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Analyst Day and Site Tour - Long Beach – California Resources Corp.

California Resources Corp. · Oct 21, 2015 · 98 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. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 1
    Long Beach ANALYST DAY & SITE TOUR Day 1 October 13, 2015
  2. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 2
    CRC AGENDA Day One Strategic Overview of CRC Todd Stevens, President & CEO Marketing Overview Carlos Contreras, VP Marketing Regulatory Overview Charlie Weiss, EVP Public Affairs Waterflood Primer Jerry Foster, Manager IOR/EOR Los…
  3. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 3
    World Class Resource Base Interests in 4 of the 12 largest fields in the lower 48 states 768 MMBoe proved reserves (12/31/2014) Largest producer in California on a gross operated basis with significant exploration and development…
  4. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 4
    CRC STRATEGIC OVERVIEW Todd Stevens President & CEO October 13, 2015
  5. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 5
    CRC AT A GLANCE World-Class Resource Base Sacramento Basin In 4 of 12 largest fields in the 19 MMBoe Proved Reserves 7 MBoepd production continental U.S. 768 MMBoe proved reserves Capital Structure San Joaquin Basin 525 MMBoe…
  6. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 6
    CRC OVERVIEW 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 Occidental San Joaquin Basin Los Angeles…
  7. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 7
    CRC IS THE LEADING OPERATOR IN CALIFORNIA Top California Producers in 2014* 86% of CA production from top 5 operators* 200 195 180 Top 25 Companies MBoepd % of CA 159 160 CRC 195.0 30% Gross Operated MBoepd 139 140 Chevron…
  8. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 8
    CAPITAL STRUCTURE 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 February credit facility amendment Total Debt 6,590 Less cash…
  9. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 9
    2015-16 STRATEGIC FOCUS Priorities and Response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 10 Analyst Presentation Day 1
  10. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 10
    CRC 2015 YTD PRIORITY DELIVERY Priorities Execution 1. Address Balance Sheet Narrowed discussions with leading counter- parties on preferred transactions 2. Adjust Activity Levels for Current Environment Balanced 2Q15 cash flows of…
  11. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 11
    2015-16 STRATEGIC FOCUS Priorities and response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 12 Analyst Presentation Day 1
  12. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 12
    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…
  13. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 13
    DELEVERAGING OPTIONS We have accessed various deleveraging alternatives and are taking decisive steps to delever the balance sheet UPSTREAM MIDSTREAM CAPITAL MARKETS JV MLP M&A Drop into Existing MLP Sale Triple Net Lease…
  14. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 14
    2015-16 STRATEGIC OPTIONS Priorities and response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 15 Analyst Presentation Day 1
  15. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 15
    CAPITAL ALLOCATION APPROACH Portfolio Management since spin-off Three principal drivers: o Maximize long-term value VCI 1.3 o Oil production growth o Financial discipline self-funding business Results in combination of projects…
  16. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 16
    FLEXIBLE HIGH RETURN INVENTORY Capital associated with currently identified projects delivering VCI 1.3* Current average well cost 1.1 MM Multi-year inventory to maintain flat production at different points in the price curve…
  17. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 17
    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, WTI,…
  18. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 18
    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 Mbopd Production (mm)* Investment 60 Median…
  19. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 19
    RESOURCE BASE ENABLES RESILIENT PRODUCTION PROFILE Rich asset portfolio and thoughtful capital Production By Stream (MBoepd) allocation deliver high margin production and Average Total Production operational flexibility through the…
  20. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 20
    DIVERSIFIED PRODUCTION TOP 10 FIELDS Production by Field 180,000 160,000 140,000 120,000 100,000 Boepd 80,000 60,000 40,000 20,000 0 2011 2012 2013 2014 1H 2015 Unconventional Waterflood Conventional…
  21. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 21
    2015-16 STRATEGIC FOCUS Priorities and response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 22 Analyst Presentation Day 1
