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3Q 2019 Earnings Presentation – California Resources Corp.

California Resources Corp. · Nov 4, 2019 · 32 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. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 1
    Third Quarter 2019 Earnings Review November 4, 2019 Todd Stevens President & CEO Mark Smith Senior EVP & CFO
  2. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 2
    Key Highlights 3rd Quarter 2019 91 Total Wells Drilled1 128 Mboe/d 188 Million2 278 Million Includes 35 internally 62% Oil 117 million 1.1 billion LTM funded wells internally funded Adj.EBITDAX3 PRODUCTION ACTIVITY…
  3. 3Q 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. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 4
    Development Activity Driving Value Q3 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. 3Q 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. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 6
    Elk Hills Carbon Capture and Sequestration (CCS) California Energy Commission: CCS+EOR Project Elements The Project identified the Elk Hills Field as one of the premier CO2 EOR and sequestration sites in the U.S. As described in…
  7. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 7
    Accelerating Value and Derisking Inventory through Development JVs Up to 300MM Up to 250MM Current commitment of 140MM, Up to 500MM Total of 200MM funded to date with 125MM funded to date Current commitment of 320MM, with 63MM…
  8. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 8
    JVs Provide Additional Capital Flexibility Net Production By Stream (MBOEPD) 1 Oil NGL Gas Total Capital CRC Capital (Internally Funded) 160 320 140 280 Production (MBOEPD) 120 240 Capital (MM) 100 200 80 160 60…
  9. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 9
    JVs Enhance CRCs Value Significant production growth through 14,000 Gross JV Production1 JV partnerships 12,000 Enhance and de-risk reserves and Total Production Estimated Production bring development forward from Gross JV…
  10. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 10
    Disciplined Capital Plan Leverages Project Portfolio 2019E Total Capital 2019E Internally Funded 2019 Internally Funded Development Capital By Basin Capital Program 385 to 400 Million Exploration Other Sacramento and Ventura, 2% 3%…
  11. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 11
    CRC Delivers Stable Production and Solid Adjusted EBITDAX Margins Field Production1 Adjusted EBITDAX2 by Quarter Field Oil Prod (MBOPD) Field NGL Prod (MBPD) Field Gas Prod (MBOEPD) 350 70% Elk Hills Acquisition Lost Hills Divestiture…
  12. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 12
    CRC Price Realizations Strong Brent Realizations Oil Price Realization (with Hedges) Gas Price Realization NYMEX Realizations WTI Realizations Brent 4.00 3.77 80 75.97 70.66 3.43 /MMBtu & /Mcf 69.50 68.08 68.41 3.50 3.16 70…
  13. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 13
    3Q18 to 3Q19 Adj. EBITDAX3 Oil Trading 3Q18 Price Hedging Volume Costs 1 Income 2 Other 3Q19 350 300 (127) (32) 31 (15) (6) 119 250 Adjusted EBITDAX3 MM 200 150 308 278 100 50 0 1 Costs includes changes in…
  14. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 14
    Third Quarter 2019 Results Comparison 3Q18 2Q19 3Q19 Net Income Attributable to Common 1.32 0.24 1.89 Stock per Share Diluted Adjusted Net Income (Loss)1 per Share Diluted 0.81 (0.29) 0.34 Oil Production 84 MBbl/d 79 MBbl/d 79…
  15. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 15
    Quarterly Cost Comparison 3Q18 2Q19 3Q19 Production costs (/Boe) 18.92 19.62 18.82 Production costs excluding PSC 17.55 17.98 17.44 effects1 (/Boe) Taxes other than on income 45 36 42 (MM) Exploration expense (MM) 4 10 5…
  16. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 16
    Improving Debt Metrics Capitalization (MM) Debt Maturities (MM) 1st Lien 2014 Revolving Credit Facility (RCF) 514 2nd Lien Notes 3,000 1st Lien 2017 Term Loan 1,300 2014 RCF 1st Lien 2016 Term Loan 1,000 Unsecured Notes 2nd Lien…
  17. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 17
    Debt Repurchases Second Lien Note Repurchases 180 CRC has opportunistically repurchased over 410MM in face 160 value of Second Lien Notes since 140 Face Value Repurchased (MM) issuance including 153MM in the third quarter of…
  18. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 18
    Fourth Quarter 2019 Guidance Anticipated Realizations Against the Prevailing Index Prices for 4Q19 Oil 96% to 101% of Brent NGLs 40% to 45% of Brent Natural Gas 110% to 120% of NYMEX Production, Capital and Income Statement Guidance…
  19. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 19
    Opportunistically Built Oil Hedge Portfolio Strategy Purchased 4Q19 1Q20 2Q20 3Q20 4Q20 Protect cash flow, operating Sold Calls Calls margins and capital Purchased Barrels per Day 35,000 30,000 15,000 10,000 5,000 investment…
  20. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 20
    Current Enterprise Value Deeply Discounted 0 1 25 20 15 Value (B) Infrastructure and Other2 Surface and Minerals3 10 Unproved4 Current EV PUD1 of 6.1 Bn5 5 PD1 0 55 Brent 65 Brent 75 Brent 1-5 See…
  21. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 21
    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…
  22. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 22
    APPENDIX
  23. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 23
    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…
  24. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 24
    CRC Significantly Undervalued EV Significantly Undervalued 60% CRC has a top quartile PV- 101 value among Proxy 40% peers, but is valued % Discount of Enterprise Value / PV-101 significantly below its peers enterprise value.…
  25. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 25
    Pressure Tested Through the Commodity Price Cycle and Focused on Long-Term Value SEPARATION VALUE TRANSITION TO OFFENSE QUICK 30 ANNOUNCEMENT PRESERVATION RESPONSE TO 110 Spin PRICE CHANGE Brent Crude Oil Price (/BBL) Brent…
  26. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 26
    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…
  27. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 27
    CRCs Natural Gas Liquids Marketing CRC is the largest NGLs producer in California CRC Average of Proxy Peers Premium % Over Proxy Peers' Avg Approximately 16,000 bpd 50 180% Breakdown of CRCs NGLs production: NGL Realized Price…
  28. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 28
    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%…
  29. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 29
    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…
  30. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 30
    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…
  31. 3Q 2019 Earnings Presentation – 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. 3Q 2019 Earnings Presentation – California Resources Corp. – slide 32
    End Notes From Slide 21 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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