California Resources Corporation · NYSE:CRC
California Resources — Q1 2023 Earnings Presentation
25 slides from California Resources's earnings presentation, May 2, 2023
Slide 1: First Quarter 2023 Results
“A Different Kind of Energy Company” First Quarter 2023 Results May 01, 2023
Slide 2: Forward Looking / Cautionary Statements – Certain Terms
Forward Looking / Cautionary Statements – Certain Terms This document contains statements that we believe to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical fa
Slide 3: Presenters
Presenters Francisco Leon President & Chief Executive Officer
Slide 4: Glossary
Glossary Term Definition Term Definition BMT Billion Metric Tons FEED Front End Engineering and Design CARB California Air Resources Board FID Final Investment Decision CCS Carbon Capture and Storage GHG Greenhouse Gas CCS+ Carbon Capture and Storage + EOR LCFS Low Carbon Fuel Standard CDMA Carbon D
Slide 5: 1Q23 Business Highlights - Strong Start to the Year
1Q23 Business Highlights - Strong Start to the Year RECORD QUARTERLY FINANCIAL PERFORMANCE Strong Performance ▪ Maintained oil production on lower quarterly capital ▪ Leading gas position1 supported by strong commodity realizations drove record quarterly profits $263MM of FCF2 in 1Q23 ▪ Returned $79
Slide 6: Strong Quarterly Operational Performance & Natural Gas Revenues
Strong Quarterly Operational Performance & Natural Gas Revenues Key Operational Results: 89 MBOE/D 1Q23 NET PRODUCTION Oil1 Oil NGLs Gas 62% 12% 26% ~42% Other ~1% ▪ Drilled 9 wells and 2 sidetracks in 1Q23 ▪ Continuing to build a sidetrack inventory in San Joaquin and Sacramento basins Electricity
Slide 7: Delivered on 1Q23 Guidance With Record Quarterly Financial Performance
Delivered on 1Q23 Guidance With Record Quarterly Financial Performance ACHIEVED RECORD QUARTERLY MARGIN1 ($MM) $31.98 1Q23 Results Exceeded CRC’s Guidance Margin Between Blended Realized Price Due to high natural gas realizations, better performance of natural gas with Hedge and Costs2 ($/BOE) marke
Slide 8: Committed To Peer Leading Returns Of Capital To Shareholders
Committed To Peer Leading Returns Of Capital To Shareholders 4.0% 3.0% Fixed Fixed Dividend Yield1 (%) Current implied annualized Dividend yield of 2.87%1; Paid $20MM in dividends in 1Q23 2.0% Yield 1.0% 0.0% 1 2 3 CRC 4 5 6 7 Avg. 8 9 10 11 12 S&P 13 14 15 TOTAL ~22% Since the Inception 500 of the
Slide 9: Progressing Business Repositioning to Unlock Shareholder Value
Progressing Business Repositioning to Unlock Shareholder Value YE23 Sustainable Run Rate Cost Reductions Target1 CRC’s management in conjunction with finance committee of the Board $25 - $50MM launched cost reduction initiative For non-energy operating costs and ▪ Commenced internal review of organi
Slide 10: Strengthening The Expansion of Carbon Management Business
Strengthening The Expansion of Carbon Management Business Signed 2 additional storage only CDMAs1 for a combined injection rate of 140,000 MTPA with Yosemite Clean Energy and InEnTec Submitted a Class VI permit application to the EPA for CTV IV with 34 MMT of CO2 storage capacity as we continue to b
Slide 11: Why California Resources Corporation?
