Parex Resources : Corporate - August 2024

Published: 2024-08-01 19:26:06 ET PXT.TO

Parex Resources

Investor Presentation - August 2024

TSX:PXT

Stock Symbol

TSX:PXT

Shares Outstanding(2)

101.2 million

Market Capitalization(2)

C$2.1 billion

Quarterly Dividend(3)

C$0.385 per share

Dividend Yield(2)(3)(4)

7.4%

Average Production(5)

53,568 boe/d

Land Position

5.4 million net acres

See "Forward-Looking Statements and Financial Outlook" advisory.

(1) Funds flow provided by operations; capital management measure; see advisory.

(2) As at July 31, 2024.

(3) Based on C$0.385 per share quarterly dividend as first approved on May 8, 2024.

(4) Supplementary financial measure; annualized dividend per share divided by PXT share price; see advisory.

(5) For three months ended June 30, 2024 (light & medium crude oil: 9.541 bbl/d, heavy crude oil: 43,229 bbl/d,

conventional natural gas: 4,788 mcf/d).

Strategy

Business Fundamentals

Colombia Advantage

& ESG

Asset Sustainability

Production Growth

Return of Capital to

Shareholders

Strategic Growth Levers

Utilize Exploitation & Technology

UNLOCKING EXTENSIVE LAND BASE USING GLOBALLY-PROVEN TECHNOLOGY

Capture Liquids-Rich Gas Opportunities

PURSUING ONSHORE, WORLD-CLASS GAS PLAYS THAT ARE UNDEREXPLORED

Deliver Outsized Exploration Potential

FOCUSING ON THE EXECUTION OF TRANSFORMATIONAL, HIGH-IMPACT PROSPECTS

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

Oil Sales

Paid in USD based on Brent reference pricing

Top Decile

Established Strong

Strategic Partner

Cash Flow per BOE

Social License

with Ecopetrol S.A.

When compared against

US$20MM+ of community

Agreement signed in high-

TSX-listed oil & gas peers(2)

investment in 2023

potential Foothills trend

(1) 2022; source: National Hydrocarbons Agency of the Republic of Colombia (ANH). (2) Source: Peters & Co. (January 8, 2024); 2024E assumptions: Brent: US$75.91/bbl WTI: US$71.31/bbl, NYMEX: US$2.83/mmbtu, AECO: C$2.34/mcf, USD/CAD: 0.749; all USD cash flow per boe netbacks converted to CAD; peer list based on Peters

& Co. Canadian Producers coverage list (40 total companies (excludes royalty companies)).

Track Record of Growth

PRODUCTION PER SHARE(1)

PDP RESERVES PER SHARE(2)

0.20

12%

CAGR

0.19

(2018A-2024F)

0.17

0.13

0.14

0.12

0.10

2018A

2019A

2020A

2021A

2022A

2023A

2024F

Absolute Production Growth CAGR: 4%

kboe/d

15%

CAGR

0.76

(2018A-2023A)

0.67

0.55

0.50

0.40

2018A

2019A

2020A

2021A

2022A

Absolute PDP Reserves Growth CAGR: 6%

mmboe

0.80

2023A

mmboe

Long-term track record of growing production and PDP reserves combined with share

repurchases that result in strong per share growth

(1) Calculated as total annual average production divided by weighted-average basic shares; see "Historical Production" table within advisory for production by product type; supplementall financial measure; see advisory. (2) Calculated as PDP gross volume divided by year-end basic shares; see advisory.

Track Record of Returning Capital

RETURN OF CAPITAL (CAD MM)(1)

~$295 ~$1,845

$300

$384

$334

$230

$300

CONTINUALLY LOWERING THE SHARE COUNT (MM)

162

148

134

122

110 104

2019A

2020A

2021A

2022A

2023A

2024F(2)

Total

Share Repurchases

Dividends

2018A

2019A

2020A

2021A

2022A

2023A

Fully Diluted Shares Outstanding

Returned over C$1.5B to shareholders and reduced the float by ~35% in the last five years;

on track to continue capital returns in 2024

(1) See "Forward-Looking Statements and Financial Outlook" advisory. (2) Current dividend based on C$0.385 per share quarterly dividend as first approved on May 8, 2024; USD/CAD assumption: 0.73.

