Parex Resources Inc. · TSX:PXT
Parex Resources — Investor Presentation (February 2022)
23 slides from Parex Resources's investor presentation, February 2022
Slide 1: Unlocking Colombia
Unlocking Colombia February 2022 1
Slide 2: Corporate Snapshot
CORPORATE SNAPSHOT Operational & Financial Highlights 2020A 2021F(1) 2022F(2) Brent ($/bbl) $43 $71 $80 Net Working Capital(4) Production (boe/d) 46,518 46,998 53,000 ~$325 Million Production Growth -12% 1% 13% PPS Growth(3) -7% 12% 23% $200MM Undrawn Credit Facility(4) CFPS – Basic $2.15 $4.63 $6.3
Slide 3: Colombia Running Room
COLOMBIA RUNNING ROOM Net Acreage (MM) • Leading oil-weighted Colombia producer 6 • PXT is the largest independent landowner in Colombia with ~5.9MM total net acres(1) 5 2021 Colombia Bid Round • High netback business with production tied to Brent Increases Position by ~4.3MM benchmark pricing 4 • S
Slide 4: Return of Capital Track Record
RETURN OF CAPITAL TRACK RECORD Summary (CAD MM) Levers $1,350 ~$370 ~$1,300 • Normal course issuer bid (NCIB) program $1,200 • Over the past three years have purchased the full 10% allowable pursuant to NCIBs $1,050 $334 • In 2022, expect to purchase full 10% for the fourth $900 year in a row $750 •
Slide 5: 2022F – Return Capital and Grow Production & Inventory
2022F – RETURN CAPITAL AND GROW PRODUCTION & INVENTORY 2022F Capital Allocation (USD MM) $800 $90/bbl $80/bbl $600 ~$250 ~$325 $425 25% $400 Exploration $70/bbl 10% Appraisal Brent 2022F Production Guidance • 52,000-54,000 boe/d $200 65% Development • +13% YoY growth • +23% YoY per share growth $50
Slide 6: Three-Year Business Plan
THREE-YEAR BUSINESS PLAN Production Forecast (boe/d; excludes exploration blocks)(1) Not Included in Production Forecast 70,000 70,000 Jan. 2022 average +5% 60,000 production: +5% 60,000 Exploitation ~51,500 +13% Utilizing Technology to Unlock Resource 50,000 50,000 40,000 40,000 Gas Development & E
Slide 7: 2022 Activities – Building a Sustainable Business
2022 ACTIVITIES – BUILDING A SUSTAINABLE BUSINESS VIM-43 VIM-1 Fortuna VIM-1 Northern VMM-46 Magdalena Boranda Drilling 1-2 exploration wells Llanos Magdalena and La Belleza-2. Start oil and Northern Llanos LLA-38 Drill 3-5 development wells CNG production at La Belleza Drill first development well
Slide 8: Valuable Conventional Reserves
VALUABLE CONVENTIONAL RESERVES Proved Proved+ 2021 Year-End Proved + Developed Proved Probable+ Corporate Reserves Report Probable Producing Possible Reserves Volumes (mmboe) 81 125 199 287 Reserve Life Index (years)(1) 4.4 6.9 10.9 15.8 After Tax NPV10% (C$/share)(2) $18.99 $25.60 $35.08 $46.64 Wor
Slide 9: Reserves Per Share Growth
RESERVES PER SHARE GROWTH 2P CAGR 12.0% (2017-2021) 1.65 1.49 1.38 1.19 1.05 0.67 0.55 0.50 0.40 0.33 2017 2018 2019 2020 2021 PDP per YE Basic Common Shares 2P per YE Basic Common Shares 19.4% PDP CAGR (2017-2021) Exploration activities complimented by material share repurchases 9
Slide 10: ESG Performance
ESG PERFORMANCE Environment ~14% reduction in scopes 1 & 2 GHG emissions intensity to ~20 Kg CO2e/boe in 2021 Bloomberg ESG Disclosure from 23 Kg CO2e/boe in the prior year Top Score Among Canadian E&Ps – 72 (E&Ps average – 49) 67,124 Mt CO2e emissions avoided February 1, 2022 Geothermal energy powe
Slide 11: ESG Priorities
ESG PRIORITIES Environment Social Governance Introduced GHGs emissions intensity Water for All - increase community reduction targets (mid-term target: 50% 2023 diversity target reduction by 2030 from a 2019 baseline) access to clean water 30% women on the Board Investing in geothermal and solar ene
Slide 12: Key Takeaways
KEY TAKEAWAYS • Focused on unlocking Colombian asset portfolio • Repurchased 46 million common shares since 2017(1) • Total shareholder returns are a priority, with a 2022 forecast of: • 13% production growth; • 10% share buyback; and • 2% current dividend yield(1) • Capex is exploitation focused, w
