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Global Energy Conference – California Resources Corp.

California Resources Corp. · Jan 9, 2018 · 42 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. Global Energy Conference – California Resources Corp. – slide 1
    GOLDMAN SACHS Global Energy Conference Mark Smith Executive Vice President & CFO Miami, FL January 9, 2018
  2. Global Energy Conference – California Resources Corp. – slide 2
    Value Proposition Multiple Ways to Increase Valuation Positioned to move Disciplined Portfolio EBITDAX Growth* from Defense to Management Offense Increasing 1,500 Investments and Deploying Rigs 1,000 Joint Ventures MM…
  3. Global Energy Conference – California Resources Corp. – slide 3
    CRCs Large Resource Base with Advantaged Infrastructure World-Class Resource Base Operate in 4 of 12 largest fields in the continental U.S. Sacramento Basin 11 MMBOE Proved Reserves 568 MMBOE proved reserves 6 MBOE/d production (100%…
  4. Global Energy Conference – California Resources Corp. – slide 4
    Largest California Producer with Deep Regional Insight Top California Producers in 2016*…
  5. Global Energy Conference – California Resources Corp. – slide 5
    Post-Spin Transformation Culture Silo / Separate One CRC CRC Regulatory Engagement Reactive Proactive Focus Employee Engagement Low High Debt 7BN 4BN Financial Capital Efficiency Low High Priorities Annual Production Costs…
  6. Global Energy Conference – California Resources Corp. – slide 6
    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…
  7. Global Energy Conference – California Resources Corp. – slide 7
    Deep Inventory of Actionable Projects at 65 Portfolio Spectrum 50 Growth portfolio focus, fully 45 burdened All projects meet VCI 1.3 40 threshold at 65 Brent and Steamflood Full Cycle Cost (/BOE) 3.50 NYMEX, and deliver 35…
  8. Global Energy Conference – California Resources Corp. – slide 8
    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…
  9. Global Energy Conference – California Resources Corp. – slide 9
    Capital Investment Program Living Within Cash Flow Moving from Defense to Offense CRC 2017 capital plan directed to oil-weighted projects in our core fields: Elk Hills, The JV capital increases Wilmington, Kern Front, Buena Vista, Mt.…
  10. Global Energy Conference – California Resources Corp. – slide 10
    Joint Ventures: A Force Multiplier 550 Million Portfolio Flexibility Kettleman North Dome Total Potential JV Capital and Optionality Lost Hills Enables High 120 Million Margin Production 260 MM Committed Mt Poso Growth Kern…
  11. Global Energy Conference – California Resources Corp. – slide 11
    San Joaquin Basin An American Super Basin Overview Basin Map Oil and gas discovered in the late 1800s 70% of CRC production is from San Joaquin Basin Cretaceous to Pleistocene sedimentary section (25,000 feet) Source rocks are…
  12. Global Energy Conference – California Resources Corp. – slide 12
    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…
  13. Global Energy Conference – California Resources Corp. – slide 13
    Buena Vista Nose Conventional: Development of Exploration Success FIELDMAP Overview BV Nose Primary Potential Development Discovery Date: 2012 Formation: Stevens Sandstone, Turbidities/Deep Marine 10,000 average True Vertical Depth…
  14. Global Energy Conference – California Resources Corp. – slide 14
    Los Angeles Basin Kitchen is the Entire Basin Overview Basin Map World-class hydrocarbon-rich sedimentary basin with large quantities of stacked pay 10 billion barrels OOIP in CRC fields Kitchen is the entire basin, hydrocarbons did…
  15. Global Energy Conference – California Resources Corp. – slide 15
    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 26 fields (over half…
  16. Global Energy Conference – California Resources Corp. – slide 16
    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,…
  17. Global Energy Conference – California Resources Corp. – slide 17
    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.…
  18. Global Energy Conference – California Resources Corp. – slide 18
    Strengthening the Balance Sheet - Improved Creditworthiness and Liquidity Pro Forma1 - Capitalization as of 9/30/17 (MM) Pro forma for the amendment to the 2014 Credit Facility and 2017 Term Loan which closed on November 17, 2017 1st…
  19. Global Energy Conference – California Resources Corp. – slide 19
    Updated Capital Structure Improved Liquidity 1,000 Reduced Revolver Utilization Debt Hierarchy 2014 Revolving Credit Facility Capacity - 750 1 billion (millions) 500 New 2017 Term Loan - 1.3 billion Drawn Revolver 837…
  20. Global Energy Conference – 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. Global Energy Conference – California Resources Corp. – slide 21
    2016 Reserves Value1 In Excess EV 24 20 16 (Billion) 12 Infrastructure2 Surface & Minerals3 8 Unproved4 Current EV of 6.1 Bn5 4 Proved Value PDP Value 0 55 Brent 65 Brent 75 Brent 1-5 See endnotes in the…
  22. Global Energy Conference – California Resources Corp. – slide 22
    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…
  23. Global Energy Conference – California Resources Corp. – slide 23
    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 5,000 9,200 9,200 15,000 15,000 Weighted Average…
  24. Global Energy Conference – California Resources Corp. – slide 24
    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…
  25. Global Energy Conference – California Resources Corp. – slide 25
    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…
  26. Global Energy Conference – California Resources Corp. – slide 26
    Appendix
  27. Global Energy Conference – California Resources Corp. – slide 27
    Summary of Amendment to the 2014 Credit Facility Description Revolver 2014 Credit Facility consisting of 1.0 billion 2014 Revolver Commitment Permit a 1.3 billion first lien term loan (the 2017 Term Loan) 2017 Term Loan Proceeds…
  28. Global Energy Conference – California Resources Corp. – slide 28
    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%…
  29. Global Energy Conference – California Resources Corp. – slide 29
    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…
  30. Global Energy Conference – California Resources Corp. – slide 30
    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'…
  31. Global Energy Conference – California Resources Corp. – slide 31
    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:…
  32. Global Energy Conference – California Resources Corp. – slide 32
    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…
  33. Global Energy Conference – California Resources Corp. – slide 33
    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…
  34. Global Energy Conference – California Resources Corp. – slide 34
    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…
  35. Global Energy Conference – California Resources Corp. – slide 35
    Multiple Recovery Methods with High Value Creation Steamfloods Waterfloods Primary Shales Gas 4.0 3.0 VCI 2.0 1.0 0.0 Kern Front Buena Vista Bardsdale Asphalto Grimes Lost Hills Elk Hills Buena Vista Nose Buena Vista…
  36. Global Energy Conference – California Resources Corp. – slide 36
    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…
  37. Global Energy Conference – California Resources Corp. – slide 37
    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 15…
  38. Global Energy Conference – California Resources Corp. – slide 38
    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…
  39. Global Energy Conference – California Resources Corp. – slide 39
    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…
  40. Global Energy Conference – California Resources Corp. – slide 40
    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.…
  41. Global Energy Conference – California Resources Corp. – slide 41
    California Operator of Choice Proven coexistence with sensitive environmental receptors 4 billion gallons of water supplied to agriculture in 2016 Excellence in safety and mechanical integrity Recognized by national safety and…
  42. Global Energy Conference – California Resources Corp. – slide 42
    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 Reflects the value of facilities and midstream assets at 50% of estimated…

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