Parex Resources Inc. · TSX:PXT
Parex Resources — Investor Day (November 2014)
121 slides from Parex Resources's investor day presentation, Nov 17, 2014
Slide 1: Parex Resources Investor Presentation Bogota
Parex Resources Investor Presentation Bogota November 17, 2014 2014 Parex Investor Day: Bogota
Slide 2: Agenda
Agenda 1. Vision, Track Record & Wayne Foo CEO Goals 2. Ken Pinsky CFO 2015 Guidance Overview Mike VP Corporate Planning Kruchten & IR 3. Reserves Summary Eric Furlan VP Engineering 5. Exploration Portfolio Ryan Fowler VP Exploration 6. Lee President & Operating in Colombia DiStefano Country Manager
Slide 3: Parex Vision
Parex Vision 1. Create long-term shareholder value 2. Build a portfolio of assets to allow for consistent growth 3. Develop an organization with bench strength to allow Parex to evolve into the leading LATAM independent E&P 2014 Parex Investor Day: Bogota 3
Slide 4: How have we progressed?
How have we progressed? 2010 – Find something Kona Field 2011 – Grow Production & Cash Q4 11,342 bopd & FFO $63 MM 2012 – Diversification acquire LLA-32, LLA-34 and Cabrestero 2013 – Demonstrate Sustainability expand RLI > 5 years 2014 – Building the Runway develop inventory to double Pare
Slide 5: Our Values
Our “Values” We are: 1. Team based, respectful and trustworthy 2. Biased to Action, not delay 3. Driven to prove the commercial viability of our concepts 4. Rewarded for creating share value 5. Managed by data whenever possible 6. Clear and objective in our depiction and management of the risks that
Slide 6: History of Creating Shareholder Value (#1)
History of Creating Shareholder Value (#1) Value Created from PetroAndina to Parex $1,000 $900 PetroAndina $800 shareholders have 260 $700 realized a 389% return Millions $600 $500 234 $400 $300 154 $200 378 166 $100 224 44 PXT = $10/sh $0 14 Placements Options Sale - Cash $7.65 Parex Shares Parex S
Slide 7: Colombia Focused
Colombia Focused Barranquilla Santa Marta Cartagena /BLOCK Significant land base VIM-1 2.75 mm gross acres Covenas Working interest in 23 blocks Diversified production base Experienced operator ~120 wells drilled VENEZUELA 58 mmbbls in 2P Reserves COLOMBIA OBC Capachos VMM-9 Medellin VMM-11 LLA-1
Slide 8: History of Creating Shareholder Value (#2)
History of Creating Shareholder Value (#2) Parex Value Created (CAD$ estimate Nov 2014) $2,000 $1,500 Current 751 2190 EV Millions CAD$ $1,000 1500 85 182 $500 288 749 48 148 $0 2010 - 2011 brought Debenture Reserve Report NPV10 Reserve Report NPV10 Verano Acquisition Total Capital Investment PXT Op
Slide 9: Track Record of Consistent Growth
Track Record of Consistent Growth Production Growth Debt Adjusted Reserve Growth Debt Adjusted 25,000 Production (bopd) Production per share 200 LHS RHS 100 Possible - LHS 0.80 20,000 160 2P - LHS Reserves (MMboe) 80 Reserves per share Production (bopd) Production per share 0.60 3P Reserve per share
Slide 10: Grow & Diversify Production
Grow & Diversify Production LLA-16 LLA-20 Los Ocarros Cabrestero LLA-32 LLA-34 LLA-30 Other 27 24 21 Bopd (000) by block 18 15 12 9 6 3 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 est. 2010 2011 2012 2013 2014 Third Quarter production averaged 25,175 bopd 2014 Parex Investor Day: Bogota 10
Slide 11: A strong production platform to grow
A strong production platform to grow 60,000 Develop 50,000 Base Target 10% YOY Target at 20% YOY 40,000 2015+ Exploration BOPD 30,000 20,000 Develop Existing Reserves1 10,000 Base – Existing Wells2 - This is a internal production forecast of our existing portfolio. Given our current asset base and e
Slide 12: 2015 Guidance: Self Funded 30% Growth
2015 Guidance: Self Funded 30% Growth 2015 Full Year Average Production 28,500-30,000 bopd # Wells Capex (Net $ million) Gross Net Wells Facilities Seismic Total Development/Appraisal (existing fields) 16 9.4 $54 $91 - $145 Exploration (new prospects) 17 12.9 $120 - $10 $130 Exploration Appraisal (c
Slide 13: Colombia: A Platform for Growth
Colombia: A Platform for Growth 2013 2014 2015 Guidance Brent Oil Price $/bbl $109 ~$101 $85 Capex (excluding acquisitions MM USD) $234 $290 $330 Annual Average Production bopd 15,854 ~22,350 28,500-30,000 Annual Production per basic share 0.053 0.067 0.079 Annual Cash Flow (MM USD) $270 ~$330 >$330
