California Resources Corporation · NYSE:CRC
California Resources — Investor Day (October 2015)
86 slides from California Resources's investor day presentation, Oct 14, 2015
Slide 1: Bakersfield Analyst Day & Site Tour
Bakersfield ANALYST DAY & SITE TOUR October 14, 2015
Slide 2: Forward-Looking / Cautionary Statements
Analyst Presentation – Day 2 FORWARD-LOOKING / CAUTIONARY STATEMENTS This presentation contains forward-looking statements that involve risks and uncertainties that could materially affect our expected results of operations, liquidity, cash flows and business prospects, and reported results should n
Slide 3: Cautionary Statements Regarding Hydrocarbon Quantities
Analyst Presentation – Day 2 CAUTIONARY STATEMENTS REGARDING HYDROCARBON QUANTITIES We have provided internally generated estimates for proved reserves and aggregated proved, probable and possible reserves (“3P Reserves”) as of December 31, 2014 in this presentation, with each category of reserves e
Slide 4: CRC Agenda
Analyst Presentation – Day 2 3 • Day One Strategic Overview of CRC – Todd Stevens, President & CEO Marketing Overview – Carlos Contreras, VP Marketing Regulatory Overview – Charlie Weiss, EVP – Public Affairs Waterflood Primer – Jerry Foster, Manager IOR/EOR Los Angeles and Ventura Basins
Slide 5: World Class Resource Base
Analyst Presentation – Day 2 World Class Resource Base • Interests in 4 of the 12 largest fields in the lower 48 states • 768 MMBoe proved reserves (12/31/2014) • Largest producer in California on a gross operated basis with significant exploration and development potential California Heritage • Str
Slide 6: Exploration Overview
EXPLORATION OVERVIEW Darren Williams | EVP – Exploration | October 14, 2015
Slide 7: Exploration Key Takeaways
Analyst Presentation – Day 2 6 EXPLORATION KEY TAKEAWAYS Sacramento Basin Dry gas & shale San Joaquin Basin Heavy oil, light oil, dry gas & shale Ventura Basin Heavy oil, light oil, dry gas & shale LA Basin Heavy oil, light oil & shale • Material growth portfolio in an underexplored, world-class hyd
Slide 8: California Exploration History
Analyst Presentation – Day 2 7 • Multiple 1 Bn Boe+ discoveries from 1880s to 1940s based upon surface information Established California as a world class hydrocarbon province • Limited exploration activity 1970 thru 2000s Industry focused on development and EOR • Late 2000s CRC reestablished fo
Slide 9: Demonstrated Value Creation Thru Exploration
Analyst Presentation – Day 2 8 DEMONSTRATED VALUE CREATION THRU EXPLORATION • 2007-2014 exploration program • Activity: 130 wells • Geologic success rate: ~70% • Net 3P Reserves Adds: 218 MMBoe • 3P Finding cost: $3.55 / Boe • 2014 production: ~18,000 Boe/d • Key discoveries: 2009: Gunslinger 20
Slide 10: Drivers for Success
Analyst Presentation – Day 2 9 DRIVERS FOR SUCCESS • Largest land position in State • Proprietary data sets provides competitive advantage • 4,250 square miles of 3D seismic, ~90% of 3D available in state • Proprietary geologic models integrating well, seismic, outcrop and analog data to identify ac
Slide 11: Conventional Exploration Assets
Analyst Presentation – Day 2 10 • Unparalleled portfolio of onshore US conventional exploration assets • Significant value creation opportunity from deep inventory of near-field exploration prospects • Analogous to producing assets & recent key exploration discoveries • Multiple, stacked reservoirs
Slide 12: Conventional Exploration Portfolio
Analyst Presentation – Day 2 11 • Unparalleled exploration assets • Material, low risk conventional onshore US exploration portfolio 125+ independent oil and gas prospects 10 key play trends across three world- class hydrocarbon basins 1+Bn BOE net, unrisked resource potential • Exploration pr
