barclays ceo energy-power conference · barclays ceo energy-power conference| 5 california’s...

Barclays CEO Energy-Power Conference

Todd Stevens | President & CEO

September 4th, 2019

Barclays CEO Energy-Power Conference| 2

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. Such statements include those regarding our expectations as to our future:

Actual results may differ from anticipated results, sometimes materially, and reported results should not be considered an indication of future performance. While we believe assumptions or bases

underlying our expectations are reasonable and make them in good faith, they almost always vary from actual results, sometimes materially. We also believe third-party statements we cite are

accurate but have not independently verified them and do not warrant their accuracy or completeness. Factors (but not necessarily all the factors) that could cause results to differ include:

Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "goal," "intend," "likely," "may," "might," "plan," "potential," "project," "seek," "should," "target, "will" or "would" and similar

words that reflect the prospective nature of events or outcomes typically identify forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is

made and we undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

• financial position, liquidity, cash flows and results of operations

• business prospects

• transactions and projects

• operating costs

• Value Creation Index (VCI) metrics, which are based on certain estimates including

future production rates, costs and commodity prices

• operations and operational results including production, hedging and capital investment

• budgets and maintenance capital requirements

• reserves

• type curves

• expected synergies from acquisitions and joint ventures

• commodity price changes

• debt limitations on our financial flexibility

• insufficient cash flow to fund planned investments, debt repurchases or changes to our

capital plan

• inability to enter desirable transactions, including acquisitions, asset sales and joint

ventures

• legislative or regulatory changes, including those related to drilling, completion, well

stimulation, operation, maintenance or abandonment of wells or facilities, managing

energy, water, land, greenhouse gases or other emissions, protection of health, safety

and the environment, or transportation, marketing and sale of our products

• joint ventures and acquisitions and our ability to achieve expected synergies

• the recoverability of resources and unexpected geologic conditions

• incorrect estimates of reserves and related future cash flows and the inability to replace

reserves

• changes in business strategy

• PSC effects on production and unit production costs

• effect of stock price on costs associated with incentive compensation

• insufficient capital, including as a result of lender restrictions, unavailability of capital

markets or inability to attract potential investors

• effects of hedging transactions

• equipment, service or labor price inflation or unavailability

• availability or timing of, or conditions imposed on, permits and approvals

• lower-than-expected production, reserves or resources from development projects, joint

ventures or acquisitions, or higher-than-expected decline rates

• disruptions due to accidents, mechanical failures, transportation or storage constraints,

natural disasters, labor difficulties, cyber attacks or other catastrophic events

• factors discussed in “Item 1A – Risk Factors” in our Annual Report on Form 10-K

available on our website at crc.com.

Forward Looking / Cautionary Statements – Certain Terms

See the Investor Relations page at www.crc.com for important information about 3P reserves and other hydrocarbon resource quantities, PV-10 and standardized measure, finding and development

(F&D) costs, recycle ratio calculations, reserve replacement ratios, Value Creation Index (VCI), debt adjusted shares calculation, drilling locations and reconciliations of non-GAAP measures to the

closest GAAP equivalent.

