Parex Resources Inc. (“Parex” or the “Company”) (TSX: PXT) provides
an update on its current operations, corporate guidance, outlook,
and announces Sanjay Bishnoi’s departure as Chief Financial Officer
(“CFO”) to pursue another opportunity. All amounts herein are in
United States Dollars (“USD”) unless otherwise stated.
Guidance Update Primarily Based on Arauca
Underperformance – Return of Capital Focus Unchanged
Regular Dividend Underpinned by Base
Assets and Excess Free Funds Flow to be Returned through Share
Buybacks
Key Highlights
- QTD Q3
2024 average production is approximately 47,600 boe/d(1).
- Revised
FY 2024 average production guidance midpoint to 49,000 boe/d from
57,000 boe/d and decreased midpoint capital expenditure guidance to
$380 million from $410 million(2).
-
Production profiles at LLA-34, Cabrestero and Capachos for FY 2024
are broadly in line with previous Management budgeting(2).
- Departure
of CFO, Sanjay Bishnoi, effective September 20, 2024; Cameron
Grainger has been appointed as Interim CFO.
“Today, we have announced revisions to our
outlook, primarily driven by lower-than-expected results at Arauca,
which have materially impacted our production view for 2024. Our
long-term profiles at LLA-34, Cabrestero and Capachos underpin
continued shareholder returns, and we are taking meaningful and
immediate steps to position Parex to deliver,” commented Imad
Mohsen, President & Chief Executive Officer.
“Moving forward, I am confident with the
management team in place and their ability to deliver improved
results following this reset. With continued belief in our
strategy, I want to thank our team for their commitment to overcome
current challenges as we work to build on our long-term track
record of success in Colombia.”
The Company is taking steps to resolve current
underperformance with the following actions taken:
-
Decreasing capital expenditures where possible, in line with lower
production;
-
Reevaluating the portfolio to refine and prioritize lower-risk
development and exploitation opportunities, complemented by a focus
on higher chance of success exploration targets; and
-
Proactively targeting sizable mature fields through farm-ins that
add incremental lower-risk exploitation opportunities to the
portfolio.
(1) See “Current Production” for additional details.(2) See
“2024 Corporate Guidance Update” for additional details.
Operational Update
Current Production
Since the July 31, 2024 news release, average production has
been 46,300 boe/d(1), resulting in QTD Q3 2024 average production
of approximately 47,600 boe/d(2).
Key drivers for lower current average production are:
- Rapid
productivity decline at Arauca;
-
Slower-than-expected volume additions from LLA-32;
- Higher
than originally budgeted downtime at LLA-34 and Cabrestero, as well
as slower than Parex’s expectations of the waterflood ramp-up at
LLA-34;
- LLA-34
declines, specifically horizontal wells that have a higher decline
than the vertical wells in the main producing reservoir; and
- Following
outperformance in H1 2024 at Cabrestero, waterflood phasing has
caused the overall decline to converge to the long-term trend and
be in line with prior Management budgeting.
(1) Estimated average production relates to the 27-day period of
August 1, 2024, to August 27, 2024 (light & medium crude oil:
~8,246 bbl/d, heavy crude oil: ~37,364 bbl/d, conventional natural
gas: ~4,138 mcf/d).(2) Estimated average production relates to the
58-day period of July 1, 2024, to August 27, 2024 (light &
medium crude oil: ~8,478 bbl/d, heavy crude oil: ~38,413 bbl/d,
conventional natural gas: ~4,255 mcf/d).
2024 Corporate Guidance Update
The table below illustrates Parex’s key assets
for FY 2024, as well as Arauca, and highlights that LLA-34,
Cabrestero and Capachos remain broadly in line with previous
Management budgeting, despite downtime experienced so far this
year. Arauca performance is the primary driver of the production
guidance update.
Approximate boe/d (net) |
Original Guidance(January
2024) |
2024 Updated Guidance(August 28,
2024) |
Variance |
LLA-34 |
28,000 |
27,000 |
(1,000) |
Cabrestero |
12,000 |
12,000 |
- |
Capachos |
4,000 |
3,500 |
(500) |
Arauca |
4,500 |
500 |
(4,000) |
Other, Including VIM-1, Legacy Fields, and Near-Field
Exploration |
8,500 |
6,000 |
(2,500) |
Average Production |
57,000 boe/d |
49,000 boe/d |
(8,000) boe/d |
FY 2024 average production guidance has been
updated to 48,000 to 50,000 boe/d (49,000 boe/d midpoint) and
concurrently, capital expenditure guidance for the year has been
revised downward to $370 to $390 million ($380 midpoint).
