Growth + Shareholder Returns www.parexresources.com | TSX:PXT - PowerPoint PPT Presentation

Growth + Shareholder Returns www.parexresources.com | TSX:PXT | Corporate Presentation | January 2019 1 Corporate Presentation | January 2019 Corporate Presentation | March 2017 1

CORPORATE SNAPSHOT 2019E (1) Operating results 2017 2018E Production (boe/d) FY Average 35,541 ~44,400 ~53,000 Capital Expenditures (2) - US$ million $212 ~$320 ~$215 Drilling Program (# wells) 38 55-60 ~45 Reserves (year-end) 2P Reserves (Dec. 31) (3) - Mmboe 162 2P Reserve Life Index - years 11.4 Capital structure – September 30, 2018 Net Working Capital - US$ million $143 US$200 MM Undrawn Credit Facility No Debt Market Capitalization (4) ~C$2.8Bn Common Shares Basic Outstanding (TSX listed) 155.4 MM (1) 2019E mid-point production guidance (2) Mid-point guidance assuming Brent oil price: US$72/bbl for 2018 and US$60/bbl for 2019 (3) Parex’ working interest, as per the independent reserve report prepared by GLJ Petroleum Consultants effective Dec. 31, 2017 (4) Assuming $18 share price See “Advisories” at the end of this presentation 2 Corporate Presentation | January 2019 Corporate Presentation | March 2017 2

WHY INVEST IN PAREX? 1. No debt and positive Q3’18 WC exceeding US$143MM $700 $650 2. High margins $600 Working Capital $550 o Q3’18 Operating Netback  US$44/boe @ Brent $76/bbl $500 CFO at $60/Bbl $450 3. Ability to grow within cash flow: $400 CFO at $55/Bbl o 2017 Growth: production 19.6% yoy & RLI increased to 11.0x $350 Returning Capital $300 (Shares Repurchases) o 2018E Production Growth: ~25% self-funded $250 Bus. Dev $200 CFO at $50/Bbl o 2019E Production Growth: ~20% self-funded Exploration $150 $100 Development 4. Focused management $50 Maintenance o Ability to grow within a single country  Colombia $- Cash Sources Cash Uses Delivering Shareholder Value 3 Corporate Presentation | January 2019 Corporate Presentation | March 2017 3

WHERE DO WE GO FROM HERE? 2019 2020 - 2022 Production New Shareholder Deliver Top Replenish & Return Free Growth & Growth: Return: Quartile Per Diversify Cash Flow to Free Cash Tight Oil NCIB Share Portfolio Shareholders Flow & Growth Exploration Our focus is on profitable future growth & delivering shareholder returns 4 Corporate Presentation | January 2019 Corporate Presentation | March 2017 4

DELIVERING CONSISTENT SHAREHOLDER VALUE 2P RESERVES (DEBT ADJUSTED) PRODUCTION PER SHARE (DEBT ADJUSTED) 1,200 350 300 DAPS (BOE/MM BASIC SHARES) 1,000 (MBOE/MM BASIC SHARES) 250 800 2P RESERVES 200 600 150 400 100 200 50 - - 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2018E PXT VS. S&P/TSX X ENERGY INDEX X (TTEN) FUNDS FLOW PER SHARE (BASIC) PXT S&P/TSX Energy Index FUNDS FLOW PER SHARE (USD/BASIC SHARE) BRENT (USD/BBL) 80% $4.00 $120 $3.50 60% 66% $100 FUNDS FLOW PER SHARE BRENT PRICE (USD/BBL) $3.00 (USD/BASIC SHARE) TOTAL RETURN 40% $80 40% $2.50 34% 20% $2.00 $60 15% 15% 15% 7% $1.50 0% $40 -11% -10% -16% $1.00 -25% -20% -29% $20 $0.50 -40% $- $0 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018E* 2018E FFO/share adjusted to exclude cost of the voluntary tax restructuring See advisories at the end of this presentation 5 Corporate Presentation | January 2019 Corporate Presentation | March 2017 5

BUSINESS IS STRONG – PRODUCTION GROWTH AND FREE CASH FLOW 0.55 55,000 Production Debt Adjusted Production Per Share 0.50 50,000 BOE PER THOUSAND SHARES 0.45 45,000 0.40 40,000 0.35 35,000 0.30 30,000 0.25 25,000 0.20 20,000 0.15 15,000 0.10 10,000 0.05 5,000 - - E 2019E* Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 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 Base assets (LLA-34/Cabrestero) growing production & exploration adds new resource 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 15 million shares repurchased (NCIB) 6 Corporate Presentation | January 2019 Corporate Presentation | March 2017 6

