California Resources Corporation · NYSE:CRC
California Resources — Investor Presentation (December 2014)
31 slides from California Resources's investor presentation, Dec 17, 2014
Slide 1: Investor Slides December, 2014
Investor Slides December, 2014
Slide 2: Forward-Looking / Cautionary Statements
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 presentatio
Slide 3: Cautionary Statements Regarding Hydrocarbon Quantities
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 S
Slide 4: Key Credit Highlights
Key Credit 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 of operatio
Slide 5: Disciplined Capital Allocation Focused Business Strategy
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 to enhanc
Slide 6: The State of California is a World Class Oil Province
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 Rich ma
Slide 7: Overview of California Resources Corporation
Overview of California Resources Corporation California Pure-Play Net Resource Overview CRC is an independent E&P company focused on high-return assets in California Largest privately-held acreage-holder with 2.3 million net acres (12/31/13) ~60% of total position is held in fee (12/31/13) Conventio
Slide 8: CRC is the Leading Operator in California
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 Aera Chevron CRC Top 25 Companies MBoe/d % of CA CRC 188.0 29% Chevron 166.2 25% Aera 147.1 22% PXP/Freeport 38.5 6% Berry/Linn 25.4 4% MacPherson
Slide 9: Acquisitions Over the Years
Acquisitions Over the Years ~40M acres Elk Hills and Kern Front 1.2MM acres Acquisition of Vintage and CA EOG assets 2.3MM acres Leading privately held acreage position in the state 1998 2009 2013 Tidelands Thums 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Acquisition Date San Joaquin and Sacr
Slide 10: Substantial Opportunity and Resource Rich Asset Base
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) $20,995 YTD Q3’14 Avg. Net Produc
Slide 11: Total California 2013 Reserves by Drive Mechanism
Conventional Waterflood Steamflood Unconventional Total Net Proved Reserves (MMBoe) 112 238 178 216 744 % Liquids - Net Proved 68% 95% 100% 57% 81% Pre-Tax Proved PV-10 ($ 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%
Slide 12: Creating a Recovery Value Chain
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 Waterflood (17 fields)
Slide 13: Large in Place Volumes with Significant Upside
Large in Place Volumes with Significant Upside Recovery Factors for Discovered Fields¹ Billion Boe 1 Does not include undiscovered unconventional resource potential. Leading asset position to exploit In place volumes of ~40 Bn Boe at low recovery factor (22%) to date Conventional “value chain” appro
Slide 14: Sacramento Basin
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 seismic surv
Slide 15: San Joaquin Basin
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 Formations Th
Slide 16: Elk Hills Field – Overview
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 production Largest gas and NGL producing field in CA, one of the largest fields in the continental
Slide 17: Ventura Basin
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 10 mi2 of 3D S
Slide 18: Los Angeles Basin
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 expressions
Slide 19: Wilmington Field – Overview
Wilmington Field – Overview Overview Field Map Proved Reserves & Cumulative Production Structure Map & Acquisition History * CRC’s flagship coastal asset: acquired in 2000 Field discovered in 1932; 3rd largest field in the U.S. Over 7 billion barrels OOIP (34% recovered to date)1 Depths 2,000’ – 10,
Slide 20: Portfolio of opportunities to generate double-digit production growth
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 flow
Slide 21: Proven Track Record in Sensitive Environments
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 22: CRC – Price Realizations
CRC – Price Realizations NGL Price Realization - % of WTI Realization % of WTI 109% 110% 106 % 101% Realization % of NYMEX 105% 105 % 102 % 102% Oil Price Realization Gas Price Realization Since California imports a significant percentage of its crude oil requirements, California refiners typically
Slide 23: Financial Strength Provides Flexibility to Drive Growth
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 Funds from o
Slide 24: Self-Funded Capital Investment Program
Self-Funded Capital Investment Program Commentary 2014 Drilling Capital Budget – By Basin 2014 Total Capital Budget 2014 Capital Budget – By Drive 2014 capital budget of $2.1 billion is an increase of 24% from 2013 CRC plans to reinvest excess free cash flow that prior to spin was sent to Occidental
Slide 25: The CRC Investment Opportunity
The CRC Investment Opportunity World Class Resource Base Portfolio of Lower-Risk, High-Growth Opportunities Management Expertise California Heritage Shareholder Value Focus
Slide 26: California Resources Corporation Q&A
California Resources Corporation Q&A
Slide 27: Non-GAAP Reconciliation for EBITDAX
Non-GAAP Reconciliation for EBITDAX For the Year Ended December 31, 9 Months Ended, Last Twelve Months Ended, ($ 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, depletion
Slide 28: Endnotes
Endnotes 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 $3 billion, each based on SEC pricing. As of 12/31/13, CRC’s probable reserves in the San Joaquin, Los Angeles, Ventura and Sacr
Slide 29: ROR Sensitivity – Pattern Waterflood
ROR Sensitivity – Pattern Waterflood Project Type Avg Pattern cost ($MM) $0.6 % Oil 100% DPI10 4.85 DPI15 4.45 Locations 180 Net F&D ($ / Boe)1 $8.92 WF EUR (Gross) MBoe Oil Prices (WTI $ / Bbl) 43 65 87 109 131 $100 102% 169% 238% 311% 388% $90 89% 147% 208% 272% 337% $80 75% 125% 178% 233% 289% Ke
Slide 30: ROR Sensitivity Steamflood Projects
ROR Sensitivity 9 Spot Inv Pattern cost ($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 Oil Prices (WTI $ / Bbl) 120 145 175 200 230 $100 30% 44% 57% 69% 82% $90 22% 35% 47% 58% 69% $80 13% 26% 37% 47% 57% Steamflood
Slide 31: Shale Geological Overview
Shale Geological Overview Major U.S. Shale Plays California Unconventional Potential Successful in upper Monterey using precise development approach Expanding efforts into lower Monterey and other shales Play Depth (ft) Thickness (gross ft) Porosity (%) Permeability (mD) Total Organic Carbon (%) Upp
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