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1Q 2019 Earnings Presentation – California Resources Corp.

California Resources Corp. · May 2, 2019 · 30 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. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 1
    First Quarter 2019 Earnings Review May 2, 2019 Todd Stevens President & CEO Mark Smith Senior EVP & CFO
  2. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 2
    Key Highlights 1st Quarter 2019 60 Total Wells Drilled1 133 Mboe/d 138 Million2 301 Million Includes 42 CRC wells 63% Oil 104 million internally funded 1,168 million LTM Operating Margin4 Growth 1 Includes all wells drilled…
  3. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 3
    CRCs Value-Driven Strategic Approach Capture Value Ensure Effective Drive Operational Strengthen of Portfolio Capital Allocation Excellence Balance Sheet Pursue value-driven Utilize VCI-based Streamline processes Reinvest to grow…
  4. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 4
    Development Results Driving Growth Q1 2019 Operations Results Drilling Program History 125 San Joaquin Los Angeles Ventura Gross Wells Drilled 100 75 Sacramento Basin 50 5,000 BOE per day No Active Drilling 25 0 1Q17 2Q17…
  5. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 5
    Unlocking Value with a Deep Inventory of Actionable Projects at 65 Brent 50 Steamflood Waterflood Fully burdened, growth-focused Primary 40 Full Cycle Cost1 (/Boe) portfolio Shale Gas 30 Achieve a VCI of 1.3 or greater at…
  6. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 6
    JVs Provide Additional Capital Flexibility Net Production By Stream (Mboe/d) 1TotalCapital reflected in the graph includes the capital investment of internal CRC capital as well as JV partners BSP and MIRA. Our consolidated…
  7. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 7
    Disciplined Capital Plan Leverages Project Portfolio Core 2019 Internally Funded Capital Program 300 to 385 Million 50-55% Expect to Align with Discretionary Cash Flow Growth 5-10% Potential JV Capital 14% 100 to 150…
  8. 1Q 2019 Earnings Presentation – 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) Elk Hills Acquisition Adj. EBITDAX Margin 2, 3 400…
  9. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 9
    CRC Price Realizations Oil Price Realization (with Hedges) Gas Price Realization WTI Realizations Brent 4.00 NYMEX Realizations 3.77 80 74.90 75.97 70 67.18 67.88 69.50 68.08 65.28 3.50 3.43 3.16 59.97 63.90 2.87 3.24 2.75 3.40…
  10. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 10
    Strong Adjusted EBITDAX Growth 1Q18 Volume Price Costs1 Trading Income Other 1Q19 350 3 300 27 44 21 44 Operating Cash Flow 250 MM 200 150 301 250 100 50 0 1 Costs includes changes in operating expenses,…
  11. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 11
    Demonstrated Experience Controlling Production Costs Through Price Cycle Annual Production Costs & Capital Investment1 1,200 Capital investment scales with commodity price changes 1,100 2014 Production Costs (MM) Flexible…
  12. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 12
    First Quarter 2019 Results Summary Comparison 1Q18 4Q18 1Q19 Net Income (Loss) Attributable to Common (0.05) 7.00 (1.38) Stock per Share Diluted Adjusted Net Income1 per Share Diluted 0.18 0.53 0.63 Oil Production 77 MBbl/d 86…
  13. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 13
    Quarterly Cost Comparison 1Q18 4Q18 1Q19 Production costs (/Boe) 19.08 18.61 19.46 Production costs excluding PSC 17.47 17.44 18.01 effects (/Boe) Taxes other than on income 38 29 41 (MM) Exploration expense (MM) 8 16 10…
  14. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 14
    Recent Transactions - Improving Debt Metrics Capitalization (MM) Debt Maturities (MM) 3/31/2019 4,000 1st Lien 2014 Revolving Credit Facility (RCF) 576 2nd Lien Notes 1st Lien 2017 Term Loan 1,300 2014 RCF 1st Lien 2016 Term Loan…
  15. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 15
    Lost Hills Field 50% Operated Working Interest Sale + Joint Venture Completed a sale of operatorship and a 50% working interest in certain zones in the Lost Hills field Proposed Patterns Proposed Tulare Producer Over 200 MM in total…