Slide 14: Exploration Prospects 2015
Exploration Prospects 2015 Llanos Basin Capachos Magdalena Basin VIM-1 LLA-10 *Lower Magdalena Middle Magdalena LLA-16 3D Seismic LLA-40 2014/15 Kona LLA-17 LLA-57 VMM-9 Los Ocarros Las Maracas Nare LLA-20 Palagua VMM-11 El Porton Cocorna El Eden LLA-24 PP Velasquez Cusiana Morpho LLA-26 LLA-29 Cebu
Slide 15: A look back: 2014 Exploration
A look back: 2014 Exploration Block Well Q1' 2014 Q2' 2014 Q3' 2014 Q4' 2014 Cebucan Taringa To drill Arlequin standing LLA-24 Campanilla LLA-26 Rumba Defer to 2015 Defer to 2015 Our original plan was to drill 19 LLA-29 Arton Fierro Defer to 2015 exploration wells: Social Access Restrepo D&A ~19 t
Slide 16: 2015 Exploration and Development Drilling Program
2015 Exploration and Development Drilling Program Numbers of Wells Total Block WI Exploration Dev/Appr Gross Net Planned Location LLA-10 50% 1 0 1 0.5 Tautaco-1 (Commitment) LLA-17 63% 1 0 1 0.6 Celeus Norte-1 (Commitment) LLA-20 100% 1 0 1 1.0 Zororojo-1 (Commitment) LLA-26 100% 2 0 2 2.0 Rumba-1 (
Slide 17: 2015 Exploration Schedule
2015 Exploration Schedule Block Well Q1 2015 Q2 2015 Q3 2015 Q4 2015 LLA-10 Tautaco LLA-17 Celeus Norte LLA-20 Zororojo LLA-26 Rumba LLA-26 Arton LLA-30 Roxana LLA-30 Matilde LLA-32 Carcayu LLA-32 Guepardo LLA-32 Xoropo Capachos Guad Upside-1 Capachos Guad Upside-2 Cebucan Taringa VMM-11 Glauca LLA-
Slide 18: Operations – After the Drilling
Operations – After the Drilling Success in Online Performance and Operating Costs Eric Furlan, VP Engineering Daniel Ferreiro, VP Operations 2014 Parex Investor Day: Bogota 18
Slide 19: Extracting the Most Value out of a Discovery
Extracting the Most Value out of a Discovery 1. Immediately delineate discoveries to understand the potential size and ultimate development of the discovery. 2. Maximize front end technical work through testing, lab analysis and reservoir simulation. • Technical “depth” that would typically be obser
Slide 20: Las Maracas – Development Efficiency
Las Maracas – Development Efficiency Las Maracas Development Oil Treatment Plant Las Maracas 2 Discovery Plan/Gas Generation Operational November 2011 July 2012 March 2013 Parex farmed in on the opportunity with a rig on location. Partners did not have any follow up surface locations available which
Slide 21: Competitor – Maniceno Field Development
Competitor – Maniceno Field Development Removal of Main Rental Maniceno Discovery Maniceno Injection Well Facilities July 2012 November 2012 August 2013 Water breakthrough. No Bandola Follow Up Well Removal of Water Disposal facilities or water handling Rental Facilities April 2013 available Septemb
Slide 22: Fluid Handling – The Largest Operating Component
Fluid Handling – The Largest Operating Component Las Maracas Maniceno 60,000 25,000 50,000 Oil Production BOPD 20,000 Oil Production BOPD Water Production BWPD Water Production BWPD Water Injection BWPD Water Injection BWPD 40,000 15,000 BOPD/BWPD BOPD/BWPD 30,000 10,000 20,000 5,000 10,000 0 0 09/2
Slide 23: Operating Cost Initiatives - Power
Operating Cost Initiatives - Power Power generation can represent 40% of total operating costs. This is typical in water drive reservoirs where a large amount of water has to be pumped. In addition to utilizing produced gas for power generation in fields, Parex has built an infrastructure that allow
Slide 24: Potential Synergies: Infrastructure Projects
Potential Synergies: Infrastructure Projects Sending gas or power from LLA-32 south to LLA-34 / Akira Shipping oil north towards ODL 2014 Parex Investor Day: Bogota 24
Slide 25: Operating Philosophy
Operating Philosophy 1. Early appraisal of initial discovery 2. Commit early to facility projects – ensure reserves base produced at lowest cost. 3. Build “fit for purpose” facilities – minimize capex 4. Reduce power costs – use produced gas for power generation 5. Share best practices on non-operat
Slide 26: Reserves and Field Development
Reserves and Field Development 2014 Parex Investor Day: Bogota 26
Slide 27: Reserves Process
