Delivering Growth & Value

Transcription

1 Delivering Growth & Value TSX:PXT Corporate Presentation July 2018 Corporate Presentation July Corporate Presentation March

2 CORPORATE SNAPSHOT Operating results E Production (boe/d) FY Average 29,715 35,541 ~43,000 Capital Expenditures (1) - US$ million $112 $212 ~$290 Drilling Program (# wells) Reserves (year-end) 2P Reserves (Dec. 31) (2) - Mmboe P Reserve Life Index - years Capital structure March 31, 2018 Net Working Capital (3) - US$ million $206 US$100 MM Undrawn Credit Facility (3) No Debt Market Capitalization (3)(4) C$3.7Bn Common Shares Basic Outstanding (TSX listed) (4) 156 MM (1) Assuming US$55 Brent Oil Price in 2018 (2) Parex working interest, as per the independent reserve report prepared by GLJ Petroleum Consultants effective Dec. 31, 2017 (3) As at March 31, 2018 (4) Assuming CAD $24 share price See Advisories at the end of this presentation Corporate Presentation July Corporate 2018 Presentation March

3 FUNDS FLOW PER SHARE (USD/BASIC SHARE) BRENT PRICE (USD/BBL) TOTAL RETURN DAPS (BOE/MM BASIC SHARES) 2P RESERVES (MBOE/MM BASIC SHARES) DELIVERING CONSISTENT SHAREHOLDER VALUE PRODUCTION PER SHARE (DEBT ADJUSTED) 2P RESERVES (DEBT ADJUSTED) 300 1, , $3.00 $2.50 $2.00 $1.50 $1.00 FUNDS FLOW PER SHARE (BASIC) $ $ $80.00 $60.00 $ % 60% 45% 30% 15% 0% PXT VS. S&P/TSX ENERGY INDEX (TTEN) 66% 40% 34% 15% 15% 15% 7% $0.50 $ $20.00 $- -15% -30% -11% -16% -25% FUNDS FLOW PER SHARE (USD/BASIC SHARE) BRENT (USD/BBL) PXT S&P/TSX Energy Index Corporate Presentation July Corporate 2018 Presentation March

4 REASONS TO OWN PAREX 1. No debt and positive working capital exceeding US$206MM (1Q18) 2. High margins: 1Q18 Operating Netback Brent $67/bbl 3. Ability to grow within cash flow: o 2017 Growth: production 19.6% yoy & RLI increased to 11 years from 10 o 2018 Growth Guidance: ~15-20% self-funded 4. Exploration Upside: o Scheduled to drill exploration wells in Focused management - ability to growth within a single country Colombia 6. Delivering shareholder value Corporate Presentation July Corporate 2018 Presentation March

5 2018 GUIDANCE: CASH FLOW FUNDED GROWTH Period Assumptions Oil (Brent) H2 18 US $75/bbl FFO netback (1)(2)(3) H2 18 US $35/boe Production (high-end) FY ~43,000 boe/d Capital expenditure H2 18 ~US$145MM Funds flow from operations (3) H2 18 ~US$295MM YOY Production growth/share FY ~15-20% (1) FFO netback is defined as Funds Flow From Operations per bopd. (2) Netback is a non-gaap Measure. (3) Excluding decommissioning & environmental liabilities CAPEX ALLOCATION Maintenance Capex 14 wells 38,000 boe/d ~ $90MM Growth Capex wells 3,000-5,000 boe/d $ MM Corporate Presentation July Corporate 2018 Presentation March

6 2018 DRILLING PROGRAM Base: Llanos Conventional Exploration Big E Exploitation: Tight Oil & Large OIP BLOCK Exploration/Appraisal Development Wells (#) Cabrestero LLA Other Llanos Capachos & VIM Aguas Blancas DeMares Other Magdalena Total Wells (#) Corporate Presentation July Corporate 2018 Presentation March