  16. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 16
    Second Quarter 2019 Guidance Anticipated Realizations Against the Prevailing Index Prices for 2Q19 Oil 95% to 100% of Brent NGLs 41% to 46% of Brent Natural Gas 85% to 95% of NYMEX Production, Capital and Income Statement Guidance…
  17. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 17
    Opportunistically Built Oil Hedge Portfolio 2Q19 3Q19 4Q19 1Q20 2Q20 Strategy Barrels per Day 5,000 - - - - Protect cash flow, operating Sold Calls Weighted Average margins and capital Ceiling Price per Barrel 68.45 - - - -…
  18. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 18
    CRC Significantly Undervalued EV Undervalued CRC has a top PV-101 value % Discount of Enterprise Value / PV-101 among Proxy peers, but is undervalued by enterprise value. CRCs market cap and debt are significantly below…
  19. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 19
    Current Enterprise Value Deeply Discounted Current EV of 7.2 Bn5 1-5 See endnotes in the Appendix. See the Investor Relations page at www.crc.com for important information about 3P reserves and other hydrocarbon quantities.…
  20. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 20
    Disciplined Execution on Highest Value Projects to Deliver Substantial Value VALUE Balance capital investment with Financial DRIVEN Portfolio of world-class assets investable Strengthening Efforts for best long-term value…
  21. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 21
    APPENDIX
  22. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 22
    Pressure Tested Through Cycle and Focused on Long-Term Value SEPARATION VALUE TRANSITION TO OFFENSE QUICK 30 ANNOUNCEMENT PRESERVATION RESPONSE TO 110 Spin PRICE CHANGE 25 Brent Crude Oil Price (/BBL) Brent Crude Price Date…
  23. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 23
    California Policies Impact Natural Gas Prices Aliso Canyon Effect on Inventory Lack of Natural Gas Storage and Peak Demand Daily SoCalGas natural gas inventories (Bcf) 20 20 20 18 16 14 12 10 8 Source: EIA and SoCalGas…
  24. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 24
    Accelerating Value and Derisking Inventory through JVs Highlights Up to 250MM over 2 years Up to 300MM Four tranches of 50MM Current commitment of 140MM Total of 200MM funded DrillCo type structure where Investor Investor funds…
  25. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 25
    Typical Industry JV Structure 7,000.00 Hurdle Rate Reached Based on recent industry JV 6,000.00 JV Share Typical E&P Share deals, a typical deal structure is o Partner pays 80-100% Capital 5,000.00 o Receives 80-100% Working…
  26. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 26
    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…
  27. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 27
    Wilmington Field Production Sharing Contracts LBU PSC 50,000 Over 90% of CRCs Long Beach production is Base Incremental covered under Production Sharing Contracts 40,000 (PSCs) with the State and the City of Long Beach 30,000 End of…
  28. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 28
    Wilmington Production Sharing Contracts Over 25% of CRCs oil production is subject to Effect of Oil Price on Net Production Production Sharing Contracts Gross Production PSC Mechanics CRC pays our partners share of the Operating…
  29. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 29
    Opportunistically Built Oil Hedge Portfolio WTI-based Floor Price Brent Advantage Median Floor Price % Hedged Highest Floor Price Among Peers 80.00 90% CRCs 2019 Weighted Avg Floor Price: 731/Bbl % of 2019 Consensus Production…
  30. 1Q 2019 Earnings Presentation – California Resources Corp. – slide 30
    End Notes From Slide 20 1 CRC estimate of reserves value as of December 31, 2018. Includes field-level operating expenses, G&A and taxes other than on income. Assumes 3.00/MMBTU NYMEX in all cases. 2 Reflectsthe value of facilities…

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