California Resources Corporation · NYSE:CRC
California Resources — Q4 2023 Earnings Presentation
31 slides from California Resources's earnings presentation, Feb 28, 2024
Slide 1: Fourth Quarter and Year End 2023 Results
Fourth Quarter and Year End 2023 Results February 27, 2024
Slide 2: 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 3: Forward-Looking / Cautionary Statements (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 4: Presenters
Presenters Francisco Leon President & Chief Executive Officer Nelly Molina EVP & Chief Financial Officer
Slide 5: Today's Key Messages
Today's Key Messages
Slide 6: Executing Our Strategy
Executing Our Strategy '23 RESULTS '24E OUTLOOK ▪ Safe Operations: CRC's lowest TRIR1 of 0.31 STRONG ▪ Implemented ~$65MM in sustainable annual cost reductions ▪ 1 rig in 2024; adding 3 rigs in 2H242 ▪ ~6% reduction in YOY non-energy operating costs OPERATIONAL & ▪ Better capital efficiency: gross p
Slide 7: Financial & Operational Results
Financial & Operational Results
Slide 8: Strong Delivery Across All Key Metrics
Strong Delivery Across All Key Metrics 2023 STRONG FINANCIAL & OPERATIONAL PERFORMANCE Higher Delivered Record Generated Returned to Stakeholders Implemented Cashflow $27.51 $468MM $279MM $65MM of Adj. EBITDAX* per BOE Of Free Cash Flow* Via Buybacks, Dividends Of Sustained Annual Cost Reductions &
Slide 9: Combination with Aera Energy
Combination with Aera Energy1 Transaction value: $2.1B Combining With California’s Second Largest Oil Producer2 + Aera 3Q23 Production: 76 MBOED | 95% Oil TRANSACTION SUMMARY Aera Carbon Storage Reservoir Capacity: 54 MMT Northern California VALUE ACCRETIVE More than doubles CRC’s 2024E FCF*; ~90% u
Slide 10: Consistent Operational & Financial Performance
Consistent Operational & Financial Performance ACHIEVED RECORD ANNUAL CASH FLOW PER SHARE2 2023E1 2023A Cash Flow From Weighted Average Diluted Shares Brent ($/bbl) $84.16 $82.22 Operations ($MM) Outstanding (MM) Brent realized price with hedge ($/bbl) N/A $65.97 $700 90 CRC GUIDANCE Guidance1 Resul
Slide 11: Power and Natural Gas Marketing Boosted Annual Results
Power and Natural Gas Marketing Boosted Annual Results 2023 Revenue Stream by Type ($MM) Oil Natural Gas 15% Marketing (NG) Average Daily1 2023 Electricity 14% NYMEX HH $2.74 NGLs Other ~22% PG&E City-gate SoCal Border $6.09 $4.81 SoCal City-gate $6.59 Of CRC’s Total 2023 54% 8% Revenue Derived from
Slide 12: Strong Balance Sheet Position, Ample Liquidity and Financial Flexibility
Strong Balance Sheet Position, Ample Liquidity and Financial Flexibility LIQUIDITY ROLL BACK1 12/31/23 NET DEBT* SNAPSHOT $1,500 ($MM) $28MM $9MM $27MM $81MM $442MM $143MM Revolving Credit Facility (RCF) $ 0 $1,200 $56MM $973MM 7.125% Senior Notes 545 $900 Face Value of Debt $ 545 $765MM $MM Less Ca
Slide 13: Continued Commitment to Shareholder Returns
Continued Commitment to Shareholder Returns1 ▪ CRC intends to raise its quarterly dividend post Aera merger close ▪ $1.35B SRP through December 31, 2025, with $747MM remaining COMPETITIVE CURRENT DIVIDEND YIELD VS. MARKET PARTICIPANTS2 SIGNIFICANT RETURN OF CAPITAL TO DATE Current Annualized Fixed D
Slide 14: Successfully Managed Reservoir Performance with Disciplined Capital Deployment
Successfully Managed Reservoir Performance with Disciplined Capital Deployment RESERVOIRS AND OPERATIONS PERFORMED IN LINE WITH EXPECTATIONS Average Gross Total Production (MBOED) ‘23 ADJ. E&P, CORP, & OTHER CAPITAL ‘23 OPERATING & TRANSPORTATION COSTS 103.3 ($MM) ($MM) D&C and Workovers Non-Energy
Slide 15: Huntington Beach – Asset Optimization & Value Unlock
Huntington Beach – Asset Optimization & Value Unlock Over 1 mile of direct access Pacific Coast Highway to Pacific Coast Highway Ft Apache Huntington Beach – Upland Strip 0.9 ACRE PARCEL – FT APACHE ~90 ACRES PARCEL – FUTURE HUNTINGTON BEACH STRATEGY ▪ Fort Apache: 1810 Pacific Coast Highway, Huntin
Slide 16: Substantially Expanded CTV's Greenfield Projects and Storage Portfolio in 2023
Substantially Expanded CTV’s Greenfield Projects and Storage Portfolio in 2023 PARTNERED WITH INNOVATIVE COMPANIES & FORMED A CONSORTIUM TO DECARBONIZE CALIFORNIA CO2 Agreement Region Emitter Project Type Location Storage Vault Service (KTPA) Type Northern California Renewable Green Northern CTV III
Slide 17: Expecting Several Positive Catalysts in 2024
Expecting Several Positive Catalysts in 2024 Low Carbon Intensity O&G Operations Carbon TerraVault O&G OPERATIONS Est. Timing CARBON TERRAVAULT I (26R PERMITS)2 Est. Timing Plants turnaround & weather: ~26MMcf/d impact 1Q24 Public comment period Ongoing Expected final permits 2H24 Increased level of
Slide 18: 1Q24 Guidance
1Q24 Guidance 1Q24 Guidance Estimates CMB Consolidated Total Production (MBoe/d) ~ 60% Oil 76 to 80 1Q24 impact of 26MMcf/d due to plants turnaround and weather, and 0.9 MBo/d from the sale of Round Mountain Marketing Natural Gas Margin ($MM) $8 to $13 Electricity Margin ($MM) $5 to $10 Other Operat
Slide 19: Why California Resources Corporation?