7 REALIZED PRICE (USD/BOE) PAREX CASH NETBACK (1) $85 $80 $75 $70 $65 $60 $55 $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $- $61.46 BRENT PRICE $67.27 ($11.29) ($7.29) ($5.35) ($4.24) ($3.40) ($7.60) Cash Netback $26.39 $28.10 $26 $29 $32 $35 $38 Q Q Differential Royalties Opex Transportation (3) G&A, Finance & Misc. Costs Tax 2018 H2 TARGET CASH NETBACKS (2) 2018 H2 Guidance Brent ~$30/bbl generates sufficient cash flow to maintain production $60 $65 $70 $75 $80 (1) Cash netbacks are non-gaap measure defined as funds flow from operations per barrel of oil per day. (2) 2018 H2 target cash netbacks are based on production guidance mid-point excluding hedges. (3) Prior period transportation expense on a gross dollar and per boe basis were restated as a result of the Company adopting IFRS 15 Corporate Presentation July Corporate 2018 Presentation March

8 CONSISTENT & SUSTAINABLE GROWTH: PATH TO 50,000* BOPD In a $50/bbl environment, our portfolio supports reaching 50,000 bopd during 2019 *Refer to February 6, 2017 Press Release Parex announces executive and board of directors appointments Corporate Presentation July Corporate 2018 Presentation March

9 SOLID FOUNDATION SUPPORTS GROWTH TRACK RECORD OF PROGRESSING RESERVES* FROM 3P TO CASH FLOW Dec. 31, Proved + Probable+ Possible Proved + Probable Proved Millions of Barrels of Oil Equivalent Annual Production 2P Reserve Life Index Based on Annualized Q4 Production years years years years years 241 Mmboe ~ 60,000 boe/d & 11 yr RLI *Per the independent reserve reports prepared by GLJ Petroleum Consultants Ltd. effective December 31 of the reported year. Future development capital (FDC) included in the 2017 GLJ Report are: 1P $302 mm, 2P $432 mm & 3P $537 mm Corporate Presentation July Corporate 2018 Presentation March

10 CONVENTIONAL OIL RESERVES GENERATE VALUE Total Company YE Proved Proved + Probable Proved+ Probable+ Possible FD&A USD/boe (1) $6.00 $4.71 $3.87 Recycle Ratio (FD&A) (1) 4.4x 5.6x 6.8x After Tax NPV10% - CAD/sh (2) $12.81 $20.32 $28.92 Working Capital - CAD/Sh (3) $1.33 $1.33 $1.33 Total CAD/Sh (3) $14.14 $21.65 $30.25 (1) Per the independent reserve reports prepared by GLJ Petroleum Consultants Ltd. effective December 31 of the reported year, including Future Development Cost. Recycle Ratio is calculated using Q Funds Flow From Operations per barrel divided by annual F&D or FD&A as applicable. (2) Based on GLJ Petroleum Consultants Ltd. price forecast, which assumes $65.40/bbl over (3) WC of US$163 million (CAD 205 million) and million shares at December 31, 2017 Corporate Presentation July Corporate 2018 Presentation March

11 SOUTHERN LLANOS: FOUNDATION FOR GROWTH CABRESTERO (100% WI, operator) Swing producer block Successful Bacano appraisal in 2017 o 4 wells drilled to date 2018 Plan: 1-2 exploration wells and 4-5 development wells LLA-34 (55% WI, Non-operated) Currently producing ~62,000 boe/d gross (~34,100 boe/d net) Tested extent of Jacana-Tigana trend to SW in 2017 o Drilled 9 exploration wells & 13 development wells 2018 Plan: 4 exploration wells and 14 development wells Explore core position, appraise & develop discoveries, and leverage Parex costs & exploration strengths. LLA-34 Chachalaca Bacano Jacana Akira LLA-32 Chiricoca Tigana Curucucu Tua Jacamar Kananaskis Tilo Tarotaro Aruco Calona Cabrestero As per the independent reserve report prepared by GLJ Petroleum Consultants Ltd. effective Dec. 31/17 Faults GLJ 3P (2017YE) Exploration Herradura Corporate Presentation July Corporate 2018 Presentation March

12 Cabrestero & LLA-34: UNDERSTANDING THE POTENTIAL 2017 GLJ 3P Outline 2017 GLJ 2P Outline B J20 11 JS-2 12 B-3 B-5 Jacana 21 JS-1 B-7 B-2 B T-2 T-4 T-1 Bacano 5 Tigui Tigui Sur 1 T-3 Tigana Akira TSO-8 TSO-1 TSO-5 TSO-6 TSO-2 TSO-7 TSO-3 TSO-4 Curucucu Jacamar LLA-34 Cabrestero Field (Parex WI) GLJ 3P Reserves (MMBO) Expanded reserve area in 2017 with Jacana, Jacamar, Curucucu, Bacano & Tigana Norte. GLJ 2P Reserves (MMBO) YEAR END Tigana Guadalupe Jacana Guadalupe Tigana-Jacana Mirador Other LLA LLA-34 TOTAL Cabrestero Exploration Appraisal/Dev Drilled Potential Stratigraphic Edge As per the independent reserve report prepared by GLJ Petroleum Consultants Ltd. effective December 31, 2017 Corporate Presentation July Corporate 2018 Presentation March

