Parex Resources Inc. · TSX:PXT
Parex Resources — Shareholder Meeting (May 2023)
29 slides from Parex Resources's shareholder meeting presentation, May 11, 2023
Slide 1: Parex Resources Annual General Meeting – May 11, 2023
Parex Resources Annual General Meeting – May 11, 2023
Slide 2: Meeting Agenda
Receive & consider the audited financial statements for year-end December 31, 2022 Election of directors Appointment of auditors Meeting Vote on approach to executive compensation Agenda Transact other business Business update presentation by Imad Mohsen, President & CEO Q&A
Slide 3: Financial Statements & Auditors Report
Financial Statements & Auditors Report For the year-end December 31, 2022
Slide 4: Election of Directors
Election of Directors Wayne Foo Bob Engbloom Lynn Azar Lisa Colnett Sigmund Cornelius Chair of the Board Lead Director G.R (Bob) McDougall Glenn McNamara Imad Mohsen Carmen Sylvain President & CEO
Slide 5: Board Retirement
Board Retirement Director Tenure Petro Andina1: 2008 – 2009 Parex Resources: 2009 – 2023 Paul Wright, Director (1) Predecessor company to Parex Resources.
Slide 6: Executive Retirement
Executive Retirement Chief Financial Officer & Corporate Secretary Petro Andina1: 2008 - 2009 Parex Resources: 2009 – 2023 Ken Pinsky, CFO (1) While at Petrod Andina, Mr. Pinsky was Vice President, Finance & CFO.
Slide 7: Appointment of Auditors
Appointment of Auditors PricewaterhouseCoopers LLP
Slide 8: Our Approach to Executive Compensation
Our Approach to Executive Compensation “Say on pay” vote
Slide 9: Business Update
Business Update Imad Mohsen President & Chief Executive Officer
Slide 10: Recognizing Leadership
Recognizing Leadership Paul Wright, Director Ken Pinsky, CFO
Slide 11: Parex has transitioned from a single asset company to a Colombia-wide operator
Parex has transitioned from a single asset company to a Colombia-wide operator. • Expanding portfolio across product types and basins • Building a pipeline of projects to ensure sustainable growth • Delivering exceptional shareholder returns
Slide 12: Why Colombia?
Why Colombia? Parex’s Preferred Jurisdiction to Invest Substantial Established Stable Operating Resource Potential Industry Environment OECD Independent Free ~750,000 US Dollar Member Branches of Capital BBL/D Commodity Country Government Movement Oil Production1 Sales COLOMBIA UNDERLYING FUNDAMENTA
Slide 13: Track Record of Growth
Track Record of Growth PRODUCTION PER SHARE(1)(2) PDP RESERVES PER SHARE(3)(4) 0.17 0.76 16% (2017-2022) CAGR 18% (2017-2022) CAGR 0.67 0.14 0.13 0.12 0.55 0.10 0.50 0.08 0.40 0.33 2017A 2018A 2019A 2020A 2021A 2022A 2017A 2018A 2019A 2020A 2021A 2022A 36 52 51 83 Absolute Production Growth CAGR: 8%
Slide 14: Track Record of Creating Value
Track Record of Creating Value PRODUCTION AND FUNDS FLOW PROVIDED BY OPERATIONS PER SHARE Production (boe/d) FFO per Share(1) 60,000 Average Production(1) FFO per Share(2) $9.00 40,000 $6.00 20,000 $3.00 0 $0.00 (3) 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A 2022A 2023F
Slide 15: Track Record of Returning Capital
Track Record of Returning Capital RETURN OF CAPITAL TRACK RECORD Return of Capital (CAD $MM) CAD Return of Capital per Share $500 $3.75 $400 $3.00 C$1.50 Current annualized dividend per share $300 $2.25 >1/3 $200 $1.50 Reduction in fully diluted float since 2017 $100 $0.75 >C$1.3B Total return of ca
Slide 16: Continued Top-Tier ESG Performance
Continued Top-Tier ESG Performance Cabrestero Plan Water for Solar Farm Padrino All ~1430 MWh 17 houses built for >30,000 people generated, avoiding disadvantaged families gained clean drinking water ~850 tCO2e since 2021 since 2012 access since 2017 16
Slide 17: Continued Top-Tier ESG Performance