The updated production guidance range
incorporates a range of technical outcomes, as well as contingency
for downtime events. Inclusive of 2024 production to date, the low
end of the production guidance range would be estimated to result
from significant downtime events that include unforeseen
longer-term operational suspensions.
Category |
2024 Guidance(January 15,
2024) |
2024 Updated Guidance(August 28,
2024) |
Brent Crude Oil Average Price |
$75/bbl |
$80/bbl |
Average Production |
54,000-60,000 boe/d |
48,000-50,000 boe/d |
Funds Flow Provided by Operations Netback(1)(2)(3) |
$29-31/boe |
$30-32/boe |
Funds Flow Provided by Operations(4) |
$590-660 million |
$545-565 million |
Capital Expenditures(5) |
$390-430 million |
$370-390 million |
Free Funds Flow(5) |
$215 million (midpoint) |
$175 million (midpoint) |
(1) Non-GAAP ratio. See “Non-GAAP and Other Financial Measures
Advisory”.(2) 2024 updated assumptions: Vasconia differential:
~$4/bbl; production expense: $12-13/bbl; transportation expense:
~$3.50/bbl; G&A expense: ~$4.00/bbl; effective tax rate:
19-21%.(3) Supplementary financial measure. See “Non-GAAP and Other
Financial Measures Advisory”.(4) Capital management measure. See
“Non-GAAP and Other Financial Measures Advisory”.(5) Non-GAAP
financial measure. See “Non-GAAP and Other Financial Measures
Advisory”.
LLA-34 and Cabrestero(1)(2)
At LLA-34, for the remainder of 2024, the
Company’s focus is on increasing injection rates and adding two
additional waterflood patterns. The block’s horizontal drilling
program is being successfully executed, with current production of
roughly 7,800 bbl/d(3) of heavy crude oil (gross) from 10 wells,
with the 11th well to come online in the coming weeks. There are
four service rigs actively working, and Parex and its partner are
reviewing adding a fifth rig to further support workovers and field
optimization.
At Cabrestero, the Company continues to see
constructive results from its polymer injection pilot, with a full
field expansion being designed and economic valuations ongoing.
Post-waterflooding implementation at LLA-34, Management expects to
recommend a similar polymer injection scheme. For the remainder of
2024, the focus is to ramp up injection rates to flatten declines,
while adding incremental oil production where possible. The block
has a service rig planned to work through the end of 2024.
(1) LLA-34: 55% W.I.(2) Cabrestero: 100% W.I.(3) Estimated
current production relates to the 27-day period of August 1, 2024,
to August 27, 2024.
LLA-32(1)
The first well of the appraisal and development
program was an unbooked stepout well and is currently producing
approximately 500 bbl/d(2) of light crude oil (gross).
The second well, was a follow-up appraisal well
targeting the two zones from the first well. The upper zone was
successfully tested(3) at roughly 600 bbl/d of light crude oil
(gross) before being isolated. Following isolation, the lower zone
commenced single-zone production, which is currently at roughly 600
bbl/d(4) of light crude oil (gross), although at a high
water-to-oil ratio. In the lower zone, the Company believes that
productivity is being impacted by water intrusion. Based on initial
positive test results from the upper zone, Parex is evaluating
drilling a horizontal well to maximize reservoir contact and
minimize water production.
Continuing with the appraisal and development
program, the Company has spud a third well, which is expected to be
onstream in Q4 2024.
(1) 87.5% W.I.(2) Estimated production relates to the 27-day
period of August 1, 2024, to August 27, 2024.(3) The Azogue-4 well
completed a production test for 13 hours in the Mirador formation.
In natural flow, the test accumulated 319 bbls of 32 API light
crude oil and 55 bbls of water. The average test rate was 589 bbl/d
at an average drawdown of 7%. The maximum test rate was 766 bbl/d
at 1% basic sediment and water, and 6% drawdown. (4) Short-term
production rate. See “Oil & Gas Matters Advisory.”
