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Q2 2015 Earnings Call – California Resources Corp.

California Resources Corp. · Aug 6, 2015 · 25 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q2 2015 Earnings Call – California Resources Corp. – slide 1
    Second Quarter 2015 Earnings Review Todd Stevens President & CEO Mark Smith Sr. EVP & CFO Los Angeles, CA August 6, 2015
  2. Q2 2015 Earnings Call – California Resources Corp. – slide 2
    Cautionary Statements Regarding Hydrocarbon Quantities We have provided internally generated estimates for proved reserves and aggregated proved, probable and possible reserves (3P Reserves) as of December 31, 2014 in this presentation,…
  3. Q2 2015 Earnings Call – California Resources Corp. – slide 3
    2015 Strategic Focus Maintaining base production via higher margin, higher return, low decline crude oil projects Balancing capital spending with cash flows Right-sizing the capital structure Focusing on cash margins and controllable…
  4. Q2 2015 Earnings Call – California Resources Corp. – slide 4
    Management Priorities and Response Priorities Execution 1. Address Balance Sheet Continuing active discussions with numerous parties regarding deleveraging 2. Adjust Activity Levels for Current options and transactions Environment…
  5. Q2 2015 Earnings Call – California Resources Corp. – slide 5
    Generate Free Cash Flow Even at Low Commodity Prices When Most Peers Will Not 2015E Free Cash Flow/(Outspend) 600 400 200 0 C R -200 C MM USD -400 -600 -800 -1000 -1200 -1400 Peers include: APA, APC, AR,…
  6. Q2 2015 Earnings Call – California Resources Corp. – slide 6
    Defending Margins Through Efficiencies and Focus on Costs Production Costs /Boe 19.50 19.00 19.03 19.00 18.35 18.50 18.00 17.50 13% yoy 17.00 16.65 16.50 16.20 16.59 16.00 15.50 15.00 14.50 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15…
  7. Q2 2015 Earnings Call – California Resources Corp. – slide 7
    Effective Management of Elk Hills Field Operating Costs* Elk Hills Field Water-Oil Ratio Elk Hills Field - Opex per Elk Hills Field - Opex, /boe (WOR) Well 18.00 5,000 Opex, 15.0 160,000 16.46 /boe 16.00 Well 14.5 140,000…
  8. Q2 2015 Earnings Call – California Resources Corp. – slide 8
    Focus on Oil Enhances Base & Margins Production By Stream (MBoe/d) Average Total Production 159 Mboe/d Average Oil Production 99 MBbl/d 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15E FY 2014 FY 2015E Oil NGL Gas Guidance 9
  9. Q2 2015 Earnings Call – California Resources Corp. – slide 9
    Building Life of Field Plans Elk Hills Field Multiple mechanisms ELK HILLS FIELD DEVELOPMENT within Elk Hills Field 100,000 Primary Waterflood 80,000 Unconventional Exploration Discoveries Longer term base 60,000 Net BOEPD…
  10. Q2 2015 Earnings Call – California Resources Corp. – slide 10
    Capital Efficient Growth Delivers Long Term Returns Single digit base declines Steamflood Example Multi-year investments of Kern Front drilling and facilities spending 14000 2008-2014 investment of 530 million 12000 Added…
  11. Q2 2015 Earnings Call – California Resources Corp. – slide 11
    Targeting Higher-Margin, Higher Return, Low Decline Crude Oil Projects 2015 Capital Budget (MM) By Drive Unconventional Other 20 Primary 40 Total: 440 million Focus on steamflood and waterflood 35 8% 5% 9% Exploration projects,…
  12. Q2 2015 Earnings Call – California Resources Corp. – slide 12
    Big Fields Continue To Get Bigger. Mature Waterflood Example of Wilmington (mature Wilmington Proved Reserves** waterflood) 150 Growing Proven Reserves 125 168% Reserves Replacement since 2011 (1) Proven Reserves (Mmboe)…
