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2Q 2017 Earnings Update – California Resources Corp.

California Resources Corp. · Aug 3, 2017 · 25 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. 2Q 2017 Earnings Update – California Resources Corp. – slide 1
    Second Quarter 2017 Earnings Review Todd Stevens President & CEO Los Angeles, CA August 3, 2017 Mark Smith Sr. EVP & CFO
  2. 2Q 2017 Earnings Update – California Resources Corp. – slide 2
    1H 2017 Highlights 7 Rigs ACTIVITY Exit Rate Shows Increased Activity 4% PRODUCTION 2H16 to 1H17 Decline 131,000 Boe/d 51 Million JVs JV Capital Invested 57 Million Free Cash Flow* *See…
  3. 2Q 2017 Earnings Update – California Resources Corp. – slide 3
    Capital Investment Program Living within Cash Flow Moving from Defense to Offense CRC 2017 capital plan will be directed to oil-weighted projects in our core fields: Elk Hills, The JV capital increases Wilmington, Kern Front, Buena…
  4. 2Q 2017 Earnings Update – California Resources Corp. – slide 4
    Deep Inventory of Actionable Projects at 45 Brent Portfolio Spectrum 40 Growth portfolio focus, fully burdened All projects meet VCI 1.3 30 threshold at 45 Brent Steamflood and 2.50 NYMEX, and Waterflood Full Cycle Cost…
  5. 2Q 2017 Earnings Update – California Resources Corp. – slide 5
    Portfolio Flexibility Provides Range of Crude Oil Scenarios Estimated Crude Oil Production Outcomes 120 Oil Production MB/d At about current commodity prices, we are 110 positioned for growth in: 100 Portfolio Planning Cash…
  6. 2Q 2017 Earnings Update – California Resources Corp. – slide 6
    Resilient Resource Base Inflection Point Production By ) Stream (Mboe/d) 180 200 160 175 140 150 120 125 Capital (MM) 100 100 MBoe/d 80 75 60 50 40 20 25 0 0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17…
  7. 2Q 2017 Earnings Update – California Resources Corp. – slide 7
    Responsible Growth: Living within Cash Flow 500 400 300 MM 200 100 0 1H15 2H15 1H16 2H16 1H17 Adj. EBITDAX* Operating Cash Flow Organic Capital Investment** * See www.crc.com, Investor Relations for a…
  8. 2Q 2017 Earnings Update – California Resources Corp. – slide 8
    CRC Price Realizations Oil Price Realization (with Hedges) Gas Price Realization WTI Realizations Brent NYMEX Realizations 60 3.26 3.50 54.66 3.14 53.64 50.92 3.00 2.66 2.42 2.90 50 49.19 2.50 2.75 51.91 48.29 2.47 45.04 50.24…
  9. 2Q 2017 Earnings Update – California Resources Corp. – slide 9
    Defending Cash Margins 20.00 16.00 12.00 /Boe 8.00 4.00 - 1H 15 2H 15 1H 16 2H 16 1H 17 Operating Cash Margin = Oil and Gas Revenue including settled hedges Production Costs (Lease Operating Expenses) Taxes…
  10. 2Q 2017 Earnings Update – California Resources Corp. – slide 10
    CRC Pivots to Increased Activity & Higher Cash Flows Working Capital and 1H16 Volume Price Costs Interest Other 1H17 200 150 Operating Cash Flow MM 100 120 50 44 0 -50 -100 2Q 2017 Earnings 11
  11. 2Q 2017 Earnings Update – California Resources Corp. – slide 11
    Strengthening the Balance Sheet Capitalization as of 6/30/17 (MM) Deleveraging remains a priority; 1.6 billion decrease to date 1st Lien Secured RCF 1 (1LFO) 842 from post-spin peak 1st Lien Secured Term Loan (1LFO) 584 1st Lien…
  12. 2Q 2017 Earnings Update – California Resources Corp. – slide 12
    Reserves Value1 In Excess of EV 20 16 12 (Billion) Infrastructure3 8 Surface & Minerals2 Unproved4 Current EV 4 Proved Value of 5.5 Bn5 PDP Value 0 50 Brent 55 Brent 60 Brent 1-5 See endnotes in the…
  13. 2Q 2017 Earnings Update – California Resources Corp. – slide 13
