delivering growth & value - parexresources.com · millions of barrels of oil equivalent based...


Operating results 2016 2017 2018E

Production (boe/d) FY Average 29,715 35,541 42,000

Capital Expenditures(1) - US$ million $112 $212 $275

Drilling Program (# wells) 17 38 45-50

Reserves (year-end)

2P Reserves (Dec. 31)(2) - Mmboe 112 162

2P Reserve Life Index - years 9.9 11.4

Capital structure – Dec. 31, 2017

Net Working Capital(3) - US$ million $163

US$100 MM Undrawn Credit Facility(3) No Debt

Market Capitalization(4)(5) C$2.8Bn

Common Shares Basic Outstanding (TSX listed)(4) 156 MM

CORPORATE SNAPSHOT

(1) Assuming US$55 Brent Oil Price in 2018(2) Parex’ working interest, as per the independent reserve report

prepared by GLJ Petroleum Consultants effective Dec. 31, 2017(3) As at December 31, 2017(4) As at March 31, 2018(5) Assuming CAD $18 share price See “Advisories” at the end of this presentation


-

200

400

600

800

1,000

1,200

2013 2014 2015 2016 2017

2P

RES

ERV

ES

(MB

OE/

MM

BA

SIC

SH

AR

ES)

2P RESERVES (DEBT ADJUSTED)

-

50

100

150

200

250

300

2013 2014 2015 2016 2017

DA

PS

(BO

E/M

M B

ASI

C S

HA

RES

)

PRODUCTION PER SHARE (DEBT ADJUSTED)

DELIVERING CONSISTENT SHAREHOLDER VALUE

15% 15%

34%

66%

7%15%

-16%-25%

40%

-11%

-30%

-15%

0%

15%

30%

45%

60%

75%

2013 2014 2015 2016 2017

TOTA

L R

ETU

RN

PXT VS. S&P/TSX ENERGY INDEX (TTEN)

PXT S&P/TSX Energy Index

$-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

2013 2014 2015 2016 2017B

REN

T P

RIC

E (U

SD/B

BL)

FUN

DS

FLO

W P

ER S

HA

RE

(USD

/BA

SIC

SH

AR

E)

FUNDS FLOW PER SHARE (BASIC)

FUNDS FLOW PER SHARE (USD/BASIC SHARE) BRENT (USD/BBL)


REASONS TO OWN PAREX

1. No debt and positive working capital exceeding US$163 MM (4Q17)

2. High margins: 4Q17 Operating Netback US$35/boe @ Brent $62/bbl

3. Ability to grow within cash flow:

o 2017 Growth: production 19.6% yoy & RLI increased to 11 years from 10

o 2018 Growth Guidance: ~15-20% self-funded

4. Exploration Upside:

o Scheduled to drill 15-18 exploration wells in 2018

5. Focused management - ability to growth within a single country Colombia

6. Delivering shareholder value - plan share buyback of ~4 million shares


2018 GUIDANCE: CASH FLOW FUNDED GROWTH

Assumptions

Oil (Brent) US $55/bbl

FFO netback(1)(2) US $20/boe

Production (mid-point) 42,000 boe/d

Capital Expenditure (mid-point) US$275 MM

Funds Flow From Operations ~ US$320MM

YOY Production growth/share ~ 15-20%

Maintenance Capex 14 wells 38,000 boe/d~ $90MM

Growth Capex31-36 wells 3,000-5,000 boe/d$170-200MM

CAPEX

ALLOCATION

(1) FFO netback is defined as Funds Flow From Operations per bopd.(2) Netback is a non-GAAP Measure.

