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3Q 2015 Earnings Review – California Resources Corp.

California Resources Corp. · Oct 5, 2015 · 27 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. 3Q 2015 Earnings Review – California Resources Corp. – slide 1
    Third Quarter 2015 Earnings Review Todd Stevens President & CEO Mark Smith Sr. EVP & CFO Los Angeles, CA November 5, 2015
  2. 3Q 2015 Earnings Review – California Resources Corp. – slide 2
    Management Priorities and Response Priorities Execution 1. Address Balance Sheet Narrowed discussions with leading counter- parties on preferred transactions and in 2. Adjust Activity Levels for Current detailed discussions. Paid…
  3. 3Q 2015 Earnings Review – California Resources Corp. – slide 3
    CRC Executing on Controllables 700 600 500 Operating Cash Flow 400 MM 300 631 200 100 180 0 3Q14 Volume Price Costs Interest Tax Working 3Q15 Capital and Other 5 3Q15 Earnings
  4. 3Q 2015 Earnings Review – California Resources Corp. – slide 4
    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,…
  5. 3Q 2015 Earnings Review – California Resources Corp. – slide 5
    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…
  6. 3Q 2015 Earnings Review – California Resources Corp. – slide 6
    Flexible High Return Inventory Capital associated with currently identified projects delivering VCI 1.3* Current average well cost 1.1 MM Multi-year inventory allows maintenance of flat production at different points in the price…
  7. 3Q 2015 Earnings Review – California Resources Corp. – slide 7
    Progressing Inventory to VCI Threshold GREATER ELK HILLS AREA INVENTORY OF POTENTIAL PROJECTS 2016 -2020 VCI = 1.0 VCI = 1.3 Plan Year 2016 to 2020 Plan Year 2016 to 2020 50 Oil, 3.00 Gas (3.50 Gas for = 2017) 50 Oil, 3.00 Gas (3.50…
  8. 3Q 2015 Earnings Review – California Resources Corp. – slide 8
    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,…
  9. 3Q 2015 Earnings Review – California Resources Corp. – slide 9
    Deleveraging Options We have assessed 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…
  10. 3Q 2015 Earnings Review – California Resources Corp. – slide 10
    Living Within Cash Flow 300 250 200 MM 150 100 50 0 1Q15 2Q15 3Q15 Adj. EBITDAX* Operating Cash Flow Capital Investment * See Appendix for reconciliations to GAAP 12 3Q15 Earnings
  11. 3Q 2015 Earnings Review – California Resources Corp. – slide 11
    Defending Margins Through Efficiencies and Focus on Cash Costs Cash Costs /Boe 35.00 2014 Average = 29.57 30.00 2.23 1.06 2015E Average = 25.51 1.69 4.49 25.00 1.11 0.52 0.34 20.00 19.00 19.03 18.35 16.65 16.20 16.59 16.91…
  12. 3Q 2015 Earnings Review – California Resources Corp. – slide 12
    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 3Q15 4Q15E FY 2014 FY 2015E Oil NGL Gas Guidance 14…
  13. 3Q 2015 Earnings Review – California Resources Corp. – slide 13
    3Q15 Results Summary Comparison 3Q14 2Q15 3Q15 Adjusted EPS* 0.48 (0.13) (0.22) Oil Production 100 MBbl/d 104 MBbl/d 103 MBbl/d Total Production 160 MBoe/d 161 MBoe/d 158 MBoe/d Realized Oil Price w/hedge (/Bbl) 96.27 56.73 47.79…
  14. 3Q 2015 Earnings Review – California Resources Corp. – slide 14
    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…
  15. 3Q 2015 Earnings Review – California Resources Corp. – slide 15
    Strong Oil Volumes Drive Quarterly Production Boe/d 165,000 +3,000 -4,000 160,000 -1,000 155,000 150,000 160,000 158,000 145,000 140,000 3Q14 Oil Gas NGL 3Q15 17 3Q15 Earnings
  16. 3Q 2015 Earnings Review – California Resources Corp. – slide 16
    Cost Variance 3Q14 2Q15 3Q15 Production costs 18.35 16.59 16.91 (/Boe) Taxes other than on income 56 53 42 (MM) Exploration 25 7 5 expense (MM) Interest expense NA 83 82 (MM) 18 3Q15 Earnings
  17. 3Q 2015 Earnings Review – California Resources Corp. – slide 17
    Capex Reduction 2014 Actual 2015 Actual Q4 Expected Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Rigs 28 25 6 4 3 3 3 3 3 3 3 3 3 3 3 Quarterly Operations CAPEX, 520 133 95 95 90-100* mm Focus on investing…
  18. 3Q 2015 Earnings Review – California Resources Corp. – slide 18
    Opportunistically Built Hedge Portfolio 80 2015/2016 Crude Oil Brent Hedges* 75 40,000 Bbl/d 73.88 call 3,000 Bbl/d 74.42 call 70 35,500 Bbl/d 66.15 call 65 40,000 Bbl/d 61.25 put 1,000 Bbl/d 61.25 swap 60 55 30,500 Bbl/d…
  19. 3Q 2015 Earnings Review – California Resources Corp. – slide 19
    Focus on Balance Sheet Capitalization as of 9/30/15 (MM) Deleveraging is a priority Senior Unsecured RCF 1 481 November credit facility amendment Senior Unsecured Term Loan 1,000 provides additional financial flexibility Senior…
  20. 3Q 2015 Earnings Review – California Resources Corp. – slide 20
    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…
  21. 3Q 2015 Earnings Review – California Resources Corp. – slide 21
    4Q15 Guidance Anticipated Realizations Against the Prevailing Index Prices for 4Q15 Oil 86% to 90% of Brent NGLs 36% to 40% of Brent Natural Gas 93% to 97% of NYMEX Production, Capital and Income Statement Guidance Production 151…
  22. 3Q 2015 Earnings Review – California Resources Corp. – slide 22
    Poised to Take Advantage of a Commodity Price Recovery Sacramento Basin World-Class Resource Base: 19 MMBoe Proved Reserves 7 MBoe/d production Large inventory of assets across basins and drive mechanisms that provide strong returns…
  23. 3Q 2015 Earnings Review – California Resources Corp. – slide 23
    California Resources Corporation Appendix 25 3Q15 Earnings
  24. 3Q 2015 Earnings Review – California Resources Corp. – slide 24
    Non-GAAP Reconciliation for Adjusted EBITDAX For the For the Nine Third Quarter Months Ended Full Ended September 30, September 30, Year ( in millions) 2015 2014 2015 2014 2014 Net Income/(loss) (104) 188 (272) 657 (1,434)…
  25. 3Q 2015 Earnings Review – 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…
  26. 3Q 2015 Earnings Review – California Resources Corp. – slide 26
    Non-GAAP Reconciliation for Adjusted EPS For the For the Second For the Nine Third Quarter Quarter Ended Months Ended Ended September 30, June 30, September 30, ( in millions) 2015 2014 2015 2015 2014 Net Income/(loss) (104) 188…
  27. 3Q 2015 Earnings Review – California Resources Corp. – slide 27
    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…

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