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Scotia Howard Weil 2016 Energy Conference – California Resources Corp.

California Resources Corp. · Mar 23, 2016 · 46 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. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 1
    Scotia Howard Weil 2016 Energy Conference Todd Stevens President & CEO New Orleans, LA March 23, 2016
  2. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 2
    2016 Strategic Focus Priorities and Responses Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 4 Scotia Howard Weil 0316
  3. Scotia Howard Weil 2016 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 14 MMBoe Proved Reserves 7 MBoe/d production continental U.S. 644 MMBoe proved reserves Capital Structure San Joaquin Basin 451 MMBoe…
  4. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 4
    History of Proactive Strategic Decisions 120 30 Cut rig count to 6 from 27, began hedging program (covered almost all of 1H15 oil 100 production) 25 Brent Crude Oil Price (/Bbl)* Preliminary 2015 Capital Budget set CRC…
  5. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 5
    Living Within Cash Flow 325 925 275 725 225 FY (MM ) 525 MM 175 125 325 75 125 25 -25 1Q15 2Q15* 3Q15 4Q15* FY 2015 -75 Adj. EBITDAX** Operating Cash Flow Capital Investment * Operating cash flow includes…
  6. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 6
    Strong Execution Track Record Total Production Capital Investment Guidance vs. Actual Guidance vs. Actual 170 160 165 120 160 Mboe/d MM 155 80 150 40 145 140 0 1Q15 2Q15 3Q15 4Q15 1Q15 2Q15 3Q15 4Q15 Production…
  7. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 7
    Sufficient Liquidity to Manage Near Term Obligations 1,400 1,200 1,000 Revolver Availability (1) 800 600 Minimum Capital Capital Budget Investment 400 Term Loan Amortization Term Loan Amortization 2016E Consensus*…
  8. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 8
    2016 Strategic Focus Priorities and Response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 10 Scotia Howard Weil 0316
  9. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 9
    Focus on Balance Sheet Deleveraging is a priority Capitalization as of 12/31/15 (MM) 1st Lien Secured RCF1 739 Ratings action initiated transition to 1st Lien Secured Term Loan 1,000 secured borrowing base facility Senior 2nd Lien…
  10. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 10
    Deleveraging Update Total Debt 7,000 100 94 90 6,000 80 5,000 70 Brent Oil (/Bbl) Total Debt (M) 55 64 60 4,000 48 50 3,000 37 40 33 2,000 30 20 1,000 10 0 0 10/1/14 3/31/15 6/30/15 9/30/15 12/31/15 2/29/16…
  11. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 11
    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…
  12. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 12
    2016 Strategic Focus Priorities and Response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 14 Scotia Howard Weil 0316
  13. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 13
    Consistent Replacement of Reserves from Resource Base 1000 900 800 Proved Reserves (MMBoe) 700 600 500 400 744 768 768 300 644 200 100 0 FY 2013 Improved Extensions Purchases Performance Production FY 2014…
  14. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 14
    Resource Base Enables Resilient Production Profile Production By Stream (MBoe/d) Rich asset portfolio and thoughtful capital 160 Mboe/d 159 Mboe/d allocation deliver high margin production and operational flexibility through the…
  15. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 15
    2016 Strategic Focus Priorities and Response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 17 Scotia Howard Weil 0316
  16. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 16
    Opportunistically Built Hedge Portfolio* Q1 2016 Q2 2016 Q3 2016 Q4 2016 2017 2018 Calls Barrels per Day 35,500 35,500 3,000 3,000 30,000 23,300 Wtd Avg Ceiling Price per Barrel 66.15 66.15 74.42 74.42 55.68 57.99 Puts Barrels per Day…
  17. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 17
    Defending Margins Through Efficiencies and Focus on Cash Costs Cash Costs /Boe 35 2014 Average = 29.57 30 2.23 1.06 1.69 4.49 2015 Average = 24.91 25 1.11 0.52 0.34 0.49 20 19.00 19.03 18.35 16.65 16.20 16.59 16.91 15 15.51 10…
  18. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 18
    2016 Strategic Focus Priorities and Response Deleverage the Balance Sheet for Flexibility Protect the Base Defend our Margins Prepare for Change in Cycle 20 Scotia Howard Weil 0316
  19. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 19
    Progressing Inventory to VCI Threshold Economic Project Inventory 6,000 Drilling and Workover Inventory (MM) 5,000 4,000 3,000 2,000 1,000 0 40 50 60 Brent Marker Price (/Bbl) VCI 1.3 VCI 1.0 21 Scotia Howard…
  20. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 20
    Diverse Assets with Flexible Development Opportunities 2015 Net Proved Reserves (MMBoe) 644 Diversity of basins, drive mechanisms 2015 % Oil Net Proved1 72% Pre-Tax Proved PV-10 ( billion)2 5.06 Predictable production, low decline…
  21. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 21
    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…
  22. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 22
    Proven Track Record in Sensitive Environments Operator of choice in coastal environments Proven coexistence with sensitive environments 2.6 billion gallons of reclaimed water supplied to agriculture in 2015 Committed to excellence…