13 LLANOS-34 BRIDGING JACANA & TIGANA FIELDS Appraisal/Dev GLJ 3P (2017YE) Faults TN5 Tigana-Norte 1 has produced ~3.5 mmbbls (1) since June 2014 o Expanding Tigana North area o Focus is Guadalupe with Mirador upside o Drilled 4 wells in 2017 o 2018 Plan: 4 development wells TSO-8 Tigana TS3 TS7 TS2 TS6 TS5 T3 TS1 TS4 TN9 TN6 T2 T4 TN4 TN2 TN3 TN1 TN8 TN7 TSO-1 TSO-5 TSO-2 Tua Jacana TSO-7 TSO-3 TSO-4 Jacana-10 (1) As at March 31, 2018 As per the independent reserve report prepared by GLJ Petroleum Consultants Ltd. effective Dec. 31/17 Corporate Presentation July Corporate 2018 Presentation March

14 CAPACHOS DEVELOPMENT AND EXPLORATION POTENTIAL NEXT STEPS Drilled 2 wells to earn 50% in the block. o Capachos-2 drilled, restricted production. o Capachos Sur-2 drilled as water disposal well. Drilling Andina exploration well. Targeting ~34-39 API Oil in the Guadalupe Formation. Construction of gas processing facility by 4Q18. GUADALUPE DEPTH STRUCTURE NORESTE-1 EXPLORATION ANDINA CAPACHOS-2 CAPACHOS SUR-2 Parex wells Legacy wells Development well Future exploration Corporate Presentation July Corporate 2018 Presentation March

15 Barranquilla Trucking MAGDALENA BASIN: NEXT GROWTH PLATFORM Cartagena VIM-1 Parex Blocks Pipeline River De MARES (1) Tested Coyote-1, produced oil Evaluate follow-up drilling locations 5-6 wells planned in 2018 VIM-1 Identifying prospects from 3D Seismic data Drill 2 exploration wells Terminal Covenas Ayacucho PLAYON AGUAS BLANCAS (1) Light oil opportunity Drill 10 wells VMM-9 & VMM-11 Acquire 400 km 2 of 3D Seismic Barrancabermeja Vasconia DE MARES AGUAS BLANCAS VMM-9 VMM-11 PLAYON (1) Drill follow-up to Boranda-1 Lerida Guaduas Hidrocasanare Cusiana Monterrey Jaguey (1) Farm-in on Ecopetrol Corporate Presentation July Corporate 2018 Presentation March

16 TIGHT OIL NEXT GROWTH AREA? Provincia Sub-Basin WCSB Unconventional & Tight Oil Plays Size of the Provincia Sub Basin De Mares Block Coyote 1/2/3 Potentially material plays for Parex Aguas Blancas Existing oil wells PXT appraisal Corporate Presentation July Corporate 2018 Presentation March

17 SUMMARY OF THE AGUAS BLANCAS OPPORTUNITY 1. Drill 6 development wells: extend water flood pattern 2. Drill 4 appraisal wells: test southern extent & identify oil in place 3. Stimulate 2 wells to increase productivity 4. Sanction Phase 2 (contingent): drill development wells Phase II Dev. Area West Area (FW) 2. 2 East Area (HW) Future Pad New Producer Existing Producer New Water Injector Existing Injector Existing Standing Well D/E Compartment Appraisal Waterflood Pattern Corporate Presentation July Corporate 2018 Presentation March

18 VIM-1: APURE PROSPECT Multiple structural & stratigraphic plays on block Main target is a carbonate reservoir draped over a basement high Analogue fields at Cicuco, Boquete and El Dificil Currently drilling VIM 1 Lower Magdalena Basin Apure Prospect Calizas Member carbonate fairway El Dificil Field Discovered: 1943 Cum Production = 12 MMBO, 352 BCF Cicuco Field Discovered: 1956 Cum Production = 48 MMBO, 194 BCF Boquete Field Discovered: 1961 Cum Production = 18.5 MMBO, 41 BCF Data Source: IHS Corporate Presentation July Corporate 2018 Presentation March

