California Resources Corporation · NYSE:CRC
California Resources — Q1 2024 Earnings Presentation
31 slides from California Resources's earnings presentation, May 8, 2024
Slide 1: First Quarter 2024 Results
First Quarter 2024 Results May 7, 2024
Slide 2: Presenters
Presenters Francisco Leon President and Chief Executive Officer Nelly Molina EVP and Chief Financial Officer
Slide 3: Key Takeaways
Key Takeaways
Slide 4: Key Takeaways
Key Takeaways 76MBOE/D RETURNED $94MM TO SHAREHOLDERS YTD1 1Q24 NET PRODUCTION Reduced outstanding share count by ~19% since program inception in May 2021 63% 14% 23% Oil NGLs Gas $87MM GENERATED $149MM OF ADJ. EBITDAX* IN 1Q24 1Q24 OPERATING CASH FLOW Robust financial and operational performance; R
Slide 5: Financial & Operational Results
Financial & Operational Results
Slide 6: Strong Reservoir Performance on Disciplined Capital Deployment
Strong Reservoir Performance on Disciplined Capital Deployment 1Q24 OPERATIONAL PERFORMANCE COMMENTARY RESERVOIRS PERFORMED IN LINE WITH EXPECTATIONS Gross Production (MBoe/d) ▪ Reservoirs’ performance remains strong with flat entry to exit gross production ▪ Base decline was managed by investing OP
Slide 7: Driving Down Costs and Delivering Durable Cash Flow
Driving Down Costs and Delivering Durable Cash Flow DELIVERING LOWER ADJ. G&A* LOWER QUARTERLY OPERATING COSTS Adj. General and Administrative Expenses* ($MM) Quarterly Operating Costs ($MM) $275 $60 $250 $55 $225 $50 $200 $45 $175 $40 $150 $35 $125 $30 $100 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24E 1Q23 2Q23
Slide 8: Consistent Operational & Financial Performance
Consistent Operational & Financial Performance 1Q24E1 1Q24A 1Q24 IMPACTS TO NET PRODUCTION VOLUMES Brent ($/Bbl) $78.73 $81.84 Net Production (MBoe/d) 84 Brent realized price with hedge ($/Bbl) N/A $77.17 83 82 CRC GUIDANCE 1Q24 Guidance1 Results Net Production (MBoe/d) 76 – 80 76 80 Net Oil Product
Slide 9: Advancing our Path to FID with CTV JV
Advancing our Path to FID with CTV JV TIMING JV ▪ Final Permit for CTV I - 26R Class VI expected in 2H24 Carbon TerraVault JV (“CTV JV”) ▪ FID on Elk Hills Cryogenic Gas Plant targeted for 2H24 26R1 Initial Payment | Milestone 2| Second Milestone 3 | Third First Installment Installment Installment B
Slide 10: 2Q24 Guidance (as of May 07, 2024)
2Q24 Guidance (as of May 07, 2024) 2Q24 E&P, Guidance Estimates Consolidated CMB Corp. & Other Net Production (MBoe/d) ~ 61% Oil 74 to 78 Lower than planned EHPP gas consumption; ~12MMcf/d Impact Marketing of Purchased Commodities Margin1 ($MM) $5 to $15 Electricity Margin2 ($MM) $34 to $42 Other Op
Slide 11: Aera Merger
Aera Merger
Slide 12: Aera Merger | Low Decline Assets Support Strong Combination: Reserves Overview
Aera Merger | Low Decline Assets Support Strong Combination: Reserves Overview1 PRO FORMA COMBINED PROVED PRO FORMA COMBINED PRO FORMA COMBINED PROVED RESERVES BY CATEGORY2 PV10* BY CATEGORY2 RESERVES BY COMMODITY2 LONG DURABILITY 1P ASSETS FOR THE 10% 8% 6% PRO FORMA COMBINED ENTITY2 14% ▪ Total Pr
Slide 13: Aera Merger | Low Decline Asset Base
Aera Merger | Low Decline Asset Base IN 2023, AERA'S RESERVOIRS AND OPERATIONS PERFORMED SIMILAR TO CRC CRC Gross Production (MBoe/d) Aera Gross Production (MBoe/d) 105 90 103.3 100 85 84.1 96.9 95 80 79.0 90 ~6% 75 ~6% '23 Base Decline '23 Base Decline 85 70 January December January December CRC Gr
Slide 14: Aera Merger | Substantial PDP Base
Aera Merger | Substantial PDP Base ASSET BUILD Pro Forma Combined PD Reserves Valuation at $70 Brent1 ($MM) KEY POINTS $6.1B $5.9B ▪ Pro forma combined PD production expected to provide resilient, durable long-term cash flows with low base declines of 10% - 13% STRONG COVERAGE METRICS AT CONSERVATIV
Slide 15: Aera Merger | 2023 At Glance: CRC + Aera = Logical Combination
Aera Merger | 2023 At Glance: CRC + Aera = Logical Combination1 Operating and Carbon Management Metrics Complementary Assets Brent ($/bbl) $82.22 $82.22 Combined Brent realized price with hedge ($/bbl) $65.97 $78.17 Operating Metrics2 ‘23 Net Production (MBoe/d) 86 74 160 ‘23 Net Oil Production (MBo
Slide 16: Appendix
Appendix
Slide 17: Introducing a New Board Member
Introducing a New Board Member ▪ Over 34 years of experience in the oil and natural gas industry in various executive and management roles ▪ Former President and Chief Executive Officer of Denbury ▪ Served as the Chairman of the Board of the Dallas Division of the American Heart Association and is a
Slide 18: CRC Pursues Multiple Paths to Permits in 2025
