Sustained Performance Expanding Potential. TSX:PXT

Transcription

1 Sustained Performance Expanding Potential TSX:PXT CORPORATE PRESENTATION April 2016

2 Demonstrating Portfolio Flexibility Operating Results Production (bopd) Full Year 22,526 27,434 Capital Expenditures (million) US $297 US $126 Exploration Drilling (# of prospects) 16 5 Discoveries 7 3 Appraisal (# wells) 4 4 Development Drilling (# wells) 18 0 Reserves 2P (Dec. 31) (1) 2P Reserve Life Index (RLI) 2P development locations 68.4 Mmboe 7.1 years Mmboe 7.8 years 102 Costs (Royalties + Opex + Transportation) US $40/bbl US $25/bbl Capital Structure Net Working Capital (2) US $200MM Credit Facility Market Capitalization US $77 MM Undrawn No Debt ~ CAD $1.6 Billion Common Shares Outstanding (TSX listed) Basic (2) Fully Diluted (3) MM MM (1) Parex net working interest, as per the independent reserve reports prepared by GLJ Petroleum Consultants Ltd. effective December 31, and December 31, 2015 (2) As at December 31, 2015 (3) Diluted shares include the effects of common shares and in-the-money stock options outstanding at December 31, 2015 stock price was CAD $10.16/share CORPORATE PRESENTATION April

3 2016 Guidance : Ability to Adjust Capex Scenario 1: November 2, 2015 (1) Assuming Brent oil price averages ~ $50/bbl in 2016, we are targeting full year: $165 MM cash flow = $165 MM Capex $15/bbl cash netback 30,200 bopd production (10% y-y growth) Scenario 2: January 2016 Flexibility to adjust capital budget at cash flow at current pricing: Brent ~$35-40/bbl $40-80 MM cash flow Capex: a) Maintenance wells & facility upgrades (<$30mm FY 29,000 bopd) b) Exploration Growth (2-4 wells with spud decisions Q2 16) c) Initiate 3-D seismic program on VIM-1 d) Evaluate Bus Dev projects with full-cycle returns at $40-$50/bbl Ability to grow within cash flow and retain a debt-free balance sheet Currently evaluating expanded capex program for 2016 (1) Detailed 2016 Guidance available at CORPORATE PRESENTATION April

4 Average Daily Production (000 bopd) Consistent Performance E ANNUAL THEMES Building Cash Flow & Production Exploration Success Sustainability Building The Runway Leveraging Portfolio Flexibility Sustained Performance Expanding Potential 15 consecutive quarters of production growth CORPORATE PRESENTATION April

5 Realized Price (US $/bbl) Parex Cash Netbacks Cash Netback Finance & Other Tax G&A Opex Transportation Royalties Brent Price US $/BBL PRICE SENSITIVITY Q4 Brent $44.70/bbl Brent $ Estimates $45 $40 $35 $ $45 $46 $39 $21 $14 $21 $5 $12 $6 $10 $14 $22 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Case 1 Case 2 Case 3 Case 4 Historical Cash Netbacks Estimated Cash Netbacks (excluding hedges) CORPORATE PRESENTATION April

6 2P FD&A ($/bbl) Annual Finding, Development & Acquisition Costs* Total Company Year 1P 2P 2P F&D $/bbl $2.00 $0.88 $9.35 FD&A $/bbl $2.00 $3.57 $10.86 Recycle Ratio 1P 2P 2P FD&A $/bbl 6.2x 3.5x 2.6x $35. $30 $25 $20 $15 $10 $5 $ Year $/bbl 3 Year $/bbl 2015 FD&A Drivers: 1. New discoveries 2. Reservoir performance 3. FX: CAD & COP 4. Lower service costs * Per the independent reserve reports prepared by GLJ Petroleum Consultants Ltd. effective Dec. 31, 2013; Dec. 31, 2014 and Dec. 31, 2015, including Future Development Cost (FDC). Recycle Ratio is calculated using Q Funds Flow from Operations per barrel divided by annual F&D or FD&A, except for 3 Year which uses 3 year average funds flow from operations CORPORATE PRESENTATION April

7 Portfolio Supports the Path to Growth Track record of progressing reserves* from 3P to cash flow Proved +Probable + Possible (mmboe) Proved + Probable (mmboe) Proved (mmboe) Annual Production (mmbbls) 2P Reserves Life Index based on annualized Q4 Production 31-Dec Dec Dec years 31-Dec years 31-Dec years 31-Dec years 31-Dec years 125 mmboe & 8 year RLI 42,500 bopd 2P (mmboe) Gross 2P Development Locations (#) FDC ($US MM) 31-Dec Dec *Per the independent reserve reports prepared by GLJ Petroleum Consultants Ltd. effective Dec. 31, 2010; Dec. 31, 2011; Dec. 31, 2015; Dec. 31, 2014 and Dec. 31, 2015 CORPORATE PRESENTATION April