At $65/Bbl FFO >US$400 million


2018 DRILLING PROGRAM

BLOCK Exploration/Appraisal

Development Wells (#)

Base: Llanos Conventional

Cabrestero 1-2 4-5 5-7

LLA-34 4 14 18

Other Llanos 2-3 - 2-3

Exploration – Big “E”

Capachos & VIM-1 2-3 1 3-4

Exploitation: Tight Oil & Large OIP

Aguas Blancas 4 6 10

DeMares 2 3-4 5-6

Other Magdalena 1 1 2

2018 – Total Wells (#) 15-18 30-32 45-50


PAREX CASH NETBACK*

$21.57 $26.39

$20 $23

$26 $29

$32($4.36)($4.64)($5.41)

($10.52)

($4.56)($5.58)

$- $5

$10 $15 $20 $25 $30 $35 $40 $45 $50 $55 $60 $65 $70 $75 $80 $85

2017FY Q4 2017

REA

LIZE

D P

RIC

E (U

SD/B

OE)

2018 Guidance

2018 TARGET CASH NETBACKS**

Brent ~$30/bbl generates sufficient cash flow to maintain production*Cash netbacks are non-GAAP measure defined as Funds Flow From Operations per barrel of oil per day. ** 2018 Target Cash Netbacks are based on production guidance mid-point excluding hedges.

Cash Netback

Royalties Differential

Transportation

Opex

TaxG&A, Finance & Misc. Costs

BRENT PRICE

$54.75$61.46

$55$60

$65$70

$75


$0

$4

$8

$12

$16

$20

USD

/BO

E

Transportation Brent Differential (Vasconia)

BARRANQUILLA

CARTAGENA

BARRANCABERMEJA

VASCONIA

MONTERREY

TERMINAL COVENAS

HIDROCASANARE

CUSIANA

MARKETING COSTS TRENDING DOWNWARD

Brent $45/bbl

Brent $56/bbl

Brent $55/bbl

Trucking

Parex Blocks

Pipeline

River


In a $50/bbl environment, our portfolio supports reaching 50,000 bopd during 2019

CONSISTENT & SUSTAINABLE GROWTH: PATH TO 50,000* BOPD

*Refer to February 6, 2017 Press Release “ Parex announces executive and board of directors appointments”

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

-

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

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

PR

OD

UC

TIO

N (

BO

E/D

)

BO

E P

ER T

HO

USA

ND

SH

AR

ES Production Debt Adjusted Production Per Share

20

18

F


Dec. 31, Proved + Probable+ Possible

Proved +Probable

Proved Annual Production

2P Reserve Life Index

Millions of Barrels of Oil EquivalentBased on Annualized

Q4 Production

2013 50 32 17 6 5 years2014 104 68 40 8 7 years2015 125 82 46 10 8 years2016 169 112 64 11 10 years

2017 241 162 96 13 11 years

TRACK RECORD OF PROGRESSING RESERVES* FROM 3P TO CASH FLOW

*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 $302 mm, 2P $432 mm & 3P 537 mm

SOLID FOUNDATION SUPPORTS GROWTH

241 Mmboe ~ 60,000 boe/d & 11 yr RLI


CONVENTIONAL OIL RESERVES GENERATE VALUE

Total Company - 2017YE ProvedProved + Probable

Proved+Probable+

Possible

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 FromOperations per barrel divided by annual F&D or FD&A as applicable.

(2) Based on GLJ Petroleum Consultants Ltd. price forecast, which assumes $65.40/bbl over 2018-2022(3) WC of US$163 million (CAD 205 million) and 154.7 million shares at December 31, 2017$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

2015 2016 2017

2P

FD

&A

(U

SD/B

OE)

1 Year $/boe 3 Year $/boe


SOUTHERN LLANOS: FOUNDATION FOR GROWTH

As per the independent reserve report prepared by GLJ Petroleum Consultants Ltd. effective Dec. 31/17

Faults GLJ 3P (2017YE) Exploration

CABRESTERO (100% WI, operator)• Swing producer block

• Successful Bacano appraisal in 2017 o 4 wells drilled to date

• 2018 Plan: 1-2 exploration wells and 4-5 development wells

LLA-34 (55% WI, Non-operated)• Currently producing ~55,000 boe/d gross (~30,000 bopd net)• Tested extent of Jacana-Tigana trend to SW in 2017

o Drilled 9 exploration wells & 13 development wells

• 2018 Plan: 4 exploration wells and 14 development wells

Explore core position, appraise & develop discoveries, and leverage Parex’ costs &

exploration strengths.