GUIDANCE: CASH FLOW FUNDED GROWTH Capex by Type Capex By Block ASSUMPTIONS Bus. Dev Other 2019FY (1) 2018FY Bus. Dev Oil (Brent)(US/bbl) $72 $60 DeMares/Playon Exploration Fortuna FFO netback (2)(3)(4) (US/boe) $33 $25 Capachos Production (Boe/d) 44,400 53,000 Aguas Blancas Development Capex (midpoint)(US$ MM) $320 $215 FFO (midpoint)(US$ MM) (4) $525 $475 SoCa Maintenance YOY Production growth/share 25% 25% (1) Mid-point 2019 guidance Capex Capex (2) FFO netback is defined as Funds Flow From Operations (“FFO”) per bopd. (3) Netback is a non-GAAP Measure. (4) Excluding decommissioning/environmental liabilities. 2018FY adjusted to exclude a $137.5 million cost of the voluntary tax restructuring during Q2 2018 7 Corporate Presentation | January 2019 Corporate Presentation | March 2017 7

2019 PLAN: HIGH NETBACKS ENABLE SHAREHOLDER RETURNS $700 $650 $600 OPTIONALITY Working Capital (1) $550 $500 CFO at $60/Bbl $450 (2) $185 CFO at $400 $55/Bbl Capex: $200 - 230 $350 $300 $250 CFO at ~$15 ~$75 $50/Bbl $200 $150 ~$50 $100 ~$75 $50 $0 (2) Sources of Cash Maintenance Development Exploration Bus Dev. NCIB Column1 (1) Estimated working capital at December 31, 2018 (2) Normal issuer course bid assumes up to ~15 million shares repurchased at ~C$16 and 2019E USD-CAD average rate of 1.3 8 Corporate Presentation | January 2019 Corporate Presentation | March 2017 8

PAREX CASH NETBACK (1) 2019 TARGET CASH NETBACKS (2) BRENT PRICE $80 $75.84 $74.97 $75 $70 $67.27 ($14.15) $65 Differential $65 $60 $60 REALIZED PRICE (USD/BOE) $55 Royalties ($9.30) $55 $50 Opex $50 ($5.40) Transportation ($2.58) $45 ($1.76) G&A, Finance & Misc. Costs $40 (3) ($5.97) Tax $35 $30 $25 $20 $15 $10 (3) $5 Cash Netback $28.10 $36.68 $19-20 $22-23 $24-26 $27-29 $31.62 $- 2019 Guidance Q1 2018 Q2 2018 Q3 2018 (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 | January 2019 Corporate Presentation | March 2017 9

2019 DRILLING PROGRAM: 45 GROSS WELLS PLANNED VIM-1: Lower Magdalena o La Belleza well Llanos Basin # wells o Capachos 1 Middle Magdalena # wells o SoCa 21 o Aguas Blancas 15 o CPO-11 1 o DeMares/Playon 3 o Fortuna 3 COLOMBIA 10 Corporate Presentation | January 2019 Corporate Presentation | March 2017 10

SOLID FOUNDATION SUPPORTS GROWTH TRACK RECORD OF PROGRESSING RESERVES* FROM 3P TO CASH FLOW Dec. 31, Proved + Probable+ Proved + Proved Annual 2P Reserve Life Possible Probable Production Index Based on Annualized Millions of Barrels of Oil Equivalent Q4 Production 2013 50 32 17 6 5 years 2014 104 68 40 8 7 years 2015 125 82 46 10 8 years 2016 169 112 64 11 10 years 2017 241 162 96 13 11 years 2018YE Reserves release expected on Feb 7, 2019 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 US$302 mm, 2P US$432 mm & 3P US$537 mm See advisories at the end of this presentation 11 Corporate Presentation | January 2019 Corporate Presentation | March 2017 11

CONVENTIONAL OIL RESERVES GENERATE VALUE Proved+ Proved + Probable+ Total Company - 2017YE Proved Probable Possible (1) 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 Q4 2017 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, 2018, which assumes $65.40/bbl over 2018-2022 (3) Working Capital of US$163 million (CAD 205 million) and 154.7 million shares at December 31, 2017 See advisories at the end of this presentation 12 Corporate Presentation | January 2019 Corporate Presentation | March 2017 12