  22. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 22
    STRONG RETURNS THROUGH THE COMMODITY CYCLE Oil Prices / Gas Prices Oil Prices / Gas Prices Invest in steam floods (above 5x Oil/Gas ratio) Gas price is a cost for steam floods. Invest in steam floods above 5x Oil/Gas ratio…
  23. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 23
    CRC EXECUTING ON CONTROLLABLES 1600 1400 1200 Operating Cash Flow 1000 MM 800 600 1236 400 200 232 0 1H14 Volume Price Costs Interest Tax Working 1H15 Capital and Other 24 JRCO 0915Presentation Day 1…
  24. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 24
    STABLE LEASEHOLD POSITION San Joaquin Los Angeles Ventura Sacramento Basin Basin Basin Basin Total CRC Net acreage held in fee (000s) 996 18 161 194 1,368 % net acreage held in fee 64% 51% 70% 37% 60% Net undeveloped acreage (000s)…
  25. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 25
    2015-16 STRATEGIC FOCUS Priorities and response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 26 Analyst Presentation Day 1
  26. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 26
    LOWER FOR LONGER WTI Crude Price Index 1.4 1.2 1 0.8 0.6 0.4 0.2 0 8/12/1985 8/12/1986 8/12/1987 8/12/1988 8/12/1989 8/12/1990 1986 Price Decline 2014 Price Decline Source: Bloomberg 2014 Price Series begins at…
  27. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 27
    28 0 20 40 60 80 100 120 140 1/1/2000 9/1/2000 5/1/2001 1/1/2002 Brent 9/1/2002 5/1/2003 1/1/2004 9/1/2004 Jan-06 Analyst Presentation Day 1 5/1/2005 1/1/2006 9/1/2006 5/1/2007 Sep-08 1/1/2008…
  28. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 28
    WHAT IS THE NEW NORMAL WTI Daily Price Frequency Conventional/Pre-Shale Tight Spare Capacity New Normal Political Premiums Frequency (Days) WTI /Bbl Source: Bloomberg, WTI (1/1995 9/2015) 29 Analyst Presentation Day 1
  29. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 29
    MARGINAL SUPPLY NEEDS 70+ (BRENT) Exhibit 24: Marginal Top 420 oil fields require US 70/bl= oil price Breakeven of non-producing and recently onstream oil assets 140 130 120 Marginal heavy oil 110 and deepwater 100 Commercial…
  30. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 30
    CALIFORNIA IS A WORLD-CLASS OIL PROVINCE Over 35 billion Boe produced since 18761 Pico Canyon 4 was the first well with 2 billion Boe1 commercial production west of the Rockies and produced from 1876 to 1992 Rich marine oil and gas…
  31. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 31
    LARGE IN PLACE VOLUMES WITH SIGNIFICANT UPSIDE Recovery Factors for Discovered Fields In place volumes of 40 Bn Boe at Billion Boe 45 low recovery factor (22%) to date 40 Conventional value chain 35 approach to life of field…
  32. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 32
    CREATING A RECOVERY VALUE CHAIN Conventional fields in various stages of Typical Recoveries by Mechanism Type development 80 Base assets in place advancing 70 recovery with traditional means Recovery of Orig. in Place; RF% 60…
  33. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 33
    MULTIPLE STACKED PAY OPPORTUNITIES California basins have significant resource potential in Heavy oil trend ETCHEGOIN 500 Conventional production stacked conventional and unconventional reservoirs 500 3,500 thick Conventional…
  34. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 34
    THE ADVANCEMENT OF OIL FIELD TECHNOLOGY IN CALIFORNIA Majors In California Majors Pull Out of CA CRC Growth Implementation Fields left undeveloped Improving deep drilling efficiency Focus on Shallow Steam Cost per well reductions…
  35. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 35
    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…
  36. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 36
    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…
  37. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 37
    MARKETING Carlos Contreras VP Commercial October 13, 2015
  38. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 38
    KEY TAKEAWAYS Crude With the isolating factors of infrastructure and necessity for waterborne crude in the CA crude market, postings tend to follow the Brent benchmark along with the Brent WTI spread Natural Gas CRC produces 1/3…
  39. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 39
    CALIFORNIA IS AN ISLAND Top Imports by Source (Mbpd) Saudi Arabia 268 ANS 212 Ecuador 137 Colombia 134 Kuwait 74 API Weighted Average California 18 CAPTIVE Import Barrels 30 MARKET CA prod 592 Mbpd CA imports 1,030 Mbpd No…
  40. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 40
    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…
  41. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 41