Reserves Process GLJ is the auditor of all Parex reserves including the additional reserves added from the acquisition of Verano Energy. Generally Parex presents their own reserves interpretation to GLJ including: Mapping and seismic interpretation Well performance and pressure buildup performance i
Slide 28: Reserves Conversion
Reserves Conversion Track record of progressing reserves from 3P to cash flow Focus on increasing reserve life index (RLI) & sustainability Proved + Probable 2P Reserves Life After Tax PV10(3) Proved + Probable Proved + Possible Index (1) (2) (USD MM) Reserves* MMboe 31-Dec -09 - - - - - 31-Dec -10
Slide 29: Reserves Overview
Reserves Overview Three key fields represent a significant portion of future: Development portfolio Reserves additions 1. Akira 2. Tua 3. Tigana In addition, Parex is evaluating developing the gas and associated liquids in LLA 32 to monetize the gas and associated liquids and reduce operating co
Slide 30: Akira Guadalupe Depth Map
Akira Guadalupe Depth Map Guad OWC -9157’ TVDSS GLJ Lwr Guad 3P LLA 34 Additional Appraisal Cabrestero Upside Akira is a 100% working interest operated property. Recent wells Akira 9, 10, and 11 will have a positive impact on the reserves in the pool. Likely 5-10 additional development wells will be
Slide 31: Akira Well Productivity
Akira Well Productivity Current Oil Current Fluid Max Oil Production Max Fluid Production Potential Oil Well Production Production 80% DD 80% DD Production (BOPD) (BFPD) (BOPD) (BFPD) (BOPD) Akira 1 189 260 260 350 71 Akira 2 0 0 300 450 300 Akira 4 420 544 630 700 210 Akira 6 676 753 2,300 2,500 1,
Slide 32: Tua Guadalupe Depth Map
Tua Guadalupe Depth Map Tua-8 results indicate additional delineation is required to understand the pool limits. The well is on production at +1,500 bopd. Tua-9 is drilling to delineate further the southern half of the Tua pool. Shown is the field outline of the Upper Guadalupe reservoir with a thin
Slide 33: Tua Gross Pool Production
Tua Gross Pool Production Operational Issue Production at Tua has essentially been flat for over a year at current facility limitations. The permanent Tua facility is expected to be commissioned in January, 2015. 2014 Parex Investor Day: Bogota 33
Slide 34: Tigana Type Well
Tigana Type Well Multi reservoir pool with tested or producing oil in the Mirador, Lower Mirador, Basal Mirador and Guadalupe Reservoirs. The most continuous reservoir appears to be the Guadalupe. 100 ft Scale 2014 Parex Investor Day: Bogota 34
Slide 35: Tigana Field Structure Section
Tigana Field Structure Section 29 API 20 API 15 API 13-15 API 15 API 15 API 15 API ? 15 API 15 API ? ~5 km Producing Zone Tested Zone 2014 Parex Investor Day: Bogota 35
Slide 36: Tigana Mirador Depth Structure
Tigana Mirador Depth Structure LLA 32 Tigana 2 (Upper Mirador A) LLA 34 Cum ~74 MBO (29 API) Current Prod = 773 bopd Current WC = 4.4% TILO Tigana 1 (Lwr Mirador A) Cum ~767 MBO (20 API) Current Prod = 2078 bopd Current WC = 12% TIGANA TAROTARO TAROTARO Lower Mirador A Sand Strat Edge from Time Slic
Slide 37: Tigana Guadalupe Depth Map
Tigana Guadalupe Depth Map Tigana Norte -1 (Guad) Cum ~100 MBO (15 API) LLA 32 Current Prod = 1688 bopd LLA 34 Current WC = 1.95% TILO Tigana Sur-2 (Guad) Tigana – 3 (Guad) On Prod Oct 2014 (15 API) Cum ~250 MBO (15 API) Current Prod = 880 bopd Current Prod = 2393 bopd Current WC = 0.54% Current WC
Slide 38: Tigana Gross Field Production
Tigana Gross Field Production This field is in the testing stage only and is facility constrained with temporary testing facilities. Currently 7 wells on production with production limited by temporary testing facilities. 2014 Parex Investor Day: Bogota 38
Slide 39: Tigana Continued Delineation
Tigana Continued Delineation Tigana delineation will continue in 2015 as additional drilling pads are required to Tilo Prospect continue delineation of the Next Steps in pool North and South along Delineation trend. Given the multiple reservoir zones encountered in the field, 30-50 additional develo
Slide 40: Une Gas at Kananaskis, Calona and Carmentea