LLA-32

LLA-34Chachalaca

Tilo

Tigana

Jacana

Akira

Tua

Tarotaro

Aruco

Kananaskis

Calona

Chiricoca

Herradura

Bacano

Curucucu

Jacamar

Cabrestero


Cabrestero & LLA-34: UNDERSTANDING THE POTENTIAL

As per the independent reserve report prepared by GLJ Petroleum Consultants Ltd. effective December 31, 2017

Expanded reserve area in 2017 with Jacana, Jacamar, Curucucu, Bacano &

Tigana Norte.

Exploration Appraisal/Dev Drilled Potential Stratigraphic Edge

CabresteroAkira

Bacano

Jacana

1

2

4

3

5

6

7

Bacano-2

8

Bacano-3

2017 GLJ 3P Outline2016 GLJ 3P Outline

JS-1Jacamar

Bacano-4

11

JS-2

LLA-34

Bacano-5

9

Curucucu

13

10

1217

TSO-1

TSO-7TSO-3

TSO-2

Totoro

Field (Parex’ WI)

GLJ 3P Reserves (MMBO)

GLJ 2P Reserves(MMBO)

YEAR END 2016 2017 2016 2017

Tigana Guadalupe 51 71 34 52

Jacana Guadalupe 45 76 30 50

Tigana-Jacana Mirador 19 36 12 21

Other LLA-34 14 19 11 12

LLA-34 TOTAL 129 202 87 135

Cabrestero 18 18 11 13

TSO-5

J20

21

Tigana


LLANOS-34BRIDGING JACANA & TIGANA FIELDS

• Tigana-Norte 1 has produced ~3.5 mmbbls(1) since June 2014oExpanding Tigana North area

oFocus is Guadalupe with Mirador upsideoDrilled 4 wells in 2017

o 2018 Plan: 4 development wells

Tigana

TSO-1

TS6

TS1TS2

TN4

TN1

TN2TN3

T2T3

TS5

TS4

TSO-3TSO-7

T4

TS3

TS7

Jacana-10

Jacana

As per the independent reserve report prepared by GLJ Petroleum Consultants Ltd. effective Dec. 31/17

Appraisal/Dev GLJ 3P (2017YE)Faults

Tua TSO-2

TN5

TN6

TN7TN9

(1) As at March 31, 2018

TSO-5

TSO-4

TN8


NORTE-1 (ANDINA) EXPLORATION

CAPACHOS-2

CAPACHOS SUR-2

NORESTE-1 EXPLORATION

GUADALUPE DEPTH STRUCTURE

NEXT STEPS

• Drill 2 firm development wells to earn 50% in the block.

o Capachos-2 drilled, restricted production.

o Capachos Sur-2, currently drilling.

• 2 wells planned for 2018 plus contingent wells.

• Targeting ~34-39 API Oil in the Guadalupe Formation.

• Construction of gas processing facility by 4Q18.

CAPACHOS DEVELOPMENT AND EXPLORATION POTENTIAL

Future exploration

Development well

Legacy wells

Parex wells


MAGDALENA BASIN: NEXT GROWTH PLATFORM

(1) Farm-in on Ecopetrol

De MARES(1)

• Tested Coyote-1, produced oil• Evaluate follow-up drilling

locations• 5-6 wells planned in 2018

VIM-1• Identifying prospects from 3D

Seismic data• Drill 2 exploration wells

AGUAS BLANCAS(1)

• Light oil opportunity• Drill 10 wells

VMM-9 & VMM-11• Acquire 400 km2 of 3D Seismic

PLAYON(1)

• Drill follow-up to Boranda-1

VIM-1

PLAYON

DE MARES

VMM-9

VMM-11

AGUAS BLANCAS

Pipeline

Oil fields

Gas fields


SUMMARY OF THEAGUAS BLANCAS OPPORTUNITY

1. Drill 6 development wells: extend water flood pattern

2. Drill 4 appraisal wells: test southern extent & identify oil in place

3. Stimulate 2 wells to increase productivity

4. Sanction Phase 2 (contingent): drill 10-15 development wells

2.2

West Area (FW)

East Area (HW)