    CRC CRUDE DAILY MARKETED BARRELS SF Bay Area Northbound Bbls/d Refineries CVO 260 P66 120 Various pipelines to Bay Area 48,000 TSO 165 VLO 170 Shell 165 Southbound Bbls/d SJ Valley Refineries Plains Pipeline to Los Angeles…
  42. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 42
    WATERBORNE IMPORTS DOMINATE CA SUPPLY CALIFORNIA REFINERY SUPPLY, MBOPD 1,800 16 13 3 16 32 48 53 46 52 19 15 1,600 51 51 50 8 13 50 50 1,400 8 51 551 564 558 547 548 559 565 566 1,200 547 538 1,000 800 600 1,049…
  43. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 43
    CALIFORNIA CRUDE BY RAIL Rail…
  44. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 44
    OPPORTUNISTICALLY BUILT HEDGE PORTFOLIO 80 3,000 Bbl/d 74.42 call 75 40,000 Bbl/d 73.88 call 30,000 Bbl/d 72.12 call 70 35,500 Bbl/d 66.15 call 65 40,000 Bbl/d 61.25 put 60 55 70,000 Bbl/d 52.14 put 30,500 Bbl/d 52.38 put…
  45. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 45
    CRC NATURAL GAS MARKET Canada CRC produces 230,000 Mcf/d (4% of CA demand) Ability to service markets throughout CA as well as others 80% sold to Southern CA markets via SoCal Gas, Kern, Mojave 20% sold to Northern CA market via…
  46. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 46
    SOCAL BORDER BASIS COMPARISON TO NYMEX HENRYHUB Historical: 2011-2014: New supply outside California causes NYMEX prices to weaken relative to California prices 1H15: Cold temps and higher demand in East keeps NYMEX prices high relative…
  47. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 47
    INTERNAL HEDGE ON NATURAL GAS 60,000 mmbtu/d Natural Hedge with thermal operations Thermal Operations buys 60,000 mmbtu/d When prices fall, Thermal Ops benefits from lower gas cost More than 50% of our natural gas production is either…
  48. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 48
    CRC NATURAL GAS LIQUIDS MARKETING Largest NGL producer in CA 20,000 bpd Breakdown of NGL production: Propane 53% Butane 33% Natural Gasoline 14% Natural Gasoline 75% of the propane is sold into Canada Mexican market Butane…
  49. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 49
    SUMMARY Crude With the isolating factors of infrastructure and necessity for waterborne crude in the CA crude market, postings tend to follow the Brent benchmark along with the Brent WTI spread Natural Gas CRC produces 1/3 of the…
  50. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 50
    REGULATORY OVERVIEW Charlie Weiss EVP Public Affairs October 13, 2015
  51. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 51
    PROVEN TRACK RECORD IN SENSITIVE ENVIRONMENTS Operator of choice in coastal environments Proven coexistence with sensitive environmental receptors Committed to excellence in safety and mechanical integrity 52 Analyst…
  52. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 52
    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…
  53. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 53
    EXAMPLE: LONG BEACH WATER CONSERVATION Target 50% reduction in fresh water usage o Expect to reach 10 MBPD fresh water goal by YE15 o Compare to 1.8 MMBPD water injected (0.6%) o Remaining fresh water use by workers, power plant and…
  54. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 54
    WATER MANAGEMENT REGULATIONS California is changing water rights and allocations o CRCs water supplies have not been curtailed to date o CRC has reduced fresh water use through recycling and conservation measures o The state is…
  55. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 55
    WELL STIMULATION REGULATIONS 2015 regulations and studies should make hydraulic fracturing and well stimulation permitting more predictable o Final DOGGR well stimulation regulations in effect under Senate Bill 4 o State Water Board…
  56. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 56
    2015 LEGISLATIVE DEVELOPMENTS SB 350: Key state energy legislation enacted Governors goals to double electricity generation from renewables and energy efficiency of buildings by 2030 State Assembly rejected other proposals this year…
  57. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 57
    WATERFLOODING Jerry Foster, PE Reservoir Engineering Manager - IOR/EOR Team October 13, 2015
  58. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 58
    Cliffs Notes Learn nomenclature & concepts Definition Recovery phases Why waterflood Increase oil recovery Key success factors CRC portfolio CRC demonstrates success Take home messages 59 Analyst Presentation Day 1
  59. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 59
    DEFINITION: WATERFLOOD Waterflooding is a process used to inject water into an oil- bearing reservoir for pressure maintenance as well as for displacing and producing incremental oil. 60 Analyst Presentation Day 1
  60. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 60
