DISCIPLINED GROWTH + SHAREHOLDER RETURNS OUR 10 YEAR JOURNEY CORPORATE PRESENTATION NOVEMBER 2019 1 CORPORATE PRESENTATION | NOVEMBER 2019
CORPORATE SNAPSHOT Capital Structure 2019E (1) 2020E (1) Operating results 2018 Production (boe/d) FY Average 44,408 52,750 55,375 Net Working Capital - US$ million (5) $280 DAPS Growth (2) 26% 31% 23% Capital Expenditures (3) - US$ million $302 $225 $225 US$200 MM Undrawn Credit Facility (5) No Debt Drilling Program (# wells) 54 43 59 Reserves (2018 Year-End) Market Capitalization (6) ~C$2.7 Billion 2P Reserves (Dec. 31) (4) - Mmboe 185 2P Reserve Life Index - years 10.3 Common Shares Basic Outstanding (6) (1) Mid-point production guidance (TSX: PXT) (2) Debt-adjusted production per share (DAPS) 142.9 MM (3) Mid-point capex assume Brent oil prices of US$63/bbl for 2019 and US$60/bbl for 2020 (4) Parex’ WI per the independent reserve report prepared by GLJ Petroleum Consultants (“GLJ”) effective Dec. 31, 2018 (5) As at September 30, 2019 (6) As at November 6, 2019 Share Buyback – repurchased (7) (7) As at October 11, 2019 the company repurchased 15.0 MM shares at an average cost of C$20.21/share 15 MM shares See “Advisories” at the end of this presentation 2 CORPORATE PRESENTATION | NOVEMBER 2019
WHY INVEST IN PAREX? DEBT-ADJUSTED PRODUCTION PER SHARE (DAPS) 1. No Debt & Positive Q3’19 Working Capital of US$280 MM 0.50 $25 2. High Margins o Q3’19 FFO netback → US$30/boe at Brent $62/bbl 0.40 $20 BOE/D PER 1,000 SAHRES SHARE PRICE (CAD) 4. Capital Allocation Discipline 0.30 $15 o Balanced capital program and return of capital 0.20 $10 5. Focused Shareholder Return o 2018 CROIC (1) → 32% 0.10 $5 o Share buy-back funded from free cash flow 0.00 $0 ▪ 15 million shares repurchased since December 2018 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Q1 2018 Q3 2018 Q1 2019 Q3 2019 ▪ Plan to buy back 10% of public float, subject to the TSX approval of the NCIB renewal PPS DAPS Share Price (QE) Source: CIBC’S Morning Summary, August 28, 2019 & Company’s data Delivering Shareholder Value (1) Cash return on invested capital calculated (CROIC), a non-GAAP measure, is calculated as EBITDA divided by average carrying value of exploration and evaluation assets and property, plant and equipment assets, excluding accumulated DD&A 3 CORPORATE PRESENTATION | NOVEMBER 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 2015 2016 2017 2018 2019YTD* -20% $0.00 -10 2014 2015 2016 2017 2018 -40% See advisories at the end of this presentation * 2019YTD total return as of November 6, 2019 4 CORPORATE PRESENTATION | NOVEMBER 2019
BUSINESS IS STRONG – PRODUCTION GROWTH AND FREE CASH FLOW DEBT-ADJUSTED CASH FLOW PER SHARE Brent: Brent: 60,000 $6.00 ~$60/Bbl ANNUAL PRODUCTION (BOE/D) ~$63/Bbl 55,000 Brent: 50,000 $5.00 $72/Bbl 45,000 Brent: 40,000 $4.00 $55/Bbl Brent: 35,000 $45/Bbl 30,000 $3.00 25,000 20,000 $2.00 15,000 10,000 $1.00 5,000 - $- 2016 2017 2018 2019E (1) 2020E (2) Production DACF/Share (1) 2019E based on mid-point production guidance and DACF/Share assumes $555 million FFO at $63/bbl and 146.5 million WA basic shares (2) 2020E based on mid-point production guidance and DACF/share assumes $535 million FFO at $60/bbl and 136.5 million WA basic shares 5 CORPORATE PRESENTATION | NOVEMBER 2019
PAREX CASH NETBACK (1) 2020 Target Cash Netbacks (2)(3) $80 $71.59 $75 $68.52 $68.32 $70 $65 $63.83 $62.03 $65 $60 $60 $55 ($12.95) $55 $50 ($6.72) $45 USD/BOE $40 ($6.15) ($0.16) $35 ($6.44) $30 $25 $20 $15 $10 $5 $29.16 (4) $31.92 (4) Cash Netback $29.61 $23.56 $31.39 $28-30 $23-25 $26-28 $0 2018FY Q4 2018 Q1 2019 Q2 2019 Q3 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) 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 6 CORPORATE PRESENTATION | NOVEMBER 2019
