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Q3 2017 Presentation – California Resources Corp.

California Resources Corp. · Nov 6, 2017 · 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. Q3 2017 Presentation – California Resources Corp. – slide 1
    Third Quarter 2017 Earnings Review Todd Stevens President & CEO Los Angeles, CA November 6, 2017 Mark Smith Sr. EVP & CFO
  2. Q3 2017 Presentation – California Resources Corp. – slide 2
    3Q 2017 Highlights 9 Rigs ACTIVITY Reached Sustainable Level of Activity 1% PRODUCTION Q-o-Q Decline 128 MBoe/d 100 Million 30 Million Funded by Capital JV Capital EBITDAX* 181 Million *See www.crc.com, Investor…
  3. Q3 2017 Presentation – 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. Q3 2017 Presentation – California Resources Corp. – slide 4
    Deep Inventory of Actionable Projects 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 Cycle Cost (/Boe)…
  5. Q3 2017 Presentation – California Resources Corp. – slide 5
    Portfolio Flexibility Provides Range of Crude Oil Scenarios Estimated Crude Oil Production Outcomes 120 Oil Production MB/d Combined with improving and stabilizing 110 commodity prices, we are positioned for 100 Portfolio…
  6. Q3 2017 Presentation – California Resources Corp. – slide 6
    Resilient Resource Base Production By ) Stream (Mboe/d) 180 200 160 175 140 150 120 125 MBoe/d Capital (MM) 100 100 80 75 60 50 40 20 25 0 0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17…
  7. Q3 2017 Presentation – California Resources Corp. – slide 7
    Accelerating Production Decline in U.S. Onshore Lower 48 Development Wells 7,000,000 40% Normalized Decline Rates 30% 6,000,000 20% 5,000,000 10% Production (BOPD) 4,000,000 0% -10% 3,000,000 -20% 2,000,000 -30%…
  8. Q3 2017 Presentation – California Resources Corp. – slide 8
    Best In Class Corporate Decline Rates 1 Year Decline 3 Year Decline 50% 80% 70% 40% 60% 50% 30% Median: 49% Median: 29% 40% 20% 30% CRC 20% 10% CRC 10% 0% 0% FY 2016 Production Percentage Liquids Less than…
  9. Q3 2017 Presentation – California Resources Corp. – slide 9
    Proven Capital Efficiency Improvements BV Hills Drilling Efficiencies 400 29R Unconventional - Drilling Cost Trend 12,000' 0' Offset Data - 2011 1,000' 350 2017 Average 2,000' 300 10,000' Average Well Depth (feet) 3,000'…
  10. Q3 2017 Presentation – California Resources Corp. – slide 10
    Living within Cash Flow 200 175 150 125 100 MM 75 50 25 0 -25 3Q16 4Q16 1Q17 2Q17 3Q17 Adj. EBITDAX* Operating Cash Flow Capital Investment** * See www.crc.com, Investor Relations for a reconciliation to the…
  11. Q3 2017 Presentation – California Resources Corp. – slide 11
    Core Principle of Living within Cash Flow 1,500 2016 Unlevered Free Cash Flow 1,000 500 Unlevered Free Cash Flow (MM) - Average: (293.5)MM (500) (1,000) (1,500) (2,000) (2,500) CRC Peers included:…
  12. Q3 2017 Presentation – California Resources Corp. – slide 12
    CRC Price Realizations Oil Price Realization (with Hedges) Gas Price Realization WTI Realizations Brent NYMEX Realizations 60 3.50 3.26 54.66 3.14 2.75 2.95 53.64 50.92 52.18 3.00 2.42 2.90 50 49.19 48.29 50.02 2.50 2.56 51.91…
  13. Q3 2017 Presentation – California Resources Corp. – slide 13
    CRC Ramps Activity to Align with Commodity Price Working Capital and 3Q16 Volume Price Costs Interest Other 3Q17 350 300 Operating Cash Flow 250 MM 200 150 225 100 145 50 0 3Q 2017 Earnings 14
  14. Q3 2017 Presentation – California Resources Corp. – slide 14
    Strengthening the Balance Sheet Capitalization as of 9/30/17 (MM) Deleveraging remains a priority; 1.6 billion decrease to date 1st Lien Secured RCF 1 (1LFO) 837 from post-spin peak 1st Lien Secured Term Loan (1LFO) 559 1st Lien…
  15. Q3 2017 Presentation – California Resources Corp. – slide 15
    Reserves Value1 In Excess of EV 20 16 12 (Billion) Infrastructure3 8 Surface & Minerals2 Unproved4 Current EV of 5.6 Bn5 4 Proved Value PDP Value 0 50 Brent 55 Brent 60 Brent 1-5 See endnotes in the…
  16. Q3 2017 Presentation – California Resources Corp. – slide 16
    Opportunistically Built Oil Hedge Portfolio Strategy Protect cash flow for capital investments and covenant compliance Sold Calls 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 Barrels per Day 6,300 10,400 10,400 16,100 16,100 Weighted…
  17. Q3 2017 Presentation – California Resources Corp. – slide 17
    Quarterly Cost Comparison 3Q16 2Q17 3Q17 Production costs (/Boe) 16.63 18.34 18.90 Taxes other than on 37 31 39 income (MM) Exploration expense 3 6 5 (MM) Interest expense 95 83 85 (MM) 3Q 2017 Earnings 18
  18. Q3 2017 Presentation – California Resources Corp. – slide 18
    3Q17 Results Summary Comparison 3Q16 2Q17 3Q17 Earnings (Loss) per Share - Diluted 13.04 (1.13) (3.11) Adjusted Earnings per Share Diluted* (1.74) (1.83) (1.22) Oil Production 90 MBbl/d 83 MBbl/d 82 MBbl/d Total Production 138…
  19. Q3 2017 Presentation – California Resources Corp. – slide 19
    4Q17 Guidance Anticipated Realizations Against the Prevailing Index Prices for 4Q17 Oil 90% to 94% of Brent NGLs 69% to 73% of Brent Natural Gas 96% to 100% of NYMEX Production, Capital and Income Statement Guidance Production 125…
  20. Q3 2017 Presentation – California Resources Corp. – slide 20
    History of Proactive Strategic Decisions Swift, decisive actions through the commodity downturn have positioned CRC for growth. Proactive discussions with lenders and solid asset base provide a path to recovery and an actionable…
  21. Q3 2017 Presentation – California Resources Corp. – slide 21
    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…
  22. Q3 2017 Presentation – California Resources Corp. – slide 22
    Appendix
  23. Q3 2017 Presentation – California Resources Corp. – slide 23
    Accelerating Value and Derisking Inventory through JVs Highlights: Highlights: Up to 250MM over 2 years Up to 300MM Two tranches of 50MM Initial commitment of 160MM Total of 100MM funded DrillCo type structure where Investor funds…
  24. Q3 2017 Presentation – 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 o Partner pays 80-100% Capital 6,000.00 o Receives 80-100% Working Interest 5,000.00 o…
  25. Q3 2017 Presentation – 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…
  26. Q3 2017 Presentation – California Resources Corp. – slide 26
    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.…
  27. Q3 2017 Presentation – California Resources Corp. – slide 27
    End Notes 1Current CRC estimate of reserves value as of December 31, 2016. Includes field-level operating expenses and G&A. Assumes 3.30/Mcf NYMEX. 2 Surface & Minerals reflect the estimated value of undeveloped surface and fee…

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