    RECOVERY PHASES OILFIELD LIFECYCLE Primary Recovery Artificial Lift Natural Flow Pump - Gas Lift - Etc. Conventional Recovery Secondary Recovery Pressure Waterflood Maintenance Gas Reinjection Tertiary Recovery Thermal…
  61. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 61
    RECOVERY PHASES OILFIELD LIFECYCLE Secondary Tertiary Primary Waterflood Non Thermal Oil Rate 10% 20-40% +10% Economic limit Average reservoir pressure Pressure Time The oil rate decline for waterfloods is generally…
  62. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 62
    WATERFLOOD PROCESS Fill Up Pressure up Gas-oil ratio down Oil decline rate slows Averages 5 to 11% of project life Inclining Production Averages 6 to 30% of project life Declining Production Most of the project life is…
  63. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 63
    WATERFLOOD PROCESS Source: Society of Petroleum Engineers Waterflood Manual 64 Analyst Presentation Day 1
  64. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 64
    WHY WATERFLOOD Most widely-used fluid injection process Numerous successful smaller waterflood operators Its a mature technology When were the first benefits of waterflooding reported in the literature Adequate produced water…
  65. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 65
    PROVEN METHOD TO INCREASE OIL RECOVERY Primary + Waterflood Ultimate Recoveries 70 Oil Recovery (% Original Oil-In-Place) 60 Waterflood (Secondary) 50 Primary 40 30 20 10 0 Each Bar Represents A Separate Field…
  66. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 66
    MAIN REASONS FOR INCREASED OIL RECOVERY 1. Pressure maintenance Wells flow longer and at higher rates Gas stays in the oil . . . More gas in the oil results in lower viscosity Less resistance to flow = more flow 2. Displacement of…
  67. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 67
    DISPLACEMENT OF OIL BY WATER - CONTINUED Injected water (blue truck) can efficiently displace oil in the water-wet system Easy oil drop Water-Wet Reservoir rock Injected water (blue truck) cannot easily displace oil in the oil-…
  68. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 68
    DISPLACEMENT OF OIL BY WATER - CONTINUED Injected water (blue truck) imbibes into the reservoir rock Better Traction oiloil drop drop Oil-Wet Reservoir rock Tilted reservoir improves the gravity-stability 69 Analyst…
  69. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 69
    KEY SUCCESS FACTORS ARE WELL-KNOWN Reservoir Geometry Lithology, Porosity, Permeability Reservoir Depth Continuity of Rock Properties Fluid Saturations & Distributions Fluid Properties Relative Permeability Primary Drive…
  70. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 70
    GEOLOGY DEPOSITIONAL ENVIRONMENTS Source: Waterflood A-Z Course OGCI 71 Analyst Presentation Day 1
  71. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 71
    COMPLEX WATER MOVEMENT MECHANISMS Source: GeoArabia Special Publication 4, Volume 1: Barremian Aptian Stratigraphy and Hydrocarbon Habitat of the Eastern Arabian Plate 72 Analyst Presentation Day 1
  72. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 72
    WATERFLOOD OPTIMIZATION injection well production well Pattern flood appropriate for low dip 5-spot 7-spot 9-spot Peripheral flood (downdip) production well fewer wells better sweep when gravity stable injection well…
  73. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 73
    KEY SUCCESS FACTORS Start the waterflood early in the fields life Successful Understand the reservoirs geology implementation and operation of a Infill drill to reduce lateral pay discontinuities waterflood project, Develop with…
  74. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 74
    SURVEILLANCE AND WATERFLOOD MANAGEMENT Water production Side view of water (blue) Oil production movement through vertical Water injection geologic layers Orange/red = oil saturation 75 Analyst Presentation Day 1
  75. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 75
    PROPER INTEGRATION IS A KEY SUCCESS FACTOR TREATMENT -filtration SURVEILLANCE -diagnostic performance plots -pressure transient analysis INJECTION -infill wells PRODUCTION -pressures -cased hole logging -prod. index -rates -RFT…
  76. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 76
    CRC INCREASING OIL RECOVERY Field discovered by Shell in 1926 5000 Mount Poso 20 Year Production Profile CRC acquired in 2007 4000 BOPD Formations: Pyramid Hill and Well Count 3000 Vedder CRC Acquired Depths: 1,300-2,000 2000…
  77. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 77
    CRC RECOVERY VALUE CHAIN Primary production 94 Fields Waterflood (secondary recovery) 17 Fields 250 MMBOE proved reserves 2014 EOR including thermal methods 13 Fields 78 Analyst Presentation Day 1
  78. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 78