  13. Q2 2015 Earnings Call – California Resources Corp. – slide 13
    CRC Price Realizations Oil Price Realization Gas Price Realization WTI Realizations Brent NYMEX Realizations 120 110.90 111.70 108.76 110 5.0 4.31 4.39 99.51 4.5 100 103.80 104.02 3.73 93.00 4.0 90 95.12 94.21 97.97 104.16 3.5…
  14. Q2 2015 Earnings Call – California Resources Corp. – slide 14
    Focus on Balance Sheet Capitalization as of 6/30/15 (MM) Deleveraging is a priority Senior Unsecured RCF 1 590 Senior Unsecured Term Loan 1,000 In discussions with various Senior Unsecured Notes 5,000 parties; considering a full…
  15. Q2 2015 Earnings Call – California Resources Corp. – slide 15
    A Net Water Supplier 4% 2% WATER MANAGED IN CRCs 2014 OPERATIONS Produced Water Fresh Water In 2014, CRCs steamflood operations Non-Fresh Water supplied more than 2 billion gallons over 6,200 acre-feet of water for irrigation…
  16. Q2 2015 Earnings Call – California Resources Corp. – slide 16
    2Q15 Results Summary Comparison 2Q14 1Q15 2Q15 Adjusted EPS 0.63 (0.25) (0.13) Oil Production 97 MBbl/d 108 MBbl/d 104 MBbl/d Total Production 156 MBoe/d 166 MBoe/d 161 MBoe/d Realized Oil Price (/Bbl) 104.50 46.44 56.73 Realized…
  17. Q2 2015 Earnings Call – California Resources Corp. – slide 17
    Strong Oil Volumes Drive Quarterly Production Boe/d 164,000 162,000 -2,000 160,000 +7,000 158,000 161,000 156,000 154,000 156,000 152,000 2Q14 Oil Gas NGL 2Q15 18
  18. Q2 2015 Earnings Call – California Resources Corp. – slide 18
    Cash Flow Reflects Changes in Commodity Prices and CRC Response 600 500 400 300 MM 496 200 100 117 0 2Q14 Volume Price Costs Interest Tax Working 2Q15 Capital and -100 Other 19
  19. Q2 2015 Earnings Call – California Resources Corp. – slide 19
    Cost Variance 2Q14 1Q15 2Q15 Production costs 19.03 16.20 16.59 (/Boe) Taxes other than on income 55 55 53 (MM) Exploration 15 17 7 expense (MM) Interest expense NA 79 83 (MM) 20
  20. Q2 2015 Earnings Call – California Resources Corp. – slide 20
    Protecting Capital Investment Program with Hedges Crude Oil Brent Hedges 80 10,000 Bbl/d call 75 30,000 Bbl/d call 2,000 Bbl/d swap 70 65 10,000 Bbl/d put 30,000 Bbl/d call 60 30,000 Bbl/d put 55 30,000 Bbl/d put 50 40,000…
  21. Q2 2015 Earnings Call – California Resources Corp. – slide 21
    3Q15 Guidance Anticipated Realizations Against the Prevailing Index Prices for 2Q15 Oil 87% to 91% of Brent NGLs 31% to 35% of Brent Natural Gas 96% to 100% of NYMEX Production, Capital and Income Statement Guidance Production 153…
  22. Q2 2015 Earnings Call – California Resources Corp. – slide 22
    Poised to take advantage of a commodity price recovery Sacramento Basin World-Class Resource Base: 19 MMBoe Proved Reserves 9 MBoe/d production Large inventory of assets across basins and drive mechanisms that provide strong returns…
  23. Q2 2015 Earnings Call – California Resources Corp. – slide 23
    California Resources Corporation Appendix 24
  24. Q2 2015 Earnings Call – California Resources Corp. – slide 24
    Non-GAAP Reconciliation for Adjusted EBITDAX For the For the Six Second Quarter Months Ended Full Ended June 30, June 30, Year ( in millions) 2015 2014 2015 2014 2014 Net Income/(loss) (68) 246 (168) 469 (1,434) Interest expense…
  25. Q2 2015 Earnings Call – California Resources Corp. – slide 25
    Non-GAAP Reconciliation for PV-10 At December 31, ( in millions) 2014 PV-10 16,091 Present value of future income taxes discounted at 10% (5,263) Standardized Measure of Discounted Future Net Cash 10,828 Flows PV-10 is a…

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