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Annual Mizuho Energy Summit – California Resources Corp.

California Resources Corp. · Apr 1, 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. Annual Mizuho Energy Summit – California Resources Corp. – slide 1
    3rd Annual Mizuho Energy Summit Todd Stevens President & CEO April 1 - 2, 2019 Napa Valley, CA
  2. Annual Mizuho Energy Summit – California Resources Corp. – slide 2
    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…
  3. Annual Mizuho Energy Summit – 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. Annual Mizuho Energy Summit – California Resources Corp. – slide 4
    Pressure Tested Through Cycle and Focused on Long-Term Value SEPARATION VALUE TRANSITION TO OFFENSE QUICK 30 ANNOUNCEMENT PRESERVATION RESPONSE TO 110 Brent Crude Price PRICE CHANGE Brent Crude Oil Price (/BBL) 25 Spin CRC +…
  5. Annual Mizuho Energy Summit – California Resources Corp. – slide 5
    Key Highlights 4th Quarter 2018 91 Gross Wells 136 Mboe/d 314 Million 197 Million2 Drilled1 63% Oil 174 million internally funded 352 million Core includes 86 CRC wells Adjusted EBITDAX3 Growth in Oil Production Production…
  6. Annual Mizuho Energy Summit – 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. Annual Mizuho Energy Summit – California Resources Corp. – slide 7
    Large Resource Base with Production Diversity SACRAMENTO BASIN Gas Optionality Largest Operator in California1 1 Producer - 5,000 BOE/d2 Operate with 86% of basin production 85% of basin mineral acreage 12,000 wells Across…
  8. Annual Mizuho Energy Summit – California Resources Corp. – slide 8
    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…
  9. Annual Mizuho Energy Summit – California Resources Corp. – slide 9
    Unlocking Value with a Deep Inventory of Actionable Projects at 65 Brent 50 Fully burdened, growth- focused 40 Full Cycle Cost1 (/Boe) portfolio 30 Achieve a VCI of 1.3 or greater at 65 Brent and 3.00 NYMEX 20 Deliver…
  10. Annual Mizuho Energy Summit – California Resources Corp. – slide 10
    JVs Provide Additional Capital Flexibility Net Production By Stream (Mboe/d) Mid-Cycle Scenario 1 Low-Price Scenario 2 1TotalCapital reflected in the graph includes the capital investment of internal CRC capital as well as…
  11. Annual Mizuho Energy Summit – California Resources Corp. – slide 11
    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…
  12. Annual Mizuho Energy Summit – California Resources Corp. – slide 12
    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…
  13. Annual Mizuho Energy Summit – California Resources Corp. – slide 13
    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 3.50 3.00 3.16* 67.18 67.88 69.50 68.08 2.87 70 2.75 61.54 3.00 3.40 60 62.87…
  14. Annual Mizuho Energy Summit – California Resources Corp. – slide 14
    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…
  15. Annual Mizuho Energy Summit – California Resources Corp. – slide 15
    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…
  16. Annual Mizuho Energy Summit – California Resources Corp. – slide 16
    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…
  17. Annual Mizuho Energy Summit – California Resources Corp. – slide 17
    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…
  18. Annual Mizuho Energy Summit – California Resources Corp. – slide 18
    Conventional Exploration Program Generates Substantial Value 10 well exploration program in 2017 and 2018 Delineation and expansion of proven play trends Multiple Small Joint plus new impact play concepts Ventures Reduced risk via…
  19. Annual Mizuho Energy Summit – California Resources Corp. – slide 19
    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…
  20. Annual Mizuho Energy Summit – California Resources Corp. – slide 20
    Recent Transactions - Improving Debt Metrics Annual Highlights Debt Reduction Repurchased face value of 183 MM of 2nd Lien Notes and 49 MM of senior notes in 2018 for 199 MM in cash Purchased LIBOR interest caps which cap a…
  21. Annual Mizuho Energy Summit – California Resources Corp. – slide 21
    Disciplined Capital Plan Leverages Portfolio of Projects & Management Expertise Core 2019 Internally Funded Capital Program 300 to 385 Million 50-55% Expect to Align with Discretionary Cash Flow Growth 5-10% Potential…
  22. Annual Mizuho Energy Summit – California Resources Corp. – slide 22
    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.…
  23. Annual Mizuho Energy Summit – California Resources Corp. – slide 23
    Disciplined Execution on Our 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…
  24. Annual Mizuho Energy Summit – California Resources Corp. – slide 24
  25. Annual Mizuho Energy Summit – California Resources Corp. – slide 25
    Opportunistically Built Oil Hedge Portfolio 1Q19 2Q19 3Q19 4Q19 1Q20 Strategy Barrels per Day 15,000 5,000 - - - Protect cash flow, operating Sold Calls Weighted Average margins and capital Ceiling Price per Barrel 66.15 68.45 - -…
  26. Annual Mizuho Energy Summit – California Resources Corp. – slide 26
    Opportunistically Built Oil Hedge Portfolio WTI-based Floor Price Brent Advantage Median Floor Price % Hedged Highest Floor Price Among Peers 80.00 100% % of 2019 Consensus Production Hedged at Floor Price CRC has a…
  27. Annual Mizuho Energy Summit – California Resources Corp. – slide 27
    Recent Transactions - Improving Debt Metrics Capitalization (MM) Debt Maturities (MM) 12/31/2018 4,000 1st Lien 2014 Revolving Credit Facility (RCF) 540 2nd Lien Notes 1st Lien 2017 Term Loan 1,300 2014 RCF 1st Lien 2016 Term Loan…
  28. Annual Mizuho Energy Summit – 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. Annual Mizuho Energy Summit – 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 Production Costs (MM) Flexible…
  30. Annual Mizuho Energy Summit – California Resources Corp. – slide 30
    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…
  31. Annual Mizuho Energy Summit – California Resources Corp. – slide 31
    CRCs Regulatory Strategy Advances Californias Leading Standards CRCS CONSISTENT REGULATORY STRATEGY Growing Permit Inventory (Permitted drilling rig days at end of period) Reflect Californians values 1600 Solicit community input…
  32. Annual Mizuho Energy Summit – California Resources Corp. – slide 32
    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 14 12 10 8 6 Source: EIA and SoCalGas Envoy…
  33. Annual Mizuho Energy Summit – California Resources Corp. – slide 33
    End Notes From Slide 23 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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