parex resources corporate_presentation september 5 2014

September 2014Corporate Presentation

PAREXRESOURCES.COM | TSX:PXT

BuildingTheRunway

Financial

Q2 2014 Operating Netback US $61.65/bbl

July/Aug 2014 Production ~25,250 bopd

Q2 Funds Flow (Sales 18,502 bopd) US $77

MM

Reserves 2P (June 30, 2014) 58 MMboe(1)

2P Reserve Life Index (RLI) of 6.7 years

Capital Structure S&P/TSX

Composite Index June 23, 2014

Market capitalization at $14/share ~Cdn$1,756 MM

Convertible debenture (Early redemption Sept. 25/14)(2) Cdn$85 MM

Net Bank Debt(3) (Credit Facility $175 MM) US$25MM

Common shares outstanding (TSX listed)

Basic 125.4 MM

Fully Diluted 141.2 FD(4) MM

Snapshot

2014: Building The Runway

(1) Parex net working interest, as per the independent reserve report prepared by GLJ Petroleum Consultants Ltd. effective June 30, 2014.(2) Convertible at $10.15 per share. (3) Defined as bank debt minus working capital(4) Fully diluted shares does not include out of the money options based on a share price of $14, but includes the diluted effect associated with PXT.DB.

2


Colombia Focused

2

Legend

3

VIM-1

VMM-9

VMM-11

Morpho

Capachos

LLA-10

LLA-40

LLA-57

LLA-24

LLA-30LLA-29

LLA-16LLA-17

Los Ocarros

LLA-34

LLA-32

LLA-26

El Eden

El Porton

CerreroCabrestero

Meta River

Mag

dal

ena

Riv

er

Ocensa

LLA-20

Cebucan

Santa MartaBarranquilla

Cartagena

Covenas

Medellin

BOGOTA100km 200km

VENEZUELA

COLOMBIAPANAMA

Land / Blocks

Off-loading stations

Refineries

Ports

Pipeline

OD

C

OBC

Barrancaberm

eja

Significant land base 2.75 mm gross acres Working interest in 23 blocks

Diversified production base

Experienced operator ~120 wells drilled

58 mmbbls in 2P ReservesO

censa

Track Record of Consistent Growth

4

0

40

80

120

160

200

0

5,000

10,000

15,000

20,000

25,000

2009 2010 2011 2012 2013 June 2014

Prod

ucti

on p

er s

hare

Prod

ucti

on (b

opd)

Production Growth Debt AdjustedProduction (bopd)

LHSProduction per share

RHS

($0.50)

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

($100)

$0

$100

$200

$300

$400

$500

2009 2010 2011 2012 2013 2014E

Fund

s Fl

ow ($

/sha

re)

Fund

s Fl

ow ($

MM

)

Funds Flow Growth Debt AdjustedFunds Flow

LHSFunds Flow per share

RHS

$0.00

$4.00

$8.00

$12.00

$16.00

$0

$400

$800

$1,200

$1,600

$2,000

2009 2010 2011 2012 2013 June 2014

3P N

PV10

AT

per s

hare

3P N

PV10

AT

($M

M)

NPV Growth Debt Adjusted3P NPV10AT (USD) - LHS

3P NPV10AT per share (USD) - RHS

3P NPV10AT per share (CAD) - RHS

0.00

0.20

0.40

0.60

0.80

0

20

40

60

80

100

2009 2010 2011 2012 2013 June 2014

Rese

rves

per

sha

re

Rese

rves

(MM

boe)

Reserve Growth Debt AdjustedPossible - LHS

2P - LHS

3P Reserve per share - RHS

2P Reserve per share - RHS

H2

2014

E

Ana

lyst

Con

sens

us

2014 Full Year Average Production 22,100-22,500 bopd

Revised 2014 Production Guidance

2014 Drilling

2014 Guidance (updated July 10)


2014 Capital expenditure program to be fully funded through cash flow

5

Gross Wells H1’14 H2’14 FY’14Development/Appraisal 10 15 25

Exploration 13 7 20

Total 2014 Wells Drilled 23 22 45

Three months ended Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 FY’14

Average daily production (bopd)17,287 18,427 19,870 24,500 -

25,00025,500 -26,500

22,100 -22,500

Increase from prior quarter 7% 7% 8% 23%-26% 4%-6%

Grow & Diversify Production


July/August production averaged 25,250 bopd

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 est.

Q4 est.

