DISCIPLINED GROWTH + SHAREHOLDER RETURNS OUR 10 YEAR JOURNEY CORPORATE PRESENTATION APRIL 2019 1 CORPORATE PRESENTATION | APRIL 2019
CORPORATE SNAPSHOT Capital structure 2019E (1) Operating results 2017 2018 Net Working Capital - US$ million (4) Production (boe/d) FY Average 35,541 44,408 ~53,000 $219 Capital Expenditures (2) - US$ million $212 302 ~$215 US$200 MM Undrawn Credit Facility (4) Drilling Program (# wells) 38 54 ~45 No Debt Reserves (2018 Year-End) Market Capitalization (5) 2P Reserves (Dec. 31) (3) - Mmboe 185 ~C$3 Billion 2P Reserve Life Index - years 10.3 Common Shares Basic Outstanding (6) (1) 2019E mid-point production guidance (TSX: PXT) (2) Mid-point guidance assuming Brent oil price: US$60/bbl for 2019 149.4 MM (3) Parex’ working interest, as per the independent reserve report prepared by GLJ Petroleum Consultants (“GLJ”) effective Dec. 31, 2018 (4) As at December 31, 2018 (5) Assuming $20 share price (6) As at March 31, 2019 Share Buyback (Shares/d) (7) As at April 9, 2019 75,000 See “Advisories” at the end of this presentation Insider Ownership (Shares) (7) ~5.04 MM 2 CORPORATE PRESENTATION | APRIL 2019
WHY INVEST IN PAREX? $850 1. No Debt and Positive 2018 Working Capital of US$219 Million $800 $750 2. High Margins Working $700 capital o Q4’18 funds flow netback → US$31/boe @ Brent $68/bbl $650 $600 CFO at $70/bbl 3. Ability to Grow Within Cash Flow: Bus. Dev $550 CFO at $65/bbl $500 o 2017 Production growth: 20% self-funded CFO at $60/bbl $450 CFO at $55/bbl $400 o 2018 Production growth: 25% self-funded Returning capital $350 (Shares repurchases) o 2019E Production growth: ~20% self-funded $300 $250 $200 4. Capital Allocation Discipline CFO at $50/bbl Exploration BRENT $150 o Balanced capital program and return of capital Development $100 $50 Maintenance 5. Focused management $- CASH SOURCES CASH USES o Ability to grow within a single country → Colombia Delivering Shareholder Value 3 CORPORATE PRESENTATION | APRIL 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 4 CORPORATE PRESENTATION | APRIL 2019
BUSINESS IS STRONG – PRODUCTION GROWTH AND FREE CASH FLOW 550 55,000 Production Debt Adjusted Production Per Share 500 50,000 BOE/MILLION BASIC WA SHARES 450 45,000 400 40,000 350 35,000 300 30,000 250 25,000 200 20,000 150 15,000 100 10,000 50 5,000 - - 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 Jun-19 2019E 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) 5 CORPORATE PRESENTATION | APRIL 2019
GUIDANCE: CASH FLOW FUNDED GROWTH CAPEX BY TYPE CAPEX BY BLOCK 2019FY (1) Assumptions Bus. Dev Other Oil (Brent)(US/bbl) $60 Bus. Dev DeMares/Playon Exploration Production (Boe/d) 53,000 Fortuna YOY Production growth/share 25% Capachos Development Aguas Blancas Capex (midpoint)(US$ MM) $215 FFO (midpoint)(US$ MM) (2) $475 SoCa FFO netback (2)(4) (US/boe) $25 Maintenance (1) Mid-point 2019 guidance (2) Excluding decommissioning/environmental costs. Capex Capex (3) Funds flow (“FFO”) netback is a non -GAAP measure that includes all cash generated from operating activities and is calculated before changes in non-cash working capital, divided by produced oil and natural gas sales volumes See advisories at the end of presentation 6 CORPORATE PRESENTATION | APRIL 2019