http://www.crc.com/


Positioned to Execute Our Strategy to Deliver Long Term Value

Value

Focus

Value Creation Index

The VCI Difference Delivers Real Value

• Value-directed investments

• Disciplined capital allocation

• Enhanced returns over full-cycle time frame

• Drives team alignment

• CRC ahead of competitive landscape in shifting to valuePV10 pre-tax cash flows

PV10 of investmentsVCI =


Strengthen

Balance SheetDrive Operational

Excellence

Ensure Effective

Capital Allocation

• Reinvest to grow cash

flow

• Simplify capital

structure

• Enhance credit metrics

• Pursue value-accretive

M&A

• Reduce absolute level of

debt

• Utilize VCI-based

decision-making

• Optimize core operating

area investment

• Enhance targeted

growth area investment

• Pursue impactful

capital workovers

• Streamline processes

• Apply technology

• Leverage sizeable

infrastructure

• Drive strategic

consolidation

• Employ new thinking

and approaches

• Pursue value-driven

production growth

• Delineate future growth

areas

• Enhance already

substantial inventory

• Pursue strategic joint

ventures

Capture Value

of Portfolio

CRC’s Value-Driven Strategic Approach

Proven and pressure-tested strategic approach

preserved value through the downturn and is set to

drive significant value creation for years to come


California’s Compelling Needs

• World’s 5th largest economy runs first and foremost on energy

▪ Consume more gasoline than countries with populations 4x

larger

▪ 37% of U.S. Port container traffic – with the busiest ports in

the country

• Operate in energy island importing 73% of crude

• Equates to sending $32 billion annually out of the state

• Energy inequality reflected in highest poverty rate in

wealthiest state

• Industry provides high-paying, middle class careers to achieve

American dream

• Imported energy does not apply California’s safety, labor and

environmental standards

• Native energy aligns with state’s progressive values

• In-state production provides critical sources of state, county

and city revenues

• Over $4.8 billion generated by CRC’s Long Beach operations

alone over past 15 years

• CRC constructively engaged on legislative front to solve

California’s challenges

• Believe thoughtful leadership will prevail as it has in the past

CRC supplies affordable,

reliable energy that

California needs


Pressure Tested Through Cycle and Focused on Long-Term Value

5

10

15

20

25

30

$20

$50

$80

$110

07/14 01/15 07/15 01/16 07/16 01/17 07/17 01/18 07/18 01/19 07/19

Rig

Co

un

t

Bre

nt

Cru

de

Oil P

rice

($

/B

BL)

Brent Crude Price

CRC + JV Rig Count

CRC Rig Count

TRANSITION TO OFFENSE

Cut rigs

Began hedging

Managed liabilities

Utilized existing facilities

Protected base production

QUICK

RESPONSE TO

PRICE CHANGE

Increased activity

Engaged in JVs

Locked in hedges

Increased liquidity

Extended maturities

Invest for value preservation

Drill high-graded portfolio

Invest in exploration and facilities

Strengthen balance sheet

Enter new JV with Colony

VALUE

PRESERVATION

SEPARATION

ANNOUNCEMENT

Spin

Date


Key Highlights

$255 Million$1.2 billion LTM

2n

dQ

ua

rte

r 2

01

9

1 Includes all wells drilled by CRC, including BSP and MIRA wells. Includes steam injectors and drilled but uncompleted wells, which would not be included in the SEC definition of wells drilled.2 Includes BSP and MIRA capital.3 See the Investor Relations page at www.crc.com for historical reconciliations to the closest GAAP measure and other important information.

$140 Million2

$124 million

internally funded

129 Mboe/d61% Oil

39 Total Wells Drilled1

Includes 37 CRC wells

$556 Million$1.2 billion LTM

$278 Million2

$228 million

internally funded

131 Mboe/d63% Oil

99 Total Wells Drilled1

Includes 79 CRC wells

Fir

st

Ha

lf 2

01

9

AC

TIV

ITY

PR

OD

UC

TIO

N

CA

PIT

AL

Ad

j.E

BIT

DA

X3

http://www.crc.com/


- 5 10 15 20 25 30

Niobrara

Barnett

Anadarko - Woodford

Haynesville - Bossier

Utica

Marcellus Shale

Eagle Ford

Bakken

Permian (Wolfcamp + Sprayberry)

California

Remaining Recoverable Resources (BBOE1)

Oil (BBO) NGL (BBOE) Gas (BBOE)

CRC Advantage

World-Class Hydrocarbon Province with Significant Potential

• Five of the largest conventional, onshore fields in the lower 48

• Over 35 billion BOE produced since 1876

• Still discovering the limits of remaining potential

• Over 10 billion BOE1 in remaining recoverable resources

California a Top Oil Province

• Stacked pays provide additional opportunity through value chain

• Operating expertise to develop the diverse opportunity set

• Robust infrastructure turns disparate fields into integrated plays1MCF:BOE = 20:1

Note: produced volumes source: DOGGR; Remaining Recoverable Resources Source: USGS


Proved Reserves

Large Resource Base with Production Diversity

SAN JOAQUIN BASIN

Greater Elk Hills – Flagship Asset

Thermal – Protecting Base Production

South Valley – New Opportunities

Shales & Tight Sands – New Opportunities

#2 Producer94,000 BOE/d2

26% of basin production

60% of basin mineral acreage

1 Based on gross production as of YE18. 2 CRC net production based on 2Q19. 3 Proved reserves at SEC18 pricing of $71.75 Brent / $3.10 NYMEX.

