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2018 Earnings – California Resources Corp.

California Resources Corp. · Nov 1, 2018 · 33 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. 2018 Earnings – California Resources Corp. – slide 1
    THIRD QUARTER 2018 EARNINGS REVIEW Todd Stevens President & CEO November 1, 2018 Mark Smith Senior EVP & CFO
  2. 2018 Earnings – California Resources Corp. – slide 2
    Key Highlights 3rd Quarter 2018 3QYTD 2018 95 Gross Wells 252 Gross Wells Drilled1 ACTIVITY Drilled1 includes 59 CRC wells includes 151 CRC wells 136 Mboe/d PRODUCTION 131 Mboe/d 62% Oil 62% Oil 196 Million2 550 Million2…
  3. 2018 Earnings – California Resources Corp. – slide 3
    CRCs Value-Driven Strategic Approach Capture Value of Ensure Effective Drive Operational Strengthen Portfolio Capital Allocation Excellence Balance Sheet Pursue value-driven Utilize VCI-based Streamline processes Reinvest to grow…
  4. 2018 Earnings – California Resources Corp. – slide 4
    Development Results Driving Growth Drilling Program History Q3 2018 Operations Results 125 San Joaquin Los Angeles Ventura Sacramento 100 Wells Drilled Sacramento Basin 75 5,000 BOE per Day 50 No Drilling Rigs in Q3 25 0…
  5. 2018 Earnings – California Resources Corp. – slide 5
    Unlocking Value with a Deep Inventory of Actionable Projects at 75 Brent 50 Steamflood Fully burdened, growth- 45 Full Cycle Cost1 (/Boe) Waterflood 40 focused portfolio Primary 35 Shale 30 Achieve a VCI of 1.3 or Gas 25…
  6. 2018 Earnings – California Resources Corp. – slide 6
    Strategic Consolidation of Elk Hills Assets Estimated Annualized Elk Hills Synergies* (MM) Initial Target 34MM Realized 0 5 10 15 20 25 30 35 CRC acquired Chevrons non-operating working Existing CRC Surface Acreage interest…
  7. 2018 Earnings – California Resources Corp. – slide 7
    Resilient Resource Base Net Production By Stream (Mboe/d) 160 240 Oil NGL Gas Total Capital* CRC Capital (Internally Funded) mid-cycle scenario 140 210 120 180 100 150 Capital (MM) MBoe/d 80 120 60 90 low…
  8. 2018 Earnings – California Resources Corp. – slide 8
    Production Delivers Growth with Expanding Adjusted EBITDAX Margins Field Production1 Adjusted EBITDAX 450 90% Field Oil Prod (MBOPD) Field NGL Prod (MBPD) Field Gas Prod (MBOEPD) Adj. EBITDAX Margin 2 3 400 Impact of Accounting Change…
  9. 2018 Earnings – California Resources Corp. – slide 9
    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, Buena Vista, Wilmington,…
  10. 2018 Earnings – California Resources Corp. – slide 10
    Targeting Double-Digit EBITDAX Growth Estimated Crude Oil Production Outcomes 130 120 Oil Production Targeting 10-15% discretionary cash flow for balance sheet strengthening1 110 7% Midpoint (MB/d) Portfolio Production…
  11. 2018 Earnings – California Resources Corp. – slide 11
    Strategic Development Joint Ventures BSP & MIRA Reversion Estimates 550 Million Portfolio Flexibility Total Potential and Optionality JV Capital 65 240 Million Enable High Margin 75 Estimated Last Date Invested Through of BSP…
  12. 2018 Earnings – California Resources Corp. – slide 12
    Continuous Efforts Provide Pathway to Reasonable Leverage Estimated Leverage Ratios 10.0x Total Debt/Adj. EBITDAX1 8.0x 6.0x 4.0x 2.0x 0.0x 2016 2017 2018E 2 2019E 2020E 2021E 2022E 65 75 85 Core Adj. EBITDAX1…
  13. 2018 Earnings – California Resources Corp. – slide 13
    California Policies Impact Natural Gas Prices Aliso Canyon Effect on Inventory Lack of Natural Gas Storage and Peak Demand Daily SoCalGas natural gas inventories 20 14 12 10 8 Source: EIA 6 Impact of Solar Generation…
  14. 2018 Earnings – California Resources Corp. – slide 14
    CRC Price Realizations Oil Price Realization (with Hedges) Gas Price Realization WTI Realizations Brent NYMEX Realizations 80 74.90 75.97 4.00 70 67.18 67.88 69.50 3.50 2.95 3.00 3.16 * 2.87 61.54 3.00 2.75 60 2.50 2.88 52.18…
  15. 2018 Earnings – California Resources Corp. – slide 15
