California Resources Corporation · NYSE:CRC
California Resources — Goldman Sachs Global Energy Conference 2015
31 slides from California Resources's conference presentation, Jan 7, 2015
Slide 1: Goldman Sachs Global Energy Conference 2015
0 Goldman Sachs Global Energy Conference 2015 January 7-8, 2015
Slide 2: Forward-Looking / Cautionary Statements
1 Forward-Looking / Cautionary Statements This presentation contains 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 statements of historical fact, included in this presentat
Slide 3: Cautionary Statements Regarding Hydrocarbon Quantities
2 Cautionary Statements Regarding Hydrocarbon Quantities CRC has provided internally generated estimates for proved reserves and aggregated proved, probable and possible reserves (“3P Reserves”) as of December 31, 2013 in this presentation, with each category of reserves estimated in accordance with
Slide 4: Key Investment Highlights
3 Key Investment Highlights World Class Resource Base •Interests in 4 of the 12 largest fields in the lower 48 states •744 MMBoe proved reserves •Largest producer in California on a gross operated basis with significant exploration and development potential California Heritage •Strong track record o
Slide 5: Disciplined Capital Allocation Focused Business Strategy
4 Disciplined Capital Allocation Focused Business Strategy • Grow NAV per share through exploration and development of under-exploited resources • Self-funding capital program eliminates reliance on external capital • Rigorously review projects to allocate capital most efficiently • Drive down costs
Slide 6: The State of California is a World Class Oil Province
5 The State of California is a World Class Oil Province 1 Produced volumes: California Division of Oil, Gas & Geothermal Resources (“DOGGR”). • Over 35 billion Boe produced since 18761 • Pico Canyon #4 was the first well with commercial production west of the Rockies and produced from 1876 to 1992 •
Slide 7: Overview of California Resources Corporation
6 12,836 73% 1,537 9% 2,310 13% 1,008 5% San Joaquin Basin Los Angeles Basin Sacramento Basin Ventura Basin San Joaquin Basin Los Angeles Basin Sacramento Basin Ventura Basin 744, 68% 79% liquids 235, 21% 99% liquids 96, 9% 89% liquids 22, 2% 1% liquids Overview of California Resources Corporation C
Slide 8: CRC is the Leading Operator in California
7 0 50 100 150 200 250 300 G ros s O per a te d M B oe/ d CRC is the Leading Operator in California • 85% of CA production from top 5 operators*Top California Producers in 2013* Growth of Top California Producers 188 166 147 38 25 - 20 40 60 80 100 120 140 160 180 200 CRC Chevron USA Aera Energy Fre
Slide 9: Substantial Opportunity and Resource Rich Asset Base
8 Substantial Opportunity and Resource Rich Asset Base Total California 2013 Reserves Net Proved Reserves (MMBoe) 744 % Liquids – Net Proved 81% Pre-Tax Proved PV-10 ($ millions)1 $14,018 Net 3P Reserves MMBoe 1,098 % Liquids – Net 3P 83% Pre-Tax 3P PV-10 ($ millions) $20,995 YTD Q3‟14 Avg. Net Prod
Slide 10: Total California 2013 Reserves by Drive Mechanism
9 Primary Waterflood Steamflood Unconventional Total Net Proved Reserves (MMBoe) 112 238 178 216 744 % Liquids - Net Proved 68% 95% 100% 57% 81% Pre-Tax Proved PV-10 ($ millions) $959 $4,216 $4,917 $4,105 $14,1982 Net 3P Reserves (MMBoe)3 187 373 227 312 1,098 % Liquids - Net 3P3 77% 94% 100% 60% 83
Slide 11: Creating a Recovery Value Chain
10 Creating a Recovery Value Chain • Conventional fields in various stages of development • Base assets in place – advancing recovery with traditional means • Moving recoveries from primary through EOR • Primary (93 fields) • Production with natural energy of reservoir or gravity drainage • Waterflo
Slide 12: Large in Place Volumes with Significant Upside
11 Large in Place Volumes with Significant Upside Recovery Factors for Discovered Fields¹ 9 40 0 5 10 15 20 25 30 35 40 45 Cum Recovered to Date Remaining 3P + Contingent RF + 10% RF + 15% RF + 20% Original in Place Billion Boe 1 Does not include undiscovered unconventional resource potential. • Lea
Slide 13: Elk Hills Field – Overview
12 0 20 40 60 80 100 120 140 1998 2000 2002 2004 2006 2008 2010 2012 2014 N et M B oe/ d Elk Hills Field – Overview • CRC‟s flagship asset, a 103-year old field with exploration opportunities1 • Large fee property with multiple stacked reservoirs • Light oil from conventional and unconventional prod
Slide 14: Wilmington Field – Overview
13 - 50 100 150 200 250 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 M M B o e Net Proved Reserves Production to Date Wilmington Field – Overview Overview Field Map Proved Reserves & Cumulative Production Structure Map & Acquisition History * • CRC‟s flagship coastal asset:
Slide 15: Production growth scenarios within cash flow
14 •CRC has a significant portfolio of conventional and unconventional opportunities to generate double-digit production growth over the longer-term. •CRC has developed preliminary planning scenarios that indicate it may be able to grow crude oil production at a double-digit pace from operating cash
