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2016 Global Energy Conference – California Resources Corp.

California Resources Corp. · Jan 6, 2016 · 36 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. 2016 Global Energy Conference – California Resources Corp. – slide 1
    Goldman Sachs 2016 Global Energy Conference Mark Smith Sr. EVP & CFO Miami, FL January 6, 2016
  2. 2016 Global Energy Conference – California Resources Corp. – slide 2
    2015-16 Strategic Focus Priorities and Response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 4 GS Energy Conference 0116
  3. 2016 Global Energy Conference – California Resources Corp. – slide 3
    CRC at a Glance World-Class Resource Base Sacramento Basin In 4 of 12 largest fields in the 19 MMBoe Proved Reserves 7 MBoe/d production continental U.S. 768 MMBoe proved reserves (2014) Capital Structure San Joaquin Basin 525…
  4. 2016 Global Energy Conference – California Resources Corp. – slide 4
    Overview of California Resources Corporation California Pure-Play Top California Producers in 2014* 200 195 An independent E&P company spun off by 180 159 Occidental 160 Gross Operated MBoepd 139 140 Focused on high-return…
  5. 2016 Global Energy Conference – California Resources Corp. – slide 5
    2015 - 2016 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…
  6. 2016 Global Energy Conference – California Resources Corp. – slide 6
    2015-16 Strategic Focus Priorities and Response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 8 GS Energy Conference 0116
  7. 2016 Global Energy Conference – California Resources Corp. – slide 7
    Focus on Balance Sheet Capitalization as of 9/30/15 (MM) Deleveraging is a priority Proforma for 12/15/15 Exchange 1 November credit facility amendment Senior Secured RCF 481 provides additional financial flexibility Senior…
  8. 2016 Global Energy Conference – California Resources Corp. – slide 8
    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…
  9. 2016 Global Energy Conference – California Resources Corp. – slide 9
    Deleveraging Options We have accessed various deleveraging alternatives and are taking decisive steps to delever the balance sheet UPSTREAM MIDSTREAM CAPITAL MARKETS JV MLP Debt Exchange M&A Drop into Existing MLP Sale Triple Net…
  10. 2016 Global Energy Conference – California Resources Corp. – slide 10
    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 GS Energy Conference 0116
  11. 2016 Global Energy Conference – California Resources Corp. – slide 11
    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,…
  12. 2016 Global Energy Conference – California Resources Corp. – slide 12
    Self-Funded Capital Investment Program Commentary 2015 Original Capital Budget Original 2015 capital budget of 440 million Other 1 Total: 440 million directed almost entirely towards oil-weighted 95 22% Drilling investment expect…
  13. 2016 Global Energy Conference – California Resources Corp. – slide 13
    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…
  14. 2016 Global Energy Conference – California Resources Corp. – slide 14
    2015-16 Strategic Focus Priorities and Response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 16 GS Energy Conference 0116
  15. 2016 Global Energy Conference – California Resources Corp. – slide 15
    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…
  16. 2016 Global Energy Conference – California Resources Corp. – slide 16
    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…
  17. 2016 Global Energy Conference – California Resources Corp. – slide 17
    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…
  18. 2016 Global Energy Conference – California Resources Corp. – slide 18
    2015-16 Strategic Focus Priorities and Response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 20 GS Energy Conference 0116
  19. 2016 Global Energy Conference – California Resources Corp. – slide 19
    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…
  20. 2016 Global Energy Conference – California Resources Corp. – slide 20
    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) 22 GS Energy Conference 0116
  21. 2016 Global Energy Conference – California Resources Corp. – slide 21
    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…
  22. 2016 Global Energy Conference – California Resources Corp. – slide 22
    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…
  23. 2016 Global Energy Conference – California Resources Corp. – slide 23
    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 Gas…
  24. 2016 Global Energy Conference – California Resources Corp. – slide 24
    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)…
  25. 2016 Global Energy Conference – California Resources Corp. – slide 25
    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…
  26. 2016 Global Energy Conference – California Resources Corp. – slide 26
    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…
  27. 2016 Global Energy Conference – California Resources Corp. – slide 27
    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…
  28. 2016 Global Energy Conference – California Resources Corp. – slide 28
    California Resources Corporation Appendix 30 GS Energy Conference 0116
  29. 2016 Global Energy Conference – California Resources Corp. – slide 29
    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)…
  30. 2016 Global Energy Conference – California Resources Corp. – slide 30
    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…
  31. 2016 Global Energy Conference – California Resources Corp. – slide 31
    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…
  32. 2016 Global Energy Conference – California Resources Corp. – slide 32
    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…
  33. 2016 Global Energy Conference – California Resources Corp. – slide 33
    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…
  34. 2016 Global Energy Conference – California Resources Corp. – slide 34
    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…
  35. 2016 Global Energy Conference – California Resources Corp. – slide 35
    Shale Geological Overview Successful in upper Monterey using precise development approach Expanding efforts into lower Monterey and other shales Total Organic Depth Thickness Porosity Permeability Carbon Play (ft) (gross ft) (%)…
  36. 2016 Global Energy Conference – California Resources Corp. – slide 36
    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…

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