Une Gas at Kananaskis, Calona and Carmentea Calona GDT -10073 Saddle ~-10150 Carmentea Kananaskis GDT/Spill -10022 N GDT highlighted by dashed pink Presentation 2014 40
Slide 41: LLA 32 Gas - Summary
LLA 32 Gas - Summary Testing is currently underway to understand the size and quality of the gas in LLA 32. The previous operator on the block was unable to complete testing on the discoveries due to operational issues. No reserves are currently booked for the gas or associated liquids. Plans are mo
Slide 42: Summary – Existing Fields
Summary – Existing Fields Three key fields provide opportunity to grow reserves and production. Development opportunities on existing fields provide several years of development while the exploration portfolio provides the feed for the next round of development. The 2015 budget includes development
Slide 43: Drilling Operations
Drilling Operations Ron MacDonald VP Drilling & Completions 2014 Parex Investor Day: Bogota 43
Slide 44: Parex Drilling Group Development
Parex Drilling Group Development Key drivers of operations success: Equipment 1. Moved from local rigs to 3 rigs imported (2011) People Parex Drilling Modify equipment to improve efficiencies Operations 2. Rigorous Planning, Risk Assessments & Execution Organizational buy-in of delivery risk P
Slide 45: Time Performance: LLA-16 (2011-2012)
Time Performance: LLA-16 (2011-2012) 0 1,000 Kona-1 Kona-2a 2,000 Goroka-1 Supermo-1 3,000 Kona-3 Kopi-1 4,000 Kona-4 Kona-6 5,000 Kona-Norte 1 Kona-5 6,000 Kona-8 MD (ft) Sulawesi-1 Kona-10 7,000 Avg 28 days to get Well TD Sulawesi-3 Kona-Norte-2 8,000 Kona-11 Avg 37 days to rig release Supremo-2 9
Slide 46: Time Performance: LLA-16 (2012-2013)
Time Performance: LLA-16 (2012-2013) 0 1,000 2,000 SULAWESI-4 KONA-15 3,000 JAVA-1 JAVA-2 4,000 MALAWI-1 KONA-SUR-1 5,000 6,000 KONA-16 MARAGOGI-NORTE-1 MD (ft) 7,000 CATURRA-1 8,000 9,000 Avg 12 days to get Well TD 10,000 Avg 19 days to rig release 11,000 12,000 13,000 14,000 0 5 10 15 20 25 30 35
Slide 47: Cost Performance: Block LLA-16
MILLIONS USD $ 10,000,000 $ 12,000,000 $ 14,000,000 $ 4,000,000 $ 2,000,000 $ 6,000,000 $ 8,000,000 $0 Kona-1 Kona-2A Supremo-1 Goroka-1 Kona-3 Kopi-1 Kona-4 Kona-6 Kona-Norte-1 Kona-5 Kona 3ST Kona-8 Sulawesi-1 Kona-3ST2 Kona-10 Sulawesi-3 Kona-Norte-2 Kona-11 WELLS Supremo-2 Kona-9 Kona-7 2014 Par
Slide 48: Time Performance: Block Los Ocarros
Time Performance: Block Los Ocarros 0 1,000 2,000 MARACAS-3 MARACAS-4 3,000 MARACAS-5 4,000 MARACAS-6 MARACAS-7 5,000 MARACAS-13 MARACAS-8 6,000 MARACAS-9 MD (ft) 7,000 Avg 16 days to rig release MARACAS-11 MARACAS-10 8,000 MARACAS-12 MARACAS-14 9,000 LA GUIRA-1 LA GUIRA-2 10,000 MARACAS-15 11,000 M
Slide 49: Cost Performance: Block Los Ocarros
Cost Performance: Block Los Ocarros $14,000,000 $ 1,000 $ 950 $ 900 $12,000,000 Actual cost (DDR) $ 850 $ 800 Cost per ft $ 750 $10,000,000 $ 700 $ 650 USD $ 600 $8,000,000 $ 550 $ 500 $ 450 $6,000,000 $ 400 $ 350 $ 300 $4,000,000 $ 250 $ 200 $2,000,000 $ 150 $ 100 $ 50 $- $0 WELLS 2014 Parex Invest
Slide 50: Time Performance: Block Cabestrero
Time Performance: Block Cabestrero 0 1,000 KITARO-1 2,000 KITARO-2 3,000 AKIRA-1 AKIRA-2 4,000 AKIRA-3 AKIRA-4 5,000 AKIRA-6 AKIRA-5 6,000 AKIRA-7 MD (ft) AKIRA-8 7,000 AKIRA-9 8,000 AKIRA-9st AKIRA-10 9,000 AKIRA-11 10,000 11,000 12,000 13,000 Avg 11 days to get Well TD Avg 17 days to rig release 1
Slide 51: Cost Performance: Block Cabestrero
Cost Performance: Block Cabestrero $ 14,000,000 $ 1,000 $ 950 $ 900 $ 12,000,000 $ 850 Actual cost (DDR) $ 800 Cost per ft $ 750 $ 10,000,000 $ 700 $ 650 $ 600 $ 8,000,000 $ 550 $ 500 USD $ 450 $ 6,000,000 $ 400 $ 350 $ 300 $ 4,000,000 $ 250 $ 200 $ 2,000,000 $ 150 $ 100 $ 50 $0 $0 WELLS 2014 Parex
Slide 52: Can you continue to apply your drilling model?
“Can you continue to apply your drilling model deeper areas in the Casanare and new (Magdalena) basins in Colombia?” We were a new entrant to Colombia and cost effectively developed 3 large fields plus exploration programs We have demonstrated our ability to quickly move from exploration data gat
Slide 53: Exploration Program
Exploration Program Ryan Fowler, VP Exploration 2014 Parex Investor Day: Bogota 53
Slide 54: What makes Parex different?
