed amendments to the 2L Indenture, but not to the Unsecured Notes Indenture, have been received.

CRC also announced today it is extending to holders who tender their Notes for Option B Consideration (as defined in the Offering Memorandum and Solicitation Statement) after the Early Participation Time, but prior to 11:59 p.m., New York City time, on March 18, 2020 (the “Expiration Time”), the Net Total Consideration, including an amount equal to the Early Participation Premium consisting of $50 in New Term Loans and 0.700 Company Warrants. All other terms of the Offers and Consent Solicitation including the pro rata acceptance structure as of the Early Participation Time, as previously announced, remain unchanged. Since Option A Consideration (as defined in the Offering Memorandum and Solicitation Statement) was fully subscribed as of the Early Participation Time, CRC will no longer accept Notes tendered for Option A Consideration. CRC intends to settle the Offers in full on a net basis on or about Friday, March 20, 2020. Holders who have already validly tendered (and not validly withdrawn) their Notes do not need to re-tender their Notes. Under the terms of the Offers, holders of Notes who had tendered their notes prior to the Early Participation Time can no longer validly withdraw those notes from the tender offer, except to the extent required by law.