Slide 13: Recent >750 BOPD Exploration Success
Analyst Presentation – Day 2 12 • Conventional reservoir in structural trap within CRC Operated field area • Multiple, stacked deepwater sand reservoirs • Reservoir interval #1 (deepest zone) 58’ gross hydrocarbon bearing sand Peak daily flow rates > 200 BOPD • Reservoir interval #2 148’ gross
Slide 14: Exploration Shale Reservoir Potential
Analyst Presentation – Day 2 13 • Multiple, regionally extensive organic-rich shale reservoirs • Exploration targets in Lower Monterey, Whepley, Kreyenhagen and Moreno shales Individual shale reservoirs range in thickness from 200 to 1000’+ Depths to targets from 8,000 – 20,000’ TOC > 4% obser
Slide 15: Shale Resources
Analyst Presentation – Day 2 14 SHALE RESOURCES Major U.S. Shale PlaysCalifornia Unconventional Potential • Successful in upper Monterey using precise development approach • Expanding efforts into lower Monterey and other shales CRC Current Production CRC Areas of Future Development 1Reservoir chara
Slide 16: Kreyenhagen Reservoir
Analyst Presentation – Day 2 15 KREYENHAGEN RESERVOIR • Type IIs organic black shale deposited in a restricted marine basin • Extensive, consistent reservoir mapped using log & 3D seismic data 500-1000’ gross thickness • Multiple, stacked high TOC (2-8%) intervals observed in log, core, cuttings &
Slide 17: Kreyenhagen Reservoir Properties
Analyst Presentation – Day 2 16 KREYENHAGEN RESERVOIR PROPERTIES • Reservoir properties key to storage capacity, completion effectiveness & well drainage • Average porosity > 10% • High quartz content 50-80% by volume • Multiple quartz-rich, brittle zones > 100’ thick • High fracture density obser
Slide 18: Proven Kreyenhagen Reservoir Production
Analyst Presentation – Day 2 17 PROVEN KREYENHAGEN RESERVOIR PRODUCTION • Production in ~20 vertical wells from Kreyenhagen reservoir 30 Day IP’s: 10-300+ BOPD • CRC implementing deliberate & cost effective approach to assessing expected reservoir performance Utilizing workovers in existing well
Slide 19: Key Elements of Successful Resource Plays
Analyst Presentation – Day 2 18 KEY ELEMENTS OF SUCCESSFUL RESOURCE PLAYS TOC & Thermal Maturity Reservoir Presence & Extent Brittleness & Fractures Overpressure Productive Hydrocarbons in Place Hydrocarbon generation potential & type Resource potential, sweet spot identification Hydrocarbon storage
Slide 20: Exploration Summary
Analyst Presentation – Day 2 19 EXPLORATION SUMMARY Sacramento Basin Dry gas & shale San Joaquin Basin Heavy oil, light oil, dry gas & shale Ventura Basin Heavy oil, light oil, dry gas & shale LA Basin Heavy oil, light oil & shale • Material growth portfolio in an underexplored, world-class hydrocar
Slide 21: Northern Operations
NORTHERN OPERATIONS Robert Barnes | EVP – Northern Operations | October 14, 2015
Slide 22: CRC North Key Takeaways
Analyst Presentation – Day 2 21 • World-Class Assets – Great Reservoirs • Base production surveillance is generating results • Cost reduction with minimal impact on production • Sustainable reduced costs and a culture of low cost operating • Expansive, integrated infrastructure with world-class reli
Slide 23: CRC North Operations at a Glance
Analyst Presentation – Day 2 22 Net Production - Q2 2015 67.0 MBOPD 17.0 MBPD NGL 224 MMCFD 121 MBOEPD 1,311 MBWPD water CRC NORTH OPERATIONS AT GLANCE 8,098 active wells • 6,919 producers • 1,025 injection/disposal wells • 79% production by beam pump Infrastructure • Consolidated Control
Slide 24: CRC North Well Count
