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OGIS San Francisco IPAA – California Resources Corp.

California Resources Corp. · Oct 5, 2015 · 43 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. OGIS San Francisco IPAA – California Resources Corp. – slide 1
    OGIS San Francisco IPAA Scott Espenshade Vice President - IR San Francisco, CA October 5, 2015
  2. OGIS San Francisco IPAA – California Resources Corp. – slide 2
    CRC at a Glance World-Class Resource Base Sacramento Basin In 4 of 12 largest fields in the 19 MMBoe Proved Reserves 9 MBoe/d production continental U.S. 768 MMBoe proved reserves Capital Structure San Joaquin Basin 525 MMBoe…
  3. OGIS San Francisco IPAA – California Resources Corp. – slide 3
    Overview of California Resources Corporation California Pure-Play Net Resource Overview Total proved reserves by basin Total identified gross drilling An independent E&P company spun off by (12/31/2014) locations by basin2…
  4. OGIS San Francisco IPAA – California Resources Corp. – slide 4
    Resource Base Enables Resilient Production Profile Rich asset portfolio and thoughtful capital Production By Stream (MBoe/d) allocation deliver high margin production and Average Total Production operational flexibility through the…
  5. OGIS San Francisco IPAA – California Resources Corp. – slide 5
    Best in Class Corporate Decline Rate Unlabeled operators include : AMXG, AREX, BBG, BCEI, CLR, CPE, CRK, CWEI, CXO, EGN, EOG, EPE, EXXI, FANG, GDP, HK, JONE, LPI, MPO, NFX, OAS, PDCE, PE, PVA, PXD, ROSE, RSPP, SFY, SM, SN, TPLM,…
  6. OGIS San Francisco IPAA – California Resources Corp. – slide 6
    Capital Efficient Portfolio Outperforms in Lower For Longer 120 Hypothetical Comparison 100 CRC 15% Corporate Decline 80 Capital Required to Plays Maintain Oil Ratio vs CRC Mbo/d Production (mm)* Investment 60 Median…
  7. OGIS San Francisco IPAA – California Resources Corp. – slide 7
    High Return Inventory Across Price Environments Capital associated with currently identified projects delivering VCI 1.3* Average well cost 1.1 MM Multi-year inventory to maintain flat production at different points in the price…
  8. OGIS San Francisco IPAA – California Resources Corp. – slide 8
    Defending Margins by Managing Costs 25 Steam Injectant 17% 20 Decrease Gas Plant Expense 15 Energy /Boe Supports 10 Downhole 5 Maintenance Workovers / Well 0 Enhancement 2011* 2012* 2013* 2014* YTD Surface Operation…
  9. OGIS San Francisco IPAA – California Resources Corp. – slide 9
    Self-Funded Capital Investment Program Commentary 2015 Total Capital Budget 2015 capital budget of 440 million expected to Other 1 Total: 440 million be directed almost entirely towards oil-weighted 95 22% Drilling investment 150…
  10. OGIS San Francisco IPAA – California Resources Corp. – slide 10
    Capital Allocation Priority: De-Leveraging Balance Sheet Exploring adjustments to capital structure Total long-term debt: 6.5 billion, net, at 6/30/2015 Proactively sought and received favorable amendment to revolver and term loan…
  11. OGIS San Francisco IPAA – California Resources Corp. – slide 11
    Capital Structure & Hedges Capitalization as of 6/30/15 (MM) Senior Unsecured RCF 1 590 Deleveraging is a priority Senior Unsecured Term Loan 1,000 Senior Unsecured Notes 5,000 Credit facility amendment provides Total Debt 6,590…
  12. OGIS San Francisco IPAA – California Resources Corp. – slide 12
    Long Term Value Creation Driven by World Class Asset Base 14
  13. OGIS San Francisco IPAA – California Resources Corp. – slide 13
    CRC is the Leading Operator in California Top California Producers in 2014* 195 200 180 159 Gross Operated MBoe/d 160 139 140 120 100 80 60 37 35 40 20 - CRC CVX Aera Energy FCX LINE Growth of Top California…
  14. OGIS San Francisco IPAA – California Resources Corp. – slide 14