Slide 13: Appendix – Foundation for Long-Term Production
APPENDIX – FOUNDATION FOR LONG-TERM PRODUCTION LLA-34 vs Southern Llanos (Net Production) 34 LLA-34 Southern LLA 15 33 14 32 13 Southern Llanos (mboed) 31 LLA-34 (mboed) 30 12 29 11 28 10 27 9 26 25 8 LLA-34 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21* * Curre
Slide 14: Appendix – Strategic Partnership with Ecopetrol
APPENDIX – STRATEGIC PARTNERSHIP WITH ECOPETROL ▪ On Strategy: Partnership with Ecopetrol in the highly prolific Llanos Basin in Arauca. Regional Arauca Map ▪ Meaningful Portfolio Additions: Near term, proven production potential and reserves plus CANO LIMON drill ready exploration prospects and fut
Slide 15: Appendix – Proven Oil Field Development
APPENDIX – PROVEN OIL FIELD DEVELOPMENT Illustrative Log & Arauca Block – Reactivation, Existing Infrastructure Arauca Fault Trend Structure Map Prospective Horizons ▪ Under explored, partially developed, proven light oil fault trend ▪ High deliverability wells from up to three productive zones Mira
Slide 16: Appendix – Fortuna
APPENDIX – FORTUNA Fortuna (100% WI, Operator) o Acquired in Q4 2018; no drilling since 2012 o Targeting four different zones o Six previously drilled vertical wells with ~800 mbbl recovered(1) 2022 Plan: o Drill follow-up multi lateral wells o Test all four zones o Increase contact area with multi
Slide 17: Appendix – VIM-1 La Belleza Discovery
APPENDIX – VIM-1 LA BELLEZA DISCOVERY Gas fields VIM-1 (50% WI, Operator) Oil fields Gas pipeline • La Belleza; production started in November 2021, with Oil Pipeline gross rates of 2,400 boe/d River El Dificil Field • Main target is a Cienaga De Oro formation draped over a VIM-1 Discovered: 1943 *C
Slide 18: Appendix – Boranda & VMM-46
APPENDIX – BORANDA & VMM-46 Boranda (50% WI, Operator) • Field currently producing 500 bbl/d of oil from vertical wells Boranda • Appraisal plan includes horizontal drilling and Boranda-1 optimized completion techniques Boranda Centro-1 Boranda Sur-2 • Drilling first well of a multi-well campaign VM
Slide 19: Advisories
ADVISORIES This presentation is provided for informational purposes only as of February 1, 2022, is not complete and may not contain certain material information about Parex Resources Inc. ("Parex" or the "Company"), including important disclosures and risk factors associated with an investment in P
Slide 20: Advisories
ADVISORIES These forward-looking statements are subject to numerous risks and uncertainties, including but not limited to, the impact of general economic conditions in Canada and Colombia; industry conditions including changes in laws and regulations including adoption of new environmental laws and
Slide 21: Advisories
ADVISORIES Oil and Gas Information ▪ The estimates of Parex' December 31, 2020 reserves set forth in this presentation have been prepared by GLJ Petroleum Consultants Ltd. ("GLJ") as of December 31, 2020 with a preparation date of February 4, 2021 (the "GLJ 2019 Report") in accordance with National
Slide 22: Advisories
ADVISORIES ▪ This presentation contains certain oil and gas metrics, including F&D, FD&A, FD&A/boe, reserves life index (or RLI), operating netbacks, cash netbacks, funds flow from operations netback, CAGR, replacement ratio, and recycle ratios, which do not have standardized meanings or standard me
Slide 23: Advisories
ADVISORIES ▪ All of Parex’ crude oil reserves disclosed herein are located in Colombia. The Company has light, medium and heavy crude oil, natural gas liquids and conventional natural gas product types. The recovery and reserve estimates of reserves provided in this document are estimates only, and
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