2020 DRILLING PROGRAM: 59 GROSS WELLS PLANNED Middle Magdalena Expl. Wells Dev. Wells o Aguas Blancas - 12 o Boranda 3 - o Fortuna 3 - Fortuna Boranda Llanos Basin Aguas Blancas Middle Magdalena o CPO-11 2 - Merecure o LLA-94 2 - SoCa Llanos Basin LLA-94 o Merecure 1 - CPO-11 o SoCa 3 33 Total Gross Wells Planned 14 45 59 Gross Wells COLOMBIA 7 CORPORATE PRESENTATION | NOVEMBER 2019
2020 PLAN: HIGH NETBACKS ENABLE SHAREHOLDER RETURNS $950 $900 $850 Optionality … 2019E $800 Working $750 Capital $700 ~US$320 $650 MILLIONS (USD) $600 CFO at $65/bbl $550 CFO at $60/bbl $500 $450 CFO at $55/bbl Capex: ~$210-$240 $400 ~$200 (1) $350 $300 CFO at ~$65-$75 $250 $50/bbl ~$30-$40 $200 BRENT ~$115-$125 $150 Operated $100 $50 LLA-34 $0 (1) SOURCES OF CASH MAINTENANCE DEVELOPMENT EXPLORATION SHARE BUY-BACK COLUMN1 (1) Assumes that 10% of the public float is repurchased in 2020 8 CORPORATE PRESENTATION | NOVEMBER 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 NAV at Brent $60 flat – C$/sh (2) $19.53 $26.35 $34.19 $4 After Tax NPV10% - C$/sh (3) $21.25 $30.18 $40.69 $3 Working Capital – C$/sh (4) $1.92 $1.92 $1.92 $2 NAV – C$/Sh (2)(4) $23.17 $32.10 $42.61 $1 (1) Per the independent reserve reports prepared by GLJ Petroleum Consultants Ltd. effective Dec. 31 of the reported year, $0 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. 2016 2017 2018 (2) Calculated by GLJ Petroleum (3) Based on GLJ Petroleum Consultants Ltd. price forecast, as at January 1, 2019, which assumes $70.30/bbl over 2019-2023. (4) Working Capital of US$219 million (CAD 298 million) and 155 million shares at December 31, 2018. 1 Year $/boe 3 Year $/boe See advisories at the end of this presentation 9 CORPORATE PRESENTATION | NOVEMBER 2019
FOUNDATION FOR GROWTH: APPRAISE & DEVELOP Faults GLJ 3P (2018YE) NET WORKING INTEREST PRODUCTION Exploration Wells (LLA-32, LLA-34 & Cabrestero) Pipeline LLA-34 50 Max 40 Tilo Chachalaca Chiricoca MBOE/D 30 20 Tarotaro Tigana 10 GUACO - 2014 2015 2016 2017 2018 Tua NET ET WORKING INT INTEREST RE RESERVES* - LAS LAST 5 5 YE YEARS (LLA-32, LLA (LL LLA-34 & Ca Cabrestero) Aruco 250 Jacana RESEVES (MMBOE) Curucucu 200 Jacamar 150 Tigui 100 50 Totoro Cabrestero Bacano 0 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 Generation of Significant Free Cash Flow 10 10 CORPORATE PRESENTATION | NOVEMBER 2019
CAPACHOS DEVELOPMENT AND EXPLORATION POTENTIAL Guadalupe depth structure Capachos (50% WI, Operator) • Producing at restricted rate of ~6,000 gross bopd ANDINA NORTE-1 o Capachos-2: Guadalupe on production ANDINA-3 o Andina-1: Guadalupe on production ANDINA-1 o Andina-2: Guadalupe on production ANDINA-2 o Andina Norte-1: Guadalupe to be placed on production • Currently testing Andina-3 appraisal well CAPACHOS-2 • Commissioned Phase-1 gas processing facility CAPACHOS SUR-2 Legacy well Parex wells Appraisal Facility/Pad Planned Flowline 11 11 CORPORATE PRESENTATION | NOVEMBER 2019
BEYOND 2019: ASSET REPLENISHMENT FOR FUTURE GROWTH Trucking Parex Blocks (1) Cartagena 1. Fortuna Pipeline o Acquired Q4/18 o River 2 wells planned in 2019 Terminal Covenas (1) 2. CPO-11 o Acquired Q4/18 FORTUNA 3. Merecure o Acquired Q1/19 & tested Tamariniza-1 at 800 bpd gross 4. ANH Bid Round o Acquired 2 blocks (LLA-94, VSM-25) in Q2/19 Mercure o Upcoming Bid Round: November 26, 2019 Why we like these and timing of activity ✓ Material prospect sizes VSM-25 LLA-94 ✓ Wide variety of play types ✓ Accessible operating areas for 2020-2021 drilling CPO-11 (1) Subject to regulatory approval See advisories at the end of this presentation 12 12 CORPORATE PRESENTATION | NOVEMBER 2019
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