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2Q 2018 Earnings Review Presentation – California Resources Corp.

California Resources Corp. · Aug 2, 2018 · 29 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 2018 Earnings Review Presentation – California Resources Corp. – slide 1
    SECOND QUARTER 2018 EARNINGS REVIEW Todd Stevens President & CEO August 2, 2018 Mark Smith Senior EVP & CFO
  2. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 2
    Key Highlights 2nd Quarter 2018 First Half 2018 83 Gross Wells 157 Gross Wells Drilled1 ACTIVITY Drilled1 includes 48 CRC wells includes 92 CRC wells 134 Mboe/d PRODUCTION 129 Mboe/d 62% Oil 62% Oil 194 Million2 355 Million2…
  3. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 3
    Development Results Driving Growth Drilling Program History Q2 2018 Operations Results 100 San Joaquin Los Angeles Ventura Sacramento Wells Drilled 75 Sacramento Basin 50 5,000 BOE per Day No Drilling Rigs in Q2 25 0 Q1 2017…
  4. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 4
    Deep Inventory of Actionable Projects at 65 Brent 50 Steamflood Portfolio Spectrum 45 Waterflood 40 Primary Growth portfolio focus, fully Full Cycle Cost2 (/Boe) Shale burdened 35 Gas 30 All projects meet a Value 25…
  5. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 5
    Elk Hills Acquisition Synergies Estimated Annualized Elk Hills Synergies Initial synergy estimate within 6 months 15MM Implemented Target total synergies over 18 months 0 5 10 15 20 Annualized Synergies (MM) Implemented…
  6. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 6
    Resilient Resource Base Net Production By Stream (Mboe/d) 160 240 Oil NGL Gas Total Capital* CRC Capital (Internally Funded) 140 210 120 180 100 150 Capital (MM) MBoe/d 80 120 60 90 40 60 20 30 0 0 3Q16 4Q16…
  7. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 7
    Production Delivers Growth with Expanding Adjusted EBITDAX Margins Field Production1 Adjusted EBITDAX 360 90% Field Oil Prod (MBOPD) Field NGL Prod (MBOPD) Field Gas Prod (MBOEPD) Adj. EBITDAX Margin 2 3 320 Impact of Accounting…
  8. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 8
    2018 Capital Investment Program Transitioning to Mid-Cycle Commodity Prices 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,…
  9. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 9
    Portfolio Flexibility Provides Range of Crude Oil Scenarios Estimated Crude Oil Production Outcomes 130 Oil Production (MB/d) Combined with mid-cycle commodity 120 prices, we are positioned for growth in: 110 Portfolio…
  10. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 10
    CRC Price Realizations Oil Price Realization (with Hedges) Gas Price Realization WTI Realizations Brent NYMEX Realizations 80 4.00 74.90 3.26 3.14 70 67.18 3.50 2.95 3.00 67.88 2.87 2.75 61.54 3.00 60 2.81* 54.66 62.87 64.11…
  11. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 11
    Strong Cash Flow Growth Working 1H17 Volume Price* Costs Interest Capital/Other 1H18 350 300 Operating Cash Flow 250 MM 200 150 234 100 120 50 0 *Includes effects of PSCs 2Q 2018 Earnings 12
  12. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 12
    Cash Generation Improvement Offset by Hedges and Equity Compensation Long Term Equity Elk Hills Compensation Q1 2018 Acquisition Price Settled Hedges Expense Other* Q2 2018 350 300 Adjusted EBITDAX 250 MM 200 Cash…
  13. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 13
    Quarterly Cost Comparison 2Q17 1Q18 2Q18 2Q18 Without the increase in compensation due to stock price Production costs 18.34 19.08 18.93 18.52 (/Boe) Production costs excluding PSC effects 17.18 17.47 17.41 17.00 (/Boe) Taxes…
  14. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 14
    2Q18 Results Summary Comparison 2Q17 1Q18 2Q18 Net Income (Loss) Attributable to Common Stock per (1.13) (0.05) (1.70) Share Diluted Adjusted Earnings (Loss) per Share Diluted* (1.83) 0.18 (0.29) Oil Production 83 MBbl/d 77 MBbl/d…
  15. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 15
    Recent Transactions - Improving Debt Metrics Capitalization (MM) Notable Quarterly Highlights 6/30/2018 1st Lien 2014 Revolving Credit Facility (RCF) 277 Repurchased face value of 95 million of 2nd Lien Notes 1st Lien 2017 Term Loan…
  16. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 16
    2Q18 Guidance Anticipated Realizations Against the Prevailing Index Prices for 3Q18 Oil 95% to 100% of Brent NGLs 55% to 60% of Brent Natural Gas 100% to 110% of NYMEX Production, Capital and Income Statement Guidance Production*…
  17. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 17
    Opportunistically Built Oil Hedge Portfolio Strategy Protect cash flow, operating margins and capital investment program 3Q 4Q 1Q 2Q 3Q 4Q FY FY 2018 2018 2019 2019 2019 2019 2020 2021 Sold Calls Barrels per Day 6,100 16,100 16,100…
  18. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 18
    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…
  19. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 19
    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…
  20. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 20
    Elk Hills Acquisition Enhances NAV Above EV 28 24 20 16 Infrastructure2 (Billion) Surface & Minerals3 12 Unproved4 8 Current EV of 7.8 Bn5 Proved Value 1 4 PDP Value 1 0 65 Brent 75 Brent 85 Brent 1-5…
  21. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 21
    The Case for CRC: Investment Thesis Overview Investment Case for CRC Competitive Advantages Resilient model that World-class assets Focused on value Clear runway and Industry Integrated and preserves optionality with significant and…
  22. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 22
    Appendix
  23. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 23
    Accelerating Value and Derisking Inventory through JVs Highlights: Highlights: Up to 250MM over 2 years Up to 300MM o Three tranches of 50MM o Current commitment of 140MM o Total of 150MM funded DrillCo type structure where…
  24. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 24
    Typical Industry JV Structure 7,000.00 Hurdle Rate Based on recent industry JV Reached deals, a typical deal structure is o Partner pays 80-100% Capital 6,000.00 o Receives 80-100% Working Interest 5,000.00 o Typical hurdle…
  25. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 25
    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…
  26. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 26
    Wilmington Field Production Sharing Contracts LBU PSC Over 90% of CRCs Long Beach production is covered 50,000 Base Incremental under Production Sharing Contracts (PSCs) with the 40,000 End of LBU State and the City of Long Beach…
  27. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 27
    Wilmington Production Sharing Contracts Effect of Oil Price on Net Production Over 25% of CRCs oil production is subject to Production Sharing Contracts Gross Production PSC Mechanics CRC pays our partners share of the Operating…
  28. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 28
    Value Additive Inventory Growth 3P Reserves Growth Since Spin Comprehensive technical review of 40% of CRCs fields. 2,500 2017 proved reserves of 618 million BOE (682 million BOE 2,250 pro forma including the Elk Hills acquisition)…
  29. 2Q 2018 Earnings Review Presentation – California Resources Corp. – slide 29
    End Notes From Slide 21 1 Current CRC estimate of reserves value as of December 31, 2017, including reserves acquired in the Elk Hills transaction. Includes field-level operating expenses and G&A. Assumes 3.00/MMBTU NYMEX. 2…

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