Analyst Presentation – Day 2 CRC - NORTHERN OPERATIONS ACTIVE WELL COUNT REPORT TOTAL PROD/INJ 7,944 Jun-2015 5,454 184 958 188 79 56 1,025 Beam ESP Flowing Prog Cavity Hydraulic Gas Lift Injection CRC NORTH WELL COUNT 23 BEAM ESP FLOWING GAS LIFT PCP HYDRAULIC INJECTION OTHER TOTAL NORTH 5,454 184
Slide 25: CRC North Performance Metrics
Analyst Presentation – Day 2 24 CRC NORTH PERFORMANCE METRICS 2014Q4 2015Q1 2015Q2 Total Hours (MM) 3.0 1.7 1.5 Net Production (MBOEPD) 123.4 121.4 120.2 Oil (MBD) 66.7 66.5 66.0 Capital ($MM) 372 90 50 Cash OPEX ($MM) 163 153 144 Realized Price ($/BOE) 50.97 34.61 39.44 Cash OPEX ($/BOE) 14.37 14.0
Slide 26: Defending Margins by Managing Costs
Analyst Presentation – Day 2 25 DEFENDING MARGINS BY MANAGING COSTS ~28% Decrease $- $5.00 $10.00 $15.00 $20.00 $25.00 2012 2013 2014 1H 2015 $ /B O E CRC NORTH COST TRENDS Surface Operations and Maintenance Downhole Maintenance Workovers/Well Enhancement Supports and Other Energy Gas Plant Expense
Slide 27: Well Servicing Scorecard
Analyst Presentation – Day 2 WELL SERVICING SCORECARD 0 5 10 15 20 25 30 35 40 45 0 5 10 15 20 25 30 35 40 45 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 $ M p er jo b H o u rs p e r jo b Job Efficiency Hours per job Cost per job 26 0 200 400 600 800 1,000 1,200 1,400 1Q2014 2Q2014 3Q2014 4Q2014 1Q201
Slide 28: World-Class Uptime Wells, Plants and Infrastructure
Analyst Presentation – Day 2 WORLD-CLASS UPTIME WELLS, PLANTS AND INFRASTRUCTURE 27 90% 91% 92% 93% 94% 95% 96% 97% 98% 99% 100% 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 P ro u d ct io n U p ti m e
Slide 29: Workovers – Low Capital, Great Returns
Analyst Presentation – Day 2 28 WORKOVERS – LOW CAPITAL, GREAT RETURNS Description CAPEX ($MM) Incremental Rate (BOPD) Incremental Rate (BOEPD) Payout (YRS) ROR (%) VCI 10 8 - Artificial Lift Upgrade 18 - Add Perfs $7.6 662 914 1.3 155 5.3 0 100 200 300 400 500 600 700 800 900 1000 Jan-15 Feb-15 Mar
Slide 30: Defend CRC's Margins
Analyst Presentation – Day 2 29 DEFEND CRC’S MARGINS Revenue - Cash Direct OPEX (Not including overhead, ad valorem tax, severance tax and GHG tax) 55% Oil 35% Oil 1% Oil 40% Oil 100% Oil 100% Oil 89% Oil 100% Oil 95% Oil 96% $- $10 $20 $30 $40 $50 $60 1 10 100 1000 Total CRC North Buena Vista Rio V
Slide 31: Elk Hills Area at a Glance
Analyst Presentation – Day 2 ELK HILLS AREA AT A GLANCE 30 3,726 active wells • 3,319 producers • 407 injection/disposal wells • 89% production by beam pump Infrastructure • Consolidated Control Facility • 3 gas plants (CGP1, LTS1, LTS2) • 520 MMCFD processing capacity • 148 units; 300K HP compressi
Slide 32: Major Gas & Power Facilities
Analyst Presentation – Day 2 31 MAJOR GAS & POWER FACILITIES • Largest gas plant complex in California CGP1 (200 MMSCFD) LTS1 (160 MMSCFD) LTS2 (160 MMSCFD) – On Standby CGP1 Amine, GTU2 & GTU3 (CO2) • Consolidated Control Facility (CCF) • 550 Megawatt Power Plant (EHPP) – Supplies power and
Slide 33: CGP1 Benefits
Analyst Presentation – Day 2 32 CGP1 BENEFITS • Cryogenic Gas Plant (CGP1) started up in mid-2012 • Added 3,000 bpd of NGL production due to improved recovery • Improved sales gas quality to consistently meet customer BTU and Dew Point specs • California’s largest natural gas and NGL plant - Process
Slide 34: San Joaquin Basin West to East Seismic Cross-Section
Analyst Presentation – Day 2 33 SAN JOAQUIN BASIN WEST TO EAST SEISMIC CROSS-SECTION Belgian Anticline & Midway Sunset Elk Hills North Shafter Kern Front Etchegoin Upper Monterey Lower Monterey Temblor Deep Marine Turbidites Basement Shallow Marine San Andreas Fault System Faults SW NE Mount Poso Bo
Slide 35: Elk Hills Major Producing Zones
Analyst Presentation – Day 2 34 ELK HILLS MAJOR PRODUCING ZONES 6 Deep Expl.