Phase II Dev. Area

D/E Compartment Appraisal

Existing Injector

Existing Producer

New Water Injector

New ProducerFuture Pad

Existing Standing Well

Waterflood Pattern


VIM-1: APURE PROSPECT

• Multiple structural & stratigraphic plays on block

• Main target is a carbonate reservoir draped over a basement high

• Analogue fields at Cicuco, Boquete and El Dificil

• Currently drilling

El Dificil FieldDiscovered: 1943Cum Production = 12 MMBO, 352 BCF

Boquete FieldDiscovered: 1961Cum Production = 18.5 MMBO, 41 BCF

Cicuco FieldDiscovered: 1956Cum Production = 48 MMBO, 194 BCF

VIM 1Apure Prospect

Lower Magdalena Basin

Calizas Membercarbonate fairway

Data Source: IHS


2018 SUMMARY

1. Self-funded industry leading production growth

2. Grow & develop Southern Casanare blocks

3. Prove play concepts in Middle/Lower Magdalena Basins

4. Expand portfolio through Business Development


APPENDIX – BLOCK SUMMARY# Block Operated/Non-Operated Working Interest Partners Gross Acres(1) Basin1 LLA-10 Operated 50% Gran Tierra 189,544 Llanos

2 LLA-16 Operated 100% N/A 10,057 Llanos




6 LLA-32(2) Operated 87.5% Geopark 57,040 Llanos

7 LLA-34 Non-operated 55% Geopark 68,382 Llanos

8 LLA-40(2) Operated 100% N/A 82,422 Llanos

9 Balay Non-operated 10% Perenco 4,500 Llanos

10 Cabrestero Operated 100% N/A 7,605 Llanos

11 Capachos(2) Operated 50% Ecopetrol 64,073 Llanos

12 Los Ocarros Operated 100% N/A 31,066 Llanos

13 VIM-1 Operated 100% N/A 223,651 Lower Magdalena

14 Aguas Blancas(2) Operated 50% Ecopetrol 13,386 Middle Magdalena

15 De Mares(2) Operated 50% Ecopetrol 174,387 Middle Magdalena

16 Morpho(3) Operated 100% N/A 51,420 Middle Magdalena

17 Playon(2) Operated 50% Ecopetrol 43,200 Middle Magdalena

18 Sogamoso Operated 100% N/A 3,695 Middle Magdalena

19 VMM-9 Operated 100% N/A 152,412 Middle Magdalena

20 VMM-11 Operated 100% N/A 116,826 Middle Magdalena

1) Exploration properties deemed non-commercial will be relinquished in due course. Accordingly, the gross acres described above may decrease as non-commercial lands are relinquished.2) Working interests are subject to regulatory approval.3) Morpho is subject to a 4% Net Profit Interest.


APPENDIX – SUMMARY OF QUARTERLY RESULTS

• Values are round up or down to the nearest dollar figure. • Net Debt is defined as Bank Debt - Working Capital

(Unaudited Results) 2017 2016 2015

FY Q4 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1

OPERATING

Production (thousands of boe/d) 35.5 39.0 36.2 34.3 32.6 29.7 31.1 29.8 29.1 28.9 27.4 28.6 27.4 27.0 26.7

Brent Price ($/bbl) 55 62 52 51 55 45 51 47 47 35 54 45 51 64 55

Average realized prices, prior to hedging ($/boe) 50 57 48 47 49 38 45 40 40 27 47 37 45 56 49

Royalty ($/boe) 5 6 4 4 4 3 4 3 3 2 4 3 4 5 4

Opex ($/boe) 5 5 6 5 5 5 6 5 5 5 7 7 7 8 8

Transportation ($/boe) 11 11 11 11 11 12 11 12 12 12 14 13 13 14 16

Operating Netback ($/boe) 29 35 28 27 28 18 24 21 20 8 22 15 21 30 22

Funds Flow Netback ($/boe) 22 26 20 17 23 13 19 16 13 5 13 12 5 20 14

FINANCIAL(millions of USD, except per share amounts)

Funds flow from operations 280 94 66 52 68 144 52 45 32 16 130 34 14 50 33

Net income (loss) 155 56 56 4 40 (46) (45) 6.8 (0.2) (8) (45) (4) (27) 2 (16)