8 Southern Llanos: Foundation for Growth Cabrestero (100% WI, Operator) Akira: swing producer 2016: 1-2 exploration wells FAULTS GLJ 3P (YE 2015) 2016 Exploration N Future Exploration Carmentea LLA -34 (55% WI, Non-operated) LLA32 Calona Large discoveries at Tua & Tigana Chachalaca discovery 6 km step-out success at Jacana 2016 exploration well, Jacana appraisal wells LLA34 Chachalaca Jacana Chirico Tigana Kananaskis Tilo Tarotaro Tua Aruco Max LLA-32 (70% WI, Operator) Utilizing gas to reduce opex Baca no Akira Jaruki Cabrestero As per the independent reserve report prepared by GLJ Petroleum Consultants Ltd. effective December 31, 2015 Explore core position, appraise & develop discoveries, and leverage Parex costs and exploration strengths CORPORATE PRESENTATION April

9 Tigana Guadalupe in Early Appraisal Stage With no new wells, Tigana has been producing flat for 15 months CORPORATE PRESENTATION April

10 Block LLA-34*: 2015 Discoveries and Extending Fields Chachalaca (2015) Tilo-2 (2015) Tilo Tigana Tarotaro Opportunities to grow the Tigana Guadalupe reserves beyond the current GLJ 3P Tua Aruco P GLJ Dec 31, P GLJ Dec 31, 2015 Prospects Jacana (2015) 0 km 2 *February 2016 CORPORATE PRESENTATION April

11 IP Rates LLA-34: Production Flexibility Mean prod n rate = 1,000 bopd 26 zones tested The mean rate of 1,000 bopd is skewed to the low-side because the higher producing rate wells are not produced at capability CORPORATE PRESENTATION April

12 Magdalena Basin: Next Growth Platform Growth Opportunities: Aguas Blancas Light oil development farm-in on Ecopetrol VIM-1 Acquire 3D seismic VMM-9 Environmental Impact Assessment underway VMM-11 Drill in 2016 on D seismic Morpho Light oil, tight sand Warehouse for higher oil prices VIM-1 *LOWER MAGDALENA No. Fields: 43 EUR: 547 mmboe Prod.: 15 mboe/d *MIDDLE MAGDALENA No. Fields: 102 EUR: 3,919 mmboe Prod.: 168 mboe/d VMM-9 VMM-11 Aguas Blancas Catatumbo Morpho *NOTE: Source 2014 IHS Data (fields, production & EUR) CORPORATE PRESENTATION April

13 Aguas Blancas: Undeveloped Discovery Discovery Well: Aguas Blancas (1962, Ecopetrol) 44 mmbo Field Information Cumulative production: 1 MMBO (28 31 API) Solution gas (reservoir pressure ~3,000 psi) Depth: 4,000 7,000 feet Main reservoir: Mugrosa C; net oil pay up to 150 feet Number of wells: 5 ( ) Active well: Aguas Blancas mmbo 813 mmbo 3D Seismic was acquired in 2011 No wells drilled since 1964 Rio Colorado 1 mmbo CORPORATE PRESENTATION April

14 Production (000 bpd) La Cira-Infantas: Production History Average Annual Production Sept 2015 Target Production 50,000 bpd Recent water-flood response Aguas Blancas is ~2 km south in the same reservoir formation Source: Colombia Ministry of Mining and Energy CORPORATE PRESENTATION April

15 Aguas Blancas: Phase 1 Appraisal Program Current Status (1)(2) Target Areas 1B (1)(2) Reserves Areas Reserves Area = 1055 ac Remaining Prospective Area = 5408 Prospective Resource Area Reserves + Resource Area = 4225 ac Remaining Prospective Area = 2238 Drill up to 4 wells from existing pads (pending Operator transfer) Expand 2P reserves area by drilling appraisal wells from new pads Implement water-flood pilot Evaluate recovery efficiency of water-flood Producer Abandoned Producer Bypassed Pay Phase 1a Location Phase 1b Location Phase 2: sanction full field development (1) See Advisories on slides 2-4 in March 2016 Playbook (2) Per the independent reserve report prepared by GLJ Petroleum Consultants Ltd. effective December 31, 2015 CORPORATE PRESENTATION April

16 PetroAndina:Other side of the other Rio Colorado Neuquén Basin, Argentina Rio Colorado Greenfield development wells/year drilled Reached 30,000 BOPD plateau (gross) CORPORATE PRESENTATION April

17 Summary: Excel at What We Do Core Competencies 1. Identify and acquire large prospective resources 2. Engage stakeholder 3. Focus on being a low cost operator Rumba Location CORPORATE PRESENTATION April

