As of June 30, 2026 and December 31, 2025, our investments in unconsolidated subsidiaries were $98 million and $111 million, respectively. The following tables present changes to our investment in unconsolidated subsidiaries for the periods presented:


	Carbon TerraVault JV		Midway Sunset Cogeneration Company
	(in millions)		(in millions)
Investment, December 31, 2025	$	57	$	54



Net loss	(3)		(1)
Contributions (distributions)	1		(10)
Investment, June 30, 2026	$	55	$	43

Investment, December 31, 2024	$	27	$	59
Net (loss) income	(2)		1
Contributions	15		—
Adjustment to the preliminary purchase price allocation	—		(7)
Investment, June 30, 2025	$	40	$	53

In August 2022, we entered into a joint venture with BGTF Sierra Aggregator LLC (Brookfield) for the further development of a carbon management business in California (Carbon TerraVault JV). We hold a 51% interest in the Carbon TerraVault JV and Brookfield holds a 49% interest. The Carbon TerraVault JV holds rights to inject CO2 into the 26R reservoir in our Elk Hills field for permanent CO2 storage (26R reservoir). Brookfield has contributed $92 million to date. The remaining amount of Brookfield's initial investment is based on the permitted storage capacity, subject to certain contractual adjustments. This remaining amount will be contributed to the joint venture upon entering into contracts for the injection of specified volumes with respect to the 26R reservoir.

Although we determined that the Carbon TerraVault JV is a variable interest entity (VIE), we share decision-making power with Brookfield on all matters that most significantly impact the economic performance of the joint venture. Therefore, we account for our investment in the Carbon TerraVault JV under the equity method of accounting. Transactions between us and the Carbon TerraVault JV are related party transactions.

Because the parties have certain put and call rights (repurchase features) with respect to the 26R reservoir if certain milestones are not met, the initial investment by Brookfield is reflected as a contingent liability included in other long-term liabilities on our condensed consolidated balance sheets. The contingent liability was $123 million at June 30, 2026 and $117 million at December 31, 2025, inclusive of interest. The amount payable to Brookfield under the put and call rights, if exercised, includes additional capital contributions made by Brookfield to develop the 26R storage reservoir, inclusive of interest. This payment would differ from the contingent liability currently recognized because the contingent liability reported in other long-term liabilities on our condensed consolidated balance sheet relates solely to the initial investment by Brookfield and does not include capital contributions made for ongoing development activities of the 26R reservoir.

The table below presents the summarized financial information related to our equity method investment in the Carbon TerraVault JV (and does not include amounts we have incurred related to development of our carbon management business, Carbon TerraVault), along with related party transactions for the periods presented.

(a)At June 30, 2026, the amount of $9 million includes approximately $4 million related to our share of collateral for a letter of credit, the remaining $2 million of Brookfield's first and second installments of their initial investment which is available to us, $3 million related to the Master Service Agreement (MSA) and vendor reimbursements. At December 31, 2025, the amount of $14 million includes $8 million remaining of Brookfield's first and second installment of their initial investment which is available to us and $6 million related to the MSA and vendor reimbursements.

We completed construction of our first carbon capture project at our cryogenic gas processing facility and began first injection in May 2026. We pay an injection fee to the Carbon TerraVault JV to inject CO2 into the 26R reservoir. The Carbon TerraVault JV recognizes revenue for the injection as services are rendered under the sequestration agreement. During the three and six months ended June 30, 2026, the Carbon TerraVault JV recorded approximately $1 million of revenue. We recognize our share of the Carbon TerraVault JV income and loss under the equity method of accounting on our condensed consolidated statement of operations. We recognized a loss of $2 million and $3 million for the three and six months ended June 30, 2026, respectively, and a loss of $1 million and $2 million for the three and six months ended June 30, 2025, respectively, related to our investment in the Carbon TerraVault JV.

We performed well abandonment work at our Elk Hills field to prepare our 26R reservoir for injection of CO2. During the three and six months ended June 30, 2026, we performed abandonment work and sought reimbursement for insignificant amounts from the Carbon TerraVault JV. During the three and six months ended June 30, 2025, we performed abandonment work and sought reimbursement in the amounts of $6 million and $8 million, respectively, from the Carbon TerraVault JV. We recorded these reimbursements as a reduction to property, plant and equipment, net on our condensed consolidated balance sheets.

The Aera Merger led to our partial ownership of Midway Sunset Cogeneration Company, which is a partnership designed to own, manage, and operate a cogeneration facility in Kern County, California. We hold a 50% interest in Midway Sunset Cogeneration Company and an affiliate of Middle River Power, LLC, holds a 50% interest. We determined that Midway Sunset Cogeneration Company is a voting interest entity, where we share decision-making power with Middle River Power, LLC on all matters that most significantly impact the economic performance of Midway Sunset Cogeneration Company. Therefore, we account for our investment in Midway Sunset Cogeneration Company under the equity method of accounting. There are no significant transactions between us and Midway Sunset Cogeneration Company.