Northern Llanos – Arauca & Capachos(1)(2)
At Arauca, Parex continues to expect the
Arauca-81 well to be onstream in late Q3 2024. Currently, reduced
productivity from the Arauca-8 and Arauca-15 wells are contributing
to lower corporate production.
At Capachos, the first of a three-well campaign
was spud in late Q2 2024, which successfully reached total depth
and matched the drilling performance of the previous pacesetter on
the block. The well is expected to be onstream in late Q3 2024, in
line with previous Management expectations.
The Northern Llanos region has recently faced
greater instability that has led to heightened security concerns.
While the Company has activated internal security protocols and is
monitoring the situation closely, Parex’s operations have not been
impacted to date.
(1) Arauca: Business Collaboration Agreement with Ecopetrol S.A.
(Parex 50% Participating Share); Ecopetrol S.A. currently holds
100% of the working interest in the Convenio Arauca while the
assignment procedure is pending.(2) Capachos: 50% W.I.
Big ‘E’ Exploration Update – High-Impact Targets
with Transformational Potential
- Llanos Foothills –
LLA-122 (50% W.I.): The drilling of the Arantes well in the
high-potential Colombian Foothills is progressing on an extended
timeline, with intermediate casing set. The next portion of the
operation is to drill an additional roughly 2,000 feet and set a
liner immediately above the zones of interest. Following the liner
being set, Parex plans to drill and evaluate the prospective zones.
Based on the current pace of operations, the well is expected to
reach total depth of roughly 19,500 feet in Q4 2024, with
preliminary results by YE 2024.
- Magdalena – VIM-1
(50% W.I.): The Hidra well, which was expected to spud Q3 2024, has
been deferred by Parex. While the well is drill-ready,
social-related issues have resulted in the decision to pause the
spud of the well to limit and safeguard capital.
- Northern Llanos –
Capachos (50% W.I.): As previously announced, Parex has postponed
the drilling of the Berilo Oeste prospect at LLA-38 (50% W.I.),
with capital being reallocated to an exploration commitment well in
Capachos.
Return of Capital Update
Long-Term Capital Allocation Framework
Parex actively adjusts its capital allocation to maximize
shareholder value. With the revised average production guidance for
2024, planned capital expenditures have been lowered in alignment
to get near the targeted return of 33% of funds flow provided by
operations(1), through dividends and share repurchases.
In the event that the Company generates higher free funds flow
than current guidance due to production outperformance or commodity
price increases, Management intends to enhance share buybacks when
conditions warrant.
(1) Capital management measure. See “Non-GAAP and Other
Financial Measures Advisory”.
Share Buyback Program Under Current Normal Course Issuer Bid
(“NCIB”)
Parex believes that the Common Shares have been trading in a
price range that does not adequately reflect their value in
relation to the Company’s current operations and its long-term
growth prospects, with the view that purchasing shares for
cancellation can provide an opportunity to enhance shareholder
returns.
As at August 27, 2024, Parex has repurchased approximately 3.2
million shares under its current NCIB, for total consideration of
roughly C$68 million.
Q3 2024 Dividend
As previously announced, Parex’s Board of
Directors has approved a Q3 2024 regular dividend of C$0.385 per
share to shareholders of record on September 9, 2024, to be paid on
September 16, 2024. This regular dividend payment to shareholders
is designated as an “eligible dividend” for purposes of the Income
Tax Act (Canada).
The Board of Directors and Management continue
to view its regular quarterly dividend as a core part of its return
of capital framework.
Three-Year Outlook Update
Parex has withdrawn its three-year plan for the
2024 through 2026 period(1).
The Company is actively assessing its short- and long-term
development and exploration opportunities as it progresses through
its 2025 budgeting and planning process.
(1) Arauca was one of the key growth drivers in the Company’s
long-term planning. The primary event and circumstance that led
Parex to withdraw the plan is due to Arauca underperformance, with
the drilling and subsequent results being materially lower than
Management’s expectations.
Chief Financial Officer Transition
Sanjay Bishnoi has resigned as Chief Financial
Officer (“CFO”), to pursue another opportunity. Mr. Bishnoi’s
departure is effective September 20, 2024, and the Company is
retaining an executive recruitment firm to assist in identifying a
successor candidate.