18 Appendix Block Summary # Block Operated/Non-Operated Working Interest Partners Gross Acres (1) Basin 1 LLA-10 Operated 50% Gran Tierra 189,544 Llanos 2 LLA-16 Operated 100% N/A 11,736 Llanos 3 LLA-20 Operated 100% N/A 2,891 Llanos 4 LLA-24 Operated 100% N/A 147,100 Llanos 5 LLA-26 Operated 100% N/A 184,061 Llanos 6 LLA-29 Operated 100% N/A 69,915 Llanos 7 LLA-30 Operated 100% N/A 117,322 Llanos 8 LLA-32 Operated 70% Apco & Geopark 57,040 Llanos 9 LLA-34 Non-Operated 55% Geopark 68,382 Llanos 10 LLA-40 Operated 50% Apco 83,465 Llanos 11 LLA-57 Operated 100% N/A 52,285 Llanos 12 Cabrestero Operated 100% N/A 29,562 Llanos 13 Capachos (2) Operated 50% Ecopetrol 64,073 Llanos 14 Cebucan Operated 100% N/A 109,185 Llanos 15 Cerrero (2) Operated 100% N/A 83,903 Llanos 16 El Eden Operated 60% Gran Tierra 6,397 Llanos 17 Los Ocarros Operated 50% Gran Tierra 31,066 Llanos 18 VIM-1 Operated 100% N/A 223,651 Lower Magdalena 19 Aguas Blancas (2) Operated 50% Ecopetrol 13,386 Middle Magdalena 20 Morpho (3) Operated 100% N/A 51,420 Middle Magdalena 21 VMM-9 Operated 100% N/A 152,412 Middle Magdalena 22 VMM-11 Operated 100% N/A 116,826 Middle Magdalena 1) Exploration properties deemed non-commercial will be relinquished in due course. Accordingly, the gross acres described above may decrease as non-commercial lands are relinquished 2) Working interests are subject to regulatory approval. 3) Morpho is subject to a 4% Net Profit Interest. CORPORATE PRESENTATION April

19 Appendix Summary of Quarterly Results (Unaudited Results) OPERATING FY Q4 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 Production (thousands of bopd) Average realized prices, prior to hedging Brent Price ($/bbl) Operating Netback ($/bbl) Funds Flow Netback ($/bbl) FINANCIAL (millions of US dollars, except per share amounts) Sales of crude oil Funds flow from operations Per share basic Net income (loss) (45) (4) (27) 2 (16) (109) (147) (28) 8 11 Per share basic (0.31) (0.02) (0.18) 0.01 (0.12) (0.90) (1.09) (0.26) EBITDA Cash and cash equivalents Working Capital Net Debt (Surplus) (1) (77) (77) (63) (90) (3) Capital Expenditures Weighed average shares outstanding Weighed average shares outstanding, diluted TRADING STATISTICS (CAD) (based on intra-day trading) High Low Close (end of period) Average daily volume (thousands) (1) Defined as Bank Debt + Convertible Denture Face Value ( C$ 85 million) - Working Capital. Current Borrowing limit of $200 million (was $175 million at December 31, 2014). convertible debentures with a face value of Cdn$85 million with a conversion price of Cdn$10.15 per share were fully redeemed on September 25, CORPORATE PRESENTATION April

20 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, or statements that certain events or conditions may or will occur. Forward-looking statements are not based on historical facts but rather on the expectations of management of the Company ("Management") regarding the Company's future growth, results of operations, production, plans for and results of drilling activity, business prospects and opportunities. Such forward-looking statements reflect Management's current beliefs and assumptions and are based on information currently available to Management. In particular, this document contains forward-looking statements regarding, but not limited to, the Company's expected production rates and Parex' drilling plans. Forward-looking statements involve significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including the risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities, competition, the ability to generate revenue and exploit operating margins, capital resources, the use of certain technologies and materials, annual impairment tests, labour relations, insurance, damage from weather and other disasters, operating and maintenance risks and environmental risks, new information regarding reserves, changes in demand for and volatility of commodity prices of oil and natural gas, failure to receive all required regulatory approvals for acquisition, the risk that the acquisition may not be completed as contemplated or at all, legislative, regulatory and political changes, the risks discussed under "Risk Factors" in Parex' annual information form for the year ended December 31, 2013 and other factors, many of which are beyond the control of the Company. The risks outlined should not be construed as exhaustive. Although the forward-looking statements contained in this document are based upon assumptions which Management believes to be reasonable, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date hereof, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Statements relating to reserves are by their nature forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. Parex Resources Inc Eighth Avenue Place, West Tower th Av SW Calgary AB T2P 1G1 Canada Tel: Fax: investor.relations@parexresources.com Website: Mike Kruchten Vice President, Investor Relations & Corporate Planning With respect to forward-looking statements contained in this presentation, the Company has made assumptions regarding: future exchange rates; the price of oil and natural gas; the impact of increasing competition; conditions in general economic and financial markets; availability of equipment; availability of skilled labour; current technology; cash flow; commodity prices; production rates; timing and amount of capital expenditures; royalty rates; effects of regulation by governmental agencies; future operating costs; receipt of all required regulatory approvals for the acquisition; successful completion of the acquisition; and the Company's ability to obtain financing on acceptable terms. Management has included the above summary of assumptions and risks related to forward-looking information provided in this presentation in order to provide shareholders with a more complete perspective on the Company's future operations and such information may not be appropriate for other purposes. This is not an offer to sell or a solicitation of an offer to purchase securities by Parex. Before making an investment, investors should refer to the Offering Documents for more complete information, including investment risks, fees and expenses and should also thoroughly and carefully review Parex' public disclosure documents available on SEDAR at with their financial, legal and tax advisors to determine whether an investment is suitable for them. CORPORATE PRESENTATION April