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Q4 2016 Results – California Resources Corp.

California Resources Corp. · Feb 16, 2017 · 33 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. Q4 2016 Results – California Resources Corp. – slide 1
    Fourth Quarter & FY 2016 Earnings Review Todd Stevens President & CEO Los Angeles, CA February 16, 2017 Mark Smith Sr. EVP & CFO
  2. Q4 2016 Results – California Resources Corp. – slide 2
    Diverse Resource Base Interests in 4 of the 12 largest fields in the lower 48 states 568 MMBoe proved reserves (12/31/2016) Largest producer in California on a gross operated basis with significant exploration and development…
  3. Q4 2016 Results – California Resources Corp. – slide 3
    Management Priorities and Response Priorities Execution in 4Q 2016 1. Address Balance Sheet Produced 135 Mboe/d with limited drilling capital and crude declined 3%, quarter over quarter, to 2. Adjust Activity Levels for Current 87…
  4. Q4 2016 Results – California Resources Corp. – slide 4
    Reserves Value1 Well In Excess of EV 24,000 22,000 20,000 18,000 16,000 14,000 (MM) 12,000 Surface & Minerals3 10,000 Infrastructure2 8,000 Unproved4 6,000 Current EV of 4,000 Proved Value 6.1 Bn5 PDP Value 2,000…
  5. Q4 2016 Results – California Resources Corp. – slide 5
    Portfolio Flexibility Provides Range of Crude Oil Scenarios 130 Estimated Crude Oil Production Outcomes 120 Oil Production MB/d 110 100 Portfolio Planning Scenarios 90 80 2016 2017E 2018E 2019E 2020E 1200 Estimated…
  6. Q4 2016 Results – California Resources Corp. – slide 6
    Double-Digit EBITDAX Growth Estimated Range of EBITDAX Outcomes 1,800 1,600 1,400 Portfolio Planning Scenarios MM 1,200 1,000 800 600 400 2016 2017E 2018E 2019E 2020E Note: See comments on previous…
  7. Q4 2016 Results – California Resources Corp. – slide 7
    Project Execution Drives Organic Deleveraging Estimated Leverage Ratios 10.0x 8.0x Total Debt/LTM EBITDAX Surface & Minerals3 6.0x 4.0x 2.0x 0.0x 2016 2017E 2018E 2019E 2020E 55 65 75 Note: All cases are…
  8. Q4 2016 Results – California Resources Corp. – slide 8
    Enhanced Life of Field Plans Yield More Actionable Inventory Actionable Economic Project Inventory 9,000 8,000 Drilling and Workover Capital (MM) 7,000 6,000 5,000 4,000 VCI 1.0 VCI 1.3 3,000 2,000 1,000 0 2015…
  9. Q4 2016 Results – California Resources Corp. – slide 9
    Track Record of Execution Reduced Debt: Reached Near Term Debt Reduction Target of 1.5 Bn Lived within Cash Flow: Generated 49 MM of Free Cash Flow Maintained the Base: Decline rate within expected 10-15% range Protected our…
  10. Q4 2016 Results – California Resources Corp. – slide 10
    Core Tenet: Living Within Cash Flow 325 925 275 725 225 FY (MM ) 525 MM 175 125 325 75 125 25 -25 1Q15 2Q15* 3Q15 4Q15* 1Q16 2Q16* 3Q16 4Q16* FY 2015 FY 2016 -75 Adj. EBITDAX** Operating Cash Flow Capital…
  11. Q4 2016 Results – California Resources Corp. – slide 11
    Resilient Resource Base Low Decline with Limited Capital Production By Stream (MBOE/d) 180 600 Average 160 Total 159 MBOE/d 160 MBOE/d Production 500 140 MBOE/d 140 120 400 Average 104 MBbl/d Oil 99 MBbl/d 100…
  12. Q4 2016 Results – California Resources Corp. – slide 12
    Defending Margins Through Operating Cost Reductions and Efficiencies 35 17% 30 2014 Avg : 27.37 Decrease Cash Costs (/BOE) 25 2015 Avg : 24.24 2016 Avg : 22.77 20 15 10 5 - FY 2014 FY 2015 FY 2016 Adj. G&A…
  13. Q4 2016 Results – California Resources Corp. – slide 13
    Strengthening the Balance Sheet Capitalization as of 12/31/16 (MM) Deleveraging is a priority; 1.5 billion decrease to date from post-spin peak 1st Lien Secured RCF1 847 1st Lien Secured Term Loan (1L) 650 1st Lien Second Out Term…
  14. Q4 2016 Results – California Resources Corp. – slide 14
    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) 6,765(1) 5,000 5,268 4,000…
  15. Q4 2016 Results – California Resources Corp. – slide 15
    Diverse Assets with Flexible Development Opportunities 2016 Net Proved Reserves (MMBOE) 568 Diversity of basins and drive mechanisms 2016 % Oil-Net Proved1 72% Predictable production and low decline rates Pre-Tax Proved PV-10 (…
  16. Q4 2016 Results – California Resources Corp. – slide 16
    2016 Proved Reserves 700 650 600 Proved Reserves (MMBOE) 550 500 644 450 568 400 350 300 Balance Production Performance- Extensions Improved Sales of Revisions Balance at Related and Recovery Proved due to at…