Slide 36: Building Life of Field Plans – Elk Hills
Analyst Presentation – Day 2 35 BUILDING LIFE OF FIELD PLANS – ELK HILLS Multiple recovery mechanisms Primary Waterflood Unconventional Improved base decline ~15%/yr Improved well uptime Infrastructure Reliability Base Surveillance and Management Implementation of a diverse project inven
Slide 37: Effective Management of Elk Hills Operating Costs
Analyst Presentation – Day 2 36 EFFECTIVE MANAGEMENT OF ELK HILLS OPERATING COSTS* *Transition from primary to secondary production in Elk Hills has been occurring during this period. The Wilmington Field has similarly experienced declines in Opex per well and Opex per Boe despite a significantly hi
Slide 38: Greater Elk Hills Area Reservoirs
Analyst Presentation – Day 2 GREATER ELK HILLS AREA RESERVOIRS 37
Slide 39: Progressing Inventory to VCI Threshold
Analyst Presentation – Day 2 PROGRESSING INVENTORY TO VCI THRESHOLD 38 GEHA INVENTORY 2016 -2020 VCI >= 1.0 VCI >= 1.3 Plan Year 2016 to 2020 Plan Year 2016 to 2020 Recovery Mechanism Prod Drill Count Inj Drill Count WO Count Net Capex $MM Recovery Mechanism Prod Drill Count Inj Drill Count WO Count
Slide 40: Mt Poso Redevelopment
Analyst Presentation – Day 2 39 MT POSO REDEVELOPMENT • Old steamfloods have hotplate heated Vedder generating drilling opportunities • Expanding waterflood development from North part to the South area of the field • 6 Recent wells (4 verticals and 2 horizontals) with good results • 400 bopd net at
Slide 41: Pleito Ranch
Analyst Presentation – Day 2 40 • Discovery date: 1957 • CRC Drilled 36 wells to date • Formations: Santa Margarita and Chanac • Complex Upturn Play Trap • Depths: 9,000 – 15,100’ MD • WI = 100% and P1 NRI = 96% • In place: 250 MMBO / Cum. Prod: 12 MMBO / ~5% RF • Current production: 3,200 BOEPD (27
Slide 42: Improved Waterflood - Buena Vista
Analyst Presentation – Day 2 IMPROVED WATERFLOOD - BUENA VISTA • 1,300 bopd and 60,000 bwpd • 80 active injectors, waterflood is 30% implemented • Prior Operator initiated disposal project on 5 acres • Current flood is responding with CRC 20 acre patterns (37 injectors in past two years) • Increment
Slide 43: CRC North Summary
Analyst Presentation – Day 2 42 • World-Class Assets – Great Reservoirs • Base production surveillance is generating results • Cost reduction with minimal impact on production • Sustainable reduced costs and a culture of low cost operating • Expansive, integrated infrastructure with world-class reli
Slide 44: Thermal EOR Overview
THERMAL EOR OVERVIEW Past, Present and Future Victor Ziegler, Ph.D. | Director – Corporate Development | October 14, 2015
Slide 45: Thermal EOR Overview
Analyst Presentation – Day 2 44 THERMAL EOR OVERVIEW • Provide an overview and update on the status of thermal enhanced oil recovery (TEOR) • Discussion includes: Thermal Process Historical Overview Economic Barometer Future Opportunities
Slide 46: Key Thermal Highlights
Analyst Presentation – Day 2 45 KEY THERMAL HIGHLIGHTS • Steam injection is the most successful EOR process • Up to 70% of the oil-in-place in a reservoir may be recovered by steamflooding • Application of new technologies has enhanced steamflooding even in mature areas such as the U.S. • TEOR opera
Slide 47: Thermal EOR Processes: Cyclic Steam Injection
Analyst Presentation – Day 2 46 THERMAL EOR PROCESSES Cyclic steam injection • A three-step well stimulation process • Used as a precursor and supplement to steamflood Source: Department of Energy