    Elk Hills Area - Overview Overview Field Map CRCs flagship asset, a 100 year-old field with exploration opportunities RR Gap Large fee property with multiple stacked reservoirs Light oil from conventional and unconventional…
  15. OGIS San Francisco IPAA – California Resources Corp. – slide 15
    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…
  16. OGIS San Francisco IPAA – California Resources Corp. – slide 16
    Wilmington Field - Overview Overview Field Map CRCs flagship coastal asset: acquired in 2000 Field discovered in 1932; 3rd largest field in the U.S. Over 7 billion barrels OOIP (34% recovered to date)1 Depths 2,000 10,000 (TVDSS)…
  17. OGIS San Francisco IPAA – California Resources Corp. – slide 17
    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 Increased inventory of well…
  18. OGIS San Francisco IPAA – California Resources Corp. – slide 18
    Proven Track Record in Sensitive Environments Operator of choice in coastal environments Proven coexistence with sensitive environments 2 billion gallons of reclaimed water supplied to agriculture in 2014 Committed to excellence…
  19. OGIS San Francisco IPAA – California Resources Corp. – slide 19
    Well Positioned for Growth in Recovery World-class asset base with diverse and rich resources. Capacity for significant production growth at higher prices as we develop high-return, lower-risk opportunities. Committed to capital…
  20. OGIS San Francisco IPAA – California Resources Corp. – slide 20
    California Resources Corporation Appendix 22 IPAA SF 2015
  21. OGIS San Francisco IPAA – California Resources Corp. – slide 21
    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…
  22. OGIS San Francisco IPAA – California Resources Corp. – slide 22
    Approved Credit Facility Amendment Provides Additional Financial Flexibility Lender group approved several amendment provisions to provide CRC additional flexibility to manage our business through the challenging commodity price…
  23. OGIS San Francisco IPAA – California Resources Corp. – slide 23
    Acquisitions Over the Years 2,500,000 1998 2009 2015 Various SJV W. Montalvo Acquisitions Ventura Basin North SJV Leasing 2,000,000 Central SJV Leasing Relinquished Leases 1,500,000 40M acres 1.2MM acres 2.26M acres Elk Hills…
  24. OGIS San Francisco IPAA – California Resources Corp. – slide 24
    World Class Assets with Significant Development Opportunities 2014 Net Proved Reserves 768 Diversity of basins, drive mechanisms (MMBoe) 2014 % Oil Net Proved 72% Predictable production, low decline Pre-Tax Proved PV-10 ( millions)1…
  25. OGIS San Francisco IPAA – California Resources Corp. – slide 25
    Large in Place Volumes with Significant Upside for CRC Recovery Factors for Discovered Fields In place volumes of 40 Bn Boe at low Billion Boe recovery factor (22%) to date 45 40 Conventional value chain approach to life of field…
  26. OGIS San Francisco IPAA – California Resources Corp. – slide 26
    Creating a Recovery Value Chain Conventional fields in various stages of Typical Recoveries by Mechanism Type development 80 Base assets in place advancing recovery with traditional means 70 Moving recoveries from primary…
  27. OGIS San Francisco IPAA – California Resources Corp. – slide 27
    San Joaquin Basin Overview Basin Map Oil and gas discovered in the late 1800s Accounts for 70% of CRC production Kettleman 25 billion barrels OOIP in CRC fields1 Cretaceous to Pleistocene sedimentary section (25,000 feet) Lost…
  28. OGIS San Francisco IPAA – California Resources Corp. – slide 28
    Conventional Waterflood Example Field discovered in 1920s by a major oil company Mount Poso Multiple stacked zones 1,200 2,000 5,000 BOPD 500 Ownership by Other Companies 4,500 450 150 MMBoe in place at 6% RF 4,000 Well Count…
  29. OGIS San Francisco IPAA – California Resources Corp. – slide 29