PAREX CASH NETBACK (1) 2019 Target Cash Netbacks (2) $80 $75.84 $74.97 $75 $70 $68.32 $67.27 $70 $65 $65 $60 ($12.90) $60 $55 $55 ($7.93) $50 $45 USD/BOE ($5.62) $40 ($3.98) ($1.98) $35 ($4.52) $30 $25 $20 $15 $10 (3) $5 Cash Netback $31.62 $36.68 $28.10 $31.39 $24-26 $22-23 $27-29 $30-32 $0 Q1 2018 Q2 2018 Q3 2018 Q4 2018 2019 GUIDANCE Cash Netback Tax G&A-Finance Transportation Opex Royalties Differential Brent Price (1) Cash netback or funds flow netback is a non-GAAP measure that includes all cash generated from operating activities and is calculated before changes in non-cash working capital, divided by produced oil and natural gas sales volumes (2) 2019 target cash netbacks are based on production guidance mid-point excluding hedges and decommissioning & environmental costs. (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 7 CORPORATE PRESENTATION | APRIL 2019
2019 PLAN: HIGH NETBACKS ENABLE SHAREHOLDER RETURNS $850 $800 $750 2018YE $700 Working $650 Capital Optionality $600 MILLIONS (USD) CFO at $70/bbl $550 CFO at $65/bbl $500 ~$226 (1) CFO at $60/bbl $450 $400 CFO at $55/bbl Capex: ~$215 $350 $300 ~$15 $250 ~$75 CFO at $50/bbl $200 ~$50 BRENT $150 $100 ~$75 $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 ~$21/share on average using a 2019E USD-CAD average rate of 1.32 8 CORPORATE PRESENTATION | APRIL 2019
2019 DRILLING PROGRAM: 45 GROSS WELLS PLANNED VIM-1: Lower Magdalena Expl. Wells Dev. Wells o La Belleza well 1 - Lower Magdalena Middle Magdalena VIM-1 o Aguas Blancas 3 12 o DeMares/Playon 3 - Fortuna Playon o Fortuna 2 1 DeMares Aguas Blancas Capachos Llanos Basin Middle Magdalena o Capachos 1 - o SoCa 4 17 SoCa Llanos Basin o CPO-11 1 - CPO-11 COLOMBIA Total Wells Planned 15 30 9 CORPORATE PRESENTATION | APRIL 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 is calculated as Funds Flow minus Capex divided by Dec. 31/18 Marketcap (converted in USD) (6) Free cash flow yield + 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% (6) 10 10 CORPORATE PRESENTATION | APRIL 2019
CONVENTIONAL OIL RESERVES GENERATE VALUE $9 Proved+ 2018YE Proved + Probable+ $8 Proved Probable Possible $7 2P FD&A (USD/BOE)(1) FD&A USD/boe (1) $7.03 $7.29 $7.59 $6 Recycle Ratio (FD&A) (1) 4.5x 4.3x 4.1x $5 $4 After Tax NPV10% - C$/sh (2) $21.25 $30.18 $40.69 Working Capital – C$/Sh (3) $1.92 $1.92 $1.92 $3 NAV – C$/Sh (3)(4) $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. $0 (2) Based on GLJ Petroleum Consultants Ltd. price forecast, as at January 1, 2019, which assumes $70.30/bbl over 2019-2023. (3) Working Capital of US$219 million (CAD 298 million) and 155 million shares at December 31, 2018. (4) At $60 Brent flat, NAV is respectively C$19.53 for 1P, C$26.35 for 2P and $34.19 for 3P 2016 2017 2018 See advisories at the end of this presentation 1 Year $/boe 11 11 CORPORATE PRESENTATION | APRIL 2019
FOUNDATION FOR GROWTH: APPRAISE, DEVELOP & GENERATE FCF ODL Offloading Faults NET WORKING INTEREST PRODUCTION GLJ 3P (2018YE) LLA-32 (LLA-32, LLA-34 & Cabrestero) Exploration Wells Carmentea Pipeline 50 40 MBOE/D 30 Calona 20 Kananaskis AZOGUE LLA-34 10 Max Chachalaca Tilo - Chiricoca 2014 2015 2016 2017 2018 Tarotaro Tigana GUACO NET ET WORKING INT INTEREST RE RESERVES* - LAS LAST 5 5 YE YEARS (LL (LLA-32, LLA LLA-34 & Ca Cabrestero) Tua 250 RESEVES (MMBOE) 200 Aruco Jacana 150 Curucucu Jacamar 100 Tigui 50 Totor Cabrestero Bacano 0 o Akira 2014 2015 2016 2017 2018 1P 2P 3P *Per the independent reserve reports prepared by GLJ Petroleum Consultants Ltd. effective Dec. 31 of the reported year. As per the independent reserve report prepared by GLJ. effective Dec. 31/18 See advisories at the end of this presentation 3-5 Years of Production Growth 12 12 CORPORATE PRESENTATION | APRIL 2019
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