Parex Resources Inc. · TSX:PXT
Parex Resources — Investor Presentation (April 2015)
24 slides from Parex Resources's investor presentation, April 2015
Slide 1: Leveraging Portfolio Flexibility
Leveraging Portfolio Flexibility April 2015 Corporate Presentation PAREXRESOURCES.COM | TSX:PXT
Slide 2: Snapshot
Snapshot Financial Q1 2015 Production ~26,700 bopd 2015 Production Guidance 26,500 bopd Reserves 2P (December 31, 2014) 68.4 MMboe(1) 2P Reserve Life Index (RLI) of 7.1 years NPV 10 AT USD $1,098 MM Capital Structure Market capitalization at CAD $8/share ~Cdn$1,078 MM Net Bank Deficit(2) (Credit
Slide 3: Colombia Focused
Colombia Focused Significant land* base 2.6 mm gross acres Working interest in 22 blocks Diversified production base Experienced operator ~130 wells drilled 68.4 mmbbls in 2P Reserves 62 2P locations CABRESTERO *Certain lands are subject to farm-in-agreement earnings terms and/or regulatory
Slide 4: 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 120 Possible - LHS 0.80 20,000 160 100 2P - LHS Reserves (MMboe) Reserves per share Production (bopd) Production per share 0.60 80 3P Reserve per s
Slide 5: 2015 Guidance: Self Funded 18% Growth
2015 Guidance: Self Funded 18% Growth Brent Oil Price Scenario $50-$60 per barrel (USD millions) Maintenance Capital $70-$75 Exploration Commitments $75-$80 2015 Base Capital $145-$155 Discretionary Growth Capital Scenario Growth Capital: Exploration Follow-Up $25 Discretionary Exploration - PXT Ope
Slide 6: 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 Q1* 2010 2011 2012 2013 2014 2015 *First Quarter production averaged ~26,700 bopd 2015: Leveraging Portfolio Fl
Slide 7: Parex Decline Rates: Decreasing with Pool Size
Parex Decline Rates: Decreasing with Pool Size 70% 60% 50% 40% 30% 20% Corporate Decline Rate = Sum of the initial rate of all wells drilled within a 10% year compared to the sum of the production rate from each well 12 months later. 0% 2010 2011 2012 2013 2014 Small Structural Large Stratigraphic P
Slide 8: Building A Sustainable Business
Building A Sustainable Business Track record of progressing reserves from 3P to cash flow Focus on increasing reserve life index (RLI) & sustainability Proved + Probable Proved + 2P Reserves Life After Tax PV10(4) Proved + Possible Probable(1) Index (2)(3) (USD MM) Reserves* MMboe 31-Dec -09 - - - -
Slide 9: Annual FD&A Including FDC
Annual FD&A Including FDC $70 Total Company 2P (Proven + Probable) 2014 3 yr F&D $/bbl $10.92 $14.99 FD&A $/bbl $13.79 $17.16 $60 Recycle Ratio 1 Year $/bbl 3 Year $/bbl Cash netback/bbl $35.56 $44.18 F&D 3.3x 2.9x FD&A 2.6x 2.6x $50 FD&A $/bbl $40 $30 $20 $10 $0 2010 2011 2012 2013 2014 2015: Lever
Slide 10: Progressively Larger Discoveries
Progressively Larger Discoveries Median Llanos Kona Las Maracas Akira 100 acres 300 acres 300 acres 1,000 – 1,500 acres 1. Size Current trap geometry* Structural Closure 2. Drive Bottom water drive Edge water drive Edge water drive Oil Water Sandstone Shale *Current trap geometry exceeds structural
Slide 11: 2P Reserves MMBO
Llanos Plains Structural Pool Sizes (IHS) 60 Pmean = 3.9 MMBO P50 = 2.0 MMBO 50 2P Reserves MMBO Good fit to a logarithmic distribution – Mature distribution 40% of discoveries made since 2010 40 Conforms to Parex Llanos initial assumption Parex discoveries include Kona, Las Maracas 30 Parex S
Slide 12: Llanos Stratigraphic Pools: Significant Gaps in the 20-90 MMBO Range
Llanos Stratigraphic Pools: Significant Gaps in the 20-90 MMBO Range 2008 * 160 140 2P Reserves MMBO 2010 120 1989 * 100 Tigana Guadalupe & Mirador likely both fit into this gap 80 60 40 2011 2010 2007 * 2013 2012 20 * Drilled on structural anomalies but now acknowledged to have a significant strati
Slide 13: Drilling Efficiency: Reducing Cost
