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IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp.

California Resources Corp. · Apr 10, 2018 · 49 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. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 1
    IPAA OIL & GAS INVESTMENT SYMPOSIUM Todd Stevens President and CEO April 10, 2018
  2. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 2
    Value Proposition Multiple Ways to Increase Valuation Regaining Momentum Disciplined Portfolio Adjusted EBITDAX Through Increased Management Growth* Investment 400+ Increasing CRC 2,500 Investments and Deploying Rigs 2,000…
  3. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 3
    CRCs Large Resource Base with Advantaged Infrastructure World-Class Resource Base Sacramento Basin Operate 4 of the largest fields in the continental U.S. 14 MMBOE Proved Reserves 6 MBOE/d production (100% dry gas) Diversified,…
  4. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 4
    Largest California Producer with Deep Regional Insight Top California Producers in 2017*…
  5. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 5
    San Joaquin Basin An American Super Basin Overview Basin Map Oil and gas discovered in the late 1800s Legend San Joaquin Basin contributed 70% of CRCs total FY 2017 production, 73% CRC Land of pro forma FY 2017 production* Oil Field…
  6. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 6
    Elk Hills Area CRCs Flagship Asset Overview Field Map CRCs flagship, a 100 year-old field with exploration opportunities Light oil from conventional and unconventional production Largest gas and NGL producing field in California, one…
  7. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 7
    Elk Hills Transaction Summary Total Consideration 2017 Net Production 2017E Operating Cash Flow 2017 Proved Reserves 460MM Cash + 13 Mboepd 100MM 64 Mmboe 2.85MM Shares 46% Oil 9% NGL 65 Brent CRC estimate SEC 2017 Pricing…
  8. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 8
    Accelerating Value Further from Midstream JV 150 Expect to achieve 5MM of annualized operational savings within 6 months of closing Cost Synergies and 15MM of additional synergies within the Acquired assets will add next 18 months…
  9. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 9
    Los Angeles Basin Kitchen is the Entire Basin Overview Basin Map World-class hydrocarbon-rich sedimentary basin with large quantities of Legend stacked pay CRC Land Oil Field 10 billion barrels OOIP in CRC fields Gas Field CRC…
  10. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 10
    Ventura Basin Birthplace of the California Oil Industry Overview Field Map Prolific basin with a long history, including the first commercial oil well in California 8 billion barrels OOIP in CRC fields Operate 28 fields (over half…
  11. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 11
    Sacramento Basin Significant Gas Optionality 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,…
  12. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 12
    Value Additive Inventory Growth 3P Reserves Growth Since Spin Comprehensive technical review of 40% of CRCs fields. 2,250 2017 proved reserves of 618 million BOE and 450 2,000 million BOE of probable reserves. 350% 1,750 Growth…
  13. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 13
    Strategy at a Glance Short-Term Long-Term Value Directed Investments Enhancing Production Margin Expansion Live within Cash Flow Value Smart Growth (per share) Through managing cost and increasing oil weighting of commodity…
  14. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 14
    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…
  15. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 15
    Significant Reduction in Total Debt 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…
  16. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 16
    Recent Transactions - Improving Debt Metrics Pro Forma Capitalization (MM) 12/31/2017 Ares 12/31/2017 Elk Hills (EH) 12/31/2017 1 Actual Transaction PF Ares Transaction Pro Forma 1st Lien 2014 Revolving Credit Facility (RCF) 363…
  17. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 17
    Strengthening the Balance Sheet - Improved Creditworthiness and Liquidity Pro Forma1 Total Debt Revolver Availability 4.96B 833MM Pro-Forma1 Debt Maturities (MM) Increased Liquidity 4,000 1,000 800 3,000 Availability…
  18. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 18
    Development Joint Ventures: A Force Multiplier 550 Million Portfolio Flexibility Kettleman North Dome Total Potential JV Capital and Optionality Lost Hills Enables High Margin 154 Million Production Growth 260 MM Committed Mt…
  19. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 19
    Resilient Resource Base ) Production By Stream (Mboe/d) 180 200 Oil NGL Gas Total Capital* CRC Capital (Internally Funded) 160 175 140 150 120 125 Capital (MM) 100 MBoe/d 100 80 75 60 50 40 20 25 0 0 1Q16…
  20. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 20
    Investment Allocation through the Commodity Cycle Bull Market Invest to accelerate production growth and explore/pilot new resources Add facilities (steam and water handling) to support pace of growth Cash generation is high VCI…
  21. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 21
    2018 Capital Investment Program Living Within Cash Flow Production Enhancement Plans for 2018 CRC 2018 capital plan will be directed to oil-weighted projects in our core fields: Elk Hills, Wilmington, Kern Front, Huntington Beach, and…
  22. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 22
    Deep Inventory of Actionable Projects at 65 50 Steamflood Portfolio Spectrum 45 Waterflood Growth portfolio focus, fully 40 Primary Shale Full Cycle Cost2 (/Boe) burdened 35 Gas 30 All projects meet a Value Creation Index…
  23. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 23
    Portfolio Flexibility Provides Range of Crude Oil Scenarios Estimated Crude Oil Production Outcomes 130 Oil Production MB/d 120 Combined with mid-cycle commodity 110 Portfolio prices, we are positioned for growth in: Planning…
  24. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 24
    Project Inventory Drives Organic Deleveraging Estimated Leverage Ratios 10.0x Total Debt/LTM Adjusted EBITDAX 8.0x 6.0x 4.0x 2.0x 0.0x 2016 2017 2018E 2019E 2020E 2021E 55 65 75 Note: All cases are…