Slide 48: Thermal EOR Processes: Steamflood
Analyst Presentation – Day 2 47 THERMAL EOR PROCESSES Steamflood • Continuous steam injection into a pattern • Rapid heating of the pattern area; steam over-rides oil column STEAMFLOOD Source: Department of Energy
Slide 49: Thermal EOR Processes: In Situ Combustion
Analyst Presentation – Day 2 48 THERMAL EOR PROCESSES In situ combustion • Inject air, which reacts with the oil to generate high temperatures (~1,000 F) • Unstable process, which has poor reservoir sweep and oil recovery Source: Department of Energy
Slide 50: Heavy Oil Recovery Efficiency
Analyst Presentation – Day 2 49 HEAVY OIL RECOVERY EFFICIENCY R e se rv e s Natural Depletion Low Med High L o w M e d H ig h Steam has larger target oil recovery Steamflood Cyclic Steam Combustion Cold Waterflood Hot Waterflood Investment
Slide 51: U.S. Thermal EOR (TEOR)
Analyst Presentation – Day 2 50 U.S. THERMAL EOR (TEOR) • Steam injection has been the most successful EOR process in the U.S. • High prices have kept production flat for the last 10 years Source: Oil and Gas Journal April 2014
Slide 52: Typical Steamflood Field
Analyst Presentation – Day 2 51 TYPICAL STEAMFLOOD FIELD Kern Front
Slide 53: Effective Enhanced Recovery Method
Analyst Presentation – Day 2 52 EFFECTIVE ENHANCED RECOVERY METHOD • Long history with initial projects begun in the 1930’s • Implementation of multi-pattern pilots, however, did not begin until the 1950’s • Success of steam pilots minimized the use of air injection • Price decline of 1986 forced ch
Slide 54: Production Reflects Pattern Response
Analyst Presentation – Day 2 53 PRODUCTION REFLECTS PATTERN RESPONSE • 95% of U.S. steamfloods are in Kern County, CA • Typical steam pattern response stabilized plateau rate even though number of projects was decreasing
Slide 55: Key Improvements in Thermal Practices
Analyst Presentation – Day 2 54 KEY IMPROVEMENTS IN THERMAL PRACTICES • Reservoir heat management 1986 price decline triggered advances in steamflood management SFR = 2.5 bs/mcf; SOR ~ 5 bs/bo >>> steam fuel costs ~ $6/bo for $3/mcf • Multi-reservoir steamflood development Accelerate oil recov
Slide 56: Reservoir Heat Management
Analyst Presentation – Day 2 55 RESERVOIR HEAT MANAGEMENT • Steamfloods are different than waterfloods >> waterfloods require a constant injection rate • Reducing steam injection in mature patterns keeps steam in pattern area, minimizes steam production and provides steam for pattern expansions • Th
Slide 57: Multi-Reservoir Steamflood Development
Analyst Presentation – Day 2 56 MULTI-RESERVOIR STEAMFLOOD DEVELOPMENT • Multiple zones may be developed either simultaneously or sequentially (bottoms-up order) • Vertically expanding a steamflood pattern to an overlying reservoir greatly extends the productive life of the project with minimal addi
Slide 58: Multi-Reservoir Steamflood Rate Profile
Analyst Presentation – Day 2 57 MULTI-RESERVOIR STEAMFLOOD RATE PROFILE • 9-pattern project at Kern Front • Initial steamflood was into Etchegoin sand in 1991 • Vertical expansion steamfloods were begun in 2005 • Oil recovery per zone approaches 70% of oil in place by steamflood (versus ~30% by wate
Slide 59: California Serves as Training Ground
Analyst Presentation – Day 2 58 CALIFORNIA SERVES AS TRAINING GROUND • Thermal EOR accounts for ~1.2 Mmbopd of world-wide oil production • Venezuela and Canada are the two largest TEOR producers • The US is the third largest TEOR producer Source: Oil and Gas Journal April 2014
