
	Equity Attributable to Noncontrolling Interests						Mezzanine Equity - Redeemable Noncontrolling Interest
	Ares JV		BSP JV		Total		Ares JV		Total
	(in millions)
Balance, December 31, 2018 (Predecessor)	$	15	$	99	$	114	$	756	$	756
Net (loss) income attributable to noncontrolling interests	(7)		17		10		117		117
Contributions from noncontrolling interest holders, net	—		49		49		—		—
Distributions to noncontrolling interest holders	(8)		(72)		(80)		(71)		(71)
Balance, December 31, 2019 (Predecessor)	$	—	$	93	$	93	$	802	$	802
Net income (loss) attributable to noncontrolling interests	3		10		13		94		94

Distributions to noncontrolling interest holders	(3)		(34)		(37)		(67)		(67)
Modification of noncontrolling interest	—		—		—		(138)		(138)
Acquisition of noncontrolling interest	—		—		—		(691)		(691)
Impact of fresh start accounting	—		7		7		—		—
Balance, October 31, 2020 (Predecessor)	$	—	$	76	$	76	$	—	$	—


	Equity Attributable to Noncontrolling Interest
	BSP JV
	(in millions)
Balance, October 31, 2020 (Successor)	$	76
Net (loss) income attributable to noncontrolling interests	(2)

Distributions to noncontrolling interest holders	(30)
Balance, December 31, 2020 (Successor)	$	44

In February 2018, our wholly-owned subsidiary California Resources Elk Hills, LLC (CREH) entered into a midstream JV with ECR, a portfolio company of Ares, with respect to the Elk Hills power plant (a 550-megawatt natural gas fired power plant) and a 200 MMcf/day cryogenic gas processing plant. These assets were held by the joint venture entity, Elk Hills Power, LLC (Elk Hills Power), and each of CREH and ECR held an equity interest in this entity.

On the Effective Date, our wholly-owned subsidiary, EHP Midco Holding Company, LLC (Elk Hills Issuer) entered into a Note Purchase Agreement (Note Purchase Agreement) with certain subsidiaries of Ares and Wilmington Trust, N.A. as collateral agent. As required by the Note Purchase Agreement, CREH transferred its ownership of two low temperature separation plants located at the Elk Hills field to Elk Hills Power.

Prior to our Effective Date, we held 50% of the Class A common interest and 95.25% of the Class C common interest in the Ares JV. ECR held 50% of the Class A common interest, 100% of the Class B preferred interest and 4.75% of the Class C common interest. The Ares JV was required to distribute each month its excess cash flow over its working capital requirements first to the Class B holders and then to the Class C common interests, on a pro-rata basis. As contemplated by the terms of the JV, CREH purchased electricity and gas processing services from the Ares JV (subject to certain limitations, including certain geographical limitations) in exchange for monthly capacity payments pursuant to the terms of a Commercial Agreement, the proceeds of which were used by the Ares JV to make distributions as contemplated by the Second Amended and Restated Limited Liability Company Agreement of Elk Hills Power, LLC. CREH also served as the operator of the Ares JV and provided operational and support services in exchange for a monthly fee pursuant to a Master Services Agreement. These agreements became intercompany agreements on the Effective Date and were cancelled as described below.

As described in Note 2 Chapter 11 Proceedings, we entered into the Settlement Agreement with ECR and Ares which, among other things, granted us the right (Conversion Right) to acquire all (but not less than all) of the equity interests of Elk Hills Power owned by ECR in exchange for the EHP Notes, Ares Settlement Stock and approximately $2 million in cash. The Conversion Right was exercised on the Effective Date.

Although certain provisions in the Settlement Agreement were not effective until certain conditions were met, such as the Bankruptcy Court entering a final order, we determined that the amended terms were substantively different such that the existing Class A common, Class B preferred and Class C common member interests held by ECR were treated as redeemed in exchange for new member interests issued at fair value in the third quarter of 2020. The estimated fair value of the new member interests was lower than the carrying value of the existing member interests by $138 million. In accordance with GAAP, the modification of noncontrolling interest was recorded to additional paid-in capital and was included in our earnings per share calculations. See Note 16 Earnings per Share for adjustments to net income (loss) attributable to common stock which includes a modification of noncontrolling interest.