During this transition period, the Board of
Directors has appointed Cameron Grainger as interim CFO. Mr.
Grainger is a Chartered Professional Accountant and was appointed
as Vice President, Finance & Controller in 2022. He has held
the position of Controller since 2013 and has been with the Company
since 2011.
About Parex Resources Inc.
Parex is an independent oil and gas company in
Colombia, focusing on sustainable, conventional production. The
Company’s corporate headquarters are in Calgary, Canada, with an
operating office in Bogotá, Colombia. Parex shares trade on the
Toronto Stock Exchange under the symbol PXT.
For more information, please contact:
Mike KruchtenSenior Vice President, Capital
Markets & Corporate PlanningParex Resources Inc.
403-517-1733investor.relations@parexresources.com
Steven EirichInvestor Relations &
Communications AdvisorParex Resources
Inc.587-293-3286investor.relations@parexresources.com
NOT FOR DISTRIBUTION OR FOR DISSEMINATION IN THE UNITED
STATES
Non-GAAP and Other Financial Measures
Advisory
This press release uses various "non-GAAP
financial measures", "non-GAAP ratios", "supplementary financial
measures" and "capital management measures" (as such terms are
defined in National Instrument 52-112 – Non-GAAP and Other
Financial Measures Disclosure). Such measures are not standardized
financial measures under IFRS, and might not be comparable to
similar financial measures disclosed by other issuers. Such
financial measures should not be considered as alternatives to, or
more meaningful than measures determined in accordance with GAAP.
These measures facilitate management’s comparisons to the Company’s
historical operating results in assessing its results and strategic
and operational decision-making and may be used by financial
analysts and others in the oil and natural gas industry to evaluate
the Company’s performance. Further, management believes that such
financial measures are useful supplemental information to analyze
operating performance and provide an indication of the results
generated by the Company's principal business activities.
Please refer to the Company’s Management’s
Discussion and Analysis of the financial condition and results of
operations for the period ended June 30, 2024 dated July 31,
2024, which is available at the Company’s website at
www.parexresources.com and on the Company’s profile on SEDAR+ at
www.sedarplus.ca for additional information about such financial
measures, including reconciliations to the nearest GAAP measures,
as applicable.
Set forth below is a description of the non-GAAP
financial measures, non-GAAP ratios, supplementary financial
measures and capital management measures used in this press
release.
Non-GAAP Financial Measures
Capital expenditures, is a
non-GAAP financial measure which the Company uses to describe its
capital costs associated with oil and gas expenditures. The measure
considers both property, plant and equipment expenditures and
exploration and evaluation asset expenditures which are items in
the Company’s statement of cash flows for the period. In Q3 2022,
the Company changed how it presents exploration and evaluation
expenditures, refer to note 2 of the Company's consolidated interim
financial statements for the period ended September 30, 2022.
Free funds flow, is a non-GAAP
measure that is determined by funds flow provided by operations
less capital expenditures. In Q3 2022, the Company changed how it
presents exploration and evaluation expenditures included in total
capital expenditures. Amounts have been restated for prior periods
to conform to the current year's presentation, refer to note 2 of
the Company's consolidated interim financial statements for the
period ended September 30, 2022. The Company considers free funds
flow to be a key measure as it demonstrates Parex’s ability to fund
return of capital, such as the NCIB or dividends, without accessing
outside funds.
Non-GAAP Ratios
Funds flow provided by operations
netback ("FFO netback") is a non-GAAP
ratio 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. The Company
considers FFO netback to be a key measure as it demonstrates
Parex's profitability after all cash costs relative to current
commodity prices.
Capital Management Measures
Funds flow provided by
operations, is a capital management measure that includes
all cash generated from operating activities and is calculated
before changes in non-cash working capital. The Company considers
funds flow provided by operations to be a key measure as it
demonstrates Parex’s profitability after all cash costs relative to
current commodity prices.
Supplementary Financial
Measures
G&A expense per bbl is
comprised of G&A expense, as determined in accordance with
IFRS, divided by Company's total oil sales volumes.
Production expense per bbl is
comprised of production expense, as determined in accordance with
IFRS, divided by Company's total oil sales volumes.
