Solid Foundation. Building New Platforms. Annual General Meeting - May 11, 2017 www.parexresources.com | TSX:PXT | AGM Presentation | May 2017 AGM Presentation | May 2017 1 Corporate Presentation | March 2017 1 Corporate Presentation | March 2017 Corporate Presentation | March 2017 1 1
PAREX BOARD Wayne Foo Board Chair Curtis Robert Bob Glenn Dave Taylor Ron Miller Paul Wright Lisa Colnett Engbloom MacDougall McNamara Bartlett CEO Retiring Board Members Norm McIntyre (Board Chair) John Bechtold (Operations Committee Chair) AGM Presentation | May 2017 2 Corporate Presentation | March 2017 2 Corporate Presentation | March 2017 Corporate Presentation | March 2017 2 2
PAREX LEADERSHIP TEAM Dave Taylor President & CEO Mike Kruchten Ryan Fowler Eric Furlan Lee DiStefano Stu Davie Ken Pinsky VP Capital Markets Sr. VP Exploration Sr. VP President & VP Corporate CFO & Corporate & Corporate & Business Engineering Secretary Country Manager Services Planning Development Parex Colombia Organization is built to accommodate growth and provide bench strength AGM Presentation | May 2017 3 Corporate Presentation | March 2017 3 Corporate Presentation | March 2017 Corporate Presentation | March 2017 3 3
BUILDING A BUSINESS 1. Get assets 2. Explore 3. Build cash flow 4. Expand asset base 5. Develop staff 6. Be sustainable Shareholder value Source: Latam Oil, June 11, 2013 AGM Presentation | May 2017 4 Corporate Presentation | March 2017 4 Corporate Presentation | March 2017 Corporate Presentation | March 2017 4 4
ANNUAL THEMES Year Theme Delivery 2017 Solid Foundation; Building New Platforms Goal: Establish new core in Magdalena Basins & grow Llanos 2016 Sustained Performance & Expanding Potential Tested new concepts while maintaining Balance Sheet strength 2015 Leveraging Portfolio Flexibility Increased financial strength & growth options 2014 Building The Runway Expanded 3P 104 mmbbls & RLI 10.7 years 2013 Achieve Sustainability Achieved 2P RLI > 5 years AGM Presentation | May 2017 5 Corporate Presentation | March 2017 5 Corporate Presentation | March 2017 Corporate Presentation | March 2017 5 5
CHARTING THE PATH TO 50,000 BOPD 36 AVERAGE DAILY PRODUCTION (MBOE/D) 32 28 24 20 16 12 8 4 - Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2E 2013 2014 2015 2016 2017 n.a RLI 5 7 8 10 * Refer to February 6, 2017 New Release “ Parex announces executive and board of directors appointments” AGM Presentation | May 2017 6 Corporate Presentation | March 2017 6 Corporate Presentation | March 2017 Corporate Presentation | March 2017 6 6
WE CONTINUE TO ADD VALUE … Production 2P Reserves 2P 30,000 120 100 MMBOE BOE/D 25,000 80 20,000 60 15,000 40 2014 2015 2016 2014 2015 2016 2P 2P Reserve Lif Life Ind Index Market Ca Capitali lization BILLION (CAD) 11 $2.5 YEARS 8 $1.5 $0.5 5 2014 2015 2016 2014 2015 2016 AGM Presentation | May 2017 7 Corporate Presentation | March 2017 7 Corporate Presentation | March 2017 Corporate Presentation | March 2017 7 7
TOTAL RETURNS: PXT VS. TSX & ENERGY INDEX Top 10 Return TSX Energy Index PXT* 394 PXT: C$4.29 At June 11, 2013 125 TSX TTEN 90 *PXT Share Price : C$9.97 at Jan 4/16, C$17.12 at Jan 3/17 & C$16.58 at May 10/17 AGM Presentation | May 2017 8 Corporate Presentation | March 2017 8 Corporate Presentation | March 2017 Corporate Presentation | March 2017 8 8
FUNDAMENTAL VALUES • Global Oil Production is heading towards more oil on oil competition where producers with lower costs, better capital efficiencies and healthy balance sheets are the ultimate survivors. Forecast 120 CRUDE OIL PRICE (USD/BBL) 100 WTI $/bbl (CPI adjusted) 80 60 40 WTI $/bbl (nominal) 20 0 1970 1980 1990 2000 2010 2020 Source: EIA Short-Term Energy Outlook, May 2017 & FactSet Futures, May 2017 AGM Presentation | May 2017 9 Corporate Presentation | March 2017 9 Corporate Presentation | March 2017 Corporate Presentation | March 2017 9 9
WHY FOCUS ON COLOMBIA? 1. Multiple play types & large resource potential in proven basins (path to 50,000 boe/d) 2. Strong operational capabilities 3. Providing shareholder returns: FD&A, recycle ratio & pay-back 4. Able to position for peace dividend Building on track record of success AGM Presentation | May 2017 10 Corporate Presentation | March 2017 10 Corporate Presentation | March 2017 Corporate Presentation | March 2017 10 10
SUMMARY: EXCEL AT WHAT WE DO CORE COMPETENCIES 1.Identify and acquire large prospective resources . 2.Focus on being a low cost operator. 3.Engage stakeholders. Bacano-3, Cabrestero Block AGM Presentation | May 2017 11 Corporate Presentation | March 2017 11 Corporate Presentation | March 2017 Corporate Presentation | March 2017 11 11
LOOK BACK – SHAREHOLDER VALUE PETRO ANDINA – LEGACY OF GROWTH Now Colombia’s 3 th largest Producer Still Finding Big Oil Fields … Petro Andina Parex 35,000 30,000 Production (boe/d) 25,000 20,000 15,000 PAR 10,000 5,000 - AGM Presentation | May 2017 12 Corporate Presentation | March 2017 12 Corporate Presentation | March 2017 Corporate Presentation | March 2017 12 12
SUMMARY: EXCEL AT WHAT WE DO CORE COMPETENCIES 1.Identify and acquire large prospective resources. 2.Focus on being a low cost operator . 3.Engage stakeholders. Bacano-3, Cabrestero Block AGM Presentation | May 2017 13 Corporate Presentation | March 2017 13 Corporate Presentation | March 2017 Corporate Presentation | March 2017 13 13
MANAGING NETBACKS Controllable Costs Trend $50 Q4 2014 Q1 2017 Delta Brent $/bbl $77.07 $54.61 ($22.46) $40 FFO/boe $20.70 $22.47 $1.77 $/boe $30 $20 $10 Q4 2014 2015 Q1' 17 2016 AGM Presentation | May 2017 14 Corporate Presentation | March 2017 14 Corporate Presentation | March 2017 Corporate Presentation | March 2017 14 14 Controllable Costs: Differential, Transportation, Opex, G&A
SUMMARY: EXCEL AT WHAT WE DO CORE COMPETENCIES 1.Identify and acquire large prospective resources. 2.Focus on being a low cost operator. 3.Engage stakeholders. Bacano-3, Cabrestero Block AGM Presentation | May 2017 15 Corporate Presentation | March 2017 15 Corporate Presentation | March 2017 Corporate Presentation | March 2017 15 15
SCHOOL – AGUAS BLANCAS Modernized facilities & increased capacity AGM Presentation | May 2017 16 Corporate Presentation | March 2017 16 Corporate Presentation | March 2017 Corporate Presentation | March 2017 16 16
THANK YOU FOR YOUR SUPPORT 17 AGM Presentation | May 2017 17 Corporate Presentation | March 2017 17 Corporate Presentation | March 2017 Corporate Presentation | March 2017 17 17
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