Note: Total basin production and CRC’s % of basin production are based on gross FY2017 production. Source: DOGGR. Total basin mineral acreage is based on internal estimates.

Largest Producer in California1

Operate

~12,000wells

with

712MMBOE3

SACRAMENTO BASINGas Optionality

#1 Producer 5,000 BOE/d2



LOS ANGELES BASIN

Steady High Margin Oil Assets

#1 Producer 24,000 BOE/d2



Across

135 fieldsVENTURA BASINGrowth and Exploration

#2 Producer6,000 BOE/d2




2018 Highlights

Enhanced Inventory Growth and Expanded 3P Position

• Proved reserves today only 7% lower despite 29%

decrease in price from the YE 2014

• Life-of-field studies increased unproved resources

• Recent exploration success not included

• Organic F&D costs excluding price related revisions

and acquisitions were $11.31 per BOE in 2018 and

4-year average of $6.42

• Organic recycle ratio of 1.9x in 2018 and 4-year

average of 2.6x

• Comprehensive technical review of 40% of fields

• Over 95% of total proved reserves audited by Ryder

Scott in the previous three years

1 See the Investor Relations page at www.crc.com for important information about 3P

reserves and other hydrocarbon quantities.2 Reserve amounts uneconomic at SEC prices for the applicable year.3 Unproved reserves (probable and possible) represent technical volumes irrespective of

commodity price. Proven reserves utilize applicable SEC prices for all year-end periods.

Growth in Unproved Reserves1

58 109 156 204

768 644 568618

712

222 251226

204

171

181431

450458

150

159

395

679

704

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2014 2015 2016 2017 2018

MM

Bo

e

>250%

Unproved

Growth

Probable3Price-Contingent

Reserves2

ProvedCumulative

Production

Possible3

http://www.crc.com/


Unlocking Value with a Deep Inventory of Actionable Projects at $65 Brent

• Fully burdened, growth-focused

portfolio

• Achieve a VCI of 1.3 or greater at

$65 Brent and $3.00 NYMEX

• Deliver robust cash flow

• Reflects all recovery

mechanisms and reserves types

• Leverage existing infrastructure,

while opportunistically targeting

new infrastructure investment

0

5

10

0 100 200 300 400 500 600 700 800Dev

Cap

ital

(B

$)

Net Resources2 (MMBoe)

1 Full cycle costs = operating costs + development costs +

facility costs + field-level G&A + taxes other than on income.2 See the Investor Relations page at www.crc.com for details

regarding 3P resources and other hydrocarbon resource

quantities.

0

10

20

30

40

50

0 100 200 300 400 500 600 700 800

Full

Cyc

le C

ost

1($

/Bo

e)

Net Resources2 (MMBoe)

Steamflood

Waterflood

Primary

Shale

Gas

http://www.crc.com/


JVs Provide Additional Capital Flexibility

Net Production By Stream (MBOEPD)

1Total Capital reflected in the graph includes the capital investment of internal CRC capital as well as JV partners BSP and MIRA. Our consolidated financial statements include BSP’s investment and

exclude MIRA’s investment based on the accounting treatment of each venture.23Q19 total capital guidance includes CRC, BSP, MIRA and Colony capital.


Up to $250MM▪ Total of $200MM funded to date

Focus on four fields within the San

Joaquin Basin

▪ Kern Front, Mt. Poso, Pleito Ranch,

Wheeler Ridge

Accelerating Value and Derisking Inventory through JVs

Up to $500MM

▪ Current commitment of $320MM

Investor funds project capital in exchange

for a net profits interest (NPI) held through

a JV

▪ Investor preferred interest is redeemed

upon achieving target IRR

▪ CRC retains early termination options

Focus on the San Joaquin and

Los Angeles Basins

CRC operates all wells

Up to $300MM

▪ Current commitment of $140MM,

with $122MM funded to date

DrillCo-type structure where investor funds

100% of project capital for 90% working

interest (WI) in wells drilled, with CRC

carried on its 10% WI

▪ CRC interest increases to 75% upon investor

achieving target IRR

▪ CRC retains an acceleration option


DrillCo-type structure where investor

funds 100% of project capital for 90% WI

in wells drilled, with CRC carried on its

10% WI

▪ CRC interest increases to 82.5% upon

investor achieving target IRR

Focus on portions of the Elk

Hills field within the San

Joaquin Basin


April 2017Feb 2017 July 2019


50%

Growth

Projects

50%

Mature

Projects

25%

Growth

Projects

75%

Mature

Projects

10%

Growth

Projects

90%

Mature

Projects

Low-Price Scenario

• Invest to grow cash flow

• Drill in high-graded portfolio (>1.5 VCI)