19 2018 SUMMARY 1. Self-funded industry leading production growth 2. Grow & develop Southern Casanare blocks 3. Prove play concepts in Middle/Lower Magdalena Basins 4. Expand portfolio through Business Development Corporate Presentation July Corporate 2018 Presentation March

20 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 10,057 Llanos 3 LLA-26 Operated 100% N/A 93,376 Llanos 4 LLA-29 Operated 100% N/A 69,915 Llanos 5 LLA-30 Operated 100% N/A 117,322 Llanos 6 LLA-32 (2) Operated 87.5% Geopark 57,040 Llanos 7 LLA-34 Non-operated 55% Geopark 68,382 Llanos 8 LLA-40 (2) Operated 100% N/A 82,422 Llanos 9 Balay Non-operated 10% Perenco 4,500 Llanos 10 Cabrestero Operated 100% N/A 7,605 Llanos 11 Capachos (2) Operated 50% Ecopetrol 64,073 Llanos 12 Los Ocarros Operated 100% N/A 31,066 Llanos 13 VIM-1 Operated 100% N/A 223,651 Lower Magdalena 14 Aguas Blancas (2) Operated 50% Ecopetrol 13,386 Middle Magdalena 15 De Mares (2) Operated 50% Ecopetrol 174,387 Middle Magdalena 16 Morpho (3) Operated 100% N/A 51,420 Middle Magdalena 17 Playon (2) Operated 50% Ecopetrol 43,200 Middle Magdalena 18 Sogamoso Operated 100% N/A 3,695 Middle Magdalena 19 VMM-9 Operated 100% N/A 152,412 Middle Magdalena 20 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 July Corporate 2018 Presentation March

21 APPENDIX SUMMARY OF QUARTERLY RESULTS (Unaudited Results) OPERATING Q1 FY Q4 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 Production (thousands of boe/d) Brent Price ($/bbl) Average realized prices, prior to hedging ($/boe) Royalty ($/boe) Opex ($/boe) Transportation ($/boe) Operating Netback ($/boe) Funds Flow Netback ($/boe) FINANCIAL (millions of USD, except per share amounts) Funds flow from operations Net income (loss) (46) (45) 6.8 (0.2) (8) EBITDA* Cash and cash equivalents Working Capital Net Debt (Surplus) (206) (163) (163) (140) (128) (131) (93) (93) (118) (98) (80) Capital Expenditures Bank Credit Facility Weighted average shares outstanding TRADING STATISTICS (CAD) PXT (based on intra-day trading) Share Price High Low Close (end of period) Average daily volume (thousands) Values are round up or down to the nearest dollar figure Net Debt is defined as Bank Debt - Working Capital 2017 transportation expense on a gross dollar and per boe basis were restated as a result of the Company adopting IFRS 15 Corporate Presentation July Corporate 2018 Presentation March

22 COLOMBIA CURRENT LAND BASE LLA-16 Source: Divestco Corporate Presentation July Corporate 2018 Presentation March

23 ADVISORIES This presentation is provided for informational purposes only as of July 18, 2018 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. This presentation does not take into account the particular investment objectives or financial circumstances of any specific person who may receive it and does not constitute an offer to sell or a solicitation of an offer to buy any security in Canada, the United States or any other jurisdiction. The contents of this presentation have not been approved or disapproved by any securities commission or regulatory authority in Canada, the United Sates or any other jurisdiction, and Parex expressly disclaims any duty on Parex to make disclosure or any filings with any securities commission or regulatory authority, beyond that imposed by applicable laws. Forward-Looking Statements and FOFI Certain information regarding Parex set forth in this document contains forward-looking statements that involve substantial known and unknown risks and uncertainties. The use of any of the words "plan", "expect", prospective, "project", "intend", "believe", "should", "anticipate", "estimate" or other similar words, or statements that certain events or conditions "may" or "will" occur are intended to identify forward-looking statements. Such statements represent Parex' internal projections, estimates or beliefs concerning, among other things, future growth, results of operations, production, future capital and other expenditures (including the amount, nature and sources of funding thereof), plans for and results of drilling activity, business prospects and opportunities. These statements are only predictions and actual events or results may differ materially. Although the Company s management believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Parex' actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Parex. In particular, forward-looking statements contained in this document include, but are not limited to, statements with respect to the performance characteristics of the Company's oil properties; the Company's vision, strategy and values; Parex' estimated 2018 capital budgets, including the expected allocation of such budget to the number of wells and capital expenditures for each of development/appraisal in existing fields, exploration, appraisal and maintenance; HOW TO REACH US PAREX RESOURCES INC Eighth Avenue Place, West Tower th Avenue SW Calgary AB T2P 1G1 Canada Tel: Fax: investor.relations@parexresources.com Website: MIKE KRUCHTEN Vice President, Capital Markets & Corporate Planning Corporate Presentation July Corporate 2018 Presentation March

