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Cowen and Company Energy Conference – California Resources Corp.

California Resources Corp. · Dec 6, 2016 · 47 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. Cowen and Company Energy Conference – California Resources Corp. – slide 1
    COWEN AND COMPANY Energy & Natural Resources Conference Mark Smith Sr. EVP & CFO December 6, 2016
  2. Cowen and Company Energy Conference – California Resources Corp. – slide 2
    CRC Opportunity Defined Priorities and Accomplishments Value Creation Focus Doubles Inventory Capital Allocation Inflection Point 4 Cowen 2016
  3. Cowen and Company Energy Conference – California Resources Corp. – slide 3
    Reserve Value1 Well in Excess of EV 18,000 16,000 14,000 12,000 Infrastructure2 10,000 (MM) Surface & Minerals3 8,000 Unproved4 Current EV of 5.7 Bn5 6,000 Proved Value 4,000 PDP Value 2,000 0 Strip Price 8/23…
  4. Cowen and Company Energy Conference – California Resources Corp. – slide 4
    Project Inventory Drives Organic Deleveraging Leverage Ratios 12.0x 10.0x Total Debt/LTM EBITDAX 8.0x Surface & Minerals3 6.0x 4.0x 2.0x 0.0x 2016E 2017E 2018E 2019E 2020E Strip 10/10 65 75 Note: All cases are…
  5. Cowen and Company Energy Conference – California Resources Corp. – slide 5
    CRCs Large Resource Base with Advantaged Infrastructure World-Class Resource Base Operate in 4 of 12 largest fields in the Sacramento Basin 14 MMBoe Proved Reserves continental U.S. 6 MBoe/d production 644 MMBoe proved reserves 142…
  6. Cowen and Company Energy Conference – California Resources Corp. – slide 6
    Largest California Producer with Deep Regional Insight Top California Producers in 2015 Largest 3-D Seismic Position in California 200 196 180 161 Gross Operated Mboe/d 160 134 140 120 100 80 60 40 Surface & Minerals3 35…
  7. Cowen and Company Energy Conference – California Resources Corp. – slide 7
    California Stacked Reservoirs: Multiple opportunity sets with large accumulations TULARE OOIP: 2 BBO Heavy Oil Trend 20 SHALLOW SANDS Estimated Recovery Factor: 25…
  8. Cowen and Company Energy Conference – California Resources Corp. – slide 8
    CRC Opportunity Defined Priorities and Accomplishments Value Creation Focus Doubles Inventory Capital Allocation Inflection Point 10 Cowen 2016
  9. Cowen and Company Energy Conference – California Resources Corp. – slide 9
    Benefits of the Spin: Focus Led to Improvements Entrepreneurial culture Disciplined capital allocation through portfolio management Three principal drivers: One CRC o Maximize long-term value VCI 1.3 o Value focused growth o…
  10. Cowen and Company Energy Conference – California Resources Corp. – slide 10
    Strengthen the Balance Sheet Significant Debt Reduction From Post-Spin Peak Chose options to maximize deleveraging and minimize recurring cost to the income statement and on a per share basis 7,000 6,000 Total Debt ( MM)…
  11. Cowen and Company Energy Conference – California Resources Corp. – slide 11
    Protect the Base Low Decline Asset Base Requires Low Levels of D&C* Capital Production By Stream (MBoe/d) Rich asset portfolio and thoughtful capital Down allocation deliver high margin production and 160 MBoe/d 12-14% With…
  12. Cowen and Company Energy Conference – California Resources Corp. – slide 12
    Defend Margins Continued Operating Cost Reductions and Efficiencies Down 3.22/Boe 20.00 Or 18% decrease 2014 Avg: 18.23 Since Spin 18.00 2015 Avg: 16.30 16.00 3Q YTD 2016 Avg: 15.01 Production Costs (/Boe) 14.00 12.00…
  13. Cowen and Company Energy Conference – California Resources Corp. – slide 13
    Reduced Well Costs 2016 program has 23% lower well costs compared to prior similar wells 2016 Drilling Efficiency drivers: Savings 100% Rig costs Rig optimization and day work rate reduction 4% 6% Cementing Slurry redesign, volume…
  14. Cowen and Company Energy Conference – California Resources Corp. – slide 14
    CRC Opportunity Defined Priorities and Accomplishments Value Creation Focus Doubles Inventory Capital Allocation Inflection Point 16 Cowen 2016
