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2Q 2019 Earnings Presentation – California Resources Corp.

California Resources Corp. · Aug 1, 2019 · 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 2019 Earnings Presentation – California Resources Corp. – slide 1
    Second Quarter 2019 Earnings Review August 1, 2019 Todd Stevens President & CEO Mark Smith Senior EVP & CFO
  2. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 2
    Key Highlights 2nd Quarter 2019 39 Total Wells 129 Mboe/d 140 Million2 255 Million Drilled1 61% Oil 124 million 1.2 billion LTM Includes 37 CRC wells internally funded Adj.EBITDAX3 PRODUCTION ACTIVITY CAPITAL First Half…
  3. 2Q 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. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 4
    Development Activity Driving Growth Q2 2019 Operations Results Drilling Program HistoryAverage Well Depth Average Measured Well Depth (ft) San Joaquin Los Angeles Ventura 125 8,000 Total Wells Drilled2 100 6,000 75…
  5. 2Q 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 portfolio Shale Full Cycle Cost1 (/Boe) Gas 30 Achieve a VCI of 1.3 or greater at…
  6. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 6
    JVs Provide Additional Capital Flexibility Net Production By Stream (MBOEPD) 1TotalCapital reflected in the graph includes the capital investment of internal CRC capital as well as JV partners BSP and MIRA. Our consolidated…
  7. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 7
    Disciplined Capital Plan Leverages Project Portfolio 2019 Internally Funded 2019E Total Capital 2019E Internally Funded Capital Program Development Capital By Basin 350 to 385 Million 1 Expect to Align with Discretionary Cash…
  8. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 8
    Accelerating Value and Derisking Inventory through JVs Up to 300MM Up to 250MM Current commitment of 140MM, Up to 500MM Total of 200MM funded to date with 122MM funded to date Current commitment of 320MM Focus on four fields within…
  9. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 9
    CRC Delivers Stable Production and Healthy Adjusted EBITDAX Margins Field Production1 Adjusted EBITDAX4 by Quarter Field Oil Prod (MBOPD) Field NGL Prod (MBPD) Field Gas Prod (MBOEPD) 350 70% Elk Hills Acquisition Lost Hills…
  10. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 10
    CRC Price Realizations Strong Brent Realizations Oil Price Realization (with Hedges) Gas Price Realization NYMEX Realizations WTI Realizations Brent 4.00 3.77 80 74.90 75.97 70.66 3.43 /MMBtu & /Mcf 67.88 69.50 68.08 3.50…
  11. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 11
    First Half 2019 Adj. EBITDAX Benefited From Oil Price & Volume, Trading Income Oil Price & NGLs Price & Gas Price & Trading 1H18 Volume1 Volume Volume Costs 2 Income3 Other 1H19 700 85 (25) 600 (29) 16 23 (9) 556 495 500…
  12. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 12
    Second Quarter 2019 Results Comparison 2Q18 1Q19 2Q19 Net (Loss) Income Attributable to Common (1.70) (1.38) 0.24 Stock per Share Diluted Adjusted Net (Loss) Income1 per Share Diluted (0.29) 0.63 (0.29) Oil Production 83 MBbl/d 84…
  13. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 13
    Quarterly Cost Comparison 2Q18 1Q19 2Q19 Production costs (/Boe) 18.93 19.46 19.62 Production costs excluding PSC 17.41 18.01 17.98 effects1 (/Boe) Taxes other than on income 37 41 36 (MM) Exploration expense (MM) 6 10 10…
  14. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 14
    Improving Debt Metrics Capitalization (MM) Debt Maturities (MM) 6/30/2019 4,000 1st Lien 2014 Revolving Credit Facility (RCF) 525 2nd Lien Notes 1st Lien 2017 Term Loan 1,300 2014 RCF 1st Lien 2016 Term Loan 1,000 3,000 Unsecured…
  15. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 15
    Debt Repurchases Second Lien Note Repurchases 100 CRC has opportunistically 90 repurchased approximately 260MM in face value of Second 80 Lien Notes since issuance 70 60 Received an average discount of 16 50 percent from the…
  16. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 16
    Third Quarter 2019 Guidance Anticipated Realizations Against the Prevailing Index Prices for 3Q19 Oil 95% to 100% of Brent NGLs 36% to 41% of Brent Natural Gas 105% to 115% of NYMEX Production, Capital and Income Statement Guidance…
  17. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 17
    Opportunistically Built Oil Hedge Portfolio Strategy Purchased Protect cash flow, operating Sold Calls Calls margins and capital 3Q19 4Q19 1Q20 2Q20 investment program 35,000 25,000 10,000 Barrels per Day 40,000 Purchased Puts…
  18. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 18
    CRC Significantly Undervalued EV Significantly Undervalued CRC has a top PV-101 value among Proxy peers, but is % Discount of Enterprise Value / PV-101 undervalued by enterprise value. CRCs market cap and fair value of…
  19. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 19
    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.…
  20. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 20
    Disciplined Execution on Highest Value Projects to Deliver Substantial Value VALUE DRIVEN Balance capital investment with Financial Strengthening Efforts Portfolio of world-class assets investable for best long-term value creation…
  21. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 21
    APPENDIX
  22. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 22
    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…
  23. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 23
    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…
  24. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 24
    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…
  25. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 25
    Typical DrillCo 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 DrillCo structure is 5,000.00 o Partner pays 80-100% Capital o Partner receives 80-100%…
  26. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 26
    Midstream Joint Venture 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 interests…
  27. 2Q 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. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 28
    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…
  29. 2Q 2019 Earnings Presentation – California Resources Corp. – slide 29
    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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