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Q2 2016 Earnings Review – California Resources Corp.

California Resources Corp. · Aug 4, 2016 · 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. Q2 2016 Earnings Review – California Resources Corp. – slide 1
    Second Quarter 2016 Earnings Review Todd Stevens President & CEO Los Angeles, CA August 4, 2016 Mark Smith Sr. EVP & CFO
  2. Q2 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. Q2 2016 Earnings Review – California Resources Corp. – slide 3
    Management Priorities and Response Priorities Execution in 2Q 2016 1. Address Balance Sheet Reduced outstanding debt with an equity for debt exchange 2. Adjust Activity Levels for Current Environment Announced bond tender Live…
  4. Q2 2016 Earnings Review – California Resources Corp. – slide 4
    Living Within Cash Flow 75 275 65 225 55 175 45 Brent Price MM 125 35 75 25 25 15 -25 1Q15 2Q15* 3Q15 4Q15* 1Q16 2Q16* 5 -75 -5 Adj. EBITDAX** Operating Cash Flow Capital Investment Brent Price *…
  5. Q2 2016 Earnings Review – California Resources Corp. – slide 5
    Deleveraging Options and Transactions We have assessed various deleveraging alternatives and are taking strategic steps to delever the balance sheet. Reduced debt principal by approximately 700mm from post -spin peak. UPSTREAM…
  6. Q2 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. Q2 2016 Earnings Review – California Resources Corp. – slide 7
    Resilient Resource Base Low Decline with Limited Capital Total Production Capital Investment Guidance vs. Actual Guidance vs. Actual 170 150 160 100 150 50 140 130 0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16…
  8. Q2 2016 Earnings Review – California Resources Corp. – slide 8
    Defending Margins Through Operating Cost Reductions and Efficiencies 18.00 2015 Avg: 16.30 16.00 1H 2016 Avg: 14.21 14.00 13% Decrease Production Costs (/Boe) 12.00 10.00 8.00 6.00 4.00 2.00 - 1Q 15 2Q 15 3Q 15 4Q…
  9. Q2 2016 Earnings Review – California Resources Corp. – slide 9
    Effective Management of Elk Hills Field Operating Costs Elk Hills Field Water-Oil Elk Hills Field - Opex per Elk Hills Field - Opex, /boe Ratio (WOR) Well 18.00 5,000 16.46 Opex, /boe 16.0 160,000 16.00 Well Counts 136,000 14.31…
  10. Q2 2016 Earnings Review – California Resources Corp. – slide 10
    Focus on Balance Sheet Capitalization as of 6/30/16 (MM) Deleveraging is a priority 1st Lien Secured RCF1 1st Lien Secured Term Loan 781 939 Utilized cash flow to make payment on Senior 2nd Lien Notes 2,250 term loan Senior…
  11. Q2 2016 Earnings Review – California Resources Corp. – slide 11
    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 47 3,000 40 35 2,000 30 20 1,000 10 0 0 10/1/14 3/31/15 6/30/15…
  12. Q2 2016 Earnings Review – California Resources Corp. – slide 12
    Progressing Inventory to VCI Threshold Economic Project Inventory 7,000 6,000 Drilling and Workover Capex (MM) 5,000 4,000 3,000 VCI 1.0 VCI 1.3 2,000 1,000 0 2015 2016 2015 2016 2015 2016 40 50 60 Brent Marker…
  13. Q2 2016 Earnings Review – California Resources Corp. – slide 13
    2015 PV-10 with Mid-Year Strip Pricing 7,000 6,000 5,758 5,059 5,000 4,025 US in millions 4,000 3,000 2,000 1,000 0 2015 Year-End SEC 1P PV-10 2015 1P PV-10 at 6/27/16 Pricing 1 2015 PDP PV-10 at 6/27/16 Pricing…
  14. Q2 2016 Earnings Review – California Resources Corp. – slide 14