  15. Cowen and Company Energy Conference – California Resources Corp. – slide 15
    Focus on Life of Field Plans Doubled project inventory at 55 Brent Actionable Economic Project Inventory 9,000 8,000 7,000 Drilling and Workover Capital (MM) 6,000 5,000 4,000 VCI 1.0 VCI 1.3 3,000 2,000…
  16. Cowen and Company Energy Conference – California Resources Corp. – slide 16
    Value Chain Progress: Building Inventory Across 135 Fields Legacy Field Review - Paloma Technical reevaluation doubled OOIP estimate Analog field performance Applying new technology and thinking Kern Front to generate new…
  17. Cowen and Company Energy Conference – California Resources Corp. – slide 17
    Updated Inventory by Project Type 8,000 Actionable projects 1.3 VCI 7,000 6,000 Drilling Capital (MM) 5,000 Workovers Waterflood 4,000 Unconventional 3,000 Steamflood Primary 2,000 1,000 0 55 Brent / 65 Brent / 75…
  18. Cowen and Company Energy Conference – California Resources Corp. – slide 18
    Robust Returns Across Multiple Drive Mechanisms Primary- Primary- Steamflood Conventional Waterflood Unconventional Primary-Gas 35 - 50+% 30 - 90+% 30 - 100+% 15 - 40+% 12 - 30+% Per Pattern Per Well Per Pattern Per Well Per Well…
  19. Cowen and Company Energy Conference – California Resources Corp. – slide 19
    Steamfloods 20 TULARE Characteristics SHALLOW SANDS Steam injection contributes to over 1.2mm bopd worldwide 50 ETCHEGOIN SANDS AVG. DEPTH (True Vertical) 2,000 Thermal techniques account for over 40% of AVG. GROSS…
  20. Cowen and Company Energy Conference – California Resources Corp. – slide 20
    Waterfloods TULARE Water-flooding techniques are the most 20 Characteristics SHALLOW SANDS commonly used EOR production methods ETCHEGOIN 50 AVG. DEPTH (True Vertical) 5,000 SANDS 20 40% of the oil-in-place can be AVG. GROSS…
  21. Cowen and Company Energy Conference – California Resources Corp. – slide 21
    Elk Hills Adjacent Field: Buena Vista Field Development Effective Production Management TVD Current net production of 10,000 Boe/d (no rigs since 2014) 2500 Surveillance with modern tools Daily exception reports/weekly pattern…
  22. Cowen and Company Energy Conference – California Resources Corp. – slide 22
    Elk Hills Analog: Kettleman North Dome Rio Lobo OOIP of 4 billion barrels, 14,000 Acres (2 mi. seismic survey wide, 15 mi. long) 1000s of feet of stacked pay KNDU Light oil API 36o Field Boundary WI=100% and NRI=80% in KNDU Lost…
  23. Cowen and Company Energy Conference – California Resources Corp. – slide 23
    CRC Opportunity Defined Priorities and Accomplishments Value Creation Focus Doubles Inventory Capital Allocation Inflection Point 25 Cowen 2016
  24. Cowen and Company Energy Conference – California Resources Corp. – slide 24
    Capital Allocation Strategies with Improving Strip Investment balanced against deleveraging Base Case Pricing* opportunities with goal of high single-digit production growth Existing Core Areas Focus on 2-3 Growth Areas Elk Hills…
  25. Cowen and Company Energy Conference – California Resources Corp. – slide 25
    Portfolio Flexibility Provides Range of Crude Oil Scenarios 130 Crude Oil Production Outcomes 120 Oil Production MB/d 110 100 Portfolio Planning Scenarios 90 80 2016E 2017E 2018E 2019E 2020E 1200 Estimated Capital…
  26. Cowen and Company Energy Conference – California Resources Corp. – slide 26
    Double-Digit EBITDAX Growth Range of EBITDAX Outcomes 1800 1600 1400 Portfolio Planning Scenarios 1200 MM 1000 800 600 400 2016E 2017E 2018E 2019E 2020E Note: See comments on previous slide. 28 Cowen…
  27. Cowen and Company Energy Conference – California Resources Corp. – slide 27
    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…
  28. Cowen and Company Energy Conference – California Resources Corp. – slide 28
    California Resources Corporation Appendix 30 Cowen 2016
  29. Cowen and Company Energy Conference – California Resources Corp. – slide 29
    Strengthening the Balance Sheet Capitalization as of 9/30/16 (MM) Deleveraging is a priority; 1.5 billion 1st Lien Secured RCF1 772 decrease to date from post-spin peak 1st Lien Secured Term Loan (1L) 671 1st Lien Second Out Term…