Why California Resources Corporation? Premier Balance Sheet with Strong Free Cash Flow Generation Superior Shareholder Returns Strategy Leading Carbon Management Business 11
Slide 12: 2023 Corporate Guidance
2023 Corporate.Guidance
Slide 13: Updated 2023E Corporate Guidance (as of May 2, 2023)
Updated 2023E Corporate Guidance (as of May 2 , 2023) nd FY 2023E 2Q23E FY23E 2Q23E CRC 2023E GUIDANCE1: E&P, Corp. & Other CMB E&P, Corp. & Other CMB Combined Combined Net Total Production1 (MBOE/D) 91 – 85 — 91 – 85 88 – 86 — 88 – 86 Net Oil Production1 (MBO/D) 55 – 51 — 55 – 51 54 – 52 — 54 – 52
Slide 14: Supplemental Materials
£F Supplemental Materials fa "ea
Slide 15: Further Expanding CTV’s Northern California Storage Opportunity Set
Further Expanding CTV’s Northern California Storage Opportunity Set CDMA DETAILS FOR YOSEMITE’S RENEWABLE FUELS PROJECT1 ▪ Yosemite to build and operate a 24 tons per day (TPD) hydrogen facility2 in the city of Oroville, California, using dual bed gasification technology with commercial operations t
Slide 16: Elk Hills Net Zero Industrial Park Expands With Its Second Storage Only Project
Elk Hills Net Zero Industrial Park Expands With Its Second Storage Only Project CDMA DETAILS FOR INENTEC DIMETHYL ETHER (DME) FACILITY1 ▪ InEnTec to construct a facility that will use proprietary gasification technology to produce 80 to 100 tons per day (TPD) renewable dimethyl ether (rDME) from bio
Slide 17: Decarbonizing California and Building a Diversified Portfolio of CO2 Emissions
Decarbonizing California and Building a Diversified Portfolio of CO2 Emissions Expecting to Further Diversify CTV’s Portfolio of Emitters Across The Energy Spectrum in California Positioned to Be California’s Premier Carbon Management Provider Continuing to attract new emissions sources due to ideal
Slide 18: Strategic Partnership – A Structural Capital Advantage
Strategic Partnership – A Structural Capital Advantage Illustrative 2027 CO2 Storage/Injection Goal Capital Funding Needs1 Improves & Increases Flexibility of CRC’s assumes Brookfield fully participates in 5MMTPA of CTV JV projects Capital Allocation Framework (5MMTPA of CO2 Injection by 2027) JV ▪
Slide 19: Illustrative CTV JV Type Curve Demonstrates Potential Valuation Upside
Illustrative CTV JV Type Curve Demonstrates Potential Valuation Upside First Full Year of Est. Impact 2026E 2028E Example Strategic Partnership Economics An average Est. CO2 Injection Rate per Year 1MMTPA 5MMTPA CTV project could generate on average $50 to $135 of EBITDA per Est. CTV JV EBITDA ($MM)
Slide 20: Large Opportunity Set With a Variety of Potential Emitters
Large Opportunity Set With a Variety of Potential Emitters ILLUSTRATIVE EBITDA1 VS CAPEX REQUIREMENTS FOR STORAGE ONLY PROJECTS ▪ CTV JV is the off-taker of CO2 at storage site through Storage Co. VARIOUS CO2 PROJECTS ▪ Lower expected capital requirements for project development, including injection
Slide 21: Strong Price Realizations in CA’s Unique Market Dynamics
Strong Price Realizations in CA’s Unique Market Dynamics CALIFORNIA IS AN OIL ISLAND AND THE LARGEST U.S. GDP CONTRIBUTOR (amounts shown as % of U.S. domestic GDP) ▪ Crude: California crude prices generally moved in tandem with the broader market with realizations for Q1 2023 experiencing a degree o
Slide 22: Hedging Program
Hedging Program OIL HEDGES1 Date as of March 31, 2023 2Q23 3Q23 4Q23 1H 2024 2H 2024 Barrels per 17,837 17,363 5,747 2,000 4,000 STRATEGY Day CRC’s hedging strategy seeks to mitigate our exposure SOLD CALLS Weighted- to commodity price volatility and ensure our financial Average Price $60.00 $57.06
Slide 23: Maintaining Balance Sheet Strength, Liquidity, and Financial Flexibility
Maintaining Balance Sheet Strength, Liquidity, and Financial Flexibility LIQUIDITY ROLL FORWARD1 3/31/23 NET DEBT SNAPSHOT $1,200 $249MM $4MM $79MM ($MM) $931MM $900 Revolving Credit Facility (RCF)1 $ 0 $765MM 7.125% Senior Notes 600 $MM $600 Face Value of Debt $ 600 Less Available Cash & Cash Equiv
Slide 24: Assumptions & Relevant Footnotes
Assumptions & Relevant Footnotes: Slide 7: ▪ (1) Margin is calculated as oil, natural gas and NGL sales, plus proceeds and less payments from settled derivatives, and less operating costs, transportation costs, taxes other than on income, general and administrative expenses and interest expense. Ple
Slide 25: Investor Relations and Media Contacts
Joanna Park (Investor Relations) Richard Venn (Media) 818-661-3731 818-661-6014 Joanna.Park@crc.com Richard.Venn@crc.com