Transportation expense per bbl
is comprised of transportation expense, as determined in accordance
with IFRS, divided by Company's total oil sales volumes.
Effective current tax rate as a
per cent of funds flow provided by operations before tax is
comprised of current income tax expense, as determined in
accordance with IFRS, divided by funds flow provided by operations
before tax.
Oil & Gas Matters
Advisory
The term "Boe" means a barrel of oil equivalent
on the basis of 6 thousand cubic feet ("Mcf") of natural gas to 1
bbl. Boe may be misleading, particularly if used in isolation. A
boe conversion ratio of 6 Mcf: 1 Bbl is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead.
Given the value ratio based on the current price of crude oil as
compared to natural gas is significantly different from the energy
equivalency of 6 Mcf: 1Bbl, utilizing a conversion ratio at 6 Mcf:
1 Bbl may be misleading as an indication of value.
This press release contains a number of oil and
gas metrics, including FFO netbacks. These oil and gas metrics have
been prepared by management and do not have standardized meanings
or standard methods of calculation and therefore such measures may
not be comparable to similar measures used by other companies and
should not be used to make comparisons. Such metrics have been
included herein to provide readers with additional measures to
evaluate the Company's performance; however, such measures are not
reliable indicators of the future performance of the Company and
future performance may not compare to the performance in previous
periods and therefore such metrics should not be unduly relied
upon. Management uses these oil and gas metrics for its own
performance measurements and to provide security holders with
measures to compare the Company's operations over time. Readers are
cautioned that the information provided by these metrics, or that
can be derived from the metrics presented in this news release,
should not be relied upon for investment or other purposes. A
summary of the calculation of FFO netbacks is provided under
"Non-GAAP and Other Financial Measures Advisory".
References in this press release to initial
production test rates, initial "flow" rates, initial flow testing,
and "peak" rates are useful in confirming the presence of
hydrocarbons, however such rates are not determinative of the rates
at which such wells will commence production and decline thereafter
and are not indicative of long-term performance or of ultimate
recovery. While encouraging, investors are cautioned not to place
reliance on such rates in calculating the aggregate production for
Parex. Parex has not conducted a pressure transient analysis or
well-test interpretation on the wells referenced in this press
release. As such, all data should be considered to be preliminary
until such analysis or interpretation has been done.
Any reference in this press release to
short-term production rates are useful in confirming the presence
of hydrocarbons, however such rates are not determination of the
rates at which such wells will continue production and decline
thereafter and readers are cautioned not to place reliance on such
rates in calculating the aggregate production of Parex.
Advisory on Forward-Looking
Statements
Certain information regarding Parex set forth in
this press release contains forward-looking statements that involve
substantial known and unknown risks and uncertainties. The use of
any of the words "plan", "expect", “prospective”, "project",
"intend", "believe", "should", "anticipate", "estimate",
“forecast”, "guidance", “budget” or other similar words, or
statements that certain events or conditions "may" or "will" occur
are intended to identify forward-looking statements. Such
statements represent Parex's internal projections, estimates or
beliefs concerning, among other things, future growth, results of
operations, production, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, plans for and results of drilling activity,
environmental matters, business prospects and opportunities. These
statements are only predictions and actual events or results may
differ materially. Although the Company’s management believes that
the expectations reflected in the forward-looking statements are
reasonable, it cannot guarantee future results, levels of activity,
performance or achievement since such expectations are inherently
subject to significant business, economic, competitive, political
and social uncertainties and contingencies. Many factors could
cause Parex's actual results to differ materially from those
expressed or implied in any forward-looking statements made by, or
on behalf of, Parex.
In particular, forward-looking statements
contained in this press release include, but are not limited to,
statements with respect to the Company's focus, plans, priorities
and strategies and the benefits to be derived from such plans,
priorities and strategies; Parex's FY 2024 average production
guidance and midpoint average production guidance; Parex's FY 2024
capital expenditure guidance and midpoint capital expenditure
guidance; Parex's anticipated means of resolving its
underperformance and the anticipated benefits to be derived
therefrom; Parex's 2024 guidance, including anticipated brent crude
oil average prices, funds flow provided by operations netback;
funds flow provided by operations, capital expenditures, free funds
flow; the Company's focus and expectations at certain of its blocks
and the anticipated results and timing thereof; that Parex will
actively adjust its capital allocation to maximize shareholder
value; the anticipated terms of the Company's Q3 2024 regular
quarterly dividend; the anticipated benefits to be derived from the
Company's NCIB; and the anticipated number of shares to be
purchased per day through the Company's automatic share purchase
plan and its expectation that it will adjust to match the targeted
long-term capital allocation framework as required.