    WATERFLOODING TAKE HOME MESSAGES Keeps oil rates higher for longer Protect the base oil production Mature technology Critical success factors are well-known Maintaining reservoir pressure Allows oil to flow more easily (i.e.,…
  79. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 79
    SOUTHERN OPERATIONS Frank Komin EVP Southern Operations October 13, 2015
  80. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 80
    CRC SOUTH KEY TAKEAWAYS Big fields get bigger Focus: Sensitive environments, mature waterfloods, with generally low technical risk and proven repeatable technology across huge OOIP fields Emphasize base management & maintaining low…
  81. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 81
    CRC SOUTH OVERVIEW Focus: Sensitive environments, mature waterfloods, with generally low technical risk and proven repeatable technology across huge OOIP fields Emphasize base management & maintaining low decline rates Focus on…
  82. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 82
    CRC SOUTH WATERFLOODS Net Rate from Waterfloods 45,000 40,000 35,000 30,000 25,000 Boepd 20,000 15,000 10,000 5,000 0 2011 2012 2013 2014 1H 2015 LONG BEACH TIDELANDS HUNTINGTON BEACH OTHER 83 Analyst…
  83. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 83
    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…
  84. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 84
    WILMINGTON FIELD - OVERVIEW Overview Field Map CRCs flagship coastal asset: acquired in 2000 Field discovered in 1932; 3 rd largest field in the U.S. Over 7 billion barrels OOIP (34% recovered to date) 1 Depths 2,000 10,000 (TVDSS)…
  85. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 85
    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…
  86. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 86
    WILMINGTON FIELD GEOLOGY Stratigraphic Column Shallow Gas Upper Fan reservoirs Middle Fan Upper Fan Ranger reservoirs Middle Fan Terminal reservoirs Middle Fan Lower Fan Lower Fan Beaubouef et al, 1999 UP-Ford…
  87. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 87
    WILMINGTON FIELD GEOSTEERING TECHNOLOGY Well Complexity State of the art, proprietary directional drilling technology Over 8,000 wellbores since 1930s Small surface footprint, reach far out into reservoirs Well placement…
  88. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 88
    WILMINGTON FIELD PRODUCTION SHARING CONTRACTS LBU PSC Over 90% of CRCs Long Beach production 50,000 Base Incremental is covered under Production Sharing 40,000 Contracts (PSCs) with the State and City of Long Beach 30,000…
  89. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 89
    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…
  90. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 90
    CRC SOUTH 1ST HALF 2015 RESULTS Production Growth 3% Growth in total production (gross) before PSC 17% Growth in CRC Net production after PSC Significant Cost Reductions Cash operating expenses per boe: 25% savings Capital…
  91. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 91
    CRC SOUTH DASHBOARD GOOD CAPITAL EFFICIENCY YTD Drilling Results Beating expectations Capital Efficiency 1H 2015 Drill Wells - Drilling wells faster & Costs 18% below AFE cheaper than planned IP rate 9% above AFE* - Allows equivalent…
  92. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 92
    FLAT PRODUCTION PROFILE FOCUS ON BASE Gross Production - 2015 gross oil decline of 13% Net Production - Strong performance, lifted by PSC Gross & Net Production (Mboepd) 60.0 50.0 40.0 30.0 20.0 10.0 0.0 1Q14 2Q14 3Q14…
  93. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 93
    MARGIN FOCUS DELIVERING COST SAVINGS Operating Costs Pre-tax (MM & /boe) 110.0 40.00 90.0 30.00 70.0 20.00 50.0 10.00 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Opex Opex/bbl Results Units 1H15 1H14 Variance Cash Opex (pre-tax)…
  94. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 94
    CAPITAL INVESTMENTS LIVING WITHIN CASH FLOWS Capital Investment (MM) 200.0 150.0 100.0 50.0 0.0 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Results Units 1H15 1H14 Variance Capital Investment MM 58 285 -80% Activity reduction…
  95. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 95
    CRC SOUTH SUMMARY Big fields get bigger Focus: Sensitive environments, mature waterfloods, with generally low technical risk and proven repeatable technology across huge OOIP fields Emphasize base management & maintaining low…
  96. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 96
    CALIFORNIA RESOURCES CORPORATION APPENDIX 97 Analyst Presentation Day 1
  97. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 97
    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…
  98. Analyst Day and Site Tour - Long Beach – California Resources Corp. – slide 98
    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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