    Summary of 5th Proposed Amendment to the Credit Agreement Description New Second Out Permit 1bn of first lien, 2nd / 3rd out debt, subject to acceptable intercreditor agreement Indebtedness To be documented under separate Credit…
  15. Q2 2016 Earnings Review – California Resources Corp. – slide 15
    Capex Reduction 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3E Q4E RIGS 3.3 3 3 2.3 0 0 1 1.5 Quarterly Total 133 95 95 78 21 5 10-20* CAPEX, mm 2016 Capital Investment Plan of 50mm to focus primarily on mechanical integrity and safe…
  16. Q2 2016 Earnings Review – California Resources Corp. – slide 16
    Opportunistically Built Oil Hedge Portfolio* Q3 Q4 Q1 Q2 Q3 Q4 1Q 2Q 3Q 4Q 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 Calls Barrels per Day 19,000 25,000 12,100 5,000 10,000 15,000 24,500 21,400 20,000 20,000 Wtd Avg Ceiling…
  17. Q2 2016 Earnings Review – California Resources Corp. – slide 17
    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…
  18. Q2 2016 Earnings Review – California Resources Corp. – slide 18
    CRC Executing on Controllable Items 250 200 Operating Cash Flow 150 232 MM 100 50 44 0 1H15 Volume Price Costs Interest Working 1H16 Capital and -50 Other -100 19 2Q16 Earnings
  19. Q2 2016 Earnings Review – California Resources Corp. – slide 19
    Quarterly Cost Comparison 2Q15 1Q16 2Q16 1H15 1H16 Production 16.59 13.69 14.76 16.39 14.21 costs (/Boe) Taxes other than on 53 39 42 108 81 income (MM) Exploration expense 7 5 5 24 10 (MM) Interest expense 83 74 74 162 148 (MM)…
  20. Q2 2016 Earnings Review – California Resources Corp. – slide 20
    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 2Q16…
  21. Q2 2016 Earnings Review – California Resources Corp. – slide 21
    2Q16 Results Summary Comparison 2Q15 1Q16 2Q16 Adjusted EPS* (1.33) (2.60) (1.80) Oil Production 104 MBbl/d 98 MBbl/d 90 MBbl/d Total Production 161 MBoe/d 148 MBoe/d 140 MBoe/d Realized Oil Price w/ Hedge (/Bbl) 56.73 36.39 43.70…
  22. Q2 2016 Earnings Review – California Resources Corp. – slide 22
    3Q16 Guidance Anticipated Realizations Against the Prevailing Index Prices for 3Q16 Oil 85% to 90% of Brent NGLs 48% to 54% of Brent Natural Gas 94% to 98% of NYMEX Production, Capital and Income Statement Guidance Production 134…
  23. Q2 2016 Earnings Review – California Resources Corp. – slide 23
    Poised to Take Advantage of a Commodity Price Recovery World-Class Resource Base: Sacramento Basin 14 MMBoe Proved Reserves 6 MBoe/d production Large inventory of assets across basins and drive mechanisms that provide strong returns…
  24. Q2 2016 Earnings Review – California Resources Corp. – slide 24
    California Resources Corporation Appendix 25 2Q16 Earnings
  25. Q2 2016 Earnings Review – California Resources Corp. – slide 25
    Non-GAAP Reconciliation for Adjusted EBITDAX For the For the Second Quarter Six Months Ended June 30, Ended June 30, ( in millions) 2016 2015 2016 2015 Net loss (140) (68) (190) (168) Interest and debt expense 74 83 148 162…
  26. Q2 2016 Earnings Review – California Resources Corp. – slide 26
    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…
  27. Q2 2016 Earnings Review – California Resources Corp. – slide 27
    Non-GAAP Reconciliation for Adjusted EPS For the For the Second Quarter Six Months Ended June 30, Ended June 30, ( in millions) 2016 2015 2016 2015 Net Loss (140) (68) (190) (168) Non-cash, unusual and infrequent items:…

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