Parex Resources Inc. · TSX:PXT
Parex Resources — Investor Presentation (February 2024)
23 slides from Parex Resources's investor presentation, Feb 1, 2024
Slide 1: Parex Resources Investor Presentation – February 2024
Parex Resources Investor Presentation – February 2024
Slide 2: TSX:PXT
TSX:PXT ▪ Largest Independent Oil & Gas Company in Colombia ▪ Deep Portfolio with Transformational Exploration Opportunities ▪ Debt-Free Balance Sheet ▪ Target the Return of ≥33% of FFO(1) to Shareholders ▪ Top-Tier ESG Performance Stock Symbol TSX:PXT Shares Outstanding(2) 103.8 million Market Capi
Slide 3: Colombia Parex Advantages
Colombia ~750,000 Independent Free OECD BBL/D Branches of Capital Movement Member Oil Production(1) Government & No Foreign Country Currency Controls Parex Advantages Offshore Top Decile Established Strong Strategic Partner Oil Sales Cash Flow per BOE Social License with Ecopetrol S.A. Paid in USD b
Slide 4: Track Record of Creating Value
Track Record of Creating Value PRODUCTION AND FUNDS FLOW PROVIDED BY OPERATIONS (FFO) PER SHARE Production (boe/d) FFO per Share(2) 60,000 Average Production(1) FFO per Share(2) $8.00 $6.00 40,000 $4.00 20,000 $2.00 0 $0.00 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A 2022
Slide 5: Strategy
Strategy Business Fundamentals Strategic Growth Levers Colombia Advantage & ESG Utilize Exploitation and Technology UNLOCKING EXTENSIVE LAND BASE USING GLOBALLY-PROVEN TECHNOLOGY Asset Sustainability Capture Liquids-Rich Gas Opportunities PURSUING ONSHORE, WORLD-CLASS GAS PLAYS THAT ARE UNDEREXPLORE
Slide 6: Asset Running Room in Colombia
Asset Running Room in Colombia NET LAND POSTION(1) First-Mover (Million Net Acres) Advantage 6 Expanded by ▪ Largest independent acreage holder in ~4x in 2021 Colombia with 40 blocks 5 ▪ 18 blocks added in the 2021 Colombia bid round 4 ▪ Built on existing relationship with Ecopetrol S.A. with execut
Slide 7: 2024 Guidance
2024 Guidance Average 54,000-60,000 Funds Capital $390-430(2) $590-660(1) Production ~5% Growth at Midpoint vs. 2023 Flow $75/bbl Brent Expenditures ~15% Lower at Midpoint vs. 2023 boe/d $ millions $ millions VIM-1 2024F CAPITAL DISTRIBUTION 1 Big ‘E’ well Hydra Fortuna Arauca, Capachos & LLA-38 ~2
Slide 8: Capital Allocation Framework Reinforced by 2024 Plan
Capital Allocation Framework Reinforced by 2024 Plan 2024F CAPITAL ALLOCATION ($MM) 2024F FFO NETBACK(5) SENSITIVITY ($/bbl Brent) $31-33 $29-31 ~$100 $25-27 25-27% 19-21% 10-12% ~$625 $65 $75 $85 ~$410 $75/bbl FFO Netback ($/boe)(5) Effective Tax Rate Brent COLOMBIA INCOME TAX & SURTAX(6) ($/bbl Br
Slide 9: Long-Term Capital Allocation Framework
Long-Term Capital Allocation Framework 1. Reinvest ~2/3 of FFO(1) into Business 2. Return ≥1/3 to Shareholders(2) Regular Dividends + Near-Field Investments Big ‘E’ Share Buybacks ▪ Drive sustainable business model ▪ Quarterly regular dividend ▪ Invest in long-term growth ▪ Target dividend growth ▪
Slide 10: Three-Year Plan: Growing Production & Free Funds Flow
Three-Year Plan: Growing Production & Free Funds Flow 2024-2026 Plan based on $75/bbl Brent(1) Net Average Production (kboe/d)(2) 65 57 61 5%+ Annual Production Growth 54 TARGETING GROWTH FROM OPERATED BLOCKS 52 47 $375-450MM of Capital Expenditures(3) Per Year INVESTING GOVERNED BY ≥1/3% FFO SHAREH
Slide 11: MOU with Ecopetrol in High-Potential Foothills Trend
MOU with Ecopetrol in High-Potential Foothills Trend Memorandum of Understanding (MOU) MOU Coverage Area with Ecopetrol S.A.(1) Gibraltar ▪ MOU signed with Ecopetrol, Colombia’s national oil company Arauca ▪ Building on existing, successful relationship with Ecopetrol Capachos ▪ Area of coverage spa