▪ Oil to gas ratio for steamfloods (>5:1) - Selectively add steam

generation facilities

▪ EOR and IOR for long-term cash flow - Primary/shale for high IP impact

• Delineate future growth areas to unlock upside

• Target 10-15% of discretionary cash flow to balance sheet strengthening

Dynamic Capital Allocation Through Commodity CycleO

il P

rice

$/

BB

L

Gas Price $/MCF

High-Price Scenario

Mid-Cycle Price Scenario

• Invest to accelerate production growth and explore/pilot new resources

• Add facilities (steam and water handling) to support pace of growth

• High cash generation

• VCI 1.3 floor to reinvest for value

• Accelerate balance sheet strengthening

• Invest to protect base production

• Take advantage of existing facilities and prior capacity investments

▪ Steamfloods and waterfloods – drill to fill

▪ Workover existing wellbores for best investment

• Utilize excess equipment to reduce capital costs

• Engineering efforts focused on field surveillance to protect existing production


CRC’s Dynamic Portfolio Provides Flexibility

0

200

400

600

800

BO

EP

D

YEAR 50

200

400

600

800

BO

EP

D

YEAR 5

0

200

400

600

800

BO

EP

D

YEAR 5

0%

25%

50%

75%

100%

Po

rtfo

lio

Mix

Gas

Shale

Primary

Waterflood

Steamflood

Workover

Oil Oil Oil

For illustration of portfolio optionality based on normalized results per $10MM of investment and not guidance. See end note for details on type curves.

Prices for recycle ratio are $65 Brent and $3.00 NYMEX.


$67.88 $69.50

$58.81 $54.90

$59.82 $64.11 $63.63 $59.97

$65.28 $70.66

$74.90 $75.97

$68.08

$63.90 $68.32

40

50

60

70

80

2Q18 3Q18 4Q18 1Q19 2Q19

$/B

bl

WTI Realizations Brent

-≈

62%66%

74% 77%

47%56%

60%64%

67%

41%30%

40%

50%

60%

70%

80%

2Q18 3Q18 4Q18 1Q19 2Q19

% o

f W

TI

& B

ren

t

WTI Brent

-

≈CRC believes near-term crude oil realizations will remain strong

CRC Price Realizations – Strong Brent Realizations

Oil Price Realization (with Hedges) Gas Price Realization

• California refinery demand for native crude continues to be strong

and reduction in heavy waterborne crude has positively influenced

differentials.

• Natural gas prices were impacted by temperate weather and

excess local and national supply.

• NGL prices were impacted by excess supply locally and nationally

as well as temperate weather in California.

NGL Price Realization - % of WTI & Brent

Realization

% of WTI94% 92% 102% 119% 118%

$2.75

$2.88

$3.40

$3.24 $2.66

$2.25

$3.16

$3.77

$3.43

$2.33

1.50

2.00

2.50

3.00

3.50

4.00

2Q18 3Q18 4Q18 1Q19 2Q19

$/M

MB

tu &

$/M

cf

NYMEX Realizations

≈

Realization %

of NYMEX82% 110% 111% 106% 88%

-


Unparalleled California Expertise and Insight

Core Assets Provide Operational Leverage

Applying analog development to adjacent fields

Decadesof observed field behavior and demonstrated shallow base decline rates

Largest 3-D Seismic

Position in California

Sources: DOGGR, Wood Mackenzie, Company Estimates. Note: Gross production data is average production in 2018.