0

3

6

9

12

15

18

21

24

27

Bo

pd

(00

0) b

y b

lock

2010 2011 2012 2013 2014

LLA-16 LLA-20 Los Ocarros Cabrestero LLA-32 LLA-34 LLA-30 Other

6

Proved + Probable + Possible

Proved + Probable Proved2P Reserves Life

Index (1) (2)

After Tax PV10 (USD MM)

Reserves* MMboe

31-Dec -09 - - - - -

31-Dec -10 10.4 5.8 1.1 - $149

31-Dec-11 17.6 10.7 4.9 2.6x $344

31-Dec-12 23.1 16.1 10.1 3.5x $450

30-Jun-13 36.4 23.7 14.1 4.2x $614

31-Dec-13 49.9 32.0 17.4 5.1x $832

30-Jun-14 90.6 57.6 31.9 6.7x $1,326

Track record of progressing reserves from 3P to cash flow

Focus on increasing reserve life index (RLI) & sustainability

Building A Sustainable Business


(1) Year-end RLI calculated using 2P year-end reserves divided by Q4 production annualized(2) Mid-year RLI calculated using 2P year-end reserves divided by annualized Q2 production at June 30, 2013 and estimated second quarter (Q2) exit rate production of 23,500 bopd annualized at June 30, 2014.

*Reserves are independently evaluated by GLJ Petroleum Consultants Ltd.

7

Median Llanos100 acres

Kona 300 acres

Akira / Tigana500 +1000 acres

Oil Water Sandstone Shale

Las Maracas300 acres

Bottom water drive Edge water drive Edge water drive

Progressively Larger Discoveries

2014: Building The Runway 8

2. Drive

1. Size

Parex Exploration Life Cycle


Continue to deliver on our strategy to expand the asset base and addedmeaningful positions for future sustainable growth

DevelopConcept

AcquireLand

TestConcept

Initial Development

Expand Land

Exploitation

Traditional 3-Ways

Low Side Closures

Stratigraphic Traps

New Plays

LLA-26, Cebucan

LLA-24, LLA-30, Akira, Tigana

Cabrestero, LLA-34, Verano Acquisition

VMM-9, VMM-11, Morpho, Llanos Deep, Capachos

9

Characterized by:Parex’ deep basin knowledge & operational experience

Producing light oil 30-37º API from 5 fields

Productive reservoirs: C7, Mirador, Gacheta & Une

Ability to use fields as swing producers to manage quarterly growth.

2014 ActivityExplore on blocks untested by Parex

exploration wells on LLA-26/40/Cebucan

Manage existing production2 development wells

Ongoing recompletion program

Traditional Llanos Structures


Continue to exploit and manage producing fields

10

Discoveries2014 Drilling

LLA-40

La Casona Rumi

Las Maracas

Sulawesi

Kona

Celeus

Cumbre

LLA-16

LLA-17 LLA-57

LLA-20

Los Ocarros

El Porton

LLA -26

Cebucan

El Eden

Cabrestero (100% WI, Operator)

Akira – development drilling; swing producer

LLA 34 (55% WI, Non-operated)

Large discoveries at Tua & Tigana

Significant development focus for 2014+

Drillable exploration prospects for 2015

LLA-32 (70% WI, Operator)

Kananaskis, Carmentea & Calona discoveries

Follow-up appraisal drilling and exploration

Southern Llanos: Play Trends


Explore core position, appraise & develop discoveries, and leverage Parex’ costs and exploration know-how

2013 3D SeismicDiscoveries 2010/11 Seismic

11

Cabrestero

LLA-32

Santiago

Max

Tarotaro

LLA-34Tigana Sur

Tua

Akira

Balay

El Palmar

Los Trompillos

Maniceño -Bandola

Kitaro

Tigana

Kananaskis

Carmentea

Planned 3D seismic acquisition on eastern side of Cabrestero and LLA-34

Discoveries

Verano Acquisition: Property Summary

Block Parex WI

Verano WI PXT WI

LLA-17 40% 23% 63%

LLA-32 30% 40% 70%

LLA-34 45% 10% 55%

Current production from acquired working interest is ~5,000 bopd


Cabrestero

LLA-32

Santiago

Max

TarotaroLLA-34

Tigana

Tigana Sur Tua

Maniceño -Bandola

KitaroAkira

Balay

El Palmar

Los Trompillos

Kananaskis

Carmentea

Strategic acquisition to increase WI in LLA-32 and LLA-34

Capachos (50% WI, Operator)

Development & exploration opportunitiesANH royalty contractLarge structure, light oil, 2 mmbbls produced from 2 wellsLeverages our strengths:

low cost drilling strong operator working with communities

Capachos Farm-in: Ecopetrol Partnership


Capachos

LLA-16

LLA-40

LLA-17

LLA-57

Capachos Sur-1

Capachos-1

Prospect/Extension

Deep Llanos: New Play Concepts


Foothills: large oil & gas structures, US $75MM wells

Plains: small oil structures, US $5 –$10MM wells

Transition Zone “Deep Basin” – 14,000-17,000 feet

Underexplored due to well depths and historic drilling costs

Apply low cost operator advantage to explore the Llanos Transition Zone

Transition Zone

14

VMM-9 & VMM-11 (100% WI, Operator)