EBITDA* 314 113 73 59 71 134 56 43 30 6 170 36 41 52 41

Cash and cash equivalents 235 235 196 203 185 149 149 132 94 92 95 95 75 104 33

Working Capital 163 163 140 128 131 93 93 118 98 80 77 77 63 90 10

Net Debt (Surplus) (163) (163) (140) (128) (131) (93) (93) (118) (98) (80) (77) (77) (63) (90) 30

Capital Expenditures 212 66 51 59 36 112 67 26 14 5 126 24 38 37 27

Bank Credit Facility 100 100 100 100 175 175 175 175 175 200 200 200 200 200 200

Weighted average shares outstanding 154 155 155 154 153 152 153 153 152 152 145 151 150 144 135

TRADING STATISTICS (CAD) – PXT(based on intra-day trading)

Share Price

High 18.46 18.46 16.14 18.19 17.73 18.22 18.22 17.40 14.61 11.96 11.55 11.55 10.57 11.10 9.24

Low 12.19 14.64 12.19 13.59 14.64 7.74 14.86 12.00 10.50 7.74 5.97 9.07 7.15 8.05 5.97

Close (end of period) 18.16 18.16 15.05 14.75 16.95 16.90 16.90 16.65 12.51 10.95 10.16 10.16 9.25 10.47 8.07

Average daily volume (thousands) 762 790 847 606 808 693 679 547 678 970 821 729 742 906 907


COLOMBIA – CURRENT LAND BASE

Source: Divestco, February 2017

LLA-16


ADVISORIES HOW TO REACH USThis presentation is provided for informational purposes only as of April 5, 2018 is not complete, andmay not contain certain material information about Parex Resources Inc. ("Parex" or the "Company"),including important disclosures and risk factors associated with an investment in Parex. Thispresentation does not take into account the particular investment objectives or financial circumstancesof any specific person who may receive it and does not constitute an offer to sell or a solicitation of anoffer to buy any security in Canada, the United States or any other jurisdiction. The contents of thispresentation have not been approved or disapproved by any securities commission or regulatoryauthority in Canada, the United Sates or any other jurisdiction, and Parex expressly disclaims any duty onParex to make disclosure or any filings with any securities commission or regulatory authority, beyondthat imposed by applicable laws.

Forward-Looking Statements and FOFI

Certain information regarding Parex set forth in this document contains forward-looking statements thatinvolve substantial known and unknown risks and uncertainties. The use of any of the words "plan","expect", “prospective”, "project", "intend", "believe", "should", "anticipate", "estimate" or other similarwords, or statements that certain events or conditions "may" or "will" occur are intended to identifyforward-looking statements. Such statements represent Parex' internal projections, estimates or beliefsconcerning, among other things, future growth, results of operations, production, future capital andother expenditures (including the amount, nature and sources of funding thereof), plans for and resultsof drilling activity, business prospects and opportunities. These statements are only predictions andactual events or results may differ materially. Although the Company’s management believes that theexpectations reflected in the forward-looking statements are reasonable, it cannot guarantee futureresults, levels of activity, performance or achievement since such expectations are inherently subject tosignificant business, economic, competitive, political and social uncertainties and contingencies. Manyfactors could cause Parex' actual results to differ materially from those expressed or implied in anyforward-looking statements made by, or on behalf of, Parex.

In particular, forward-looking statements contained in this document include, but are not limited to,statements with respect to the performance characteristics of the Company's oil properties; theCompany's vision, strategy and values; Parex' estimated 2018 capital budgets, including the expectedallocation of such budget to the number of wells and capital expenditures for each ofdevelopment/appraisal in existing fields, exploration, appraisal and maintenance;

PAREX RESOURCES INC.