Although the forward-looking statements
contained in this press release are based upon assumptions which
management believes to be reasonable, the Company cannot assure
investors that actual results will be consistent with these
forward-looking statements. With respect to forward-looking
statements contained in this press release, Parex has made
assumptions regarding, among other things: current and anticipated
commodity prices and royalty regimes; availability of skilled
labour; timing and amount of capital expenditures; future exchange
rates; the price of oil, including the anticipated Brent oil price;
the impact of increasing competition; conditions in general
economic and financial markets; availability of drilling and
related equipment; effects of regulation by governmental agencies;
receipt of partner, regulatory and community approvals; royalty
rates; future operating costs; uninterrupted access to areas of
Parex's operations and infrastructure; recoverability of reserves
and future production rates; the status of litigation; timing of
drilling and completion of wells; on-stream timing of production
from successful exploration wells; operational performance of
non-operated producing fields; pipeline capacity; that Parex will
have sufficient cash flow, debt or equity sources or other
financial resources required to fund its capital and operating
expenditures and requirements as needed; that Parex's conduct and
results of operations will be consistent with its expectations;
that Parex will have the ability to develop its oil and gas
properties in the manner currently contemplated; that Parex's
evaluation of its existing portfolio of development and exploration
opportunities is consistent with its expectations; current or,
where applicable, proposed industry conditions, laws and
regulations will continue in effect or as anticipated as described
herein; that the estimates of Parex's production and reserves
volumes and the assumptions related thereto (including commodity
prices and development costs) are accurate in all material
respects; that Parex will be able to obtain contract extensions or
fulfill the contractual obligations required to retain its rights
to explore, develop and exploit any of its undeveloped properties;
that Parex will have sufficient financial resources in the future
to pay a dividend in the future; that the Board will declare
dividends in the future; and other matters.
These forward-looking statements are subject to
numerous risks and uncertainties, including but not limited to, the
impact of general economic conditions in Canada and Colombia;
prolonged volatility in commodity prices; industry conditions
including changes in laws and regulations including adoption of new
environmental laws and regulations, and changes in how they are
interpreted and enforced in Canada and Colombia; determinations by
OPEC and other countries as to production levels; competition; lack
of availability of qualified personnel; the results of exploration
and development drilling and related activities; obtaining required
approvals of regulatory authorities in Canada and Colombia; risks
associated with negotiating with foreign governments as well as
country risk associated with conducting international activities;
volatility in market prices for oil; fluctuations in foreign
exchange or interest rates; environmental risks; changes in income
tax laws or changes in tax laws and incentive programs relating to
the oil industry; changes to pipeline capacity; ability to access
sufficient capital from internal and external sources; failure of
counterparties to perform under contracts; risk that Brent oil
prices are lower than anticipated; risk that Parex's evaluation of
its existing portfolio of development and exploration opportunities
is not consistent with its expectations; risk that initial test
results are not indicative of future performance or ultimate
recovery; risk that other zones to be tested do not contain the
expected hydrocarbon bearing formations; the risk that Parex's 2024
capital expenditures and planned exploration and development
programs are different than expected, including in a manner adverse
to Parex; the risk that Parex's financial and production results
may be less favorable than anticipated; the risk that certain of
Parex's wells may not spud or come onstream when anticipated, or at
all; the risk that Parex may not have sufficient financial
resources in the future to pay a dividend or repurchase its shares;
the risk that the Board may not declare dividends in the future or
that Parex's dividend policy changes; that risk that Parex may not
actively adjust its capital allocation or maximize shareholder
value; the risk that the Company may purchase less shares per day
through its automatic share purchase plan than anticipated and that
it may not adjust to match its targeted long-term capital
allocation framework as required; and other factors, many of which
are beyond the control of the Company. Readers are cautioned that
the foregoing list of factors is not exhaustive. Additional
information on these and other factors that could affect Parex's
operations and financial results are included in reports on file
with Canadian securities regulatory authorities and may be accessed
through the SEDAR+ website (www.sedarplus.ca).
