DISCIPLINED GROWTH + SHAREHOLDER RETURNS OUR 10 YEAR JOURNEY CORPORATE PRESENTATION MARCH 2019 1 CORPORATE PRESENTATION | MARCH 2019
CORPORATE SNAPSHOT Capital 2019E (1) Operating results 2017 2018 structure Production (boe/d) FY Average 35,541 44,408 ~53,000 December 31, 2018 Capital Expenditures (2) - US$ million $212 302 ~$215 Net Working Capital - US$ million $219 Drilling Program (# wells) 38 54 ~45 Reserves (2018 Year-End) US$200 MM Undrawn Credit Facility 2P Reserves (Dec. 31) (3) - Mmboe 185 No Debt 2P Reserve Life Index - years 10.3 Market Capitalization (4) ~C$3 Billion (1) 2019E mid-point production guidance (2) Mid-point guidance assuming Brent oil price: US$60/bbl for 2019 (3) Parex’ working interest, as per the independent reserve report prepared by GLJ Petroleum Consultants (“GLJ”) effective Dec. 31, 2018 Common Shares Basic Outstanding (5) (4) Assuming $20 share price (5) As at March 6, 2019 (TSX listed) 151 MM See “Advisories” at the end of this presentation 2 CORPORATE PRESENTATION | MARCH 2019
WHY INVEST IN PAREX? $700 1. No Debt and Positive 2018 Working Capital of US$219MM $650 2. High Margins Working $600 capital $550 o Q4’18 funds flow netback → US$31/boe @ Brent $68/bbl $500 Bus. Dev 3. Ability to Grow Within Cash Flow: CFO at $60/bbl $450 CFO at $55/bbl $400 o 2017 Production growth: 20% self-funded $350 Returning capital o 2018 Production growth: 25% self-funded (Shares repurchases) $300 $250 o 2019E Production growth: ~20% self-funded CFO at $50/bbl $200 BRENT Exploration 4. Capital Allocation Discipline $150 Development $100 o Balanced capital program and return of capital $50 Maintenance 5. Focused management $- CASH SOURCES CASH USES o Ability to grow within a single country → Colombia Delivering Shareholder Value 3 CORPORATE PRESENTATION | MARCH 2019
WHERE DO WE GO FROM HERE? 2019 2020 - 2022 Our focus Is on Profitable Future Growth Production growth Deliver top quartile & Delivering & free cash flow per share growth Shareholder Returns New growth: Replenish & tight oil & exploration diversify portfolio Shareholder return: Return free cash Share buybacks flow to shareholders 4 CORPORATE PRESENTATION | MARCH 2019
DELIVERING CONSISTENT SHAREHOLDER VALUE PRODUCTION PER SHARE (DEBT ADJUSTED) 2P RESERVE PER SHARE (DEBT ADJUSTED) 350 1,600 BOE/MILLION WA BASIC SHARES 1,400 MBOE/MM BASIC SHARES 300 1,200 250 1,000 200 800 150 600 100 400 50 200 - - 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 FUNDS FLOW PER BASIC SHARE PAREX VS. TSX ENERGY INDEX FFO/SHARE Brent Oil Price PXT S&P/TSX Energy Index FUNDS FLOW PER SHARE (USD) $3.00 110 80% BRENT OIL PRICE (USD/BBL) $2.50 90 60% TOTAL RETURN $2.00 70 40% $1.50 50 20% $1.00 30 0% $0.50 10 2014 2015 2016 2017 2018 -20% $0.00 -10 2014 2015 2016 2017 2018 -40% See advisories at the end of this presentation 5 CORPORATE PRESENTATION | MARCH 2019
BUSINESS IS STRONG – PRODUCTION GROWTH AND FREE CASH FLOW 550 55,000 Production Debt Adjusted Production Per Share 500 50,000 450 45,000 400 40,000 BOE/MILLION BASIC WA SHARES 350 35,000 300 30,000 250 25,000 200 20,000 150 15,000 100 10,000 50 5,000 - - 2019E Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Q2 2018 adjusted to exclude a $137.5 million one-time voluntary tax restructuring during the three months ended June 30, 2018 2019E DAPS assumes 14.2 million shares repurchased (NCIB) 6 CORPORATE PRESENTATION | MARCH 2019
GUIDANCE: CASH FLOW FUNDED GROWTH CAPEX BY TYPE CAPEX BY BLOCK 2019FY (1) Assumptions Bus. Dev Other Oil (Brent)(US/bbl) $60 Bus. Dev DeMares/Playon Exploration FFO netback (2)(3)(4) (US/boe) $25 Fortuna Production (Boe/d) 53,000 Capachos Capex (midpoint)(US$ MM) $215 Development Aguas Blancas FFO (midpoint)(US$ MM) (4) $475 YOY Production growth/share 25% SoCa Maintenance (1) Mid-point 2019 guidance (2) FFO netback is defined as Funds Flow From Operations (“FFO”) per bopd. (3) FFO Netback is a non-GAAP Measure. Capex Capex (4) Excluding decommissioning/environmental liabilities. 2018FY adjusted to exclude a $137.5 million cost of the voluntary tax restructuring during Q2 2018 See advisories at the end of presentation 7 CORPORATE PRESENTATION | MARCH 2019