  23. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 23
    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 low-decline, lower-risk opportunities. Committed to capital…
  24. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 24
    California Resources Corporation Appendix 26 Scotia Howard Weil 0316
  25. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 25
    End Notes: (1) O rgan i c Res erves Repl ac emen t Rat i o 2015 2014 2013 Proved reserves added in 2015 MMBOE Extensions and Discovery 33 1 0 Improved Recovery 3 117 89 Revisions related to performance 45 (19) 0 Total (A) 81 99…
  26. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 26
    End Notes: (3) Our total production costs consist of variable costs that tend to vary depending on production levels, and fixed costs that do not vary with changes in production levels or well counts, especially in the short term. The…
  27. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 27
    Non-GAAP Reconciliation for Adjusted EBITDAX For the For the Fourth Quarter Twelve Months Ended December 31, Ended December 31, ( in millions) 2015 2014 2015 2014 Net Income/(loss) (3,282) (2,091) (3,554) (1,434) Interest expense…
  28. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 28
    Amendment Summary of General Terms & Conditions Revised Amendment Previous Maximum Leverage First Lien Leverage Ratio suspended through 12/31/16; Maximum First Lien Secured Leverage Ratio: 2.25x At and after 3/31/17 : < 2.25x…
  29. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 29
    Amendment Summary of Liability Management Terms Revised Amendment Previous Sale of Borrowing Base 100% of proceeds used to repay first the term loan, then the Subject to potential repayment of revolver revolver due to resultant…
  30. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 30
    CRC Leading California Producer California Pure-Play Top California Producers in 2015* 200 196 An independent E&P company spun off by 180 161 Occidental Gross Operated MBoepd 160 134 140 Focused on high-return assets in…
  31. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 31
    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,…
  32. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 32
    Self-Funded Capital Investment Program Commentary 2015 Total Capital Actuals 2015 actual capital investment of 401 million Other1 Total: 401 million 81 was directed almost entirely toward oil-weighted 20% Drilling investments 130…
  33. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 33
    CRC Price Realizations Oil Price Realization* Gas Price Realization* WTI Realizations Brent NYMEX Realizations 120 110.90 111.70 108.76 110 5.0 99.51 4.5 100 103.80 104.02 4.31 3.73 4.39 93.00 4.0 90 95.12 94.21 97.97 104.16 3.5…
  34. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 34
    San Joaquin Basin Overview Basin Map Oil and gas discovered in the late 1800s Accounts for 69% of CRC production Kettleman 25 billion barrels OOIP in CRC fields1 Cretaceous to Pleistocene sedimentary section (25,000 feet) Lost…
  35. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 35
    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…
  36. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 36
    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 Longer term base 60,000 Discoveries Net…
  37. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 37
    Effective Management of Elk Hills Field Operating Costs* Elk Hills Field Elk Hills Field Elk Hills Field Water-Oil Ratio (WOR) Opex per Well Opex, /Boe 16.0 160,000 Elk Hills Field - Opex, /Boe 18.00 5,000 140,000 Well Counts…
  38. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 38
    Capital Efficient Growth Delivers Long Term Returns Single digit base declines Steamflood Example Multi-year Investments of Kern Front drilling and facilities spending 14000 2008-2015 Investment 605 million 12000 Added…
  39. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 39
    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…
  40. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 40
    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)…
  41. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 41
    Big Fields Continue To Get Bigger. Example of Wilmington (mature Mature Waterflood waterflood) Wilmington Proved Reserves*** Growing Proven Reserves 120 120% Reserves Replacement since 2011* Proven Reserves (Mmboe) 100…
  42. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 42
    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…
  43. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 43
    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…
  44. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 44
    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…
  45. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 45
    A NET WATER SUPPLIER 3% 3% WATER MANAGED IN CRCs OPERATIONS Produced Water Fresh Water Non-Fresh Water In 2015, CRCs steamflood operations supplied more than 2.6 billion gallons over 8,100 acre-feet of water for irrigation…
  46. Scotia Howard Weil 2016 Energy Conference – California Resources Corp. – slide 46
    Non-GAAP Reconciliation for PV-10 At December 31, ( in millions) 2015 PV-10 of Proved Reserves 5,059 Present value of future income taxes discounted at 10% (1,035) Standardized Measure of Discounted Future Net Cash 4,024…

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