2700 Eighth Avenue Place, West Tower

585 8th Avenue SW Calgary

AB T2P 1G1 Canada

Tel: 403-265-4800

Fax: 403-265-8216

Email: [email protected]

Website: www.parexresources.com

MIKE KRUCHTEN

Vice President, Capital Markets & Corporate Planning


ADVISORIESthe Company's forecasted 2018 average production range; the Company's estimated average daily production for full year 2018 & full year 2019; the Company's planned capital program, including anticipatedamounts focused on existing discoveries and the appraisal programs and the timing of drilling key exploration prospects, seismic programs and development drilling; anticipated cash flow, cash flow per share,funds flow from operations netback, capital expenditures, and funds flow from operations for 2018; the Company's exploration, development and appraisal program for 2018 including anticipated numberand type of wells, drill ready prospects, the focus of development/appraisal drilling and the potential for drilling of additional follow-up appraisal wells and facilities in 2018; exploration prospects; theCompany's exploration schedule; the Company's drilling plans and production capability/potential; anticipated drilling locations, including the Company's delineation and drilling plans; the Company's plans totarget additional growth opportunities; the Company's future plans for its business, including plans to complete further acquisitions and increase production; financial and business prospects and financialoutlook; and activities to be undertaken in various areas. Statements relating to "reserves" or "resources" are forward-looking statements, as they involve the implied assessment, based on estimates andassumptions that the reserves and resources described exist in the quantities predicted or estimated and can be profitably produced in the future.

• 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; industry conditionsincluding 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; competition; lack ofavailability of qualified personnel; the results of exploration and development drilling and related activities; risks related to obtaining required approvals of regulatory authorities, in Canada and Colombia andpartner and community approvals in Colombia; risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities; volatility in market pricesfor oil; fluctuations in foreign exchange or interest rates; environmental risks; changes in income tax laws, tax rates and/or incentive programs relating to the oil industry; changes to pipeline capacity; ability toaccess sufficient capital from internal and external sources; risks related to the lawsuit brought in Texas against Parex and certain foreign subsidiaries; failure of counterparties to perform under the terms oftheir contracts; 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 otherfactors that could effect Parex' operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

• Although the forward-looking statements contained in this document are based upon assumptions which management believes to be reasonable, the Company cannot assure investors that actual results willbe consistent with these forward-looking statements. With respect to forward-looking statements contained in this document, Parex has made assumptions regarding, among other things: current commodityprices 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 increasingcompetition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; receipt of partner, regulatory and communityapprovals; royalty rates; future operating costs; effects of regulation by governmental agencies; uninterrupted access to areas of Parex' operations and infrastructure; recoverability of reserves and futureproduction 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 producingfields; 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; thatParex' conduct and results of operations will be consistent with its expectations; that Parex will have the ability to develop it's oil and gas properties in the manner currently contemplated; current or, whereapplicable, proposed industry conditions, laws and regulations will continue in effect or as anticipated as described herein; that the estimates of Parex' 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 toexplore, develop and exploit any of its undeveloped properties; and other matters.

• Management has included the above summary of assumptions and risks related to forward-looking information provided in this document in order to provide shareholders with a more complete perspectiveon Parex' current and future operations and such information may not be appropriate for other purposes. Parex' actual results, performance or achievement could differ materially from those expressed in, orimplied 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, whatbenefits Parex will derive. These forward-looking statements are made as of the date of this document and Parex disclaims any intent or obligation to update publicly any forward-looking statements, whetheras a result of new information, future events or results or otherwise, other than as required by applicable securities laws. The forward-looking statements contained in this presentation are expressly qualifiedby this cautionary statement.


ADVISORIES• This document also contains a financial outlook, in particular the information set forth on slides 2-5 & 7. Such financial outlook has been prepared by Parex' 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 andexpenditures 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 forthe 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 suchoperating 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 ofoperations of the Company and the resulting financial results will likely vary from the amounts set forth in the analysis presented in this presentation, and such variation may be material. The Company and itsmanagement 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 asnecessarily indicative of future results. Except as required by applicable securities laws, Parex undertakes no obligation to update such financial outlook.