2019 PLAN: HIGH NETBACKS ENABLE SHAREHOLDER RETURNS $700 $650 $600 2018FY Optionality Working $550 Capital $500 ~$215 (1) $450 CFO at $60/bbl CFO at $400 $55/bbl Capex: ~$215 $350 $300 $250 ~$15 CFO at ~$75 $200 $50/bbl BRENT ~$50 $150 ~$75 $100 $50 $0 (1) SOURCES OF CASH MAINTENANCE DEVELOPMENT EXPLORATION BUS DEV. NCIB COLUMN1 (1) Normal issuer course bid assumes up to ~14.2 million shares repurchased at ~$20/share on average using a 2019E USD-CAD average rate of 1.32 8 CORPORATE PRESENTATION | MARCH 2019
PAREX CASH NETBACK (1) 2019 Target Cash Netbacks (2) $80.00 $75.84 $74.97 $75.00 $70 $68.32 $67.27 $70.00 $65 $65.00 $60 ($12.90) $60.00 $55 $55.00 ($7.93) $50.00 $45.00 USD/BOE ($5.62) $40.00 ($3.98) ($1.98) $35.00 ($4.52) $30.00 $25.00 $20.00 $15.00 $10.00 (3) $5.00 Cash Netback $31.62 $36.68 $28.10 $31.39 $24-26 $22-23 $27-29 $30-32 $0.00 Q1 2018 Q2 2018 Q3 2018 Q4 2018 2019 GUIDANCE Cash Netback Tax G&A-Finance Transportation Opex Royalties Differential Brent Price (1) Cash netbacks are a non-GAAP measure defined as funds flow from operations per barrel of oil (2) 2019 target cash netbacks are based on production guidance mid-point excluding hedges and decommissioning & environmental liabilities. (3) Q2 2018 tax and cash netback adjusted to exclude a $137.5 million one-time voluntary tax restructuring during the three months ended June 30, 2018 See advisories at the end of this presentation 9 CORPORATE PRESENTATION | MARCH 2019
2019 DRILLING PROGRAM: 45 GROSS WELLS PLANNED VIM-1: Lower Magdalena Expl. Wells Dev. Wells Lower Magdalena o La Belleza well 1 - VIM-1 Middle Magdalena o Aguas Blancas 3 12 Fortuna o DeMares/Playon 3 - Playon o Fortuna 2 1 DeMares Capachos Middle Magdalena Aguas Blancas Llanos Basin o Capachos Llanos Basin 1 - SoCa o SoCa 4 17 CPO-11 o CPO-11 1 - COLOMBIA Total Wells Planned 15 30 10 CORPORATE PRESENTATION | MARCH 2019
YEAR-END 2018 RESERVES (1) 3P Reserves 2P at Dec. 31, 2017 (MMboe) 162.2 262.1 MMboe - Production 16.2 + 2P Reserves additions (2) 38.7 - Acquisitions - 2P at Dec. 31, 2018 (MMboe) 184.7 2P Reserves replacement ratio (3) 238% 2P Reserves life index (years) (4) 10.3 PROVED PROBABLE POSSIBLE ( 1) Per the independent reserve reports prepared by GLJ Petroleum Consultants Ltd. effective December 31, 2018 + + 121.7 63.0 77.4 (2) Includes technical revisions, discoveries, extensions and improved recovery (3) Calculated as 2P reserves additions divided by 2018 annual production MMboe MMboe MMboe (4) Calculated as 2P reserves divided by Q4 2018 production annualized. (5) Free cash flow yield =((Funds Flow – Capex)/Marketcap at Dec. 31/18)) + Proved Reserves annual growth % Future development capital included in the 2018 GLJ Report are: 1P US$297 mm, 2P US$412 mm & 3P US$518 mm See advisories at the end of this presentation FCF Yield + YoY Proved Reserves Growth of ~32% (5) 11 CORPORATE PRESENTATION | MARCH 2019
CONVENTIONAL OIL RESERVES GENERATE VALUE $9 Proved+ Total Company - 2018YE Proved + Probable+ $8 Proved Probable Possible $7 FD&A USD/boe (1) $7.03 $7.29 $7.59 $6 Recycle Ratio (FD&A) (1) 4.5x 4.3x 4.1x 2P FD&A (USD/BOE) (1) $5 After Tax NPV10% - CAD/sh (2) $21.25 $30.18 $40.69 $4 Working Capital - CAD/Sh (3) $1.92 $1.92 $1.92 $3 Total CAD/Sh (3) $23.17 $32.10 $42.61 $2 (1) Per the independent reserve reports prepared by GLJ Petroleum Consultants Ltd. effective Dec. 31 of the reported year, $1 including Future Development Cost. Recycle Ratio is calculated using Q4 2018 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, as at January 1, 2019, which assumes $70.30/bbl over 2019-2023 $0 (3) Working Capital of US$219 million (CAD 298 million) and 155 million shares at December 31, 2018 See advisories at the end of this presentation 2016 2017 2018 1 Year $/boe 3 Year $/boe 12 CORPORATE PRESENTATION | MARCH 2019
SOCA – FOUNDATION FOR GROWTH ODL Offloading Faults GLJ 3P (2018YE) LLA-32 Exploration Wells Explore Core Position, Carmentea Pipeline Appraise & Develop Discoveries, and Calona Kananaskis AZOGUE LLA-34 Max Generate Free Cash Flow Chachalaca Tilo Chiricoca Tarotaro Tigana GUACO Tua 2019 Plan: ~21 wells Aruco Jacana Curucucu Jacamar Tigui Totor Cabrestero Bacano Faults GLJ 3P (2018YE) 2019 Exploration o Akira As per the independent reserve report prepared by GLJ. effective Dec. 31/18 13 CORPORATE PRESENTATION | MARCH 2019
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