Slide 60: Main Economic Barometer
Analyst Presentation – Day 2 59 MAIN ECONOMIC BAROMETER 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 Brent / Henry Hub Ratio Ratio Economic Limit Source: Bloomberg • Even with recent price drop, TEOR remains attractive investment with oil/gas ratio >5x (currently ~15x) • TEOR patterns compete favo
Slide 61: Regulatory Focus for Thermal in CA
Analyst Presentation – Day 2 60 REGULATORY FOCUS FOR THERMAL IN CA • Fresh water use, under drought conditions CRC is a net supplier of water to agriculture CRC provides more treated, reclaimed water from TEOR operations than the amount of fresh water we purchase statewide • State review of Unde
Slide 62: Steamflood Innovations
Analyst Presentation – Day 2 61 STEAMFLOOD INNOVATIONS • Enclosed parabolic solar troughs to pre-heat feedwater or generate steam • Permanently buried seismic sources and receivers to provide daily images of the movement of a steam front Source: GlassPoint Source: IPTC 17407
Slide 63: Future Opportunities – New Reservoirs
Analyst Presentation – Day 2 62 FUTURE OPPORTUNITIES – NEW RESERVOIRS • Majority of known heavy oil sands are already developed • Carbonates, diatomite and siliceous shale reservoirs containing both light and heavy oils are the next targets Heavy oil sand
Slide 64: Potential Recovery Mechanisms
Analyst Presentation – Day 2 63 POTENTIAL RECOVERY MECHANISMS • Viscosity reduction is the primary recovery mechanism • In fractured reservoirs, low matrix permeability means heat transfer is primarily by conduction • Oil recovery will be aided by counter-current imbibition and thermal expansion of
Slide 65: Key Thermal Highlights
Analyst Presentation – Day 2 64 KEY THERMAL HIGHLIGHTS • Steam injection contributes over 1 million bopd worldwide • Up to 70% of the oil-in-place in a reservoir may be recovered by steamflooding • Reservoir heat management and multi-zone development have enhanced steamflooding even in mature areas
Slide 66: Thermal Operations - Steamflooding
THERMAL OPERATIONS - STEAMFLOODING Jeff Hatlen | Chief Reservoir Engineer – Thermal Operations | October 14, 2015
Slide 67: Key Steamflood Take-Aways
Analyst Presentation – Day 2 66 KEY STEAMFLOOD TAKE-AWAYS • Up-front Investment • Strong Margins • Stable/Long-Lived Declines • Strong Backside Cash Flow Creates Real Value
Slide 68: Introduction to Steamflooding
Analyst Presentation – Day 2 67 INTRODUCTION TO STEAMFLOODING • Steamfloods have a life cycle • Immature • High injection rate • Steam build-out • Breakthrough • Mature • Oil drainage • Heat cuts • Strong cash flow • Steamfloods follow a path • Primary production • Cyclic steam • Continuous steam in
Slide 69: Steamflood Targets
Analyst Presentation – Day 2 68 STEAMFLOOD TARGETS • Our reservoirs are like a layer cake of sandstone and clay • Each sandstone layer is important • To achieve the highest cash margins, we need to control each layer • Understanding how steam moves through these layers will drive success Common Co
Slide 70: Steam Movement and Impact
Analyst Presentation – Day 2 69 STEAM MOVEMENT AND IMPACT Steam Injection Oil & Water Oil & Water Start of steam injection Heat management Effluent Steam Steam breakthrough
Slide 71: Steamflooding: Pattern Developments Over Multiple Years