What makes Parex different? Technical Fundamentals First principles technical – geologists and engineers are experienced and trained to ask questions and asked and challenge paradigms Subsurface technical team had no prior experience in Colombia and few pre-conceived ideas open minded Aggressive E
Slide 55: Parex Exploration History - Casanare Experts
Parex Exploration History - Casanare Experts 49 Independent Prospects Parex drilled on 14 blocks over 5 Discoveries years What is a discovery? Capachos Something that gets put on production 30 Discoveries LLA-10 19 Dry LLA-40 61% Success Rate LLA-16 LLA- Year by Year: 17 Los LLA-57 2010/2011: 4/9 Oc
Slide 56: Parex Exploration Life Cycle
Parex Exploration Life Cycle Develop Acquire Test Initial Expand Exploitation Concept Land Concept Development Land Traditional 3-Ways LLA-26, Cebucan Low Side Cabrestero, LLA-32, LLA-34, Closures Stratigraphic LLA-24, LLA-30, Akira, Tigana Traps New Plays Magdalena Basin, Llanos Deep, Capachos Cont
Slide 57: Llanos Basin Exploration Progression
Llanos Basin Exploration Progression Parex Casanare Structural Exploration 2009 - 2013 Traps Combination Traps New Stratigraphic Traps Concepts 2014 - Resource Plays 2014 Parex Investor Day: Bogota 57
Slide 58: Progressively Larger Discoveries – Structural Traps
Progressively Larger Discoveries – Structural Traps Median Llanos Kona Las Maracas Tua 100 acres 300 acres 300 acres 1000 acres 1. Size 2. Drive Bottom water drive Edge water drive Edge water drive Oil Water Sandstone Shale 2014 Parex Investor Day: Bogota 58
Slide 59: Progressively Larger Discoveries – Combination Traps
Progressively Larger Discoveries – Combination Traps Akira Tigana 1000 – 1500 acres 2000+ acres 1. Size Current trap geometry Trap type at 2. Drive Tigana is still under appraisal Structural Closure Current trap geometry exceeds structural closures implying strat components 2014 Parex Investor Day:
Slide 60: Llanos Basin Conventional Prospect Summary
Llanos Basin Conventional Prospect Summary Working 2015 Block Prospects Interest Drills LLA 34 55 6 3 Capachos 50 4 2 LLA 32 70 10 3 LLA 26 100 5 2 LLA 10 50 5 1 Cerrero 65 5 0 LLA 30 100 5 2 Cebucan 100 2 1 Other 22 2 Total 64 16 Note: Capachos Block is pending ANH Conveno 2014 Parex Investor Day:
Slide 61: New Basins Conventional Prospect Summary
New Basins Conventional Prospect Summary Working 2015 Block Prospects Interest Drills VMM 9 100 12 0 VIM 1 100 2 0 VMM 11 100 4 1 (*) Morpho 100 1 0 Total 19 1 (*) Up to 4 contingent follow ups at Glauca 2014 Parex Investor Day: Bogota 61
Slide 62: Non-Conventional Potential
Non-Conventional Potential Gross Working Block Prospective Interest Area (acres) Cerrero 65 100,000 Cebucan 100 100,000 El Eden 60 90,000 LLA 26 100 85,000 El Porton 50 110,000 Llanos Sub-Total 485,000 Working Prospective Block Interest Area (acres) VMM 9 100 65,000 VMM Sub-Total 65,000 2014 Parex I
Slide 63: 2015 Exploration Program
2015 Exploration Program 2014 Parex Investor Day: Bogota 63
Slide 64: 2015 Llanos Exploration Program
2015 Llanos Exploration Program Block Prospect WI Parex LLA-10 Tautaco 50% Exploration LLA-17 Celeus Norte 63% LLA-20 Zoro Rojo 100% Locations Capachos LLA-26 Rumba 100% 2 LLA-26 Arton 100% LLA-30 Matilde 100% LLA-30 Roxana 100% LLA-10 LLA-32 Xoropo 70% LLA-32 Carcayu 70% LLA-40 LLA-32 Guepardo 70%
Slide 65: Southern Casanare – LLA 34 & LLA 32
Southern Casanare – LLA 34 & LLA 32 Santiago Continue to drill Maniceño -Bandola structural closures while Balay LLA-32 assessing combination El Palmar and stratigraphic trap Carmentea potential Los Trompillos Calona Kananaskis Attempt first pure Max stratigraphic test Tarotaro Tigana Using increasi
Slide 66: LLA34 Fields & Prospects
LLA34 Fields & Prospects Play Types: Synthetic Structures Guadalupe & Mirador Stratigraphic & Combo Traps Chenchena Chiricoca MaxNorte Tilo 2014 Drill TIGANA TAROTARO Chenchena Sur TUA Aruco Norte ARUCO Jacana Mochuleo 2015 Drills PXT-B X Location O Pads Prospects AKIRA 3D Seismic Coverage 2D Se
Slide 67: Evaluating The Tigana Fault Trend
Evaluating The Tigana Fault Trend LLA 32 Only about 5 km of LLA 34 the 15 km Tigana Fault Trend has TILO been drilled The Tilo and Jacana exploration TAROTARO locations are drilled on small structural closures bracketing the ends of the fault trend Significant stratigraphic upside exists along the T
Slide 68: LLA32 Fields & Prospects
LLA32 Fields & Prospects Play Types: 1) Antithetic & Synthetic Structures 2) Guadalupe & Mirador Strat & Combo Traps MANICENO 3) Paleozoic involved 4WC EL PALMAR SAMARIA CARMENTEA LOS TROMPILLOS 2015 Drills Carcayu Taurmenero Structural Prospects Stratigraphic Prospects CALONA 3D Seismic Coverage Gu
Slide 69: Kananaskis & Calona Fields