Continued Top-Tier ESG Performance Listed on the Jantzi Social Index Listed on the 2023 Bloomberg Gender Equality 1 of 50 Canadian Index companies Recognized as an ESG Top Rated Member of the MSCI Company Global Sustainalytics ESG Risk Rating: 27.2 (2) Index Rank: 9 out of 163 (6th percentile) MSCI
Slide 18: Parex's Growth Strategy
Parex’s Growth Strategy Exploitation Outsized Onshore Liquids- Through Exploration Rich Gas Technology Potential Introduction of proven technology supports each element of our growth strategy Horizontal Drilling & Waterflood Injection Gas Reinjection Synthetic Drilling Fluid 18
Slide 19: Significant Running Room for Growth
Significant Running Room for Growth NET LAND POSTION(1) Net Land (MM Acres) 6 1st Mover Advantage 5 Land, equipment & technology 4 Expanded portfolio 3 ~4x in 2021 bid round 2 ~6 Million Acres 1 Largest independent acreage holder in Colombia 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2
Slide 20: 3-Year Plan: Efficiently Grow Production
3-Year Plan: Efficiently Grow Production(1) BASE DEVELOPMENT PLAN(1)(2) Average Production (boe/d) (Excludes Exploration Upside) Capital Expenditures ($MM)(3) 80,000 $600 ~15% Production Growth in 2023 at Midpoint Magdalena 60,000 $450 Northern Llanos 40,000 Southern Llanos $300 ~5% Production Growt
Slide 21: 3-Year Plan: Delivers, Even Excluding Exploration Upside
3-Year Plan: Delivers, Even Excluding Exploration Upside(1)(2) 5% PRODUCTION DECREASING CAPITAL GROWING FFO AT INCREASED FFF FOR GROWTH PER YEAR EXPENDITURES $80/BBL BRENT SHAREHOLDERS (kboe/d)(1) ($MM)(1)(3) (FFO per share)(1)(4)(5) (FFF per share)(1)(4)(5) 67 $512 $10.0 $6.1 63 $6.1 60 $450 $8.5 5
Slide 22: Big 'E' Exploration: Transformational Opportunities
Big ‘E’ Exploration: Transformational Opportunities Strategy targets prospects ~15 High-impact exploration >20,000 prospects in portfolio boe/d Diversified across both Oil & Gas ~$50MM Projected Spend Per Year opportunities (2023-2025)(1) Expect to deliver roughly one catalyst per quarter (1) See sl
Slide 23: Parex is positioned to continue capturing Colombia's resource potential
Parex is positioned to continue capturing Colombia’s resource potential ▪ ESG leadership enabling operational delivery ▪ Minimizing declines & maximizing returns through technology ▪ Targeting world-class exploration opportunities ▪ Building on best-in-class return of capital track record
Slide 24: 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 25: Appendix: Three-Year Plan: Efficiently Grow Production & Free Funds Flow
Appendix: Three-Year Plan: Efficiently Grow Production & Free Funds Flow (boe/d) BASE DEVELOPMENT PLAN(1)(6)(7) (Excludes Exploration Upside) Exploration Strategy(6) 80,000 ▪ Approach: ~$50MM per Magdalena year on high-impact 60,000 prospects for step-change Northern Llanos exposure Southern Llanos
Slide 26: Advisory
Advisory This presentation is provided for informational purposes only as of May 11, 2023, 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 27: 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 28: Advisory
Advisory Market, Independent Third Party and Industry Data Certain market, independent third party and industry data contained in this presentation is based upon information from government or other independent industry publications and reports or based on estimates derived from such publications an
Slide 29: Advisory: Historical Production
Advisory Historical Production(1) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Light & Medium Crude Oil (bbl/d) - - - - - - - - 4,668 7,214 6,021 6,831 7,471 Heavy Crude Oil (bbl/d) - - - - - - - - 39,120 44,494 39,197 38,449 43,008 Average Oil Production (bbl/d) 77 5,345 11,407