Oil and Gas Information

• The estimates of Parex' December 31, 2017 reserves set forth in this presentation have been prepared by GLJ Petroleum Consultants Ltd. ("GLJ") as of December 31, 2017 with a preparation date of February2, 2017 (the "GLJ 2017 Report") in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluations Handbook (the"COGEH") and using GLJ's forecast prices and costs as at January 1, 2018. The estimates of Parex' December 31, 2016 reserves set forth in this presentation have been prepared by GLJ as of December 31, 2016with a preparation date of February 6, 2017 in accordance with NI 51-101 and the COGEH and using GLJ's forecast prices and costs as at January 1, 2017. The estimates of Parex' December 31, 2015 reservesset forth in this presentation have been prepared by GLJ as of December 31, 2015 with a preparation date of February 5, 2016 in accordance with NI 51-101 and the COGEH and using GLJ's forecast prices andcosts as at January 1, 2016. The estimates of Parex' December 31, 2014 reserves set forth in this presentation have been prepared by GLJ as of December 31, 2014 with a preparation date of February 13, 2015in accordance with NI 51-101 and the COGEH and using GLJ's forecast prices and costs as at January 1, 2015. The estimates of Parex' December 31, 2013 reserves set forth in this presentation have beenprepared by GLJ as of December 31, 2013 with a preparation date of February 20, 2014 in accordance with NI 51-101 and the COGEH and using GLJ's forecast prices and costs as at January 1, 2014.

• Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10 percent probability that the quantities actually recovered will equal or exceed the sumof proved plus probable plus possible reserves.

• Estimates of the net present value of the future net revenue from Parex' reserves do not represent the fair market value of Parex' reserves. The estimates of reserves and future net revenue from individualproperties or wells may not reflect the same confidence level as estimates of reserves and future net revenue for all properties and wells, due to the effects of aggregation.

• This presentation contains certain oil and gas metrics, including F&D, FD&A, FD&A/boe, reserves life index (or RLI), operating netbacks, cash netbacks, funds flow from operations netback, and recycle ratios,which 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 tomake 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 thefuture 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 theseoil and gas metrics for its own performance measurements and to provide investors with measures to compare the Company's operations over time.


ADVISORIESReaders are cautioned that the information provided by these metrics, or that can be derived from the metrics presented herein, should not be relied upon for investment or other purposes. A summary of thecalculations of such metrics are as follows:

o FD&A costs represent the costs of property acquisition, exploration, and development incurred. The aggregate of the exploration and development costs incurred in the most recent financial year andthe change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year.

o FD&A costs are calculated as capital expenditures plus change in F&D costs. FD&A per boe is calculated as FD&A costs divided by reserves additions for the applicable period.

o Reserves life index is calculated as proved plus probable reserves divided by annualized fourth quarter production.

o Recycle ratio is calculated as cash netback per boe (or Funds Flow From Operations per boe) divided by F&D or FD&A, as applicable.

o Cash netback per boe (or Funds Flow From Operations netback per boe) is calculated as Funds Flow From Operations divided by production for the period.

o Operating netback is calculated as oil & gas revenue less expenses (royalties, production and transportation) divided by production for the period.

• "BOEs" may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 mcf: 1 bbl) is based on an energy equivalencyconversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to naturalgas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

• All of Parex’ crude oil reserves disclosed herein are located in Colombia. The Company does have light, medium and heavy crude oil and natural gas liquids. The recovery and reserve estimates of crude oilreserves provided in this document are estimates only, and there is no guarantee that the estimated reserves will be recovered. Actual crude oil reserves may eventually prove to be greater than, or less than,the estimates provided herein. All evaluations and reviews of future net revenue contained in GLJ's reports are stated prior to any provision for interest costs or general and administrative costs and after thededuction of royalties, development costs, production costs, well abandonment costs and estimated future capital expenditures for wells to which reserves have been assigned.

• This presentation discloses drilling locations in three categories: (i) proved locations; (ii) probable locations; and (iii) possible locations. Proved locations, probable locations and possible locations are derivedfrom the GLJ 2017 Report and account for drilling locations that have associated proved and/or probable and/or possible reserves, as applicable. Of the 191 drilling locations identified herein, 115 are provedlocations, 43 are probable locations and 33 are possible locations. The drilling locations on which the Company actually drills wells will ultimately depend upon the availability of capital, regulatory approvals,seasonal restrictions, oil prices, costs, actual drilling results, additional reservoir information that is obtained and other factors.

