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First Quarter 2016 Earnings Review – California Resources Corp.

California Resources Corp. · May 5, 2016 · 23 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. First Quarter 2016 Earnings Review – California Resources Corp. – slide 1
    First Quarter 2016 Earnings Review Todd Stevens President & CEO Los Angeles, CA May 5, 2016 Mark Smith Sr. EVP & CFO
  2. First Quarter 2016 Earnings Review – California Resources Corp. – slide 2
    Diverse Resource Base Interests in 4 of the 12 largest fields in the lower 48 states 644 MMBoe proved reserves (12/31/2015) Largest producer in California on a gross operated basis with significant exploration and development…
  3. First Quarter 2016 Earnings Review – California Resources Corp. – slide 3
    Management Priorities and Response Priorities Execution 1. Address Balance Sheet Reduced outstanding debt with free cash flow and through open market repurchases 2. Adjust Activity Levels for Current Environment No change to…
  4. First Quarter 2016 Earnings Review – California Resources Corp. – slide 4
    Living Within Cash Flow 75 275 65 225 55 175 45 Brent Price MM 35 125 25 75 15 25 5 -25 1Q15 2Q15* 3Q15 4Q15* 1Q16 -5 Adj. EBITDAX** Operating Cash Flow Capital Investment Brent Price * Operating cash…
  5. First Quarter 2016 Earnings Review – California Resources Corp. – slide 5
    Deleveraging Options We have assessed various deleveraging alternatives and are taking strategic steps to delever the balance sheet UPSTREAM MIDSTREAM CAPITAL MARKETS JV MLP Debt Exchange M&A Drop into Existing MLP Open market bond…
  6. First Quarter 2016 Earnings Review – California Resources Corp. – slide 6
    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…
  7. First Quarter 2016 Earnings Review – California Resources Corp. – slide 7
    Strong Execution Track Record Total Production Capital Investment Guidance vs. Actual Guidance vs. Actual 170 160 165 160 120 155 Mboe/d MM 150 80 145 140 40 135 130 0 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16…
  8. First Quarter 2016 Earnings Review – California Resources Corp. – slide 8
    Defending Margins By Managing Costs 18.00 15% 16.00 Decrease 14.00 Production Costs (/Boe) 12.00 10.00 8.00 6.00 4.00 2.00 - 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 Steam Injectant Gas Plant Expense Energy Supports and…
  9. First Quarter 2016 Earnings Review – California Resources Corp. – slide 9
    Focus on Balance Sheet Capitalization as of 3/31/16 (MM) Deleveraging is a priority 1st Lien Secured RCF1 1st Lien Secured Term Loan 695 975 Utilized free cash flow to execute open Senior 2nd Lien Notes 2,250 market purchases of…
  10. First Quarter 2016 Earnings Review – California Resources Corp. – slide 10
    CRC Effectively Managing Down Debt Total Debt 7,000 100 94 90 6,000 80 5,000 70 64 Brent Oil (/Bbl) Total Debt (M) 55 60 4,000 51 45 50 3,000 40 35 2,000 30 20 1,000 10 0 0 10/1/14 3/31/15 6/30/15…
  11. First Quarter 2016 Earnings Review – California Resources Corp. – slide 11
    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 12 1Q16 Earnings
  12. First Quarter 2016 Earnings Review – California Resources Corp. – slide 12
    Capex Reduction 2015 Actual FY 2016E Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 RIGS 3.3 3 3 2.3 0 0 0 0 Quarterly Operations 133 95 95 78 50* CAPEX, mm 2016 Capital Investment Plan to focus on mechanical integrity and safe operations…
  13. First Quarter 2016 Earnings Review – California Resources Corp. – slide 13
    Opportunistically Built Hedge Portfolio* Q2 2016 Q3 2016 Q4 2016 2017 2018 Calls Barrels per Day 35,500 4,000 23,000 30,000 23,300 Wtd Avg Ceiling Price per Barrel 66.15 71.13 53.67 55.68 57.99 Puts Barrels per Day 55,500 28,000…
  14. First Quarter 2016 Earnings Review – California Resources Corp. – slide 14
    CRC Price Realizations Oil Price Realization* Gas Price Realization* WTI Realizations Brent NYMEX Realizations 120 110 108.76 5.0 4.39 100 104.16 4.5 99.51 4.0 3.73 90 97.97 93.00 3.5 4.34 80 92.30 3.0 3.66 /Mcf 70 2.75…
  15. First Quarter 2016 Earnings Review – California Resources Corp. – slide 15
    CRC Executing on Controllable Items 140 120 100 Operating Cash Flow 80 MM 60 115 115 40 20 0 1Q15 Volume Price Costs Interest Working 1Q16 -20 Capital and Other -40 16 1Q16 Earnings
  16. First Quarter 2016 Earnings Review – California Resources Corp. – slide 16
    Quarterly Cost Comparison 1Q15 4Q15 1Q16 Production costs 16.20 15.51 13.69 (/Boe) Taxes other than on income 55 30 39 (MM) Exploration 17 7 5 expense (MM) Interest expense 79 82 74 (MM) 17 1Q16 Earnings
  17. First Quarter 2016 Earnings Review – California Resources Corp. – slide 17
    Managing Base Production with No Drilling Capital Production By Stream (MBoe/d) Average 160 Mboe/d Total 159 Mboe/d Production Average 104 MBbl/d Oil 99 MBbl/d Mboe/d Production 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16E…
  18. First Quarter 2016 Earnings Review – California Resources Corp. – slide 18
    1Q16 Results Summary Comparison 1Q15 4Q15 1Q16 Adjusted EPS* (0.25) (0.20) (0.26) Oil Production 108 MBbl/d 102 MBbl/d 98 MBbl/d Total Production 166 MBoe/d 155 MBoe/d 148 MBoe/d Realized Oil Price w/ Hedge (/Bbl) 46.44 45.88 36.39…
  19. First Quarter 2016 Earnings Review – California Resources Corp. – slide 19
    2Q16 Guidance Anticipated Realizations Against the Prevailing Index Prices for 2Q16 Oil 85% to 89% of Brent NGLs 43% to 47% of Brent Natural Gas 81% to 85% of NYMEX Production, Capital and Income Statement Guidance Production 138…
  20. First Quarter 2016 Earnings Review – California Resources Corp. – slide 20
    Poised to Take Advantage of a Commodity Price Recovery World-Class Resource Base: Sacramento Basin 14 MMBoe Proved Reserves 7 MBoe/d production Large inventory of assets across basins and drive mechanisms that provide strong returns…
  21. First Quarter 2016 Earnings Review – California Resources Corp. – slide 21
    Non-GAAP Reconciliation for Adjusted EBITDAX For the First Quarter Ended March 31, ( in millions) 2016 2015 Net loss (50) (100) Interest expense 74 79 Income taxes benefit (78) (69) Depreciation, depletion and amortization 147…
  22. First Quarter 2016 Earnings Review – California Resources Corp. – slide 22
    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…
  23. First Quarter 2016 Earnings Review – California Resources Corp. – slide 23
    Non-GAAP Reconciliation for Adjusted EPS For the First Quarter Ended March 31, ( in millions) 2016 2015 Net Loss (50) (100) Non-cash loss on outstanding hedges 81 3 Severance costs and other employee-related costs 14 - Plant…

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