  25. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 25
    2017 Reserves Value1 In Excess EV 20 16 12 (Billion) Infrastructure2 Surface & Minerals3 8 Unproved4 Current EV of 5.7 Bn5 4 Proved Value PDP Value 0 55 Brent 65 Brent 75 Brent 1-5 See endnotes in the…
  26. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 26
    The Case for CRC: Investment Thesis Overview Investment Case for CRC Competitive Advantages World-class assets Resilient model that Focused on value Grow within Clear runway and Industry leading Integrated and with significant…
  27. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 27
    APPENDIX
  28. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 28
    Wilmington Field Production Sharing Contract LBU PSC Over 90% of CRCs Long Beach production is 50,000 Base Incremental covered under Production Sharing Contracts End of 40,000 (PSCs) with the State and the City of Long Beach LBU…
  29. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 29
    Wilmington PSC Illustration Total Production Brent Price Total Revenue Brent Price Gross Production Cost Recovery Barrels Mboepd MM Variable with price NPI Barrel Revenue Variable with Price Cost Recovery Revenue…
  30. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 30
    CRC Price Realizations Oil Price Realization (with Hedges) Gas Price Realization WTI Realizations Brent NYMEX Realizations 70 3.50 3.26 3.14 3.09 61.54 2.95 3.00 3.00 2.75 60 54.66 2.42 56.92 54.82 51.91 50.92 53.64 2.50 2.90…
  31. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 31
    Updated Capital Structure from Recent Transactions Improved Liquidity 1,000 Reduced Revolver Borrowing Debt Hierarchy 2014 Revolving Credit Facility Capacity - 750 1 billion (MM) Added in 500 2017 Term Loan - 1.3 billion…
  32. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 32
    Margin Expansion Driven by Liquid-Rich Resource Base 75% As we develop our reserves we anticipate the oil weight of production to trend from 64% produced in 2017 toward the 72% reflected in our 2017 Proved Reserves The 2017 average…
  33. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 33
    Opportunistically Built Oil Hedge Portfolio Strategy Protect cash flow for capital investments and covenant compliance 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 Sold Calls Barrels per Day 6,200 6,100 16,100 16,100 6,000 Weighted…
  34. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 34
    Buena Vista Area Highly Prospective Area Overview Includes Buena Vista (BV) Hills and BV Nose JV capital applied to infill development program that led to improved operational efficiencies Organic capital deployed to expand the…
  35. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 35
    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%…
  36. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 36
    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…
  37. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 37
    Core Principle of Living within Cash Flow 1,000 2017 Unlevered Free Cash Flow 500 - Unlevered Free Cash Flow (MM) (500) Average: (341.5)MM (1,000) (1,500) (2,000) (2,500) CRC (3,000) Peers…
  38. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 38
    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…
  39. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 39
    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…
  40. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 40
    Strategic Partner Alignment Summary of Deal Partner Affiliate of Ares Management (Ares) Contributed Elk Hills power plant, gas processing assets and related non-borrowing base Assets infrastructure currently owned by CRC Class A…
  41. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 41
    CRC Midstream JV Structure with Ares Benefits Strategic alignment with Ares Provides CRC paths for opportunistic deleveraging through cash flow growth or debt reduction California Resources Elk Greatly enhances liquidity Hills,…
  42. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 42
    Dynamic Portfolio Provides Flexibility Higher Oil to Gas Price Ratio Lower Oil to Gas Price Ratio 100% Gas 75% Unconventional Portfolio Mix Primary 50% Waterflood 25% Steamflood Workover 0% 800 800 800 600 600 600…
  43. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 43
    Greenfield Steamflood Type Pattern 100 Kern Front Actuals 75 N. Antelope Lost Hills Hills Kern Front McDonald Composite Anticline NYMEX Type Curve Midway 50 McKittrick VCI 3.5 3 2.5 Sunset 50 1.0 1.1 1.2 25 55 1.3 1.4…
  44. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 44
    Waterflood New Pattern Composite Type Well 60 Kettleman Mount Poso Actuals Mount Poso 45 Buena Vista Actuals Elk Hills Paloma Buena Vista EUR 30 VCI 165 190 215 50 1.3 1.5 1.7 Composite Rincon South Mountain Type Curve…
  45. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 45
    Waterflood Redevelopment Type Well 160 Huntington Beach Actuals 120 Elk Hills EUR 80 Composite Type well VCI 140 165 190 East Wilmington Actuals San Miguelito 50 1.1 1.3 1.5 West Wilmington Actuals 40 Huntington 55 1.4…
  46. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 46
    Primary Type Well Deeper Horizons 900 Kettleman 750 BV Nose Actuals Elk Hills Paloma 600 Bardsdale BV Nose Rio Viejo Actuals Yowlumne Wheeler Ridge EUR 450 Pleito Ranch VCI 400 430 460 Pleito Ranch Bardsdale 50 1.5 1.6…
  47. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 47
    California Shale Type Well 500 Kettleman Rose 400 N. Shafter Elk Hills (2001-2003) Elk Hills Railroad Gap Asphalto 300 New Pool Type Curve Buena Vista Gunslinger VCI Infill New Pool Gunslinger Actuals 200 Rose/N.…
  48. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 48
    A Net Water Supplier 4% 2% WATER MANAGED IN CRC set a new company record for CRCs OPERATIONS water deliveries to agriculture in 2017, an 85% increase since 2015, Produced Water preserving farmland and jobs. Fresh Water Non-Fresh…
  49. IPAA OIL and GAS INVESTMENT SYMPOSIUM – California Resources Corp. – slide 49
    End Notes From Slide 26 1 Current CRC estimate of reserves value as of December 31, 2017. Includes field-level operating expenses and G&A. Assumes 3.00/MMBTU NYMEX. 2 Reflects the value of facilities and midstream assets at 50% of…

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