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Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp.

California Resources Corp. · Jun 5, 2019 · 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. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 1
    Bank of America Merrill Lynch Energy Credit Conference Mark Smith Senior EVP & CFO June 5, 2019
  2. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 2
    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…
  3. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 3
    Californias Compelling Needs Worlds 5th largest economy runs first and foremost on energy Consume more gasoline than countries with populations 4x larger 37% of U.S. Port container traffic with the busiest ports in the country…
  4. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 4
    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…
  5. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 5
    Large Resource Base with Production Diversity SACRAMENTO BASIN Gas Optionality Largest Producer in California1 1 Producer - 5,000 BOE/d2 Operate with 86% of basin production 85% of basin mineral acreage 12,000 wells Across…
  6. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 6
    World-Class Hydrocarbon Province with Significant Potential Remaining Recoverable Resources (BBOE1) California a Top Oil Province California Five of the largest conventional, onshore fields in the lower 48 Permian (Wolfcamp +…
  7. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 7
    Enhanced Inventory Growth and Expanded 3P Position 2018 Highlights Growth in Unproved Reserves1 Proved reserves today only 7% lower despite 29% 2,500 decrease in price from the YE 2014 2,250 Life-of-field studies increased unproved…
  8. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 8
    Unparalleled California Expertise and Insight Extensive Field Core Assets Provide Largest 3-D Seismic Operations Experience Operational Leverage Position in California of observed field behavior and Decades demonstrated shallow base…
  9. Bank of America Merrill Lynch Energy Credit Conference – 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. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 10
    Current Enterprise Value Deeply Discounted Current EV of 6.8 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.…
  11. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 11
    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…
  12. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 12
    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…
  13. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 13
    Elk Hills Flagship Asset in San Joaquin Basin Large field with 100% NRI 10 billion original BOE in place within multiple reservoirs Produces 60,000 BOE/d with annual 10% base decline Infrastructure provides low-cost advantage…
  14. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 14
    Developing Entire Southern San Joaquin Basin into Core Area Redevelopment, expansion and additional recovery in existing CRC operated fields Large Inventory of Development Projects Large fields with low recovery factors 500 identified…
  15. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 15
    Leveraging Infrastructure for Nearby Low-Cost Field Development Southern San Joaquin Valley Consolidation Coring up with Elk Hills Elk Hills serves as the hub Power, pipelines, compression Connecting fields and building out Lower…
  16. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 16
    Accelerating Value and De-risking 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…
  17. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 17
    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…
  18. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 18
    Dynamic Capital Allocation Through Commodity Cycle High-Price Scenario Invest to accelerate production growth and explore/pilot new resources Add facilities (steam and water handling) to support pace of growth High cash generation…
  19. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 19
    Disciplined Capital Plan Leverages Project Portfolio 2019 Internally Funded 2019E Total Capital 2019E Internally Funded Capital Program Plan Including JVs Development Capital By Basin 300 to 385 Million Expect to Align with…
  20. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 20
    Recent Transactions - Improving Debt Metrics Capitalization (MM) Debt Maturities (MM) 4,000 Pro forma 3/31/19* 2nd Lien Notes 1st Lien 2014 Revolving Credit Facility (RCF) 408 2014 RCF 1st Lien 2017 Term Loan 1,300 3,000 Unsecured…
  21. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 21
    Strengthening the Balance Sheet Remains a Priority Target 2x 3x Leverage Ratio Continue to Employ Leverage Core Adjusted EBITDAX1 Leverage ALL of the ABOVE 10.0x 9.0x Approach Total Debt / LTM Adj. EBITDAX1 8.0x 7.0x 6.0x…
  22. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 22
    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…
  23. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 23
    APPENDIX
  24. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 24
    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…
  25. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 25
    Positioned to Execute Our Strategy to Deliver Long Term Value The VCI Difference Delivers Real Value Value Value-directed investments Focus Disciplined capital allocation Enhanced returns over full-cycle time frame Drives…
  26. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 26
    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 - - - -…
  27. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 27
    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 (Brent) % of 2019 Consensus…
  28. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 28
    CRCs BOE Recovery per Foot Competes With Major Shale Plays Normalizing estimated ultimate recovery (EUR) vs. measured depth shows CRC advantage: Better recovery factors driven by low decline rate waterfloods and steamfloods Diverse…
  29. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 29
    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 Flexible operations and shallow base…
  30. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 30
    CRCs Regulatory Strategy Advances Californias Leading Standards CRCS CONSISTENT REGULATORY STRATEGY Growing Permit Inventory Reflect Californians values (Permitted drilling rig days at end of period) 1600 Solicit community input…
  31. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 31
    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…
  32. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 32
    CRCs Dynamic Portfolio Provides Flexibility 100% Gas 75% Shale Portfolio Mix Primary 50% Waterflood 25% Steamflood 0% Workover 800 800 800 600 600 600 400 400 400 200 200 200 BOEPD BOEPD BOEPD 0 Oil 0 Oil 0…
  33. Bank of America Merrill Lynch Energy Credit Conference – California Resources Corp. – slide 33
    End Notes From Slide 11 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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