Kananaskis & Calona Fields Kananaskis-1 Mirador Structure Mirador: IP = 5000 bopd 30 API CTD = ~800 MB (water free) Valley fill trap with down dip water – better Une: fit to well performance High liquids gas than simple structural Further testing required model LLA 32 LLA 34 Presentation 2014 69
Slide 70: LLA32 Synthetic Prospect – Guepardo/Carcayu
LLA32 Synthetic Prospect – Guepardo/Carcayu Guepardo Mirador Depth Structure Synthetic structure with similarity to both Tigana and Akira CARMENTEA Carcayú CALONA Guepardo KANANASKIS LLA 32 LLA 34 2014 Parex Investor Day: Bogota 70
Slide 71: Capachos Block: Ecopetrol Farm In
Capachos Block: Ecopetrol Farm In The Capachos Block is in the Arauca Department in the northern part of the Llanos Basin Capachos sits at a major corner in the Andean mountainfront – a focus point for oil migration Capachos is located along the major north-south transportation corridor (highways, p
Slide 72: Capachos and Cano Limon
Capachos and Cano Limon Cano Limon Capachos shares a major strike-slip fault and migration pathway with the Cano Limon Field (> 1 Billion Bbls Rec) Capachos Block 72
Slide 73: Capachos Field & Prospects
Capachos Field & Prospects Play Types: 1) Thrusted & Transpressional Structures 1) Guadalupe 2) Une 3) Mirador? 2) Guadalupe Combo Traps Critical Success Factors • Drilling Cost • Community Relations Prospects 3D Seismic Coverage 2D Seismic Lines Guadalupe Closures Guadalupe Faults 2015 Drills 2014
Slide 74: The Future: New Play Concepts
The Future: New Play Concepts 2014 Parex Investor Day: Bogota 74
Slide 75: Llanos Plains Structural Pool Sizes (IHS)
Llanos Plains Structural Pool Sizes (IHS) Pmean = 3.9 MMBO P50 = 2.0 MMBO Good fit to a logarithmic distribution – Mature distribution 40% of discoveries made since 2010 Conforms to Parex Llanos initial assumption Parex discoveries include Kona, Las Maracas Parex Structural Discovery (Avg 2P=
Slide 76: Stratigraphic Plays Emerging (Modified IHS)
Stratigraphic Plays Emerging (Modified IHS) Pmean = 30.3 MMBO P50 = 3.9 MMBO Poor fit to a logarithmic distribution Immature distribution (major gaps) 65% of discoveries made since 2010 Parex discoveries include Tigana, Akira, Adalia Zoomed in on next slide 2014 Parex Investor Day: Bogota 76
Slide 77: Llanos Stratigraphic Pools Excluding Rubiales
Llanos Stratigraphic Pools Excluding Rubiales (too big to fit on this chart) Significant gap in the 20 – 90 MMBO Range 2008 * Largest Pools all discovered post 2010 * Drilled on structural anomalies but now acknowledged to 2010 have a significant strat element 1989 * Parex Stratigraphic/Combo Discov
Slide 78: Llanos Basin Conventional
Llanos Basin Conventional 2014 Parex Investor Day: Bogota 78
Slide 79: LLA 10: Looking for Cano Limonito
LLA 10: Looking for Cano Limonito Most of the oil in the Northern Llanos Basin CAÑO LIMON (1.1 BBO) is trapped along NE- SW oriented strike-slip faults PXT-A1 CARICARE Tautaco (31 MMBO) A couple of significant strike-slip fault trends have been identified on PXT - A CAPACHOS Garza Roja LLA 10 Region
Slide 80: Stratigraphic Channel Play: LLA-30
Stratigraphic Channel Play: LLA-30 ADALIA Play Types: 38 API 1) C5 Valley Fills High Probability 2) C3 Valley Fills for Light Oil 3) Antithetic Structures Marlena Discoveries REMACHE SUR 36 API Matilde Roxanne Matilde VIREO 35 API VIVIANA ESTE Viviana Coco 2015 Drills Prospects 3D Seismic Coverage 2
Slide 81: Future Parex Exploration Projects
Future Parex Exploration Projects High Probability VIM 1 Conventional 1. Moving beyond High Impact Conventional Casanare Non-Conventional Province 2. Moving beyond the Llanos Basin VMM 9 Capachos 3. Moving beyond VMM 11 LLA 10 Conventional Morpho Exploration Cebucan LLA 26 LLA 30 LLA 32 Cerrero LLA
Slide 82: Magdalena Basin
Magdalena Basin 2014 Parex Investor Day: Bogota 82
Slide 83: Mid Mag Basin - Play Type Distribution
Mid Mag Basin - Play Type Distribution Conventional Cretaceous Pools Pmean = 3.4 MMBO P50 = 0.8 MMBO Tertiary Structural – Why The Mid Mag Basin? Stratigraphic Pools Pmean = 34.5 MMBO Larger pool size distributions P50 = 4.1 MMBO Security of operations Access to infrastructure Foothills Pools Pmean
Slide 84: Mid Mag Exploration Strategy
Mid Mag Exploration Strategy 3. Eocene Subcrop Edge Multiple play types, in close 4. La Luna OPON Resource Play proximity, on the same 3D 1. Teriatry seismic volumes Structure Fairway (CHOPS) Play Types TECA-NARE 1. Tertiary Structure (CHOPS/Hztl Drills) 2. Foothills/Subthrust VELASQUEZ 2. Foothills
Slide 85: VMM Fault Trends
VMM Fault Trends Over 60% of the Mid Mag Basin’s Reserves have been found associated with converging strike slip fault trends at Casabe – La Cira and Teca/Nare - Velasquez A similar strike slip fault trend Casabe-La Cira convergence has been identified on VMM 9 Acacia-Veracruz Middle Magdalena Fault
Slide 86: VMM 11 Leads & Prospects