Slide 12: Arauca (Arauca-8): Multi-Zone, High-Impact Exploration Target
Arauca (Arauca-8): Multi-Zone, High-Impact Exploration Target Basin: Northern Llanos Operator: PXT W.I.: 50%(1) Arauca 3D Seismic Actively testing multiple reservoirs with positive initial results(2) ▪ Previous development was on 2D seismic and halted due to social issues Arauca-8 Target ▪ What succ
Slide 13: Arauca: Building Off of Capachos to Drive Future Growth
Arauca: Building Off of Capachos to Drive Future Growth Basin: Northern Llanos Operator: PXT W.I.: 50%(1) 2024F Wells Arauca-8 Arauca-8 Well Pad Depth Arauca-12 Arauca-15ST (Big ‘E’) Arauca-81 Zone 1 Barco Zone 2 Guadalupe Zone 3 Gacheta (New) Zone 4 Une Key Takeaways ▪ Targeting proven, multi-zone
Slide 14: Cabrestero & LLA-34: Maximizing Recovery & Free Funds Flow
Cabrestero & LLA-34: Maximizing Recovery & Free Funds Flow Basin: Southern Llanos Operator: PXT (Cabrestero), Non-Operator (LLA-34) W.I.: 100% (Cabrestero), 55% (LLA-34) CABRESTERO PROFILE(1) Focused on 13 12 pressure management & minimizing decline 11 10 9 Cabrestero Block 7 ▪ Planned downspacing a
Slide 15: Top-Tier ESG Performance
Top-Tier ESG Performance E External Recognition ▪ Reduced GHG intensity by 37% (scope 1 & 2) from 2019 baseline ▪ Cabrestero solar field completed; projected to avoid 3,500 tCO2e per year ▪ Plan to eliminate routine flaring by 2025 S ▪ Invested over US$15 million in communities in 2023 24.1 Rating(1
Slide 16: Key Takeaways
Key Takeaways ▪ 2024 focus is on increasing overall cash that can be used to reward shareholders ▪ Demonstrated track record of production growth and return of capital ▪ Invested in infrastructure & technology to flatten decline rates of key assets ▪ Strategic partner with Ecopetrol S.A., with growi
Slide 17: Appendix
Appendix
Slide 18: Strategically Investing Across Basins
Strategically Investing Across Basins Northern Llanos Basin Diversified (Operated) Operations ▪ SOCA(1): Reducing decline rate & future Magdalena Basins capital requirements (Operated) ▪ Northern Llanos & Magdalena: Foundation for capital Southern Llanos Basin efficient growth (Operated) ▪ Big ‘E’ E
Slide 19: Contact Information
Contact Information Mike Kruchten Senior Vice President, Capital Markets & Corporate Planning 403-517-1733 investor.relations@parexresources.com Steven Eirich Investor Relations & Communications Advisor 587-293-3286 investor.relations@parexresources.com Parex Resources Inc. 2700 Eighth Avenue Place,
Slide 20: Advisory
Advisory This presentation is provided for informational purposes only as of February 1, 2024, 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 Par
Slide 21: Advisory
Advisory Non-GAAP and Other Financial Measures Advisory This presentation uses various "non-GAAP financial measures", "non-GAAP ratios", "supplementary financial measures" and "capital management measures" (as such terms are defined in National Instrument 52-112 – Non-GAAP and Other Financial Measur
Slide 22: Advisory
Advisory Oil and Gas Information (Continued) This presentation contains certain oil and gas metrics, including netbacks, cash netbacks, funds flow from operations netback and CAGR, which do not have standardized meanings or standard methods of calculation and therefore such measures may not be compa
Slide 23: Advisory – Historical Production
Advisory Historical Production(1) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023(2) Light & Medium Crude Oil (bbl/d) - - - - - - - - 4,668 7,214 6,021 6,831 7,471 8,417 Heavy Crude Oil (bbl/d) - - - - - - - - 39,120 44,494 39,197 38,449 43,008 45,163 Average Oil Production (bb
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