California Resources Corporation · NYSE:CRC
California Resources — Investor Presentation (December 2020)
27 slides from California Resources's investor presentation, Dec 7, 2020
Slide 1: California Resources Corporation, December 2020
Y CALIFORNIA December 2020
Slide 2: Forward Looking / Cautionary Statements - Certain Terms
Forward Looking / Cautionary Statements - Certain Terms liquidity, i Such . tion, liquidity . > lashes prospects ® Macexctiors and peiecte + reserves + operating cost + type curves rates, costs and commodity prices . prices + + debt limitations on our financial flexibility + changes in business stra
Slide 3: Forward Looking / Cautionary Statements - Certain Terms (cont'd)
Forward Looking / Cautionary Statements - Certain Terms (cont’d) information. "). (ii) PV-10, (iii) fr sh fi (iv) See “Appendix” i i i 2020, it Bas December 1, 2020, wit i i i i i jneers. There were 4, 2020 compared 019. There Note: For referen 7 for 2024, $47.34 for 2022, $47.68 for 2023, $48.10 fo
Slide 4: CRC Overview
CRC Overview ‘Sacramento. \ California Basin / 3,000 BOE per day* * Diverse, 106 World-Class Mboepd (60% oil) Asset Base . i gest p! ly it i . Spanning 2.1 million net mineral acres - high net revenue interest of 87% decades of low-breakeven, repeatable opportunities Integrated power plant is one of
Slide 5: CRC - New Foundation
CRC - New Foundation @ Peers t ) CRC Flatter Organization Sustainable raver | Low Corporate Decline Rate+ Boles cnet with Leaner Structure iat ie _ 45% 40% @C@ e = 35% e ee e@ e B 30% © Ceee e & 25% ECTED TO DELIVER @ 2% = 20% e je Value Foc! & 15% @ e C * Feces on eta 10% sd : phere eae Energy Port
Slide 6: CRC Supplies Essential California Energy
CRC Supplies Essential California Energy + World’s 5th largest SeETeUy eli biggest contributor to GommEsiC GD! pt, California is thi energy d consumes ~2% of the world’s daily crude oil pattie CALIFORNIA IS THE LARGEST U.S. GDP CONTRIBUTOR + In-state production provides critical state, county and ci
Slide 7: CRC Situated in a Premier Oil Province
CRC Situated in a Premier Oil Province California - a Top Oil-Producing Province California ¢ Five of the largest conventional, onshore fields in the Lower 48 * Over 35 billion BOE* produced since 1876 Permian (Wolfcamp + Spraberry) * Still discovering the extent of remaining potential Bakken * Over
Slide 8: CRC's Advantages Aligned with Heese Proposition
CRC’s Advantages Aligned with Heese Proposition Shale Led Production Low production decline helps Decline Stability of cash flows Market A ney r Premium pricing to WT! —— Peis <> High oil cut provides better margins High NRI across all fields increases revenues al cal Decades long History 3" party p
Slide 9: Diverse Assets with Flexible Development Opportunities
Diverse Assets with Flexible Development Opportunities * World-class resource base with a diverse asset base and extensive high-quality inventory + Proven operator at managing and growing a profitable business, with strong historical F&D and Recycle profitability performance 5 5 @ ~ @®@ - * Total Pr
Slide 10: Significant CRC Inventory at Current Market Pricing
Significant CRC Inventory at Current Market Pricing Z Robust project inventory with full cycle cost below $35/Boe Large resource base continues to grow Optimized portfolio capable of growth in various commodity cycles All projects meet Company threshold (VCI index) and deliver robust cash flow . Por
Slide 11: Maximize Margins and Free Cash Flow through Active Cost Management
Maximize Margins and Free Cash Flow through Active Cost Management Margin Improvement . Operating Margins Higher At Similar Realized Prices | _. $30 + Reduced costs by $300+ million’ — majority will be sustainable 3 $25 | savings in production and G&A, and continuing cost optimization = Jul-20 Aug-2
Slide 12: California Is An Energy Island
California Is An Ener, Island... \ CA Depends Upon Imports To Satisfy Demand*+ } \ OIL DEMAND 1,688 MBOPD 2019 J * California Supply = Domestic Import = Foreign Import NATURAL GAS DEMAND * California Supply = Foreign Import Due To Lack Of Crude Pipelines. } Production — Crude Olt Pipeline Petroleum
Slide 13: ... That Drives Premium Pricing for CRC
... That Drives Premium Pricing for CRC CRC Production Mix (3QYTD 2020) Product _ Energy Equivalent Revenue (unhedged) Local vs. US Pricing Benchmarks CRC Positioning Crude Price, 12/1/20, $/bbI > 30 , = WTI (OK) $44.55 > 3 largest crude producer in CA re > Realized pricing premium © em pees Buena V