24 ADVISORIES the Company's forecasted 2018 average production range; the Company's estimated average daily production for full year 2018 & full year 2019; the Company's planned capital program, including anticipated amounts focused on existing discoveries and the appraisal programs and the timing of drilling key exploration prospects, seismic programs and development drilling; anticipated cash flow, cash flow per share, funds flow from operations netback, capital expenditures, and funds flow from operations for 2018; the Company's exploration, development and appraisal program for 2018 including anticipated number and type of wells, drill ready prospects, the focus of development/appraisal drilling and the potential for drilling of additional follow-up appraisal wells and facilities in 2018; exploration prospects; the Company's exploration schedule; the Company's drilling plans and production capability/potential; anticipated drilling locations, including the Company's delineation and drilling plans; the Company's plans to target additional growth opportunities; the Company's future plans for its business, including plans to complete further acquisitions and increase production; financial and business prospects and financial outlook; and activities to be undertaken in various areas. Statements relating to "reserves" or "resources" are forward-looking statements, as they involve the implied assessment, based on estimates and assumptions that the reserves and resources described exist in the quantities predicted or estimated and can be profitably produced in the future. These forward-looking statements are subject to numerous risks and uncertainties, including but not limited to, the impact of general economic conditions in Canada and Colombia; industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced, in Canada and Colombia; competition; lack of availability of qualified personnel; the results of exploration and development drilling and related activities; risks related to obtaining required approvals of regulatory authorities, in Canada and Colombia and partner and community approvals in Colombia; risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities; volatility in market prices for oil; fluctuations in foreign exchange or interest rates; environmental risks; changes in income tax laws, tax rates and/or incentive programs relating to the oil industry; changes to pipeline capacity; ability to access sufficient capital from internal and external sources; failure of counterparties to perform under the terms of their contracts; and other factors, many of which are beyond the control of the Company. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could effect Parex' operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website ( 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. With respect to forward-looking statements contained in this document, Parex has made assumptions regarding, among other things: current commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil, including the anticipated Brent oil price; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; receipt of partner, regulatory and community approvals; royalty rates; future operating costs; effects of regulation by governmental agencies; uninterrupted access to areas of Parex' operations and infrastructure; recoverability of reserves and future production rates; the status of litigation; timing of drilling and completion of wells; on-stream timing of production from successful exploration wells; operational performance of non-operated producing fields; pipeline capacity; that Parex will have sufficient cash flow, debt or equity sources or other financial resources required to fund its capital and operating expenditures and requirements as needed; that Parex' conduct and results of operations will be consistent with its expectations; that Parex will have the ability to develop it's oil and gas properties in the manner currently contemplated; current or, where applicable, proposed industry conditions, laws and regulations will continue in effect or as anticipated as described herein; that the estimates of Parex' reserves volumes and the assumptions related thereto (including commodity prices and development costs) are accurate in all material respects; that Parex will be able to obtain contract extensions or fulfill the contractual obligations required to retain its rights to explore, develop and exploit any of its undeveloped properties; and other matters. Management has included the above summary of assumptions and risks related to forward-looking information provided in this document in order to provide shareholders with a more complete perspective on Parex' current and future operations and such information may not be appropriate for other purposes. Parex' actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits Parex will derive. These forward-looking statements are made as of the date of this document and Parex disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement. Corporate Presentation July Corporate 2018 Presentation March