151 146

116

31

-

50

100

150

200

CRC Chevron

USA

Aera

Energy

Berry

Gro

ss O

pe

rate

d M

BO

E/d

Top California Producers in 2018

$19$21

$24$22

$0

$5

$10

$15

$20

$25

$30

0%

25%

50%

75%

100%

CRC Chevron

USA

Aera

Energy

Berry

OP

EX

$/B

OE

Pro

du

cti

on

Mix

Shallow Deeper (>5,000') FY2018 OPEX $/BOE

Majority of CA Production is Shallow

Extensive Field Operations Experience

~ 25,000net identified proven and unproved

drilling locations in 2018

Midstream infrastructure provides low cost advantage


Elk Hills Flagship Asset in San Joaquin Basin

• Large field with 100% NRI

▪ 10 billion original BOE in place within multiple reservoirs

▪ Produces ~60,000 BOE/d with annual 10% base decline

• Infrastructure provides low-cost advantage

▪ On-site gas processing and liquids extraction

▪ Large power plant reduces electricity costs by 75%

▪ Various light crude blends desired by multiple

customers

• Large integrated business

▪ Stacked reservoirs with 280+ MMBOE proven reserves

▪ Diverse development inventory

▪ Proving ground for recovery techniques

Annualized Elk Hills synergies1 ($MM)

1Synergies include operational cost savings and revenue enhancement


Leveraging Infrastructure for Nearby Low-Cost Field Development

• Coring up with Elk Hills

▪ Elk Hills serves as the hub

▪ Power, pipelines, compression

▪ Connecting fields and building out

• Lower cost shared resources

▪ Central control facilities and automation

▪ Optimized service provider utilization

▪ Shared support staff across fields

• Efficient step-out to new growth areas

▪ Dominant acreage position

▪ Low development costs for bolt-ons

▪ Discovering new resources through exploration

Southern San Joaquin Valley Consolidation

1 3P approximate totals: 380 MMBOE proved, 280 MMBOE probable, 250 MMBOE possible

~900 Million BOE of 3P reserves1


Developing Entire Southern San Joaquin Basin into Core Area

• Redevelopment, expansion and additional recovery in existing CRC operated fields

▪ Large fields with low recovery factors

▪ >500 identified development locations

▪ >150 MMBOE potential 3P reserves1

• New field development project following recent exploration successes: Pleito Ranch

▪ Extension of CRC operated Pleito Ranch field

▪ >90 identified development locations

▪ >30 MMBOE discovered resources1

• Delivering value-driven growth

▪ Apply technology, operating expertise and knowledge

▪ Improved returns from leveraging existing infrastructure

▪ Disciplined and deliberate investment into high graded portfolio

Large Inventory of Development Projects

1See the Investor Relations page at www.crc.com for important information regarding potential reserves, discovered resources and other hydrocarbon resources.

Applying CRC asset playbook to substantial

drilling inventory extends core Elk Hills

operations and infrastructure

Yowlumne

Paloma

Coles Levee

Rio Viejo

Landslide

TOTAL

900

1,000

1,300

60

70

3,300

13%

14%

21%

16%

23%

18%

Workover, primary drilling, New reservoirs and EOR

Workover, primary drilling, and EOR

Workover, primary drilling, and EOR

Primary drilling, New reservoirs

Workover, primary drilling and EOR

http://www.crc.com/


Conventional Exploration Program Generates Substantial Value

• 10 well exploration program in 2017 and 2018

▪ Delineation and expansion of proven play trends

plus new impact play concepts

• Reduced risk via joint ventures

▪ 7 exploration wells funded by partners1; CRC total

initial net investment of ~$20MM

• Meaningful value creation

▪ ~$4/share value, potential to increase further

with additional appraisal

1 Partner WI funding varied by well; 2 $65 Brent and $3/NYMEX; 3 Net P50 PV10 = Sum [P50 type curve PV10 x NRI] for development locations; 4 VCI = [Net P50 PV10 pre-tax cash flows] / [PV10 exploration and development capital]

Multiple Small Joint Ventures

$170+MM2,3 PV10 from Initial Net Investment of ~$20MM

Fully-Burdened VCI of 1.52,4Repeatable recipe for success

provided by analog prospects in

CRC’s differentiated inventory


Strengthening the Balance Sheet Remains a Priority

Target 2x – 3x Leverage Ratio

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

YE14 YE15 YE16 YE17 YE18 Target

To

tal D

eb

t / L

TM

Ad

j. E

BIT

DA

X1

Leverage Core Adjusted EBITDAX Leverage1

Complicated

Capital Structure

Simplified

Capital Structure

Simple

Capital Structure

1See the Investor Relations page at www.crc.com for a reconciliation to the closest GAAP measure and other

important information. Core Adjusted EBITDAX excludes settled hedges and cash settled equity compensation costs.2Subject to limitations on debt repayment in finance agreements.

