California Resources Corporation · NYSE:CRC
California Resources — Proxy Contest (April 2017)
16 slides from California Resources's proxy contest presentation, Apr 21, 2017
Slide 1: CRC Governance Update April 2017
CRC Governance Update April 2017
Slide 2: Forward Looking / Cautionary Statements
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. Such statements include those regarding our expectations a
Slide 3: CRC Overview
CRC Overview CRC is an independent exploration and production (E&P) company focused on high-return assets in California CRC explores for, produces, gathers, processes and markets crude oil, natural gas and natural gas liquids Management has expertise in operating in sensitive environments and in a s
Slide 4: Focused on California
Focused on California Grow NAV per share through exploration and development of under-developed resources Eliminate reliance on external capital through self-funding capital program Rigorously review projects to allocate capital efficiently Drive down costs to enhance project returns Aggressively ap
Slide 5: Impact of Oil Prices & Debt Burden on Stock Price
Impact of Oil Prices & Debt Burden on Stock Price 1 Calculations of Adjusted EBITDAX and Net Debt (debt less cash) for the Peers have been made using publicly available data and may not be comparable across companies presented due to differences in methods used between companies or availability of s
Slide 6: 2016 Strategic Focus
2016 Strategic Focus CRC began 2017 poised to take advantage of the commodity price upswing 2016 Strategic Priorities Performance on Strategic Priorities Reduce overall leverage while minimizing dilution to shareholders Reduced outstanding debt nearly $1.5 billion, or over 20%, from 2015 peak at an
Slide 7: CRC Focus Post-Spin Transformation
CRC Focus Post-Spin Transformation Culture Regulatory Engagement Employee Engagement Silo / Separate Reactive Low One CRC Proactive High Financial Priorities $ Debt Capital Efficiency Annual Production Costs $7BN Low $1.2BN $4BN High $750MM Portfolio Management Maintenance Capital Product Focus Acti
Slide 8: Strong Board Oversight
Strong Board Oversight Board Leadership Structure The Chair and Lead Independent Director lead the Board in its oversight role, enabling the CEO to focus on the company’s business operations Commitment to Maintaining a Balance of Skills & Qualifications to Oversee the Company William Albrecht Non-Ex
Slide 9: Board is Committed to Governance Best Practices
Board is Committed to Governance Best Practices Separate Chairman and CEO Roles Independent Lead Director Majority Independent Board Independent Board Committees Regular Executive Sessions No Stockholder Rights Plan (“Poison Pill”) Majority Vote Standard Annual Election of Directors Beginning in 201
Slide 10: 2016 CEO Compensation Package
2016 CEO Compensation Package Base Salary Annual Incentive Long-Term Incentive Established based on peer group market data as well as individual factors including experience and internal pay equity Strategic & Individual Objectives Execution of objectives Stakeholder outreach Stockholder relations R
Slide 11: Peer Group Selection
Peer Group Selection 2014 Peer Group Market Cap Revenue 2015 & 2016 Peer Group Enterprise Value Asset Value Equity Market Cap Scope of Operations Why the 2014 Peer Group was not appropriate Occidental selected peer companies for CRC in 2014 prior to the finalization of the spin-off terms and the sev
Slide 12: Peer Group Companies
Peer Group Companies 2014 Peer Group* 2015 & 2016 Peer Group** Company Enterprise Value Assets (Most Recent Quarter) Equity Market Cap EOG Resources 53,029 34,763 49,206 Apache Corp 37,498 55,952 24,822 Devon Energy Corp 39,924 50,637 25,320 Pioneer Natural Resources 24,371 14,909 22,720 Marathon Oi
Slide 13: Character, Responsibility, Commitment
Character, Responsibility, Commitment CRC supports thousands of vendors, suppliers and jobs by investing over $2 billion annually into California’s economy Active and constructive participant in California’s development of legislation, regulation and energy policy Apply advanced production technolog
Slide 14: Conclusion
Conclusion Management executed on strategic priorities and significantly reduced leverage by cutting debt and enhancing margins The Board took action to shape the annual incentive plan around the strategic priorities The Board aligned CEO pay and performance by: Reducing base salary by 10% during th
Slide 15: APPENDIX
APPENDIX
Slide 16: Select Market Commentary
Select Market Commentary "So far, CRC owns the title of the worst-timed oil spin out in history (from Oxy with a $6bn ton of debt, on the Monday of Thanksgiving 2014’s most bearish OPEC meeting in history). CRC made remarkable progress in 2016, containing spending, restructuring debt, preserving the