    1 Opportunistically Built Oil Hedge Portfolio Calls 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 Barrels per Day 6,100 6,300 16,800 16,200 16,100 16,100 Weighted Average Ceiling 57.73 57.80 58.86 58.92 58.91 58.91 Price per…
  14. 2Q 2017 Earnings Update – California Resources Corp. – slide 14
    Quarterly & Six Month Cost Comparison 2Q16 1Q17 2Q17 1H16 1H17 Production 14.76 17.70 18.34 14.21 18.02 costs (/Boe) Taxes other than on 42 33 31 81 64 income (MM) Exploration expense 5 6 6 10 12 (MM) Interest expense 74…
  15. 2Q 2017 Earnings Update – California Resources Corp. – slide 15
    2Q17 Results Summary Comparison 2Q16 1Q17 2Q17 Earnings (Loss) per Share Diluted (3.51) 1.22 (1.13) Adjusted Earnings (Loss) per Share* (1.80) (1.02) (1.83) Oil Production 90 MBbl/d 86 MBbl/d 83 MBbl/d Total Production 140 MBoe/d 132…
  16. 2Q 2017 Earnings Update – California Resources Corp. – slide 16
    3Q17 Guidance Anticipated Realizations Against the Prevailing Index Prices for 3Q17 Oil 90% to 94% of Brent NGLs 58% to 62% of Brent Natural Gas 84% to 88% of NYMEX Production, Capital and Income Statement Guidance Production 127…
  17. 2Q 2017 Earnings Update – California Resources Corp. – slide 17
    History of Proactive Strategic Decisions Swift, decisive actions have positioned the company for growth through the commodity downturn. Proactive discussions with lenders and solid asset base provide line of sight to a recovery and an…
  18. 2Q 2017 Earnings Update – California Resources Corp. – slide 18
    The Case for CRC: Investment Thesis Overview Investment Case for CRC Competitive Advantages World-class assets with Resilient model that Focused on value Operational Grow within Industry leading Integrated and significant inventory…
  19. 2Q 2017 Earnings Update – California Resources Corp. – slide 19
    Appendix
  20. 2Q 2017 Earnings Update – California Resources Corp. – slide 20
    Significant Debt Reduction from Post-Spin Peak Chose options to maximize deleveraging and minimize recurring cost to the income statement on a per share basis Continue to seek opportunistic transactions that reduce overall debt 7,000…
  21. 2Q 2017 Earnings Update – California Resources Corp. – slide 21
    Inventory of Actionable Projects Expands by 200MMBoe at 55 Brent 40 Portfolio Spectrum Growth portfolio focus, fully burdened All projects meet VCI 1.3 30 threshold at 55 Brent Steamflood and 3.50 NYMEX, and Waterflood Full…
  22. 2Q 2017 Earnings Update – California Resources Corp. – slide 22
    JVs Validate Inventory and Enhance Value 550 Million Portfolio Flexibility SIGNED TWO Total Potential JV Capital and Optionality JVs Kettleman North Dome Enables High 250 Million Margin Production Lost Hills INVESTMENTS…
  23. 2Q 2017 Earnings Update – California Resources Corp. – slide 23
    Accelerating Value and Derisking Inventory through JVs Highlights: Highlights: Up to 250MM over 2 years Up to 300MM Initial tranche of 50MM Initial commitment of 160MM funded DrillCo type structure where Investor funds Investor…
  24. 2Q 2017 Earnings Update – California Resources Corp. – slide 24
    Typical Industry JV Structure Hurdle Rate Based on recent industry JV 7,000.00 Production deals, a typical deal structure is Reached Partner pays 80-100% Capital 6,000.00 Receives 80-100% Working Interest 5,000.00 Typical…
  25. 2Q 2017 Earnings Update – California Resources Corp. – slide 25
    Life of Field Plans Growing Inventory 3P Resource Growth Comprehensive technical review of 40% of CRCs fields 2,000 1,750 Updated Geologic models, OOIP 1,500 Teams shared analog experience across 1,250 826 CRC 250%New…

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