Capital MarketsSolutions

Disciplined Capital

Investment

Asset Monetizations

Joint ventures

Infrastructure

Producing

assets

Refinance and

simplify

capital

structure

Target 10-15% of

discretionary

cash flow for

balance sheet

strengthening2

Accretive

acquisitions Cash flow growth

and support future

reinvestment

Continue to Employ

ALL of the ABOVE Approach

Mineral

interests

http://www.crc.com/


Disciplined Capital Plan Leverages Project Portfolio

2019 Internally Funded

Capital Program

$350 to $385 Million

Discretionary Cash Flow

Expect to Align with

Core Program

JV Capital

$175 to $225 Million to invest in Core and Growth properties

Buena Vista | Elk Hills

Wilmington

Kern Front | Mount Poso

2019E Internally Funded

Development Capital By Basin2019E Total Capital

1Other includes corporate, maintenance and occupational health, safety and environmental projects, seismic and other investments.

1


Current Enterprise Value Deeply Discounted

1-5 See endnotes in the Appendix. See the Investor Relations page at www.crc.com for important information about 3P reserves and other hydrocarbon quantities.

Current EV

of $6.8 Bn5

http://www.crc.com/


Disciplined Execution on Highest Value Projects to Deliver Substantial Value

Portfolio of world-class assets investable

throughout the commodity cycle

Robust inventory of high

value growth projects

Deep operational knowledge

and technical expertise

Integrated and complementary

infrastructure

Disciplined and effective

capital allocation

Balance Sheet Goals

High VCI Projects

Investing for the Future

Growth Prospects

Core Operating Areas

Simplify Balance Sheet

Reduce Fixed Charges

Reduce Debt

Balance capital investment with

Financial

Strengthening Effortsfor best long-term value creation

VALUE DRIVEN

APPENDIX


Opportunistically Built Oil Hedge Portfolio

Strategy

Protect cash flow, operating

margins and capital

investment program

Hedge program continues to target

50% of crude oil production and

provides significant upside

exposure to commodity price

movement

Note: Hedge portfolio is current as of 6/30/19.

The BSP JV entered into crude oil derivatives that are

included in our consolidated results but not in the above

table. For further information please see Attachment 7 of

our 2Q19 Earnings Release.

Sold Calls

Purchased

Puts

Sold Puts

4Q19 1Q20 2Q20

35,000

$75.71

35,000

$60.00

-

-

25,000

$72.00

25,000

$57.00

-

-

10,000

$70.00

10,000

$55.00

5,0001

$70.05

51% 32% 19%Percentage of 2Q19 Oil Production

Hedged Against Downside

3Q19

Purchased

Calls

Swaps

Barrels per Day

Weighted Average

Price per Barrel

Barrels per Day

Weighted Average

Price per Barrel

Barrels per Day

Weighted Average

Price per Barrel

40,000

$73.13

40,000

$57.50

-

-

44%

1Counterparties have the option to increase swap volumes by up to 5,000 barrels per day at a weighted-average Brent price of $70.05 for the second quarter of 2020.


Improving Debt Metrics

6/30/2019

1st Lien 2014 Revolving Credit Facility (RCF) 525$

1st Lien 2017 Term Loan 1,300

1st Lien 2016 Term Loan 1,000

2nd Lien Notes 1,991

Senior Unsecured Notes 344

Total Debt 5,160

Less cash (15)

Total Net Debt 5,145

Mezzanine Equity 777

Total Equity (279)

Total Net Capitalization 5,643$

Total Debt / Total Net Capitalization 91%

Total Debt / LTM Adjusted EBITDAX2

4.4x

LTM Adjusted EBITDAX2

/ LTM Interest Expense 3.0x

PV-103 / Total Debt 1.8x

Total Debt / Proved Reserves3 ($/Boe) $7.25

Total Debt / Proved Developed Reserves3 ($/Boe) $9.74

Total Debt / 2Q19 Production ($/Boepd) $40,000

Capitalization ($MM)

1 Excludes $12 MM of restricted cash.2 See the Investor Relations page at www.crc.com for historical reconciliations to the closest GAAP measure

and other important information. 3 Proved Reserves and PV-10 estimates are as of 12/31/18 and based on SEC18 prices of $71.75 Brent /

$3.10 NYMEX. See the Investor Relations page at www.crc.com for details on how PV-10 is calculated.4 The 2017 Term Loan remains subject to a springing maturity in October 2021 related to the outstanding

balance of the 2016 Term Loan.