CRC Pursues Multiple Paths to Permits in 2025 CRC IS NAVIGATING OBTAINING PERMITS IN CALIFORNIA ILLUSTRATIVE PERMIT REVIEW PROCESS ▪ PRELIMINARY REVIEW determines if an activity is a project requiring Est. Completion Dates 2024 2025 CEQA review ▪ INITIAL STUDY If deemed to require further CEQA revie
Slide 19: Class VI Permitting Leadership
Class VI Permitting Leadership CTV Leads CA/Region 9 with EPA Class VI Permit Submissions U.S. EPA Regions2 ▪ CTV Elk Hills 26R (CTV I) is expected to receive final permits in 2H241 ▪ CTV Elk Hills 26R (CTV I) permit approval would be first in California and first permit for 5 storage into a deplete
Slide 20: Positioned to Be California's Premier Carbon Management Provider
Positioned to Be California’s Premier Carbon Management Provider EPA released Class VI Draft permits for 26R (CTV I) reservoir; Public comment period complete Targeting first CO2 injection at CTV I by the end of 20251 Vault CTV I CTV II CTV III CTV IV CTV V EPA Permit Application Yes Yes Yes Yes Yes
Slide 21: CTV's CCS Projects and Storage Portfolio
CTV’s CCS Projects and Storage Portfolio PARTNERED WITH INNOVATIVE COMPANIES & FORMED A CONSORTIUM TO DECARBONIZE CALIFORNIA CO2 Agreement Region Emitter Project Type Location Storage Vault Service (KTPA) Type Northern California Renewable Green Northern CTV III Storage-Only 40 CDMA Hydrogen Califor
Slide 22: Strong Commodity Price Realizations in the State That Relies on External Energy Sources
Strong Commodity Price Realizations in the State That Relies on External Energy Sources ▪ Crude: California 1Q24 crude prices generally moved in tandem with the broader CALIFORNIA IS AN OIL ISLAND AND THE LARGEST U.S. GDP CONTRIBUTOR market and realizations experienced limited seasonal softening. Be
Slide 23: CRC Hedging Program
CRC Hedging Program OIL HEDGES1 As of March 31, 2024 2Q24 3Q24 4Q24 1H25 2H25 Barrels per Day 30,000 30,000 29,000 28,000 27,500 STRATEGY SOLD CALLS Weighted- CRC’s hedging strategy is designed to meet our Average Price $90.07 $90.07 $90.07 $86.88 $86.90 business objectives should market prices decl
Slide 24: CRC: Strong Balance Sheet Position, Ample Liquidity and Financial Flexibility
CRC: Strong Balance Sheet Position, Ample Liquidity and Financial Flexibility LIQUIDITY ROLL BACK1 3/31/24 NET DEBT* SNAPSHOT $1,500 ($MM) Revolving Credit Facility (RCF) $ 0 $1,200 $24MM $21MM $58MM 7.125% Senior Notes 545 $973MM $10MM $880MM $900 Face Value of Debt $ 545 $MM Less Cash & Cash Equiv
Slide 25: Glossary
Glossary Term Definition Term Definition Bcf Billion Cubic Feet GHG Greenhouse Gas BMT Billion Metric Tons IRR Internal Rate of Return CARB California Air Resources Board KMTPA Thousand Metric Tons Per Annum CCS Carbon Capture and Storage LCFS Low Carbon Fuel Standard CDMA Carbon Dioxide Management
Slide 26: Assumptions, Estimates and Endnotes
Assumptions, Estimates and Endnotes Slide 4: (1) All CRC’s future quarterly dividends and share repurchases are subject to commodity prices, credit agreement covenants and Board of Directors approval. Total shareholder return calculated through April 30, 2024. (2) See “The California Resources and A
Slide 27: Assumptions, Estimates and Endnotes (Cont.)
Assumptions, Estimates and Endnotes (Cont.) Slide 15: (1) See “The California Resources and Aera Energy Merger” announcement presentation from February 7, 2024, for calculation of transaction value and other important information. Closing is subject to customary closing conditions, regulatory approv
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations PV-10 and Standardized Measure The following table presents a reconciliation of the Aera’s GAAP financial measure of Standardized Measure of discounted future net cash flows (Standardized Measure) to the non-GAAP financial measure of PV-10. PV-10 is a non-GAAP financial meas
Slide 29: 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
Slide 30: Forward – Looking / Cautionary Statements – Certain Terms (Cont.)
Forward – Looking / Cautionary Statements – Certain Terms (Cont.) We caution you not to place undue reliance on forward-looking statements contained in this document, which speak only as of the filing date, and we undertake no obligation to update this information. This document may also contain inf
Slide 31: Cashflow Carbon California
Joanna Park (Investor Relations) Richard Venn (Media) 818-661-3731 818-661-6014 . Joanna.Park@crc.com Richard.Venn@crc.com Higher Less Better Cashflow Carbon California