    Conventional Steamflood Example Year over Year Performance Eastern San Joaquin Valley Steamflood 15,000 Net Oil (bopd) 110,000 Two major intervals 1,500 2,500 14,000 Steam (bspd) 100,000 500 MMBoe in place at 35% RF 13,000…
  30. OGIS San Francisco IPAA – California Resources Corp. – slide 30
    Effective Management of Elk Hills Field Operating Costs* Elk Hills Field Water-Oil Elk Hills Field - Opex Elk Hills Field - Opex, /boe Ratio (WOR) per Well 18.00 Opex, 5,000 15.0 160,000 16.46 /boe 16.00 Well 14.5 136,000 14.31…
  31. OGIS San Francisco IPAA – California Resources Corp. – slide 31
    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 530 million 12000 Added…
  32. OGIS San Francisco IPAA – California Resources Corp. – slide 32
    Los Angeles Basin Overview Basin Map Large, world class basin with thick deposits Kitchen is the entire basin, hydrocarbons did not migrate laterally; basin depth (30,000 ft) 10 billion barrels OOIP in CRC fields1 Most significant…
  33. OGIS San Francisco IPAA – California Resources Corp. – slide 33
    Sacramento Basin Overview Basin Map Exploration started in 1918 and focused on seeps and topographic highs. In the 1970s the use of multifold 2D seismic led to largest discoveries Cretaceous Starkey, Winters, Forbes, Kione, and the…
  34. OGIS San Francisco IPAA – California Resources Corp. – slide 34
    Ventura Basin Overview Basin Map Estimated 3.5 billion barrels OOIP in CRC fields1 Operate 29 fields (about 40% of basin) 300,000 net acres Multiple source rocks: Miocene (Monterey and Rincon Formations), Eocene (Anita and Cozy…
  35. OGIS San Francisco IPAA – California Resources Corp. – slide 35
    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…
  36. OGIS San Francisco IPAA – California Resources Corp. – slide 36
    Capex Reduction 2014 Actual 2015 Actual 2015 Expected Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Rigs 28 25 6 4 3 3 3 3 3 3 3 3 Quarterly Operations 520 133 95 105-115* CAPEX, mm Focus on investing within expected cash…
  37. OGIS San Francisco IPAA – California Resources Corp. – slide 37
    Opex Reduction 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Production costs 19.00 19.03 18.35 16.65 16.20 16.59 /boe Workforce redeployed to focus on reducing costs and building a robust project pipeline Targeting 6-month payout on workovers…
  38. OGIS San Francisco IPAA – California Resources Corp. – slide 38
    Value Creation Index Measures value created per dollar investment (Bang for the buck) Corporate Target 1.3 PV10 pre-tax cash flows VCI = PV10 of investments Project A Project B Project C Max IRR% Max VCI Max NPV Period Capital…
  39. OGIS San Francisco IPAA – California Resources Corp. – slide 39
    Exploration History of California California Exploration History Multiple 1 Bn Boe+ discoveries Drill Oil and Gas Drill Surface Small 2D Seismic from 1880s to 1940s based 4.0 Seeps Features Discoveries 40 upon surface…
  40. OGIS San Francisco IPAA – California Resources Corp. – slide 40
    2014 Exploration Portfolio Near Field Exploration in Proven Play Trends 1.5 Bn Boe Net Unrisked Resources 5,117 Net Drilling Locations San Joaquin San Joaquin Conventional Conventional San Joaquin San Joaquin Unconventional…
  41. OGIS San Francisco IPAA – California Resources Corp. – slide 41
    Shale Geological Overview 0 GR 150 Successful in upper Monterey using precise development approach 3,000 Expanding efforts into lower Monterey and other shales Total Organic N Depth Thickness Porosity Permeability Carbon Play (ft)…
  42. OGIS San Francisco IPAA – California Resources Corp. – slide 42
    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…
  43. OGIS San Francisco IPAA – California Resources Corp. – slide 43
    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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