  30. Cowen and Company Energy Conference – California Resources Corp. – slide 30
    Living within Cash Flow Plus Additional Liquidity 1,600 1,400 1,200 1 Revolver Availability 1 1,000 Revolver Availability 11 (MM) 800 600 Credit Amendment CapEx 23 HSE & Capital Investment HSE Capital Investment 400…
  31. Cowen and Company Energy Conference – California Resources Corp. – slide 31
    Opportunistically Built Oil Hedge Portfolio1 Q4 Q1 Q2 Q3 Q4 1Q 2Q 3Q 4Q 2016 2017 2017 2017 2017 2018 2018 2018 2018 Calls Barrels per Day 25,000 12,100 5,000 10,000 15,000 15,600 15,000 15,000 15,000 Wtd Avg Ceiling 53.62 56.37…
  32. Cowen and Company Energy Conference – California Resources Corp. – slide 32
    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 5.1 Predictable production, low decline…
  33. Cowen and Company Energy Conference – California Resources Corp. – slide 33
    Key CRC Fields by Drive Mechanism Oakridge Wilmington Montalvo Huntington Beach Rio Viejo San Miguelito Asphalto Pleito Ranch Mt. Poso Railroad Gap Wheeler Ridge Rincon BV Nose Saticoy S. Mountain Shale 29R Oxnard Bardsdale…
  34. Cowen and Company 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. Cowen and Company 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. Cowen and Company Energy Conference – California Resources Corp. – slide 36
    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…
  37. Cowen and Company Energy Conference – California Resources Corp. – slide 37
    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) 3Q…
  38. Cowen and Company Energy Conference – California Resources Corp. – slide 38
    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…
  39. Cowen and Company Energy Conference – California Resources Corp. – slide 39
    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…
  40. Cowen and Company Energy Conference – California Resources Corp. – slide 40
    Shale Geological Overview 3,000 0 GR 150 Successful in upper Monterey using precise development approach Expanding efforts into lower Monterey and other shales Total Organic N Depth Thickness Porosity Permeability Carbon Play (ft)…
  41. Cowen and Company Energy Conference – California Resources Corp. – slide 41
    Large in Place Volumes with Significant Upside for CRC Recovery Factors for Discovered Fields In place volumes of 40 billion Boe at Billion Boe low recovery factor (22%) to date 45 Conventional value chain approach 40 to life of field…
  42. Cowen and Company Energy Conference – California Resources Corp. – slide 42
    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…
  43. Cowen and Company Energy Conference – California Resources Corp. – slide 43
    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…
  44. Cowen and Company Energy Conference – California Resources Corp. – slide 44
    End Notes: 1Reflects CRC estimate of reserves value as of August 23, 2016 applying a 15% tax rate. Includes 125 MM of annual, non-field level G&A. 2 Reflectsthe value of facilities and midstream assets at 50% of estimated replacement…
  45. Cowen and Company Energy Conference – California Resources Corp. – slide 45
    Non-GAAP Reconciliation for Adjusted EBITDAX Third Quarter Nine Months ( in millions) 2016 2015 2016 2015 Net Income (loss) 546 (104) 356 (272) Interest and debt expense 95 82 243 244 Income tax benefit - (50) (78) (165)…
  46. Cowen and Company Energy Conference – California Resources Corp. – slide 46
    Non-GAAP Reconciliation for Adjusted Net Loss and Adjusted EPS Third Quarter Nine Months ( in millions) 2016 2015 2016 2015 Net Income (loss) 546 (104) 356 (272) Non-cash, unusual and infrequent items Non-cash derivative losses…
  47. Cowen and Company Energy Conference – California Resources Corp. – slide 47
    Non-GAAP Reconciliation for PV-10 At December ( in millions) 31, 2015 PV-10 of Proved Reserves 5,059 Present value of future income taxes discounted at (1,035) 10% Standardized Measure of Discounted Future Net 4,024 Cash…

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