• Further, this presentation includes estimates of pay thickness, which are considered to be anticipated results or information that indicate the potential value or quantities of resources under NI 51-101. Suchestimates have been prepared internally by Parex by a non-independent qualified reserves evaluator and have not been prepared or reviewed by an independent qualified reserves evaluator or auditor. Therisks associated with these estimates include, but are not limited to, the risk that Parex' exploration and development drilling and related activities may provide different results; the risk that Parex mayencounter unexpected drilling results; the occurrence of unexpected events involved in the exploration for, and the operation and development of, oil and gas; delays in anticipated timing of drilling andcompletion of wells; geological, technical, drilling and processing problems and other difficulties in producing petroleum reserves; and the risk that if any resources are discovered that it will not becommercially viable to produce any portion thereof. There is no certainty that Parex will achieve the estimated results or that any portion of the resources will be discovered. If discovered, there is also nocertainty that it will be commercially viable to produce any portion of the resources.


ADVISORIES

• Further, this presentation includes estimates of pay thickness, which are considered to be anticipated results or information that indicate the potential value or quantities of resources under NI 51-101. Suchestimates have been prepared internally by Parex by a non-independent qualified reserves evaluator and have not been prepared or reviewed by an independent qualified reserves evaluator or auditor. Therisks associated with these estimates include, but are not limited to, the risk that Parex' exploration and development drilling and related activities may provide different results; the risk that Parex mayencounter unexpected drilling results; the occurrence of unexpected events involved in the exploration for, and the operation and development of, oil and gas; delays in anticipated timing of drilling andcompletion of wells; geological, technical, drilling and processing problems and other difficulties in producing petroleum reserves; and the risk that if any resources are discovered that it will not becommercially viable to produce any portion thereof. There is no certainty that Parex will achieve the estimated results or that any portion of the resources will be discovered. If discovered, there is also nocertainty that it will be commercially viable to produce any portion of the resources.

• Certain information in this document may constitute "analogous information" as defined in NI 51-101. Such information includes production estimates, drilling results, test rates, reserves estimates and otherinformation retrieved from other publicly available sources, including but not limited to IHS. Management of Parex believes the information is relevant as it may help to define the reservoir characteristics andproduction profile of lands in which Parex may hold an interest. Parex is unable to confirm that the analogous information was prepared by a qualified reserves evaluator or auditor and is unable to confirmthat the analogous information was prepared in accordance with NI 51-101. Such information is not an estimate of the production, reserves or resources attributable to lands held or to be held by Parex andthere is no certainty that the production, reserves or resources data and economic information for the lands held or to be held by Parex will be similar to the information presented herein. The reader iscautioned that the data relied upon by Parex may be in error and/or may not be analogous to such lands held or to be held by Parex.

• Certain other information contained in this presentation has been prepared by third-party sources, which information has not been independently audited or verified by Parex. No representation or warranty,express or implied, is made by Parex as to the accuracy or completeness of the information contained in this document, and nothing contained in this presentation is, or shall be relied upon as, a promise orrepresentation by Parex.

• This presentation contains references to type well production and economics, which are derived, at least in part, from available information respecting the well economics of other companies and, as such,there is no guarantee that Parex will achieve the stated or similar results, capital costs and return costs representative per well.

• References in this presentation 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 notdeterminative 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 arecautioned 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 thispresentation. As such, all data should be considered to be preliminary until such analysis or interpretation has been done.

Financial Matters

• The Company discloses several financial measures that do not have any standardized meaning prescribed under International Financial Reporting Standards ("IFRS"). These financial measures includeoperating netbacks, cash netbacks, funds flow netbacks and funds flow from operations. Management believes that these financial measures are useful supplemental information to analyze operatingperformance and provide an indication of the results generated by the Company’s principal business activities. Investors should be cautioned that these measures should not be construed as an alternative tonet income or other measures of financial performance as determined in accordance with IFRS. Parex’s method of calculating these measures may differ from other companies, and accordingly, they may notbe comparable to similar measures used by other companies. Please see the Company’s most recent Management’s Discussion and Analysis, which is available at www.sedar.com for additional informationabout these financial measures.

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