DISCIPLINED GROWTH + SHAREHOLDER RETURNS OUR 10 YEAR JOURNEY CORPORATE PRESENTATION AUGUST 2019 1 CORPORATE PRESENTATION | AUGUST 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 $240 Capital Expenditures (2) - US$ million $212 $302 ~$215 US$200 MM Undrawn Credit Facility (4) Drilling Program (# wells) 38 54 ~46 No Debt Reserves (2018 Year-End) Market Capitalization (5) 2P Reserves (Dec. 31) (3) - Mmboe 185 ~C$3.1 Billion 2P Reserve Life Index - years 10.3 Common Shares Basic Outstanding (5) (1) 2019E mid-point production guidance (TSX: PXT) (2) Mid-point guidance assuming Brent oil price: US$60/bbl for 2019 144.5 MM (3) Parex’ working interest, as per the independent reserve report prepared by GLJ Petroleum Consultants (“GLJ”) effective Dec. 31, 2018 (4) As at June 30, 2019 (5) As at August 1, 2019 Share Buyback (Shares/d) 50,000 See “Advisories” at the end of this presentation Insider Ownership (Shares) (5) ~4.3 MM 2 CORPORATE PRESENTATION | AUGUST 2019
WHY INVEST IN PAREX? 1. No Debt & Positive Q2’19 Working Capital of US$240 MM 2. High Margins o Q2’19 FFO netback → US$32/boe at Brent $69/bbl ~27% 3. Ability to Grow Within Cash Flow: o 2017 Production growth: 20% self-funded o 2018 Production growth: 25% self-funded o 2019E Production growth: ~20% self-funded 4. Capital Allocation Discipline o Balanced capital program and return of capital 5. Focused management o Ability to grow within a single country → Colombia Delivering Shareholder Value 3 CORPORATE PRESENTATION | AUGUST 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 | AUGUST 2019
BUSINESS IS STRONG – PRODUCTION GROWTH AND FREE CASH FLOW Brent: Production DACF/Share DEBT-ADJUSTED CASH FLOW PER SHARE ~$65/Bbl 55,000 $5.50 Brent: ANNUAL PRODUCTION (BOE/D) 50,000 $5.00 $72/Bbl 45,000 $4.50 Brent: 40,000 $4.00 $55/Bbl Brent: 35,000 $3.50 $45/Bbl 30,000 $3.00 25,000 $2.50 20,000 $2.00 15,000 $1.50 10,000 $1.00 5,000 $0.50 - $- 2016 2017 2018 2019E* * Based on mid-point production guidance and DACF/Share assumes $575 million FFO at $60-65/bbl and 146 million WA basic shares 5 CORPORATE PRESENTATION | AUGUST 2019
GUIDANCE: CASH FLOW FUNDED GROWTH CAPEX BY TYPE CAPEX BY BLOCK 2019FY (1) Assumptions Bus. Dev Other Oil (Brent)(US$/bbl) - H2 2019 $60-65 Bus. Dev DeMares/Playon Exploration Production (Boe/d) 53,000 Fortuna YOY Production growth/share 25% Capachos Development Aguas Blancas Capex (midpoint)(US$ MM) $215 FFO (midpoint)(US$ MM) (2) $575 SoCa (5) FFO netback (2)(4) (US/boe) $30 Maintenance (1) Mid-point 2019 guidance - see news release dated August 1, 2019 (2) Excluding decommissioning/environmental costs. (3) Funds flow (“FFO”) netback is a non -GAAP measure that includes all cash generated from operating activities and is Capex Capex calculated before changes in non-cash working capital, divided by produced oil and natural gas sales volumes (4) Assuming Brent/Vasconia crude differential of less than $3/bbl (5) SoCa is defined as Parex’ Southern Casanare blocks including LLA -32, LLA-34 and Cabrestero See advisories at the end of presentation At Brent Prices of $65-$70/bbl, We Estimate 2019 Full-Year FFO of ~US$580-640 Million (4) 6 CORPORATE PRESENTATION | AUGUST 2019
PAREX CASH NETBACK (1) 2019 Target Cash Netbacks (2)(3) $80 $75 $71.59 $75 $68.52 $70 $68.32 $70 $65 $63.83 $65 $60 ($13.79) $60 $55 ($7.97) $50 USD/BOE $45 ($5.51) $40 ($2.59) $35 ($6.74) $30 $25 $20 $15 $10 $5 $29.16 (4) $31.92 (4) $26-28 $29-31 $32-34 $35-37 Cash Netback $23.56 $31.39 $0 2018FY Q4 2018 Q1 2019 Q2 2019 2019 GUIDANCE Cash Netback Tax G&A-Finance Opex Royalties Differential & Transportation 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) Assuming Brent/Vasconia crude differential of less than $3/bbl (4) In Q2 2019, Parex changed how it presents funds flow provided by (used in) operations to present a more comparable basis to peer presentation. See advisories at the end of this presentation 7 CORPORATE PRESENTATION | AUGUST 2019
2019 PLAN: HIGH NETBACKS ENABLE SHAREHOLDER RETURNS $950 $900 $850 2018YE Working $800 Capital $750 Optionality $700 CFO at $75/bbl $650 MILLIONS (USD) CFO at $70/bbl $600 $550 CFO at $65/bbl $500 CFO at $60/bbl ~$226 (1)(2) $450 $400 Capex: ~$215 $350 CFO at $300 $55/bbl ~$15 $250 BRENT ~$75 $200 ~$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 in 2019 at ~$21/share on average using a 2019E USD-CAD average rate of 1.32 (2) As of August 1, 2019 the Company has purchased 11.9 million shares at an average cost of C$20.13 8 CORPORATE PRESENTATION | AUGUST 2019
2019 DRILLING PROGRAM: 46 GROSS WELLS PLANNED VIM-1: Lower Magdalena Expl. Wells Dev. Wells o La Belleza well 1 - Middle Magdalena Lower Magdalena VIM-1 o Aguas Blancas 2 12 o DeMares/Boranda 3 - o Fortuna 2 - Fortuna Boranda DeMares Llanos Basin Aguas Blancas Capachos LLA-10 o LLA-10 Middle Magdalena 1 - Merecure o Capachos 1 1 o Merecure 1 - SoCa Llanos Basin o SoCa 4 17 CPO-11 o CPO-11 1 - COLOMBIA Total Wells Planned 16 30 9 CORPORATE PRESENTATION | AUGUST 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 | AUGUST 2019
CONVENTIONAL OIL RESERVES GENERATE VALUE $9 Proved+ Proved + Probable+ $8 2018YE 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 $5 After Tax NPV10% - C$/sh (2) $21.25 $30.18 $40.69 $4 Working Capital – C$/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. (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. (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 3 Year $/boe 11 11 CORPORATE PRESENTATION | AUGUST 2019
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