California Resources Corporation

Good day and welcome to the California Resources Corporation third quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Joanna Park, Vice President of Investor Relations and Treasurer. Please go ahead.

Good morning and welcome to California Resources Corporation's third quarter 2025 conference call. Following prepared remarks, members of our leadership team will be available to take your questions. By now, I hope you have had a chance to review our earnings release and supplemental slides. We have also provided information reconciling non-GAAP financial measures to comparable GAAP measures on our website and in our earnings release. We will also discuss our pending very merger. We encourage you to read our form S4 filed on October 14, 2025, as it contains important information. Copies of this and other relevant documents are also available on our website and the SEC's website. Today, we will be making forward-looking statements based on current expectations. Actual results may differ due to factors described in our earnings release and SEC filings. As a reminder, please limit your questions to one primary and one follow-up as this allows us to get to more of your questions. I will now turn the call over to Francisco.

Good morning, everyone. CRC delivered another strong quarter, reinforcing the discipline, performance, and strategic focus that set us apart as a different kind of energy company. and also positioning us at the forefront of California's energy revival. We have a lot of good news to share this morning. Here's how we're going to structure the call. First, we will open with a list of accomplishments and summarize important recent events. Next, Cleo will discuss our third quarter results. Lastly, we will share some early thoughts around 2026. Let's start with the highlights. California's energy and regulatory environment is improving in meaningful ways, and CRC is well positioned. The recent passage of key legislation has created the most constructive framework we've seen in more than a decade, strengthening oil and gas permitting, authorizing CO2 pipelines, and extending the cap and invest program through 2045. Together, these laws help support reliable in-state production while encouraging investment in the state's rapidly rising energy demands. CRC's EMP, CCS, and power businesses can support California's need for energy security and clean energy solutions. Our EMP business continues to perform exceptionally well. Our teams are executing safely, and our assets are demonstrating strong production performance and low base declines. With our successful error integration behind us, we can now move our annual base decline assumption to 8% to 13%, which is down from 10% to 15% previously. This significant change strengthens our cash flow generation, improves our capital intensity, and enhances the value of our large PDP reserve base. TRC's conventional reservoirs are advantaged with significantly higher estimated ultimate recoveries when compared to shale resource place. As many of the lower 48 producers are moving towards lower quality locations, we are well positioned with long duration, high quality, low decline reservoirs. We believe that this will allow us to effectively replace reserves, maintain production with less capital, and deliver consistent results through the cycle. Strong execution and smooth integration remain key strengths of our operating teams. We recently announced our merger agreement with Barrie Corporation. Like ERA, this deal was well-timed, is progressing as planned, and will add assets that are adjacent to our current positions, creating meaningful synergies that further enhance our leading operational scale in California. Through ERA, we demonstrated our ability to effectively integrate assets, improve operating efficiency, and rapidly capture value. We plan to apply that same approach to Berry. Turning to our carbon-terrible business, momentum continues to build. We are well ahead of the competition and close to making history at Elk Hills with our first CCS cash flows. Our first carbon capture and sequestration project at our Elk Hills Cryogenic Gas Plant is advancing. Reconstruction underway and first CO2 injection expected in early 2026 pending regulatory go ahead. This will be California's first commercial scale CCS project and a critical step towards realizing the state's decarbonization goals. Now that the CO2 pipeline moratorium has been lifted, Our strategically positioned CTB reservoirs across the state have the potential to provide storage solutions for existing brownfield emitters that don't have the benefit of co-location, creating a true statewide framework for emissions reduction. We are also advancing our regulatory efforts in permitting inventory to expand our statewide storage network. We currently have seven Class VI permits under active review with the EPA and are preparing additional applications totaling 100 million metric tons across Central California. As we focus on the most attractive markets for CCS, one thing is clear. California's biggest opportunity lies in delivering clean, reliable power. The California Public Utilities Commission estimates that incremental power capacity in the state will need to double by 2035 to meet demand. Layer on the projected investment in AI inference targeting major population centers, and it's clear that California is heading towards a substantial power shortfall. While renewable resources and scalable battery storage have a role, they will not be enough to satisfy demand. California needs clean, reliable baseload power to enable data center growth while ensuring a reliable grid. State leaders recognize this challenge and have proposed several pathways to address it. With CCS, CRC and CTV are well-placed to be part of the solution. Google recently announced plans to deploy natural gas generation with carbon capture for their Illinois data centers. Here in California, the Energy Commission recently issued a report highlighting that pairing natural gas generation with CCS is a practical and scalable path to decarbonize baseload power across the state's legacy assets. It's clear that leading innovators share this vision, and so do we. CRC and CTV have an unequal portfolio of assets located in the heart of the nation's largest economy. We can readily pair existing power generation with carbon capture to rapidly unlock firm, clean baseload power in proximity to major demand centers. We are evaluating multiple opportunities today in this rapidly expanding market. First, utility and wholesale markets, where front of the meter sales could provide the carbonized baseload power directly into the grid to support system reliability and reduce emissions under the CPUC's newly proposed Reliable and Clean Power Procurement Program, or RCPPP. Second, we can help meet demand from existing large technology and data center operators. Based on PG&E's interconnection queue, data center requests in California have now exceeded 10 gigawatts, reflecting surging energy needs tied to AI, cloud computing, and electrification across the state. As the AI revolution advances from training to inference, data center sites are expected to shift from prioritizing areas with cheap abundant electricity to low latency areas near major population clusters. As the largest state in the nation with nearly 40 million people and four of the top largest US cities, California screens extremely well. As we evaluate our options, it's important that we do the right deal at the right time to create the most value for our shareholders. We're focused on turning an evolving market opportunity into real progress. And earlier today, we took another important step in our natural gas power with CCS strategy in Kern County as we announced a new partnership with Capital Power to develop carbon management solutions for the La Paloma Power Facility. This builds on our previous announcements with Hull Street and our own project CalCapture and Elk Hill. These partnerships validate market demand, expand scale from front or behind-the-meter data centers, and highlight CRC's ability to connect firm power generation with carbon storage. With strong execution, disciplined growth, and a constructive policy environment, CRC is well-positioned to lead California's energy comeback. one that values both reliability and responsibility. Cleo, over to you.