Parex Resources Inc. · TSX:PXT
Parex Resources — Investor Presentation (June 2017)
27 slides from Parex Resources's investor presentation, June 2017
Slide 1: Solid Foundation. Building New Platforms.
Solid Foundation. Building New Platforms. www.parexresources.com | TSX:PXT | Corporate Presentation | June 2017 Corporate Presentation Corporate|Presentation June 2017 1 1 | March 2017
Slide 2: Corporate Snapshot
CORPORATE SNAPSHOT Operating results 2016 2017E Production (boe/d) FY Average 29,715 34,000-36,000 Capital Expenditures(1) (million) US $112 US $200-$225 Exploration Drilling (# prospects) 7 14 Appraisal Drilling (# wells) 4 15-20 Development Drilling (# wells) 6 12 Total (# wells) 17 41-46 Reserves
Slide 3: Reasons to Own Parex
REASONS TO OWN PAREX 1. No debt and positive WC of US$131MM 2. High margins: Q1’17 Cash Flow ~US$22.47/bbl @ Brent $55 3. Ability to grow within cash flow: o 2016 Growth: production 8.4% y-y & RLI increases to 10 years from 8 years o 2017 Growth guidance of 15%-21% self-funded 4. Exploration Upside
Slide 4: 2017 Guidance: Cash Flow Funded Growth
2017 GUIDANCE: CASH FLOW FUNDED GROWTH Maintenance Capex Exploration Capex 12 wells 14 wells 30,000 boe/d Assumptions 2,000-3,000 boe/d $45-55MM $85-90MM Oil (Brent) US $50/bbl FFO netback(1)(2) US $17/boe Production 34,000-36,000 bopd CAPEX Capital Expenditure US $200-225MM ALLOCATION Funds Flow Fr
Slide 5: Parex Cash Netback
PAREX CASH NETBACK* 2017 TARGET CASH NETBACKS** $60 Brent $54.61 Brent $55 Brent $51.13 ($4.38) Royalties Brent $50 $50 ($3.75) ($5.89) Differential Brent $45 ($6.29) REALIZED PRICE (USD/BOE) $40 ($11.11) Transportation ($11.13) ($5.09) Opex $30 ($5.56) ($3.77) G&A/Fin. & Other Costs ($4.23) ($1.90)
Slide 6: Marketing Costs Trending Downward
MARKETING COSTS TRENDING DOWNWARD $20 Brent $100/bbl $18 Brent $56/bbl $16 $14 Brent $45/bbl Brent $/boe $12 $55/bbl $10 $8 $6 $4 $2 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Transportation Brent Differential Corporate Presentation Corporate|Presentation June 2017
Slide 7: Transportation: Multiple Evacuation Routes, Surplus Take-away Capacity
Trucking Parex Blocks TRANSPORTATION BARRANQUILLA Pipeline River PAREX’ TRANSPORTATION ALTERNATIVES: CARTAGENA 1. Export Cargo – 60% Volume TERMINAL COVENAS oTruck/Pipeline – Tender process 2. Magdalena River - 35% Volume oTruck/Barge oWellhead sales 3. Casanare Refinery - 5% volume BARRANCABERMEJA
Slide 8: Consistent & Sustainable Growth: Path to 50,000 bopd
CONSISTENT & SUSTAINABLE GROWTH: PATH TO 50,000 BOPD 45,000 38,500-43,500 AVERAGE DAILY PRODUCTION 40,000 34,000-36,000 35,000 Q2E RLI 10 yr 30,000 RLI 8 yr (BOE/D) 29,715 25,000 RLI 7 yr 27,434 20,000 22,526 RLI 5 yr 15,000 RLI 3 yr 15,854 10,000 11,407 5,000 - 2012 2013 2014 2015 2016 2017E 2018E
Slide 9: Solid Foundation Supports Growth
SOLID FOUNDATION SUPPORTS GROWTH TRACK RECORD OF PROGRESSING RESERVES* FROM 3P TO CASH FLOW Proved + Probable Annual 2P Reserve Life Proved + Probable Proved Index + Possible (mmboe) (mmboe) Production based on annualized (mmboe) (mmboe) Q4 Production 31-Dec-11 18 11 5 2 3 years 31-Dec-12 23 16 10 4
Slide 10: Conventional Oil Reserves: Industry Leading Results
CONVENTIONAL OIL RESERVES: INDUSTRY LEADING RESULTS $18 Total Company(1) 2016 PDP 1P 2P FD&A $/boe $6.47 $6.99 $3.40 $15 Recycle Ratio (FD&A) 2.9x 2.7x 5.5x $12 2P FD&A (USD/BOE) Company(3) 2P Reserves 3 Yr 2P 3 Yr PDP 3 Yr 2P Total per share FD&A FD&A Recycle FDC/2017E $9 Growth YoY Incl. FDC Ratio
Slide 11: Southern Llanos: Foundation for Growth
SOUTHERN LLANOS: FOUNDATION FOR GROWTH Carmentea CABRESTERO (100% WI, operator) • Akira: swing producer LLA-32 Calona • Successful Bacano appraisal in 2017 (4 wells to date) Kananaskis Chiricoca LLA-34 Tilo Max LLA-34 (55% WI, Non-operated) Chachalaca Tigana Tarotaro • Current production ~45,000 bop
Slide 12: Cabrestero & LLA-34: 2017 Focus - Test Extent
Cabrestero & LLA-34: 2017 FOCUS - TEST EXTENT Field GLJ 3P Reserves GLJ 2P Reserves 2015 GLJ 3P Outline (Parex’ WI) (MMBO) (MMBO) 2016 GLJ 3P Outline YEAR END 2015 2016 2015 2016 2017 Prospective Area YTD Tigana Jacana 41 51 28 34 7 5 Guadalupe 6 Jacana Jacana Sur-2 3 2 14 45 5 30 Guadalupe 4 1 8 Ot
Slide 13: LLA-34 Guadalupe Trend – Production History