$0

$1,000

$2,000

$3,000

$4,000

2019 2020 2021 2022 2023 2024

2nd Lien Notes

2014 RCF

Unsecured Notes

2016 Term Loan

2017 Term Loan

Debt Maturities ($MM)

1

4

http://www.crc.com/

http://www.crc.com/


CRC’s BOE Recovery per Foot Competes With Major Shale Plays

Normalizing estimated ultimate recovery (EUR) vs. measured depth shows CRC advantage:

• Better recovery factors driven by low decline rate waterfloods and steamfloods

• Diverse reservoir portfolio provides optionality to drill deep large EUR producers with later life up-hole recompletions

Historical focus:

• Cheaper, simpler well designs (primarily vertical)

• Quality reservoirs that do not require complicated completions or long horizontal

Future upside:

• Tighter rock, horizontal drilling with new generation stimulation, increasing reservoir contact

We

ll T

ota

l M

ea

su

red

De

pth

(ft

)

21,000’

17,000’

6,000’

13,000’

14,000’

BOE/ft

BV Nose

South

Valley

LA Basin

Notes:

Source: Wood Mackenzie data for Shale Play areas; Source: Internal estimates for CRC, taking all wells drilled since 2012. BOE calculated as Oil + 20:1 Gas.

Well dots sized by oil expected ultimate recovery (MMBOE). Darker colors are newer wells; lighter colors are older wells.

Wolfcamp includes Midland and Delaware Basins.


250

500

1000

$600

$700

$800

$900

$1,000

$1,100

$1,200

$20 $40 $60 $80 $100 $120P

rod

ucti

on

Co

sts

($

MM

)Brent $/Bbl

Annual Production Costs & Capital Investment1

Demonstrated Experience Controlling Production Costs Through Price Cycle

• Capital investment scales with

commodity price changes

• Flexible operations and shallow base

decline allow for quick response to

commodity price changes while

preserving value

• Consistently controlled production

costs throughout price cycles

• Production costs have been as low as

approximately $15/boe when

commodity prices reached a relative

low point

2014

(Pre-spin)2015

2016

20172018

1Includes JV Capital.

Capital Investment

Scale ($MM)

1

1


2019 Capital Plan Flexes JV Capital

$64

$68

$60

$57

Q1 Q2 Q3E Q4E

CRC Capital JV Capital Brent ($/bbl)

2019

• CRC flexes JV capital to maintain activity level in the face of volatile commodity prices

• Internal capital was front-loaded in 1H19 during higher commodity prices, while JV capital is expected to be back-end loaded with lower strip prices

1Realized Brent prices for 1Q19 and 2Q19. 2Bloomberg Brent Strip price for 3Q19 and 4Q19 as of 8/23/19.

1 1 2 2


Advancing California’s Sustainability Strategy

WATERIncrease volume of recycled

produced water by 30%

Progress: 17% increase through 2018

METHANEReduce methane emissions

by 50%

Progress: Surpassed Target with 60%

reduction through 2018

Note: CRC 2030 Sustainability Goals are subject to liquidity, securing funding and permits

RENEWABLESIntegrate renewables into oil and gas

operations by adding 10 MW

Progress: 4 MW of solar in development

CARBONDesign and permit carbon capture

system at Elk Hills by 2030 to

reduce CO2 emissions by 30%

Progress: Miscible ethane gas pilot installed

and carbon capture technology evaluation

underway

CRC’s 2030 Goals demonstrate our long-term commitment to sustainable in-state energy production that meets the needs of

California’s growing population and California’s leading safety, labor, human rights and environmental standards.

Measured against a 2013 baseline, the year before CRC’s formation and a baseline for several state goals.