Drilling Efficiency: Reducing Cost Operated Wells (11,000 - 13,000 ft) 60 $900 $800 50 $700 Avg. Days to Rig Release 40 $600 $500 Cost per foot 30 $400 20 $300 $200 10 $100 0 $0 2010 2011 2012 2013 2014 2015: Leveraging Portfolio Flexibility 13
Slide 14: Parex Exploration Life Cycle
Parex Exploration Life Cycle Develop Acquire Test Initial Expand Exploitation Concept Land Concept Development Land Traditional LLA-26, Cebucan 3-Ways Low Side Cabrestero, LLA-34, Closures LLA-10 Stratigraphic LLA-24, LLA-30, Akira, Tigana Traps New Plays Magdalena Basin, Llanos Deep, Capachos Conti
Slide 15: Southern Llanos: New Play Trends
Southern Llanos: New Play Trends Cabrestero (100% WI, Operator) Santiago Akira – development drilling; swing producer Maniceño -Bandola Balay LLA-32 El Palmar LLA 34 (55% WI, Non-operated) Carmentea Los Trompillos Large discoveries at Tua & Tigana Kananaskis Max Significant development focus for 201
Slide 16: Southern Llanos: 2015 Focus
Southern Llanos: 2015 Focus KANANASKIS Chenchena Chiricoca MaxNorte Tilo 2014 Drill TIGANA TAROTARO Chenchena Sur TUA Aruco Norte ARUCO Jacana Mochuleo PXT-B AKIRA Prospects 2015: Leveraging Portfolio Flexibility 16
Slide 17: Capachos Farm-in: Ecopetrol Partnership
Capachos Farm-in: Ecopetrol Partnership Capachos (50% WI, Operator)1 Capachos Development & exploration opportunities ANH royalty contract Large structure, light oil, 2 mmbbls produced from 2 wells Leverages our strengths: low cost drilling strong operator working with communities LLA-10 LLA-10 Pros
Slide 18: Middle Magdalena Basin: New Play Concepts
Middle Magdalena Basin: New Play Concepts VMM-9 & VMM-11 (100% WI, Operator) 3. Eocene Testing of new play concepts: Subcrop Edge Cold heavy oil production (CHOPS) OPON Conventional structure/sub-thrust 1. Teriatry 4. La Luna La Luna unconventional play Structure Resource Play Builds on management’s
Slide 19: VMM-11 Leads & Prospects
VMM-11 Leads & Prospects Teca-Nare Field Cum Production: 115 Producing Field MMboe Prospect/Lead 2014 3D Lead 1 Acquisition Lead 2 Parex Block Lead 3 Faults VMM 11 Glauca Prospect Velasquez/Palagua Field Cum Production: 199 MMboe 2015: Leveraging Portfolio Flexibility 19
Slide 20: Colombian Netbacks
Colombian Netbacks Operating Opex & Royalties Brent Price Netback Transportation US $/BBL 140 120 $9 Realized Price (US $/bbl) $8 $8 $8 $15 100 $12 $8 $14 $14 $26 $12 $15 $7 $8 $14 $26 $29 $11 $22 $23 $29 $27 80 $22 $29 $26 $29 $28 $28 Price $28 $30 60 $7 Royalties 40 $82 $28 Costs $71 $67 $71 $73 $
Slide 21: Parex' Value Proposition
Parex’ Value Proposition Proven Management’s track record Self-funded growth Exposure to Brent Oil Pricing LATAM exposure 2015: Leveraging Portfolio Flexibility 21
Slide 22: Appendix – Block Summary
Appendix – Block Summary Operated/ Block Working Interest Partners Gross Acres Basin Non-Operated LLA-10 Operated 50% Petro America 189,544 Llanos LLA-16 Operated 100% N/A 157,611 Llanos LLA-17 Operated 63% Geopark 108,726 Llanos LLA-20 Operated 100% N/A 144,292 Llanos LLA-24 Operated 100% N/A 147,1
Slide 23: Appendix – Summary of Quarterly Results
Appendix – Summary of Quarterly Results (Unaudited) 2014 2013 FY Q4 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 OPERATING Production (thousands of bopd) 22.5 26.5 25.2 19.9 18.4 15.9 17.3 16.2 15.5 14.4 Average realized prices, prior to hedging 88 60 94 105 103 104 102 106 99 110 Brent Price ($/bbl) 100 77 104 110 108
Slide 24: Legal Advisory How to Reach Us
Legal Advisory How to Reach Us Certain statements in this document are “forward-looking statements”. Forward-looking statements are frequently characterized by words such as “prospective”, “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “forecast”, or other similar words,