LLA-34 GUAD TREND – PRODUCTION HISTORY 5000 • IP Range: 500-3,500 bopd 4500 Tigana-4 • Flat production profile Jacana-1 • Low decline 4000 Jacana-5 Tigana Sur-1 PRODUCING DAY BOPD 3500 Tigana Norte-1 3000 Jacana-4 2500 TREND AVERAGE 2000 1500 Tigana-3 Jacana-2 GLJ Tigana 1000 Tigana Sur-2 2P Represe
Slide 14: Capachos Development and Exploration Potential
CAPACHOS DEVELOPMENT AND GUADALUPE DEPTH STRUCTURE EXPLORATION POTENTIAL 2017 PLAN • Drill 2 firm development wells (Capachos–2 and NORESTE-1 EXPLORATION Capachos Sur–2) to earn 50% in the block. • Disposal well. NORESTE • Development wells are targeting proven structural NORTE-1 EXPLORATION compart
Slide 15: Magdalena Basin: Next Growth Platform
VIM-1 Pipeline Oil fields MAGDALENA BASIN: Gas fields NEXT GROWTH PLATFORM 2017 ACTIVITIES AGUAS BLANCAS(1) PLAYON(1) • Light oil opportunity • Drill follow-up to Boranda-1 • Drill 10-15 appraisal wells PLAYON SOGAMOSO VIM-1 VMM-9 • Interpreting 525 km2 of 3D • Environmental Impact DE MARES seismic
Slide 16: Aguas Blancas Objectives
AGUAS BLANCAS OBJECTIVES AB-9 2017 PROGRAM AB-5 1. Identify oil in place; 35 API. 2. Develop production strategy. 3. Understanding waterflood potential. DEFINITION OF SUCCESS 700’ 1. Achieve Unstimulated IP Rates = 50-200 bopd 570’ • Target stimulated rates 1.5x to 2x 2. Primary Recovery per well =
Slide 17: Summary of the Aguas Blancas Opportunity
SUMMARY OF THE AGUAS BLANCAS OPPORTUNITY 1. Increase Field Size (area): o Total delineated YE 2016 2P Area 2,388 acres (~30% of total area) 2. Demonstrate development AB 13 353 ac capital efficiencies & stimulation AB-2 AB-5 AB 17 410 ac rates YE 2016 2P Area AB 18 110 ac AB 16 327 ac 3. Increase Fi
Slide 18: Summary: Excel at What We Do
SUMMARY: EXCEL AT WHAT WE DO CORE COMPETENCIES 1. Identify and acquire large prospective resources. 2. Engage stakeholders. 3. Focus on being a low cost operator. Bacano Field Corporate Presentation Corporate|Presentation June 2017 1818 | March 2017
Slide 19: Appendix – Block Summary
APPENDIX – BLOCK SUMMARY # Block Operated/Non-Operated Working Interest Partners Gross Acres(1) Basin 1 LLA-10 Operated 50% Gran Tierra 189,544 Llanos 2 LLA-16 Operated 100% N/A 11,736 Llanos 3 LLA-20 Operated 100% N/A 2,891 Llanos 4 LLA-26 Operated 100% N/A 184,061 Llanos 5 LLA-29 Operated 100% N/A
Slide 20: Appendix – Summary of Quarterly Results
APPENDIX – SUMMARY OF QUARTERLY RESULTS (Unaudited Results) 2017 2016 2015 Q1 FY Q4 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 OPERATING Production (thousands of boe/d) 32.6 29.7 31.1 29.8 29.1 28.9 27.4 28.6 27.4 27.0 26.7 Brent Price ($/bbl) 55 45 51 47 47 35 54 45 51 64 55 Average realized prices, prior to hedging
Slide 21: Colombia – Current Land Base
COLOMBIA – CURRENT LAND BASE Source: Divestco, February 2017 Corporate Presentation Corporate|Presentation June 2017 2121 | March 2017
Slide 22: Advisories
ADVISORIES HOW TO REACH US This presentation is provided for informational purposes only as of June 2, 2017, 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 in
Slide 23: Advisories
ADVISORIES the Company's forecasted 2017 average production range; the Company's estimated average daily production for Q2 2017, full year 2017 and full year 2018; the Company's planned capital program, including anticipated amounts focused on existing discoveries and the appraisal programs and the
Slide 24: Advisories
ADVISORIES • This document also contains a financial outlook, in particular the information set forth on slides 3 and 4. Such financial outlook has been prepared by Parex' management to provide an outlook of the Company's activities and results. The financial outlook has been prepared based on a num
Slide 25: Advisories
ADVISORIES Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented herein, should not be relied upon for investment or other purposes. A summary of the calculations of such metrics are as follows: o FD&A costs represent the costs of pro
Slide 26: Advisories
ADVISORIES • Further, this presentation includes estimates of pay thickness, which are considered to be anticipated results or information that indicate the potential value or quantities of resources under NI 51-101. Such estimates have been prepared internally by Parex by a non-independent qualifie
Slide 27: Corporate Presentation June 2017
Corporate Presentation Corporate|Presentation June 2017 2727 | March 2017