Why California Resources Corporation? LEADING CARBON MANAGEMENT BUSINESS PREMIER BALANCE SHEET WITH STRONG FREE CASH FLOW GENERATION STRONG SHAREHOLDER RETURNS STRATEGY DISCIPLINED CAPITAL ALLOCATION Higher Less Better Cashflow Carbon California
Slide 20: Appendix
Appendix
Slide 21: Transformed the Way We Operate
Transformed the Way We Operate Non-Energy Operating Costs ($MM) ~$65MM $520 Achieved in 2023 Implemented YE2023 Run Rate Reduction $510 Includes an additional ~$5MM in savings from exploration expense (lease rentals) and capital $500 Non-Energy Operating Costs ($MM) $490 $480 ~$50MM $470 OPPORTUNITY
Slide 22: 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 storage into a 5 deplete
Slide 23: 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 Targeting first CO2 injection at CTV I by the end of 20251 Vault CTV I CTV II CTV III CTV IV CTV V 145 MMT EPA Permit Application Yes Yes Yes Yes Yes Yes Administratively Co
Slide 24: 2023: Sustainability & Social Responsibility Is In Our Business Model
2023: Sustainability & Social Responsibility Is In Our Business Model ▪ Recertified Wildlife Habitat Council projects at THUMS, Bolsa Chica, and Elk Hills ▪ Eliminated 269 pneumatic venting devices reducing methane emissions by >400 Mt/year ▪ Delivered more than 113 million barrels of water for agri
Slide 25: 2023 Reserves
2023 Reserves ~13% PUD Est. Annual Est. Annual PV10 MMBOE LONG DURABILITY 1P ASSETS ($70 % Oil R/P $5.5B4 Brent) 1 Decline Production2 (MBOE/D) PV10 $3.8B3 ~87% PD $4.3B1 San Joaquin Basin 85% 15% 273 ~60% ~13% 62 ~12 Los Angeles Basin 95% 5% 82 ~99% ~7% 18 ~13 Sacramento Basin 89% 11% 10 0% ~11% 3
Slide 26: Strong Commodity Price Realizations in a State Reliant on External Energy
Strong Commodity Price Realizations in The State That Relies on External Energy Sources CALIFORNIA IS AN OIL ISLAND AND THE LARGEST U.S. GDP CONTRIBUTOR ▪ Crude: California crude prices continued move in tandem with the broader market with realizations for 4Q23 similar to 3Q23. For 2024, local (perm
Slide 27: CRC Hedging Program
CRC Hedging Program OIL HEDGES1 As of December 31, 2023 1Q24 2Q24 3Q24 4Q24 2025 Barrels per 23,650 30,000 30,000 29,000 19,748 Day SOLD CALLS Weighted- Average Price $90.00 $90.07 $90.07 $90.07 $85.63 per Barrel STRATEGY CRC’s hedging strategy is designed to meet our business Barrels per objectives
Slide 28: 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 CCS+ Carbon Capture and Storage
Slide 29: Assumptions, Estimates and Endnotes
Assumptions, Estimates and Endnotes: Slide 6: (1) Total Recordable Incident Rate (TRIR) calculated as recordable incidents per 200,000 hours for all workers (employees and contractors). (2) Assumes a 4 rigs scenario starting from 2H24 subject to the availability of well permits. If CRC is not able t
Slide 30: Assumptions, Estimates and Endnotes
Assumptions, Estimates and Endnotes: Slide 15: (1) Source: CRC’s 2023 total gross production. (2) CRC internal preliminary estimates. Actual costs could be higher. Slide 17: (1) Assumes a 4 rigs scenario starting from 2H24 subject to the availability of well permits. If CRC is not able to receive dr
Slide 31: Investor Relations and Media Contacts
Joanna Park (Investor Relations) Richard Venn (Media) 818-661-3731 818-661-6014 Joanna.Park@crc.com Richard.Venn@crc.com