We exercised the Conversion Right on the Effective Date and issued the EHP Notes in the aggregate principal amount of $300 million, Ares Settlement Stock comprising approximately 20.8% (subject to dilution) of common stock and approximately $2 million in cash (Conversion). Upon the Conversion, Elk Hills Power became our indirect wholly-owned subsidiary, and Ares and its affiliates ceased to have any direct or indirect interest in Elk Hills Power. In connection with the Conversion, Elk Hills Power’s limited liability company agreement was amended and restated.

In connection with the Conversion, on the Effective Date, we entered into a Sponsor Support Agreement dated the Effective Date (Support Agreement) pursuant to which, among other things, the parties agreed that Elk Hills Power will be our primary provider of electricity to, and will be the primary processor of our natural gas produced from, the Elk Hills field, which is already consistent with our current practice.

On the Effective Date, in connection with the Conversion, we terminated: (a) the Commercial Agreement, dated as of February 7, 2018, by and between Elk Hills Power and CREH and (b) the Master Services Agreement, dated as of February 7, 2018, by and between Elk Hills Power and CREH.

Our consolidated statements of operations for the Predecessor periods reflect the operations of the Ares JV, with ECR's share of net income (loss) reported in net income attributable to noncontrolling interests. Distributions to ECR reduce the carrying amount of noncontrolling interests on our consolidated balance sheets and are reported as a financing cash outflow on our consolidated statements of cash flows. ECR's redeemable noncontrolling interests was reported in mezzanine equity due to an embedded optional redemption feature.

In February 2017, we entered into a development joint venture with Benefit Street Partners (BSP) where BSP invested $200 million to date, before transaction costs, in exchange for a preferred interest in the BSP JV. BSP is entitled to preferential distributions and, if it receives cash distributions equal to a predetermined threshold, the preferred interest is automatically redeemed in full with no additional payment. The funds contributed by BSP were used to develop certain of our oil and natural gas properties.

The BSP JV holds net profits interests (NPI) in existing and future cash flow from certain of our properties and the proceeds from the NPI are used by the BSP JV to (1) pay quarterly minimum distributions to BSP, (2) make distributions to BSP until the predetermined threshold is achieved, and (3) pay for additional development costs within the project area, upon mutual agreement between members.

Our consolidated results reflect the operations of our development JV with BSP, with BSP's preferred interest reported in equity on our consolidated balance sheets and BSP’s share of net income (loss) reported in net income attributable to noncontrolling interests in our consolidated statements of operations for all periods presented. Distributions to BSP reduce the carrying amount of noncontrolling interests on our consolidated balance sheets and are reported as a financing cash outflow on our consolidated statements of cash flows.

In July 2019, we entered into a development joint venture with Alpine Energy Capital, LLC (Alpine) to develop portions of our Elk Hills field (Alpine JV). Alpine is a joint venture between subsidiaries of Colony Capital, Inc. (Colony) and Equity Group Investments. Alpine committed to invest an initial $320 million in the Elk Hills field of which $226 million has been invested to date. The initial commitment was expected to be invested over a period of up to three years in accordance with a 275-well development plan. Alpine will fund 100% of the drilling and completion costs of these wells, in which they will earn a 90% working interest. If Alpine receives an agreed upon return, our working interest in those wells will increase from 10% to 82.5%. Our consolidated financial statements reflect only our working interest share in the productive wells.

On March 27, 2020, Alpine elected to suspend its funding obligations pursuant to a contractual right that was triggered when the average NYMEX 12-month forward strip price for Brent crude oil fell below $45 per barrel over a 30-trading day period. The suspension may be lifted by mutual consent. As of December 31, 2020, funding for the initial development phase has not re-started.

In April 2017, we entered into a development joint venture with Macquarie Infrastructure and Real Assets Inc. (MIRA) to develop certain of our oil and natural gas properties in the San Joaquin basin in exchange for a 90% working interest in the related properties (MIRA JV). MIRA funded 100% of the drilling and completion costs of wells in the agreed-upon drilling program. Our 10% working interest increases to 75% if MIRA receives cash distributions equal to a predetermined threshold return. The initial phase of the agreed-upon drilling program was funded through December 31, 2020. Our consolidated results reflect only our working interest share in the productive wells.