2024 Guidance

Average

54,000-60,000

Production

Trending to the Lower

boe/d

End of the Range

2024F CAPITAL DISTRIBUTION

10% Magdalena

30%

Northern LLA

75%

Operated

35%

Southern LLA

25%

LLA-34

Non-Operated

VIM-1

1 Big 'E' well

Hidra

Fortuna

~1 wells

Funds

$590-660(1)

Capital

(2)

Flow

Expenditures

$390-430

$75/bbl Brent

Trending to the Lower

$ millions

End of the Range

Arauca & Capachos

~5 wells

1 Big 'E' well

Andina-Este

LLA-122

1 Big 'E' well

Arantes

Southern Llanos

5-10 wells Workover activities

LLA-34

15-20 wells

Workover activities

2024F Program: ~35 gross wells

See "Forward-Looking Statements and Financial Outlook" advisory. 2024 guidance based on $75/bbl Brent crude oil price (see Janua ry 15, 2024, and July 31, 2024 news releases).

(1) Funds flow provided by operations; capital management measure; see advisory. (2) Non-GAAP financial measure; see advisory.

Capital Allocation Framework Reinforced by 2024 Plan

2024F CAPITAL ALLOCATION ($MM)

2024F FFO NETBACK(5) SENSITIVITY

($/bbl Brent)

~$100

$29-31

$25-27

$31-33

~$115

~$625

19-21%

10-12%

25-27%

$75/bbl

Brent

~$410

FFO

(1)

(2)

Current Dividend

(3)

(4)

Capital Expenditures

Remaining FFF

2024 plan at $75/bbl Brent is expected to generate

~$215MM of free funds flow(4)

$65

$75

$85

FFO Netback ($/boe)(5)

Effective Tax Rate

2024F CAPITAL EXPENDITURES(2)

BY CATEGORY

Development

23%

Activity

Development

Facilities

50%

10%

Near-Field

Exploration

12%

Big 'E'

Exploration

Carry Capital

See "Forward-Looking Statements and Financial Outlook" advisory. 2024 guidance based on $75/bbl Brent crude oil price (see Janua ry 15, 2024, and July 31, 2024 news releases).

(1) Capital management measure; see advisory. (2) Non-GAAP financial measure; see advisory. (3) Based on paid Q1 2024 dividend of C$0.375 per share and updated Q2 2024 C$0.385 per share dividend as first approved on May 8, 2024. (4) Non-GAAP financial measure; free funds flow defined as funds flow less capital expenditures; 8 see advisory; remaining FFF defined as FFO less forecast capital expenditures, less the estimated current dividend. (5) Non-GAAP ratio; see advisory.

Long-Term Capital Allocation Framework

1. Reinvest ~2/3 of FFO(1) into Business

2. Return ≥1/3 to Shareholders(2)

Near-Field Investments

Big 'E'

Regular Dividends +

Share Buybacks

Target the return of at least 1/3 of total FFO(1) to shareholders

through regular dividends and share buybacks

See "Forward-Looking Statements and Financial Outlook" advisory.

(1) Funds flow provided by operations; capital management measure; see advisory. (2) Based on funds flow provided by operations; capital management measure; see advisory.

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)

$25

$70

$155

$130

$10

2021A

2022A

2023A

2024F

2025F

2026F

Capital ($MM)

(3)

Production (kboe/d)

(2)

LLA-34 PROFILE(1)

30 32 30 28

Focused on

pressure management & minimizing decline

Cabrestero Block

$25

$85

$120

$90

$15

$30$155$80

Infrastructure & technology investments have positioned key assets

2021A 2022A 2023A 2024F 2025F 2026F

Capital ($MM)(2)

Production (kboe/d)(3)

to have the potential for significant free funds flow(4) generation

See "Forward-Looking Statements and Financial Outlook" advisory.

(1) After 2024F, budgets and forecast for Cabrestero and LLA-34 have not been finalized and are subject to a variety of factors, including prior year's results as well as partner approval in respect to LLA-34. (2) Capital expenditures; non-GAAP financial measure; see advisory. (3) Average annual production. (4) Non-GAAP financial 10 measure; free funds flow defined as FFO less capital expenditures; see advisory.

Disclaimer

Parex Resources Inc. published this content on 01 August 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 August 2024 23:25:03 UTC.