    Strong Cash Flow Growth Working 3QYTD 17 Volume* Price* Costs Interest Capital/Other 3QYTD 18 700 600 Operating Cash Flow 500 MM 400 300 200 393 100 225 0 *Includes effects of PSCs. 3Q 2018 Earnings 16
  16. 2018 Earnings – California Resources Corp. – slide 16
    Cash Generation Improvement Marketing Gas 2Q18 Volumes Price Trading Income Settled Hedges Other* 3Q18 350 300 Adjusted EBITDAX 250 MM 200 150 308 245 100 50 0 *Other includes changes in operating costs,…
  17. 2018 Earnings – California Resources Corp. – slide 17
    Quarterly Cost Comparison 3Q17 2Q18 3Q18 3Q18 Without the increase in compensation due to higher stock price Production costs 18.90 18.93 18.92 18.77 (/Boe) Production costs excluding PSC effects 17.81 17.41 17.55 17.40…
  18. 2018 Earnings – California Resources Corp. – slide 18
    3Q18 Results Summary Comparison 3Q17 2Q18 3Q18 Net Income (Loss) Attributable to Common Stock per (3.11) (1.70) 1.32 Share Diluted Adjusted Net Income (Loss) per Share Diluted* (1.22) (0.29) 0.81 Oil Production 82 MBbl/d 83 MBbl/d…
  19. 2018 Earnings – California Resources Corp. – slide 19
    Recent Transactions - Improving Debt Metrics Capitalization (MM) Highlights 9/30/2018 1st Lien 2014 Revolving Credit Facility (RCF) 342 Received 8th Amendment to the 2014 Credit Agreement to repurchase 1st Lien 2017 Term Loan 1,300…
  20. 2018 Earnings – California Resources Corp. – slide 20
    4Q18 Guidance Anticipated Realizations Against the Prevailing Index Prices for 4Q18 Oil 93% to 98% of Brent NGLs 55% to 60% of Brent Natural Gas 100% to 110% of NYMEX Production, Capital and Income Statement Guidance Production*…
  21. 2018 Earnings – California Resources Corp. – slide 21
    Opportunistically Built Oil Hedge Portfolio 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 Strategy Sold Calls Barrels per Day 15,000 15,000 5,000 - - - Weighted Average Protect cash flow, Ceiling Price per Barrel 58.83 66.15 68.45 - - -…
  22. 2018 Earnings – California Resources Corp. – slide 22
    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…
  23. 2018 Earnings – California Resources Corp. – slide 23
    Summary of Mid-Year 2018 Reserves Changes 96% Half-Year Proven Organic 731…
  24. 2018 Earnings – California Resources Corp. – slide 24
    Current Enterprise Value Deeply Discounted 28 24 20 Infrastructure2 16 Value (Billion) Surface & Minerals3 12 Unproved4 8 Current EV PUD 1 of 7.6 Bn5 4 PD1 0 65 Brent 75 Brent 85 Brent 1-5 Seeendnotes in the…
  25. 2018 Earnings – California Resources Corp. – slide 25
    Investment Proposition: Delivering Smart Growth and Real Value Portfolio of world- Deep operational Disciplined and Robust inventory Integrated and class assets knowledge and effective capital of high value complementary investable…
  26. 2018 Earnings – California Resources Corp. – slide 26
    Appendix
  27. 2018 Earnings – California Resources Corp. – slide 27
    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…
  28. 2018 Earnings – California Resources Corp. – slide 28
    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…
  29. 2018 Earnings – California Resources Corp. – slide 29
    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 owned by CRC Class A common…
  30. 2018 Earnings – California Resources Corp. – slide 30
    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…
  31. 2018 Earnings – California Resources Corp. – slide 31
    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…
  32. 2018 Earnings – California Resources Corp. – slide 32
    Enhanced Inventory Growth and Expanded 3P Position First Half 2018 Highlights Unproven Reserves1 Growth Mid-year reserves audited by Ryder Scott Proved reserves today only 5% lower despite 25% 2,500 decrease in price from the Spin…
  33. 2018 Earnings – California Resources Corp. – slide 33
    End Notes From Slide 25 1CRC estimate of reserves value as of December 31, 2017, including reserves acquired in the Elk Hills transaction at the indicated Brent prices. Includes field-level operating expenses, G&A and taxes other than…

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