  17. Q4 2016 Results – California Resources Corp. – slide 17
    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…
  18. Q4 2016 Results – California Resources Corp. – slide 18
    Disciplined 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…
  19. Q4 2016 Results – California Resources Corp. – slide 19
    Self-Funded Capital Investment Program Commentary 2017E Total Capital Plan Other 2017 capital plan of 300 million will be directed 25 Total: 300 million to oil weighted projects in our core fields: Elk Hills, Exploration 8%…
  20. Q4 2016 Results – California Resources Corp. – slide 20
    Operational Control Leads to Capital Flexibility 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Rig Count 3.3 3 3 2.3 0 0 1 1.5 3.5 Quarterly Total 133 95 95 78 21 5 19 30 60-70 CAPEX, mm Initial 2017 capital investment program…
  21. Q4 2016 Results – California Resources Corp. – slide 21
    CRC Drives California Rig Count Activity 50 45 40 35 Rig Count 30 25 20 15 10 5 0 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Total CA Rig Count CRC Rig Count…
  22. Q4 2016 Results – California Resources Corp. – slide 22
    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…
  23. Q4 2016 Results – California Resources Corp. – slide 23
    Opportunistically Built Oil Hedge Portfolio1 Q1 Q2 Q3 Q4 1Q 2Q 3Q 4Q 2017 2017 2017 2017 2018 2018 2018 2018 Calls Barrels per Day 12,100 5,000 10,000 15,000 15,600 15,000 15,000 15,000 Wtd Avg Ceiling 56.37 55.05 56.15 56.12 58.77…
  24. Q4 2016 Results – California Resources Corp. – slide 24
    CRC Executing on Controllable Items 450 400 350 300 Operating Cash Flow 250 MM 200 403 150 100 130 50 0 -50 FY 2015 Volume Price Cost Interest Working FY 2016 Reductions Capital and Other 26 4Q16 Earnings
  25. Q4 2016 Results – California Resources Corp. – slide 25
    Quarterly Cost Comparison 4Q15 3Q16 4Q16 FY 15 FY 16 Production 15.51 16.63 17.50 16.30 15.61 costs (/Boe) Taxes other than on 30 37 26 180 144 income (MM) Exploration expense 7 3 10 36 23 (MM) Interest expense 82 95 85 326 328 (MM)…
  26. Q4 2016 Results – California Resources Corp. – slide 26
    4Q16 Results Summary Comparison 4Q15 3Q16 4Q16 Adjusted EPS* (2.01) (1.75) (1.76) Oil Production 102 MBbl/d 90 MBbl/d 87 MBbl/d Total Production 155 MBoe/d 138 MBoe/d 135 MBoe/d Realized Oil Price w/ Hedge (/Bbl) 45.88 43.03 45.48…
  27. Q4 2016 Results – California Resources Corp. – slide 27
    1Q17 Guidance Anticipated Realizations Against the Prevailing Index Prices for 1Q17 Oil 88% to 92% of Brent NGLs 50% to 55% of Brent Natural Gas 90% to 94% of NYMEX Production, Capital and Income Statement Guidance Production 128…
  28. Q4 2016 Results – California Resources Corp. – slide 28
    Poised to Take Advantage of a Commodity Price Recovery World-Class Resource Base: Sacramento Basin 11 MMBOE Proved Reserves Large inventory of assets across basins and 6 MBOE/d production drive mechanisms that provide strong returns…
  29. Q4 2016 Results – California Resources Corp. – slide 29
    California Resources Corporation Appendix 31 4Q16 Earnings
  30. Q4 2016 Results – California Resources Corp. – slide 30
    Non-GAAP Reconciliation for Adjusted EBITDAX Fourth Quarter Twelve Months ( in millions) 2016 2015 2016 2015 Net (loss) Income (77) (3,282) 279 (3,554) Interest and debt expense 85 82 328 326 Income tax benefit - (1,757) (78)…
  31. Q4 2016 Results – California Resources Corp. – slide 31
    Non-GAAP Reconciliation for Adjusted EPS and Adjusted Net Income Fourth Quarter Twelve Months ( in millions) 2016 2015 2016 2015 Net (loss) Income (77) (3,282) 279 (3,554) Unusual and infrequent items Non-cash derivative losses…
  32. Q4 2016 Results – California Resources Corp. – slide 32
    Non-GAAP Reconciliation for PV-10 At December 31, ( in millions) 2016 PV-10 of Proved Reserves 2,848 Present value of future income taxes discounted at 10% (181) Standardized Measure of Discounted Future Net Cash 2,667…
  33. Q4 2016 Results – California Resources Corp. – slide 33
    Organic Recycle Ratio (/BOE) Full Year 2016 Oil and gas revenues 33.17 Production Costs (15.61) Taxes other than on income (Oil and Gas Operations) (2.36) Total CRC general and administrative expenses (4.84) Margin 10.36…

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