Analyst Presentation – Day 2 70 STEAMFLOODING: PATTERN DEVELOPMENTS OVER MULTIPLE YEARS Patterns are the Fundamental Building Blocks 5-spot Pattern • Typical 5 acres Injection well Production well Displacement Project • Common start-date • Contiguous patterns Field Development • Several Projects • M
Slide 72: Thermal Process: Pattern Life Cycle
Analyst Presentation – Day 2 71 THERMAL PROCESS : PATTERN LIFE CYCLE Ramp-up Mature Stable Oil Decline Injection Reduction Facilities Established Maximize injection 6mo – 2+ yrs Steam Injection Rate Peak Maximum Oil Rate Steam Breakthrough
Slide 73: Kern Front – Stacked Intervals
Analyst Presentation – Day 2 72 KERN FRONT – STACKED INTERVALS
Slide 74: Steamflood Surveillance
Analyst Presentation – Day 2 73 STEAMFLOOD SURVEILLANCE
Slide 75: Steam Management
Analyst Presentation – Day 2 74 STEAM MANAGEMENT
Slide 76: Steamflood Learnings
Analyst Presentation – Day 2 75 STEAMFLOOD LEARNINGS Kern Front
Slide 77: Lost Hills – Additional Opportunities
Analyst Presentation – Day 2 76 LOST HILLS – ADDITIONAL OPPORTUNITIES Short Circuiting Layer Cold Oil Cold Oil Previous Operator Pattern Group
Slide 78: Multi-Year Inventory of Patterns
Analyst Presentation – Day 2 77 MULTI-YEAR OF INVENTORY OF PATTERNS Lost Hills Kern Front
Slide 79: Deep Inventory Fuels Thermal Growth
Analyst Presentation – Day 2 78 DEEP INVENTORY FUELS THERMAL GROWTH 0 5,000 10,000 15,000 20,000 25,000 30,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 N e t B O E P D 2011-2020 Thermal Operations Production Kern Front Lost Hills Adv. Properties
Slide 80: Robust Margins Despite Low Prices
Analyst Presentation – Day 2 79 ROBUST MARGINS DESPITE LOW PRICES 41% 43% 33% 49% 58% 58% 48% 44% $42 $47 $41 $47 $55 $57 $47 $42 $0 $10 $20 $30 $40 $50 $60 $70 0% 25% 50% 75% 100% Jan Feb Mar Apr May Jun Jul Aug O p e ra ti n g M a rg in a s % o f O il P ri ce 2015 Thermal Operations Op. Margin as
Slide 81: Strong Backside Cash Flow Creates Real Value
Analyst Presentation – Day 2 80 STRONG BACKSIDE CASH FLOW CREATES REAL VALUE 0 Positive Cash Kern Front Field Example Representative example; based on CRC estimates.
Slide 82: Key Steamflood Take-Aways
Analyst Presentation – Day 2 81 KEY STEAMFLOOD TAKE-AWAYS • Up-front Investment • Strong Margins • Stable/Long-Lived Declines • Strong Backside Cash Flow Creates Real Value
Slide 83: California Resources Corporation Appendix
Analyst Presentation – Day 2 82 CALIFORNIA RESOURCES CORPORATION APPENDIX
Slide 84: End Notes
Analyst Presentation – Day 2 END NOTES: (1) The reserves replacement ratio is calculated for a specified period using the applicable proved oil-equivalent additions divided by oil-equivalent production. Company- wide 76% of 2014 additions were proved undeveloped. There is no guarantee that historica
Slide 85: Non-GAAP Reconciliation for Adjusted EBITDAX
JRCO 0915Analyst Presentation – Day 2 Non-GAAP Reconciliation for Adjusted EBITDAX For the Second Quarter Ended June 30, For the Six Months Ended June 30, Full Year ($ in millions) 2015 2014 2015 2014 2014 Net Income/(loss) ($68) $246 ($168) $469 ($1,434) Interest expense 83 - 162 - 72 Income taxes
Slide 86: Non-GAAP Reconciliation for PV-10
JRCO 0915Analyst Presentation – Day 2 Non-GAAP Reconciliation for PV-10 ($ in millions) At December 31, 2014 PV-10 $16,091 Present value of future income taxes discounted at 10% (5,263) Standardized Measure of Discounted Future Net Cash Flows $10,828 PV-10 is a non-GAAP financial measure and represe