25 ADVISORIES This document also contains a financial outlook, in particular the information set forth on slides 2-5 & 7. Such financial outlook has been prepared by Parex' management to provide an outlook of the Company's activities and results. The financial outlook has been prepared based on a number of assumptions including the assumptions discussed above and assumptions with respect to the costs and expenditures to be incurred by the Company, capital equipment and operating costs, foreign exchange rates, taxation rates for the Company, general and administrative expenses and the prices to be paid for the Company's production. Management does not have firm commitments for all of the costs, expenditures, prices or other financial assumptions used to prepare the financial outlook or assurance that such operating results will be achieved and, accordingly, the complete financial effects of all of those costs, expenditures, prices and operating results are not objectively determinable. The actual results of operations of the Company and the resulting financial results will likely vary from the amounts set forth in the analysis presented in this presentation, and such variation may be material. The Company and its management believe that the financial outlook has been prepared on a reasonable basis, reflecting the best estimates and judgments, and represent, to the best of management's knowledge and opinion, Parex's expected expenditures and results of operations. However, because this information is highly subjective and subject to numerous risks including the risks discussed above, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, Parex undertakes no obligation to update such financial outlook. Oil and Gas Information The estimates of Parex' December 31, 2017 reserves set forth in this presentation have been prepared by GLJ Petroleum Consultants Ltd. ("GLJ") as of December 31, 2017 with a preparation date of February 2, 2018 (the "GLJ 2017 Report") in accordance with National Instrument Standards of Disclosure for Oil and Gas Activities ("NI ") and the Canadian Oil and Gas Evaluations Handbook (the "COGEH") and using GLJ's forecast prices and costs as at January 1, The estimates of Parex' December 31, 2016 reserves set forth in this presentation have been prepared by GLJ as of December 31, 2016 with a preparation date of February 6, 2017 in accordance with NI and the COGEH and using GLJ's forecast prices and costs as at January 1, The estimates of Parex' December 31, 2015 reserves set forth in this presentation have been prepared by GLJ as of December 31, 2015 with a preparation date of February 5, 2016 in accordance with NI and the COGEH and using GLJ's forecast prices and costs as at January 1, The estimates of Parex' December 31, 2014 reserves set forth in this presentation have been prepared by GLJ as of December 31, 2014 with a preparation date of February 13, 2015 in accordance with NI and the COGEH and using GLJ's forecast prices and costs as at January 1, The estimates of Parex' December 31, 2013 reserves set forth in this presentation have been prepared by GLJ as of December 31, 2013 with a preparation date of February 20, 2014 in accordance with NI and the COGEH and using GLJ's forecast prices and costs as at January 1, Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10 percent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. Estimates of the net present value of the future net revenue from Parex' reserves do not represent the fair market value of Parex' reserves. The estimates of reserves and future net revenue from individual properties or wells may not reflect the same confidence level as estimates of reserves and future net revenue for all properties and wells, due to the effects of aggregation. This presentation contains certain oil and gas metrics, including F&D, FD&A, FD&A/boe, reserves life index (or RLI), operating netbacks, cash netbacks, funds flow from operations netback, and recycle ratios, which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. Such metrics have been included herein to provide readers with additional measures to evaluate the Company's performance; however, such measures are not reliable indicators of the future performance of the Company and future performance may not compare to the performance in previous periods and therefore such metrics should not be unduly relied upon. Management uses these oil and gas metrics for its own performance measurements and to provide investors with measures to compare the Company's operations over time. Corporate Presentation July Corporate 2018 Presentation March