Management has included the above summary of
assumptions and risks related to forward-looking information
provided in this press release in order to provide shareholders
with a more complete perspective on Parex's current and future
operations and such information may not be appropriate for other
purposes. Parex's actual results, performance or achievement could
differ materially from those expressed in, or implied by, these
forward-looking statements and, accordingly, no assurance can be
given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do, what
benefits Parex will derive. These forward-looking statements are
made as of the date of this press release and Parex disclaims any
intent or obligation to update publicly any forward-looking
statements, whether as a result of new information, future events
or results or otherwise, other than as required by applicable
securities laws.
This press release contains a financial outlook,
in particular: Parex's FY 2024 capital expenditure guidance and
midpoint capital expenditure guidance; Parex 2024 guidance,
including anticipated brent crude oil average prices, funds flow
provided by operations netback; funds flow provided by operations,
capital expenditures, free funds flow, capital reinvestment and
return of capital (dividends and share repurchases); the
anticipated terms of the Company's Q3 2024 regular quarterly
dividend; and the anticipated number of shares to be purchased per
day through the Company's automatic share purchase plan and its
expectation that it will adjust to match the targeted long-term
capital allocation framework as required. Such financial outlook
has been prepared by Parex's management to provide an outlook of
the Company's activities and results. The financial outlook has
been prepared based on a number of assumptions including the
assumptions discussed above and assumptions with respect to the
costs and expenditures to be incurred by the Company, capital
equipment and operating costs, foreign exchange rates, taxation
rates for the Company, general and administrative expenses and the
prices to be paid for the Company's production.
Management does not have firm commitments for
all of the costs, expenditures, prices or other financial
assumptions used to prepare the financial outlook or assurance that
such operating results will be achieved and, accordingly, the
complete financial effects of all of those costs, expenditures,
prices and operating results are not objectively determinable. The
actual results of operations of the Company and the resulting
financial results will likely vary from the amounts set forth in
the analysis presented in this press release, and such variation
may be material. The Company and its management believe that the
financial outlook has been prepared on a reasonable basis,
reflecting the best estimates and judgments, and represent, to the
best of management's knowledge and opinion, Parex's expected
expenditures and results of operations. However, because this
information is highly subjective and subject to numerous risks
including the risks discussed above, it should not be relied on as
necessarily indicative of future results. Except as required by
applicable securities laws, Parex undertakes no obligation to
update such financial outlook.
Distribution Advisory
The Company's future shareholder distributions,
including but not limited to the payment of dividends and the
acquisition by the Company of its shares pursuant to a normal
course issuer bid, if any, and the level thereof is uncertain. Any
decision to pay further dividends on the common shares (including
the actual amount, the declaration date, the record date and the
payment date in connection therewith and any special dividends) or
acquire shares of the Company will be subject to the discretion of
the Board of Directors of Parex and may depend on a variety of
factors, including, without limitation the Company's business
performance, financial condition, financial requirements, growth
plans, expected capital requirements and other conditions existing
at such future time including, without limitation, contractual
restrictions and satisfaction of the solvency tests imposed on the
Company under applicable corporate law. Any purchases of common
shares pursuant to a normal course issuer bid is subject to all
required regulatory approvals. There can be no assurance that the
Company will pay dividends or repurchase any shares of the Company
in the future. The payment of dividends to shareholders is not
assured or guaranteed and dividends may be reduced or suspended
entirely. In addition to the foregoing, the Company’s ability to
pay dividends or acquire shares now or in the future may be limited
by covenants contained in the agreements governing any indebtedness
that the Company has incurred or may incur in the future, including
the terms of the credit facilities.
Abbreviations
The following abbreviations used in this press
release have the meanings set forth below:
bbl |
one barrel |
bbl/d |
barrels per day |
boe |
barrels of oil equivalent of natural gas; one barrel of oil or
natural gas liquids for six thousand cubic feet of natural gas |
boe/d |
barrels of oil equivalent of natural gas per day |
mcf |
thousand cubic feet |
mcf/d |
thousand cubic feet per day |
W.I. |
working interest |
PDF
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