San Joaquin Basin

Approximately 76 percent of California Resources Corporation’s (CRC) estimated proved reserves as of year-end 2016 are located in the San Joaquin Basin. We actively operate and develop 45 fields in this basin consisting of conventional primary, improved oil recovery, enhanced oil recovery and unconventional project types. We hold approximately 1.5 million net mineral acres in the San Joaquin Basin, approximately 64 percent of which we hold in fee.

According to the California Department of Conservation’s Division of Oil, Gas, and Geothermal Resources (DOGGR), approximately 75 percent of California’s daily oil production for 2015 was produced in the San Joaquin Basin. Commercial petroleum development began in the basin in the late 1800s when asphalt deposits were mined and shallow wells were hand dug and drilled in the Coalinga, McKittrick and Kern River areas. Rapid discovery of many of the largest oil accumulations followed during the next several decades, including the Elk Hills Field. According to the U.S. Geological Survey as of 2012, the San Joaquin Basin contained three of the 10 largest oilfields in the United States based on cumulative production and proved reserves. Most discovered oil accumulations occur in Eocene-age through Pleistocene-age sedimentary sections. Source rocks are organic-rich shales from the Monterey, Kreyenhagen and Tumey formations.

We operate several of the largest existing fields in the San Joaquin Basin, including Elk Hills, our largest producing field, as well as the Buena Vista and Kettleman North Dome fields, which have primary and waterflood production. Due to complex stratigraphy and structure in the San Joaquin Basin with stacked hydrocarbon pay zones, these mammoth fields are thought to hold considerable oil in place in stratigraphic and structural traps. We believe our extensive 3D seismic library, which covers nearly 3,000 square miles in the San Joaquin Basin – approximately half our acreage in the basin – gives us a competitive advantage in exploration and development. For example, in 2016, CRC completed data processing for over 200 square miles of 3D seismic data in the Kettleman North Dome field to help pinpoint drilling locations.

Thermal enhanced oil recovery was pioneered in the San Joaquin Basin in the 1960s, and CRC operates prolific steamfloods in the Kern Front Field and the northwest portion of the Lost Hills Field. In addition to significant oil production, CRC recycles the produced water from thermal fields for reuse in steam generation and treats surplus produced water for beneficial use by agricultural water districts, making our company a net water supplier.

In 2016, CRC supplied nearly 4 billion gallons of treated, reclaimed water for agriculture – almost doubling our 2014 delivery and increasing our 2015 volume by 50 percent. This water delivery set a new record for our operations, and exceeded our total fresh water purchases by over 250 percent. More importantly, we supported up to 5,000 acres of productive farmland and associated farmworker jobs during the height of California’s drought.