VMM 11 Leads & Prospects Teca-Nare Field Cum Production: 115 MMboe 2P Resources: 368 Mmboe Steam Injection EOR Caipal Field Producing Field Cum Production: 5 MMboe 2P Resources: 8 MMboe Lead 1 Prospect/Lead Lead 2 Current 3D Acquisition Lead 3 Parex Block VMM 11 Faults Glauca Prospect Conventional P
Slide 87: VMM 9 Leads
VMM 9 Leads Producing Field Prospect/Lead Proposed 3D ~350km2 Proposed 3D Parex Block Lead 1 Faults La Luna Resource Play Area Lead 2 Lead 3 Lead 7 Conventional Play Types: 1) Transtensional Structures & Lead 6 Lead 5 Lead 4 Combo Traps 1) Colorado Lead 11 2) Mugrosa Lead 10 3) Eocene 2) Eocene Subc
Slide 88: Veracruz Fault Section
Veracruz Fault Section Possible Eocene subcrop edge Proposed 3D ~350km2 Lead 1 La Luna Resource Play Area Lead 2 Lea d3 Lead 7 Lead 4 Lead 6 Lead 5 Lead 11 Lead 10 Lead 9 Lead 8 Lead Lead 12 13 2014 Parex Investor Day: Bogota 88
Slide 89: Middle Magdelena Basin: Morpho Area Sub-Thrust Light Oil
Middle Magdelena Basin: Morpho Area Sub-Thrust Light Oil A’ A A’ A A’ Sandstones of the Eocene and Oligocene get truncated by an out-of- sequence fault carrying Cretaceous Morpho Block 54,000 acres Cretaceous Cordoba triangle zone Syncline 2014 Parex Investor Day: Bogota 89
Slide 90: Mid Mag/Upper Mag Basins – Sub Thrust Pools
Mid Mag/Upper Mag Basins – Sub Thrust Pools Known Sub-Thrust Pools Pmean = 46 MMBO * Includes Opon as a 36 MMBOE field (extremely conservative) Sub-Thrust pools exist all along the eastern edge of the Middle and Upper Mag Basins: Nutria - Oligocene Opon – Eocene / Oligocene Morpho – Oligocene / Eoce
Slide 91: Morpho Eocene Potential
Morpho Eocene Potential Zeus-1 Oligocene Colorado & Mugrosa Oligocene Colorado 2600’ Interbedded SS & Shale Net SS = 500’, Tested Oil Zeus-1 Eocene Esmeraldas Eocene Esmeraldas? or La Paz? & La Paz 3200’ Clean, Blocky SS Net SS = 2600’ (Oil show at top) Eocene La Paz? Or Paleocene Lisama? 2600’ Serr
Slide 92: VIM - Regional Framework
VIM - Regional Framework The Miocene Porquero Fm is the acknowledged source rock for the Lower Mag Basin (Gas Prone) VIM 1 is located on the NW margin of the Plato Sub-Basin VIM 1 El Dificil The Plato Sub-Basin has all of the VIM oil accumulations around its margin Cicuco Cicuco, Boquete, El Dificil
Slide 93: Lower Magdalena Basin Play Types
Lower Magdalena Basin Play Types El Dificil Field (2P Oil = 11.5 MMBO) Cicuco Field (2P Oil = 48 MMBO) Structural basement high Structural basement high Oligocene Clastic and/or Caliza on Oligocene Caliza on Basement Basement very thick Calizas across the structure) Caliza deposition
Slide 94: VIM 1 Prospects & Leads
VIM 1 Prospects & Leads Boquete Style A: 675 acres Boquete Style B: 1000 acres Apure Porquero (combo Struct/Strat): 6000 acres Apure CDO (El Dificil Style): 53000 acres Boquete Style C: 650 acres Conventional Play Types: 1) Transtensional Structures & Combo Traps (Oligocene SS) 2) Oligocene Carbonat
Slide 95: Apure Area Analogies – Cicuco / Boquete
Apure Area Ananlogies – Cicuco / Boquete Boquete Style Boquete Style Leads Apure Leads Apure Cicuco 48 MMBO Cicuco Boquete 48 MMBO 20 MMBO Boquete 20 MMBO 95 2014 Parex Investor Day: Bogota
Slide 96: Non-Conventional Exploration
Non-Conventional Exploration 2014 Parex Investor Day: Bogota 96
Slide 97: Lower Gacheta Resource Play (EIA)
Lower Gacheta Resource Play (EIA) 2014 Parex Investor Day: Bogota 97
Slide 98: Basal Gacheta Exploration Wells
Basal Gacheta Exploration Wells La Casona-2 On structure Core with oil saturation (1st core in basin) Flowed oil & gas Arlequin-1 Off structure Proposed Core with oil Park saturation Recovered oil Katmandu Norte-1 Off structure Core with oil saturation Une faults Flowed oil & gas Early Generation Ma
Slide 99: Lower Gacheta Project Progression
Lower Gacheta Project Progression Bookable Identify Resource and Source Rock Reserves “Proof of Evaluate Concept” Geochemical Horizontal Data and Trap Multi-Stage Production Test Estimate EUR’s 2014 Parex Investor Day: Bogota 99
Slide 100: La Luna Resource Play (EIA)
La Luna Resource Play (EIA) Approximate location of VMM 9 No direct geochemical data 2014 Parex Investor Day: Bogota 100
Slide 101: Veracruz Fault Section
Veracruz Fault Section Proposed 3D ~350km2 Lead 1 La Luna Resource Play Area Lead 2 Lea d3 Lead 7 Lead 4 Lead 6 Lead 5 Lead 11 Lead 10 Lead 9 Lead 8 Lead Lead 12 13 2014 Parex Investor Day: Bogota 101
Slide 102: VMM 9 Prospective Shale Area
VMM 9 Prospective Shale Area Approximately 100 Sq. Miles (64,000 acres or 2 townships) is prospective for the Cretaceous Resource Play La Luna Resource Play Area 2014 Parex Investor Day: Bogota 102
Slide 103: Parex Exploration Portfolio Summary
Parex Exploration Portfolio Summary 1. Solid portfolio of low-to-moderate risk exploration prospects in core Casanare region through 2016 Upside potential on emerging combination and stratigraphic plays 2. Current focus on expanding portfolio to New Basins containing larger moderate and high risk op
Slide 104: Operating in Colombia