Testing of new play concepts:

Cold heavy oil production (CHOPS)

Conventional structure/sub-thrust

La Luna unconventional sand

Builds on management’s success with Petro Andina in Argentina’s Neuquén Basin

Morpho (100% WI, Operator)

Over 2000’ of gross sands pay in each of the Colorado (Oligocene) and Eocene

Morpho-1 well completed in 3 of 6 Oligocene sands, > 100 bopd

Next, new well & optimized frac program

Acquiring new 2D seismic allows us to evaluate a resource concept over approximately 10,000 acres

Middle Magdalena Basin: New Play Concepts


New Play Concepts: applying proven technology in Colombia

Discoveries

15

Middle Magdalena Basin

VMM-11

Morpho

Ocensa Pipeline

VMM-9

40 km


New Discoveries 2013:

Adalia-1 38° API at 1,000 bopd

Adalia-2 waiting on completion

Adalia-3 initial test of 38° API at 1,000 bopd

Exploration well in 2014


New block for Parex:

Exploration well in 2014 & test concepts

New Play Type: Stratigraphic/Channels


First drilled in 2013 and analyzing stratigraphic concepts. Drilling off structure prospect to prove-up concept.

LLA-20

LLA-24

LLA-29

LLA-30

Discoveries

Adalia

16

Operating Netback: Colombia Premium

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 0

20

40

60

80

100

120

140

$63 $71 $67 $71

$82 $73 $71 $69 $67

$58 $64 $61 $62 $62

$26 $22

$22 $23

$26

$26 $29 $29 $27 $28

$29 $29 $28 $28

$7 $12

$8 $8

$9

$8 $8 $8 $15 $14

$14 $12 $14 $15

Rea

lize

d P

rice

(U

S $

/bb

l)


Price

Royalties

Costs

Parex’ Take

2011 2012 2013 2014

Brent PriceUS $/BBL

RoyaltiesOpex &Transportation

OperatingNetback

17

Proven Management’s track record

Exposure to Brent Oil Pricing LATAM exposure

Self-funded growth

Parex’ Value Proposition


Expanding Capacity


New take-away capacity exceeds basin production growth

Source: Ecopetrol, Feb 2013

2010 2011 2012 2013 2014 2015 20160

500

1000

1500

2000

2500

Colombian Throughput vs. Pipeline Capacity* (mbd)

Fuel Oil

Third Parties production

Partners

Pipeline Capacity

Diluent

Royalties

Ecopetrol’s Production

Total Capacity*includes trucks

Growth Opportunity

2012 – 2014:

Crude Oil Pipeline – Key Projects

1. San Fernando - Monterrey System: +390 mbod

2. Bicentenario Phase 1: +120 mbod

3. Magdalena Medio System: +75 mbod

4. Caño Limón - Coveñas: +55 mbod

988

1,1331,287 1,377 1,446 1,472

2,020

19

Appendix – Block Summary

1) Working interests are subject to regulatory approval.2) Farm-in agreement for 50% participating interest in the block, excluding Curiara Area, subsequent to fulfilling certain obligations.3) Morpho is subject to a 4% Net Profit Interest.4) Farm-out agreement awarding 51% participating interest subsequent to fulfilling certain obligations.

BlockOperated/

Non-OperatedWorking Interest Partners Gross Acres Basin

LLA-10 Operated 45% Petro America & Petromont 189,544 Llanos

LLA-16 Operated 100% N/A 157,611 Llanos

LLA-17 Operated 63% Geopark 108,726 Llanos






LLA-32 Operated 70% Apco & Geopark 100,325 Llanos

LLA-34 Non-Operated 55% Geopark 82,286 Llanos

LLA-40 Operated 50% Apco 163,090 Llanos


Cabrestero Operated 100% N/A 29,562 Llanos

Capachos(1) Operated 50% Ecopetrol 64,175 Llanos

Cebucan Operated 100% N/A 109,150 Llanos

Cerrero(1) Operated 65% Perenco 108,973 Llanos

El Eden Operated 60% Petro America 109,249 Llanos

El Porton(2) Operated 50% Petro America 109,476 Llanos

Los Ocarros Operated 50% Petro America 110,436 Llanos

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

Morpho(3) Operated 100% N/A 51,398 Middle Magdalena

VMM-9 Operated 100% N/A 152,314 Middle Magdalena

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

Moruga(4) - (Trinidad) Operated 32.8%Caribbean Rex &

Touchstone7,443 -

20

(millions of US dollars, except per share amounts) 2014 2013 2012

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

OPERATING

Average realized prices, prior to hedging 105 103 104 102 106 99 110 109 106 108 108 117