26 ADVISORIES Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented herein, should not be relied upon for investment or other purposes. A summary of the calculations of such metrics are as follows: o o o o o o FD&A costs represent the costs of property acquisition, exploration, and development incurred. The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year. FD&A costs are calculated as capital expenditures plus change in F&D costs. FD&A per boe is calculated as FD&A costs divided by reserves additions for the applicable period. Reserves life index is calculated as proved plus probable reserves divided by annualized fourth quarter production. Recycle ratio is calculated as cash netback per boe (or Funds Flow From Operations per boe) divided by F&D or FD&A, as applicable. Cash netback per boe (or Funds Flow From Operations netback per boe) is calculated as Funds Flow From Operations divided by production for the period. Operating netback is calculated as oil & gas revenue less expenses (royalties, production and transportation) divided by production for the period. "BOEs" may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 mcf: 1 bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. All of Parex crude oil reserves disclosed herein are located in Colombia. The Company does have light, medium and heavy crude oil and natural gas liquids. The recovery and reserve estimates of crude oil reserves provided in this document are estimates only, and there is no guarantee that the estimated reserves will be recovered. Actual crude oil reserves may eventually prove to be greater than, or less than, the estimates provided herein. All evaluations and reviews of future net revenue contained in GLJ's reports are stated prior to any provision for interest costs or general and administrative costs and after the deduction of royalties, development costs, production costs, well abandonment costs and estimated future capital expenditures for wells to which reserves have been assigned. This presentation discloses drilling locations in three categories: (i) proved locations; (ii) probable locations; and (iii) possible locations. Proved locations, probable locations and possible locations are derived from the GLJ 2017 Report and account for drilling locations that have associated proved and/or probable and/or possible reserves, as applicable. Of the 191 drilling locations identified herein, 115 are proved locations, 43 are probable locations and 33 are possible locations. The drilling locations on which the Company actually drills wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. Further, this presentation includes estimates of pay thickness, which are considered to be anticipated results or information that indicate the potential value or quantities of resources under NI Such estimates have been prepared internally by Parex by a non-independent qualified reserves evaluator and have not been prepared or reviewed by an independent qualified reserves evaluator or auditor. The risks associated with these estimates include, but are not limited to, the risk that Parex' exploration and development drilling and related activities may provide different results; the risk that Parex may encounter unexpected drilling results; the occurrence of unexpected events involved in the exploration for, and the operation and development of, oil and gas; delays in anticipated timing of drilling and completion of wells; geological, technical, drilling and processing problems and other difficulties in producing petroleum reserves; and the risk that if any resources are discovered that it will not be commercially viable to produce any portion thereof. There is no certainty that Parex will achieve the estimated results or that any portion of the resources will be discovered. If discovered, there is also no certainty that it will be commercially viable to produce any portion of the resources. Corporate Presentation July Corporate 2018 Presentation March

27 ADVISORIES Certain information in this document may constitute "analogous information" as defined in NI Such information includes production estimates, drilling results, test rates, reserves estimates and other information retrieved from other publicly available sources, including but not limited to IHS. Management of Parex believes the information is relevant as it may help to define the reservoir characteristics and production profile of lands in which Parex may hold an interest. Parex is unable to confirm that the analogous information was prepared by a qualified reserves evaluator or auditor and is unable to confirm that the analogous information was prepared in accordance with NI Such information is not an estimate of the production, reserves or resources attributable to lands held or to be held by Parex and there is no certainty that the production, reserves or resources data and economic information for the lands held or to be held by Parex will be similar to the information presented herein. The reader is cautioned that the data relied upon by Parex may be in error and/or may not be analogous to such lands held or to be held by Parex. Certain other information contained in this presentation has been prepared by third-party sources, which information has not been independently audited or verified by Parex. No representation or warranty, express or implied, is made by Parex as to the accuracy or completeness of the information contained in this document, and nothing contained in this presentation is, or shall be relied upon as, a promise or representation by Parex. This presentation contains references to type well production and economics, which are derived, at least in part, from available information respecting the well economics of other companies and, as such, there is no guarantee that Parex will achieve the stated or similar results, capital costs and return costs representative per well. References in this presentation to initial production test rates, initial "flow" rates, initial flow testing, and "peak" rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. While encouraging, investors are cautioned not to place reliance on such rates in calculating the aggregate production for Parex. Parex has not conducted a pressure transient analysis or well-test interpretation on the wells referenced in this presentation. As such, all data should be considered to be preliminary until such analysis or interpretation has been done. Financial Matters The Company discloses several financial measures that do not have any standardized meaning prescribed under International Financial Reporting Standards ("IFRS"). These financial measures include operating netbacks, cash netbacks, funds flow netbacks and funds flow from operations. Management believes that these financial measures are useful supplemental information to analyze operating performance and provide an indication of the results generated by the Company s principal business activities. Investors should be cautioned that these measures should not be construed as an alternative to net income or other measures of financial performance as determined in accordance with IFRS. Parex s method of calculating these measures may differ from other companies, and accordingly, they may not be comparable to similar measures used by other companies. Please see the Company s most recent Management s Discussion and Analysis, which is available at for additional information about these financial measures. Corporate Presentation July Corporate 2018 Presentation March

28 Corporate Presentation July Corporate 2018 Presentation March