CRC’s Regulatory Strategy Advances California’s Leading Standards

CRC’S CONSISTENT REGULATORY STRATEGY

✓ Reflect Californians’ values

✓ Solicit community input

✓ Advance community interests

✓ Build strategic alliances

✓ Educate and inform policy makers

✓ Sustain 90-day permit inventory per rig line

✓ Fulfill California’s high standards

✓ Help achieve the state’s long-term goals

✓ Contribute to vibrant future for all Californians

0

200

400

600

800

1000

1200

1400

1600

YE16 YE17 1Q18 2Q18 3Q18 4Q18

Growing Permit Inventory(Permitted drilling rig days at end of period)

Seasoned operator with

proven local expertise


“Duck” Curve

California Policies Impact Natural Gas Prices

Limited third-party storage, peak demand, and

reliance on renewable sources have increased

volatility in local natural gas prices

Source: EIA and SoCalGas Envoy

Da

ily S

oC

alG

as n

atu

ral

ga

s in

ve

nto

rie

s (

Bcf)

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

01/17 04/17 07/17 10/17 01/18 04/18 07/18 10/18 01/19 04/19 07/19

So Cal City Gate Wheeler Ridge NG Futures

Lack of Natural Gas Storage and Peak Demand

California Natural Gas Prices

Impact of Solar Generation

Aliso Canyon Effect on Inventory

>$20

Source: Bloomberg

Source: California ISO

>$20


-

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 97 101105109113117JV Share Typical E&P Share

Typical Industry JV Structure

• Based on recent industry JV deals, a typical deal structure is

o Partner pays 80-100% Capital

o Receives 80-100% Working Interest

o Typical hurdle rate:o 10% - 20% IRR

o Partner’s working interest once hurdle rate is achieved:o 5% - 25%

Hurdle Rate

Reached

Pro

du

cti

on

Time


Lost Hills Field – 50% Operated Working Interest Sale + Joint Venture

• Completed a sale of operatorship and a 50% working interest in certain zones in the Lost Hills field

• Over $200 MM in total consideration consisting of $168 MM in cash + drilling carry with estimated minimum value of $35 MM

• Implied transaction metrics (assuming minimum carry):

• ~$88,000 per flowing barrel

• Other transaction highlights:

• Partner will carry CRC on 100% of the investment in 200 new wells

• Operatorship is transferred to buyer

• CRC retains rights to deep formations

• Closed May 1, 2019

• Lost Hills is a heavy oil field in the northwestern San Joaquin basin

Map to be updated

Proposed Patterns

Proposed Tulare Producer

Elk Hills

Buena Vista

Lost Hills

Kern

Front


End Notes

From Slide 24

1 CRC estimate of reserves value as of December 31, 2018. Includes field-level operating expenses, G&A and taxes other than on

income. Assumes $3.00/MMBTU NYMEX in all cases.

2 Reflects the value of facilities and midstream assets, excluding assets owned by the Ares JV, at 50% of estimated replacement value.

This discount is estimated to exceed the burden on reserves that would be incurred if assets were monetized. Does not include value

of extensive seismic library.

3 Surface & Mineral reflects the estimated value of undeveloped surface and mineral acreage held in fee.

4 Unproved reserves are comprised of risked probable and possible reserves as of December 31, 2018.

5 Calculated using June 30, 2019 debt at par and a market cap as of 7/30/2019. Includes non-controlling interests reported as

mezzanine and permanent equity as of June 30, 2019.

See the Investor Relations page at www.crc.com for important information about 3P reserves and other hydrocarbon resource quantities,

PV-10 and standardized measure, finding and development (F&D) costs, recycle ratio calculations, reserve replacement ratios, Value

Creation Index (VCI), debt adjusted shares calculation, drilling locations and reconciliations of non-GAAP measures to the closest GAAP

equivalent.

Type Curve Note: Each field-specific type well curve represents an average of the historical results of multiple projects over the prior four-

year time period. Drive mechanism type curves are the weighted average of the field-specific curves related to the projects chosen for our

near-term growth plan. Type curves represent management’s estimates of future results and are subject to project selection and other

variables. Our type well curves are prepared for purposes of modeling overall results of our near-term growth program and are not useful

for purpose of benchmarking any individual well/pattern performance. Actual results are expected to vary depending on which projects

are specifically developed.

http://www.crc.com/

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