Slide 16: Proven Track Record in Sensitive Environments
15 Proven Track Record in Sensitive Environments • Operator of choice in coastal environments • Proven coexistence with sensitive environmental receptors • Excellence in safety and mechanical integrity
Slide 17: CRC – Price Realizations
16 CRC – Price Realizations $95.12 $94.21 $97.97 $99.61 $103.80 $104.02 $104.16 $100.94 $110.90 $111.70 $108.76 $107.02 $80 $90 $100 $110 $120 2011 2012 2013 9 Months 2014 $ /B b l WTI Realizations Brent $4.11 $2.81 $3.66 $4.46 $4.31 $2.94 $3.73 $4.53 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 2011
Slide 18: Financial Strength Provides Flexibility to Drive Growth
17 Financial Strength Provides Flexibility to Drive Growth • Capital program: Invest within cash flow • Growth strategy based on re-investment in opportunity rich portfolio of projects and disciplined allocation of capital • Maintain strong liquidity profile, target: • Debt / EBITDAX of 2.2x or less
Slide 19: Self-Funded Capital Investment Program
18 Drilling ~$1,390 ~66% Dev. Facility ~$280 ~13% Workover ~$200 ~9% Exploration ~$95 ~5% Other ~$145 ~7% Self-Funded Capital Investment Program Commentary 2014 Drilling Capital Budget – By Basin 2014 Total Capital Budget 2014 Capital Budget – By Drive San Joaquin $942 68% Los Angeles $384 28% Ventu
Slide 20: The CRC Investment Opportunity
19 The CRC Investment Opportunity World Class Resource Base Portfolio of Lower-Risk, High-Growth Opportunities Management Expertise California Heritage Shareholder Value Focus
Slide 21: Appendix
20 California Resources Corporation Appendix
Slide 22: Non-GAAP Reconciliation for EBITDAX
21 Non-GAAP Reconciliation for EBITDAX For the Year Ended December 31, 9 Months Ended, Last Twelve Months Ended, ($ in millions) 2012 2013 9/30/2013 9/30/2014 9/30/2014 Net Income $699 $869 $657 $657 $869 Interest Expense - - - - - Provision for income taxes 482 578 438 444 584 Depreciation, depleti
Slide 23: Acquisitions Over the Years
22 Acquisitions Over the Years 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Acquisition Date San Joaquin and Sacramento Basin Minerals San Joaquin MineralsSan Joaquin Basin Minerals and North Shafter SJV North SJV and Sac Stockdale SJV Central Huntington Beach Buena Vista Hills Kettleman North
Slide 24: Sacramento Basin
23 Sacramento Basin • Exploration started in 1918 and focused on seeps and topographic highs. In the 1970s the use of multifold 2D seismic led to largest discoveries • Cretaceous Starkey, Winters, Forbes, Kione, and the Eocene Domengine sands • Most current production is less than 10,000 feet • 3D s
Slide 25: San Joaquin Basin
24 San Joaquin Basin • Oil and gas discovered in the late 1800s • Currently accounts for ~70% of CRC production • 25 billion barrels OOIP in CRC fields • Cretaceous to Pleistocene sedimentary section (>25,000 feet) • Source rocks are organic rich shales from Moreno, Kreyenhagen, Tumey, and Monterey
Slide 26: Ventura Basin
25 Ventura Basin • Estimated ~3.5 billion barrels OOIP in CRC fields1 • Operate 25 fields (about 40% of basin) • 257,500 net acres • Multiple source rocks: Miocene (Monterey and Rincon Formations), Eocene (Anita and Cozy Dell Formations) • YTD Q3‟14 average net production of 9 MBoe/d • In 2013, shot
Slide 27: Los Angeles Basin
26 Los Angeles Basin • Large, world class basin with thick deposits • Kitchen is the entire basin, hydrocarbons did not migrate laterally; basin depth (>30,000 ft) • 10 billion barrels OOIP in CRC fields • Most significant discoveries date to the 1920s – past exploration focused on seeps & surface e
Slide 28: ROR Sensitivity – Pattern Waterflood
27 0 20 40 60 80 100 -6 0 6 12 18 24 2012 2013 2014 ROR Sensitivity – Pattern Waterflood Project Type Avg Pattern cost ($MM) $0.6 % Oil 100% DPI10 4.85 DPI15 4.45 Locations 180 Net F&D ($ / Boe)1 $8.92 WF EUR (Gross) MBoe O il P ri c e s (W T I $ / B b l) 43 65 87 109 131 $100 102% 169% 238% 311% 38
Slide 29: ROR Sensitivity – Steamflood Spot Investment
28 ROR Sensitivity 9 Spot Inv Pattern cost ($MM) $1.8 % Oil 100% DPI10 2.2 DPI15 1.9 Net F&D ($ / Boe) 1 $10.50 Locations 100+ Fuel Gas Price, $ / MMBTU $4.50 EUR (Gross) MBoe O il P ri c e s (W T I $ / B b l) 120 145 175 200 230 $100 30% 44% 57% 69% 82% $90 22% 35% 47% 58% 69% $80 13% 26% 37% 47% 5
Slide 30: Shale Geological Overview
29 Shale Geological Overview Major U.S. Shale PlaysCalifornia Unconventional Potential 0 GR 150 0 GR 150 0 GR 150 0 GR 150 0 GR 150 0 GR 150 3,000 2,000 1,000 Kreyenhagen Productive interval Target interval Moreno Bakken Barnett Eagle Ford N A B C D PG • Successful in upper Monterey using precise de
Slide 31: Endnotes
30 Endnotes 1) As of 12/31/13, CRC’s probable reserves were 218 MMBoe (87% liquids) with a PV-10 of $4 billion and possible reserves were 136 MMBoe (83% liquids) with a PV-10 of $3 billion, each based on SEC pricing. 2) As of 12/31/13, CRC’s probable reserves in the San Joaquin, Los Angeles, Ventura
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