Operating in Colombia Lee DiStefano President/Country Manager 2014 Parex Investor Day: Bogota 104
Slide 105: Trending Topics
Trending Topics 1. Requirement for increased production 2. Increased community disruptions 3. Environmental records 4. Permitting hurdles 5. Security 6. Marketing & Transportation 2014 Parex Investor Day: Bogota 105
Slide 106: Lower oil prices require incremental production to maintain balance
Lower oil prices require incremental production to maintain balance 2014 Parex Investor Day: Bogota 106
Slide 107: Existing royalty distribution leads to social unrest and industry disruptions
Existing royalty distribution leads to social unrest and industry disruptions •New distribution to double returns to Casanare and Meta •Intent to reduce social delays 2014 Parex Investor Day: Bogota 107
Slide 108: Action to reduce environmental permitting time
Action to reduce environmental permitting time, expedite the license process Licensing period to be reduced to 5 months from current 14 months average 2014 Parex Investor Day: Bogota 108
Slide 109: Parex Average Licensing Time is 9 months
Parex Average Licensing Time is 9 months Parex submits quality applications: no license applications have been rejected 2014 Parex Investor Day: Bogota 109
Slide 110: Environment Record of Colombia Operators
Environment Record of Colombia Operators Industry leading health & safety transportation performance Parex 2014 Parex Investor Day: Bogota 110
Slide 111: CSR: Our Process
CSR: Our Process 1. Work with community through numerous consultations • Regular senior management presence in field 2. Work with local government, communities and land owners to address their concerns: a) Perceived environmental damage to local water sources b) Damage to road surfaces during mob-de
Slide 112: Community Engagement
Community Engagement Presentation of the project to the land Presentation of the project to the local owners of La Graciela Village authorities of Aguazul 04-05-2014 Tour in the paved route with Presentation “EIA” Llanos 26 with representatives from the mayor and Aguazul authorities04-07-2014 commun
Slide 113: Personalize the relationships, not the differences among us
Canadian Ambassador to Colombia Stephen Benoit Carmen Sylvain Andean Region Rep Export Dev. Canada Mayor Eduardo Duarte San Luis de Palenque “Personalize the relationships, not the differences among us” 113
Slide 114: Parex Security Support
Parex Security Support Private Security K9 SUPPORT WHEN SECURITY GUARDS AND NECCESARY ACCESS CONTROL CONTROL AND PREVENTIVE MOBILE COMMUNICATIONS CENTER ELECTRONIC SURVEILLANCE SURVEILLANCE CONTROL THE FLOW OF PEOPLE EARLY WARNING AND GOODS SYSTEMS GPS BASED LOCATION MONITORING 2014 Parex Investor D
Slide 115: Marketing Transportation
Marketing Transportation 2014 Parex Investor Day: Bogota 115
Slide 116: Marketing Distribution 2014: 26K BOPD via Ocensa
Marketing Distribution 2014: 26K BOPD via Ocensa Costa Crude Type Color Light Heavy Blend Vasconia Aguazul Blending Station LIGHT OIL • Central Blending Station Monterrey/Cusiana (Aguazul) 12Kbopd capacity Guaduas operational March 2014. Expanding to 17K bopd in La Casona Blending Station 2015 HEAVY
Slide 117: Marketing Distribution 2015 Initiatives
Marketing Distribution 2015 Initiatives Capachos Tie-in (4 km) to OBC Aguazul Blending and Tie-in (1 km) to Ocensa Carmentea Blending & Tie-in (10 km) to ODL Flow line Akira/Tigana/Carmentea 2014 Parex Investor Day: Bogota 117
Slide 118: Wrap-Up: 2015 Key Deliverables
Wrap-Up: 2015 Key Deliverables 1. Expand reserves and understanding of the emerging stratigraphic plays 2. Invest in Magdalena Basin with objective to: • Establish production and reserves in 2015 • Develop drilling inventory for 2016 3. Focus on cash costs and capital efficiencies to drive balance s
Slide 119: Parex Value Proposition
Parex Value Proposition 1. Structured with financial strength to succeed in a low price environment 2. Built an opportunity portfolio based on option value. We can: a) maintain or grow at development risk; and/or b) invest in new plays to increase production and/or extend RLI according to prices and
Slide 120: Forward-Looking Statements and FOFI
Forward-Looking Statements and FOFI This presentation and its contents are confidential and may not be reproduced or forwarded to any other person, or published (in whole or in part) for any purpose. This presentation is provided for informational purposes only as of the date hereof, is not complete
Slide 121: Forward-Looking Statements and FOFI: Oil and Gas Information
Forward-Looking Statements and FOFI Oil and Gas Information The estimates of Parex' June 30, 2014 reserves set forth in this presentation have been prepared by GLJ Petroleum Consultants Ltd. ("GLJ") as of June 30, 2014 with a preparation date of July 10, 2014 in accordance with National Instrument 5