Slide 14: Further Margin Uplift Through Integrated Model
Further Margin Uplift Through Integrated Model * Elk Hills power plant’s integration with the Elk Hills field offers significant strategic value * Elk Hills power plant saves CRC ~$100mm/year through self-supply/generation of power * Ability to sell excess power produced * Operations streamlining *
Slide 15: Financial Flexibility Across Oil Prices
Financial Flexibility Across Oil Prices @| > $50 Brent - Accelerate rogram * Drillin high-graded portfolio * Focus on i ility projects - di i ‘ion of business " * Shareholder return initiatives DISCRETIONARY CASH FLOW PRIORIT| @ Protect balance sheet and liquidity ©| $40 to $50 Brent - Focus on Low-
Slide 16: CRC's Financial Framework
CRC’s Financial Framework »> |" »> + » Prioriti Metrics and Bal. Sheet Health . Target of 1x leverage . Maintain healthy liquidity, asset and fixed charge coverage © Pursue free cash flow generation Exercise Capital Discipline . Evaluate capital investment opportunities using VCI and payback metrics
Slide 17: CRC's Refreshed and Simplified Capital Structure
CRC’s Refreshed and Simplified Capital Structure Pro Forma Net Debt as of September 30, 2020 $541 Million $ in Millions. BEHP Secured Notes ™2LTermLoan mRevolving Credit Facility CRC has ample liquidity of ~$350MM®?) a ears * $1.2 billion borrowing base * Cash interest of L+3.0% - L+4.0% based on ut
Slide 18: Hedging Program Supports Cash Flows
Hedging Program Supports Cash Flows aw Hedges In Place | Strate; iS) a a ‘ture of Puts, Participating Collars and Swaps to protec cash Te and to 80% 75%. to liv also 71% aligned with CRC’s RBL requirements 60% oom Cash Flow Protected 40% volumes through October 2022 (in line with RBL terms), and 20%
Slide 19: Leading Financial Metrics
Leading Financial Metrics Production (Q3’20, Mboepd) | | | li l ii. e Total Debt / Enterprise Value (3920, %)? “alll 80% 60% ‘Scarce: Company tings, FactSet as of 12/4/2020. Oi peers miclude BAY, NGY, MTDR. MUR, POCE. PLand WP: | Total Proved Reserves (2019YE, MMBoe) | 3.0x il vo BiGGecn c NK and Hi
Slide 20: CRC Demonstrates ESG Leadership
CRC Demonsirates ESG Leadership Environmental Social Governance independent the Paris Climate Accord aiaind GRC’s exemplary ESG performance CRC methane emissions declined by Safety Achievement Awards ~63% since 2013 SB) ou p [= \« iz) U stewardship, water conservation and water supplier F ‘sustainab
Slide 21: Concluding Remarks
Concluding Remarks y IN Portfolio of world-class assets investable throughout the commodity cycle Disciplined capital allocation in a robust inventory of conventional low-decline projects to deliver FCF Maintain pristine ple liquidity; ESG focus with stable and sustainable foundation CALIFORNIA WBS
Slide 22: Appendix
Appendix
Slide 23: CRC's Asset Portfolio: Liquids-Weighted Production, Premium Realized Pricing
CRC’s Asset Portfolio: Liquids-Weighted Production, Premium Realized Pricing SAN LUIS OBISPO SANTA BARBARA ra * VENTURA . OP Vera Bas 4 LOS ANGELES /* Elk Hills Area Wilmington Hi sBuena Vista Kern Front South Valley Huntington Beach = Mount Poso Other CRC Operated o Outside Operated 12/1 Strip PV-
Slide 24: Adjusted EBITDAX Reconciliation
Adjusted EBITDAX Reconciliation We define adjusted Selec aS net (loss) income before interest and debt expense, net income taxes, depreciation, depletion and amortization; exploration expense; other ual, out-of-period and infrequent items; and other non-cash items. We believe this measure provides u
Slide 25: Other Reconciliations
Other Reconciliations Leverage and Net Debt ae calculate the leverage ratio by dividing net debt by adjusted EBITDAX for the applicable period. We define net debt as the face value of our debt less ash used to collateralize letters of credit outstanding and available cash. We believe the leverage ra
Slide 26: Other Reconciliations (cont'd)
spe as , Other Reconciliations (cont’d) Pv-10 PV-10 is a financial measure that represents the present value of estimated future cash inflows from proved oil and natural gas reserves, less future development and production costs, discounted at 10% per annum to reflect the timing of future cash flows
Slide 27: Y CALIFORNIA
Y CALIFORNIA
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