Parex Resources Inc. · TSX:PXT
Parex Resources — Investor Presentation (March 2024)
24 slides from Parex Resources's investor presentation, March 2024
Slide 1: Parex Resources Investor Presentation – March 2024
Parex Resources Investor Presentation – March 2024
Slide 2: TSX:PXT
TSX:PXT ▪ Colombia’s Largest Independent Oil & Gas Company ▪ Track Record of Creating Value in Colombia since 2009 ▪ Deep Portfolio with Transformational Exploration Opportunities ▪ Target the Return of ≥33% of FFO(1) to Shareholders ▪ Top-Tier ESG Performance Stock Symbol TSX:PXT Shares Outstanding
Slide 3: 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 4: 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 5: Track Record of Growth
Track Record of Growth PRODUCTION PER SHARE(1) PDP RESERVES PER SHARE(2) 0.20 0.80 0.76 CAGR CAGR 12% (2018A-2024F) 0.19 15% (2018A-2023A) 0.17 0.67 0.14 0.13 0.55 0.12 0.50 0.10 0.40 2018A 2019A 2020A 2021A 2022A 2023A 2024F 2018A 2019A 2020A 2021A 2022A 2023A 45 57 63 83 Absolute Production Growth
Slide 6: Track Record of Returning Capital
Track Record of Returning Capital RETURN OF CAPITAL (CAD MM)(1) CONTINUALLY LOWERING THE SHARE COUNT (MM) ~$290 ~$1,840 162 $300 148 $384 134 122 $334 110 $230 104 $300 2019A 2020A 2021A 2022A 2023A 2024F(2) Total 2018A 2019A 2020A 2021A 2022A 2023A Share Repurchases Dividends Fully Diluted Shares O
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% ~$115 19-21% 10-12% ~$625 $65 $75 $85 $75/bbl FFO Netback ($/boe)(5) Effective Tax Rate Brent ~$410 2024F CAPITAL EXPENDITURES(2) BY CA
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 52 54 TARGETING GROWTH FROM OPERATED BLOCKS 47 $375-450MM of Capital Expenditures(3) Per Year INVESTING GOVERNED BY ≥1/3% FFO SHAREH
Slide 11: 2024 High-Impact Exploration Plan
2024 High-Impact Exploration Plan VIM-1(1) Hydra Potential surrounds La Belleza Planned spud Q2-Q3 2024 Targeting gas & condensate LLA-38(1) Berillo Oeste Adjacent trend to Arauca Planned spud Q4 2024 Targeting light oil & gas LLA-122(1) Arantes High-potential Foothills trend Began drilling in Q1 20
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 ▪ What success looks like:
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: 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 15: 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 16: 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 17: Creating Shareholder Value
Creating Shareholder Value RETURN ON AVERAGE PDP RESERVES PRODUCTION FREE FUNDS FLOW CAPITAL EMPLOYED (ROACE)(1) PER SHARE(2) PER SHARE(3) PER SHARE(4) 48% 0.80 0.19 $2.44 0.76 0.17 0.67 $1.87 $1.74 35% 0.14 0.55 0.12 $1.13 23% 2021A 2022A 2023A 2020A 2021A 2022A 2023A 2020A 2021A 2022A 2023A 2020A
Slide 18: Long-Term Track Record
Long-Term Track Record 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 2022A 2023
Slide 19: Key Takeaways
Key Takeaways ▪ 2024 focus is on increasing overall cash that can be used to reward shareholders ▪ Demonstrated long-term track record of production growth and return of capital ▪ Invested in technology & infrastructure to flatten decline rates of key assets ▪ Strategic partner with Ecopetrol S.A.,
Slide 20: 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 21: Advisory
Advisory This presentation is provided for informational purposes only as of March 4, 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 Parex.
Slide 22: Advisory: Non-GAAP and Other Financial Measures
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 23: Advisory: Oil and Gas Information
Advisory Oil and Gas Information The estimates of Parex's December 31, 2023 reserves set forth in this presentation have been prepared by GLJ Petroleum Consultants Ltd. ("GLJ") as of December 31, 2023 with a preparation date of February 29, 2024 in accordance with National Instrument 51-101 – Standa
Slide 24: Advisory: Historical Production
Advisory Historical Production(1) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 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 (bbl/d