Charting a new course 2021 Strategy Day March 18, 2021
Presenters: Mac McFarland Chairman & Interim CEO Francisco Leon EVP & CFO Also In Attendance: Shawn Kerns EVP, Operations & Engineering Michael Preston Senior EVP, CAO and General Counsel March 18, 2021 2
CRC : Strong Foundation and Quality Investment Opportunity CASH ADVANTAGED BUSINESS MODEL 2020 AVERAGE PRODUCTION Conventional, stacked pay assets offer low to mid-teens decline, low reinvestment High margins: Oil weighted with Brent…
OPTIMIZING THE BUSINESS MODEL WITH A NEW STRATEGY 5
CRC Strategic Evaluation Concluded Cash Generation Potential Is Robust Comprehensive strategic CRCs Board Operating Committee and executive leadership conducted a evaluation of business comprehensive strategic evaluation of CRC…
Strategic Repositioning Snapshot BEFORE 2020 2021 STRATEGY Grow state-wide position Business Focus on highest FCF1 generation fields and Use JV structures to leverage CRC capital Model simplified business model Buy and hold…
CRCs Three Strategic Pillars Built On Solid Financial Foundation 1 COST & OPERATIONAL EXCELLENCE 2 DISCIPLINED INVESTING 3 PORTFOLIO MANAGEMENT Simplified, lower cost Continuously optimize assets for operating model for mature…
Rationalizing Spending Profile Across Categories INTEREST G&A OPEX EXPENSE FY 2019 290 MM 895 MM 383 MM FY 2020 252 MM 625 MM 217 MM Targeted Savings / 70 MM 25 MM 160 MM Interest Reduction (27%) (4%) (75%) FY 2021E 180…
NEW STRATEGY DRIVES FREE CASH FLOW GENERATION AND VALUE 10
Rationalized Spending Across Categories Improves FCF Breakeven to 35 Brent SIMPLIFIED DEBT STACK ANNUAL OPEX DOWN 33% ANNUAL G&A DOWN 38% DRIVES INTEREST EXPENSE FROM 2019-2021E FROM 2019-2021E DOWN 330MM FROM 2019 CRC Annual…
FY 2021E Forecast Highlights Focus On Free Cash Flow FY 2019 FY 2020 FY 2021E1 /boe Improvements Total Production, Mboepd2 128 111 96 99 2021 estimates include 125-175 MM of negative Oil Production, Mbopd2 80 69 60 62 hedge…
Disciplined 2021 Capital Program Within 40% Of Discretionary Cash Flow1 2021E CAPITAL PROGRAM OF 200MM - 225MM DISCIPLINED CAPITAL SUPPORTS STABLE CRUDE VOLUMES 90 160% 80 Infrastructure 70 2020 Exit Rate 120% and Other Oil…
Core Fields Offer Significant Stacked Pay and Low Risk Development Opportunities1 NPV per well ( MM)3 San Joaquin Fields Discovered in 1911, the Eastern Shallow Oil Zone (ESOZ) area is one of 72% of YE 2020 Reserves ELK HILLS…
Low Leverage and Strong Balance Sheet = Winning Combination Acceleration of the Cash Return Business Model with robust leverage metrics should provide further equity support while demonstrating Balance Sheet Strength Renewed &…
Committed to ESG ENVIRONMENTAL CRC remains dedicated to improving upon all ESG & HSE metrics CRCs 2030 Sustainability Goals align with Californias landmark while continuing to deliver reliable and affordable energy to California goals…
STEWARDING OUR RETURNS-FOCUSED BUSINESS MODEL
CRCs Reserves Value at Current Prices Provides Equity Upside CURRENT OIL PRICING OFFERS ROBUST UPSIDE RESERVES MULTIPLE COMPARED TO PEERS4 SHOWS STRONG INVESTMENT OPPORTUNITY 5.0x 5,720 MM3 4.0x PV-10 Reserves EV/SMOG5 3.0x…
CRC Targets 1.5 Billion of Sustainable Free Cash Flow Over Next Five Years1 SUSTAINABLE FREE CASH FLOW GENERATION AND DECREASING LEVERAGE FOR 2021 THROUGH 20252 PERIOD Sustainable free cash flow further underpins our financial health…
CRCs Optimized Strategy Provides a Quality Investment Opportunity 1 COST & OPERATIONAL EXCELLENCE 2 DISCIPLINED INVESTING 3 PORTFOLIO MANAGEMENT Continuous optimization of assets Its all about execution Invest in our shallow decline…
SUPPLEMENTAL MATERIALS 21
CRCs Leading Safety Rating Better Than Ever CRC had its Best-Ever Safety Performance in 2020, and Outperforming Most Other Industries Surpassing the Oil & Gas Industry 1.0 4.0 2019 Injury & Illness Rate (IIR)1 (per 200,000…
Hedging Program Provides Stable Cash Flow CURRENT HEDGE PROTECTION1 Jan-Oct 1Q21 2Q21 3Q21 4Q21 2022 2023 STRATEGY Barrels per Day 19,028 33,537 36,362 36,700 30,783 17,758 CRC hedging strategy typically utilizes a mixture of…
Stabilizing Production with Quick High Impact Well Work and Capital Workovers INCREMENTAL BARRELS THROUGH MAINTENANCE CRC has 9,490 net productive oil wells1 of which 90% are on artificial lift. Due to a backlog of wells accumulated…
Leverage our Integrated Assets to Uplift Margins, Lower Costs, Improve Flexibility STRATEGIC INTEGRATION & OPERATIONAL STREAMLINING Elk Hills power plant reduces LOE 100mm/year, allows for more efficient operation of asset Gathering…
Future Presents Significant Liquidity and Financial Flexibility ESTIMATED LIQUIDITY ROLL FORWARD 800 CRC 12/31/20 DEBT SNAPSHOT 680 MM 700 PRO FORMA FOR JANUARY 2021 SENIOR NOTES OFFERING 600 2020 Revolving Credit Facility (RCF) 9…
Adjusted EBITDAX Reconciliation We define adjusted EBITDAX as earnings before interest expense; income taxes; depreciation, depletion and amortization; exploration expense; other unusual, infrequent and out-of-period items; and other…
Other Reconciliations FY 2021E Leverage and Net Debt Estimated We calculate the leverage ratio by dividing net debt by adjusted EBITDAX for (in millions) Low High the applicable period. We define net debt as the face value of our…
Other Reconciliations (contd) Discretionary Cash Flow & Free Cash Flow Management uses discretionary cash flow, which is defined as the cash available after distributions to noncontrolling interest holders, cash interest, ARO and idle…
Joanna Park (Investor Relations) Richard Venn (Media) 818-661-3731 818-661-6014 Joanna.Parkcrc.com Richard.Venncrc.com
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