Brent Price ($/bbl) 110 108 109 109 110 103 112 112 110 110 108 119

Vasconia ($/bbl) 104 101 104 102 106 99 108 106 103 103 104 115

Production (thousands of bopd) 19.9 18.4 15.9 17.3 16.2 15.5 14.4 11.4 12.7 10.9 10.4 11.7

FINANCIAL

Sales of crude oil 183 180 637 167 157 148 165 524 150 131 113 130

Funds flow from operations 77 77 270 76 68 66 60 242 54 42 61 84

Per share – basic 0.70 0.70 2.49 0.70 0.63 0.61 0.56 2.23 0.50 0.39 0.57 0.77

Net income (loss) 11 10 13 22 (28) 8 11 40 (16) 8 21 27

Per share – basic 0.10 0.09 0.20 0.20 (0.26) 0.07 0.10 0.37 (0.15) 0.07 0.19 0.25

Per share – diluted 0.10 0.09 0.18 0.18 (0.26) 0.04 0.05 0.31 (0.15) 0.07 0.09 0.25

EBITDA 84 97 325 92 82 80 72 258 46 62 68 83

Cash and cash equivalents 63 40 57 57 26 45 27 32 32 27 51 121Working Capital 31 37 24 24 19 9 17 (13) (13) (9) (0.6) 116

Net Debt (1) 110 29 70 70 85 104 88 107 107 94 86 (31)

Capital Expenditures 95 62 234 59 50 78 47 268 65 51 93 59

Weighed average shares outstanding 111 109 108 108 108 108 109 108 108 108 108 108

Weighed average shares outstanding, diluted 122 111 124 124 108 130 129 126 110 109 117 118

TRADING STATISTICS

($, based on intra-day trading)

High 13.25 9.50 6.8 6.80 6.30 4.89 6.50 8.67 6.03 5.18 7.15 8.67

Low 9.33 6.59 4.05 5.60 4.10 4.05 4.39 4.07 4.27 3.85 4.29 6.49

Close (end of period) 12.55 9.50 6.58 6.58 5.83 4.12 4.63 5.80 5.80 4.83 4.72 7.04

Average daily volume (thousands) 556 360 216 258 193 203 210 236 235 148 335 264

Appendix – Summary of Quarterly Results (Unaudited)


(1) Defined as Bank Debt + CD Face Value C$85 million – Working Capital Bank credit facility currently has a borrowing base of $125 million & Face value of debenture is Cdn $85 million with conversion price of Cdn $10.50/share.

21

Certain statements in this document are “forward-looking statements”. Forward-looking statements are frequently

characterized by words such as “prospective”, “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “forecast”,

or other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are not

based on historical facts but rather on the expectations of management of the Company ("Management") regarding the

Company's future growth, results of operations, production, plans for and results of drilling activity, business prospects and

opportunities. Such forward-looking statements reflect Management's current beliefs and assumptions and are based on

information currently available to Management. In particular, this document contains forward-looking statements regarding, but

not limited to, the Company's expected 2013 production rates and Parex' drilling plans. Forward-looking statements involve

significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from

the results discussed in the forward-looking statements including the risks associated with negotiating with foreign

governments as well as country risk associated with conducting international activities, competition, the ability to generate

revenue and exploit operating margins, capital resources, the use of certain technologies and materials, annual impairment

tests, labour relations, insurance, damage from weather and other disasters, operating and maintenance risks and

environmental risks, new information regarding reserves, changes in demand for and volatility of commodity prices of oil and

natural gas, failure to receive all required regulatory approvals for acquisition, the risk that the acquisition may not be

completed as contemplated or at all, legislative, regulatory and political changes, the risks discussed under "Risk Factors" in

Parex' annual information form for the year ended December 31, 2012 and other factors, many of which are beyond the control

of the Company. The risks outlined should not be construed as exhaustive. 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 will be consistent with these forward-looking statements. These forward-looking statements are

made as of the date hereof, and the Company assumes no obligation to update or revise them to reflect new events or

circumstances, except as required by law.

Statements relating to “reserves” are by their nature forward-looking statements, as they involve the implied assessment,

based on certain estimates and assumptions that the reserves described can be profitably produced in the future.

With respect to forward-looking statements contained in this presentation, the Company has made assumptions regarding:

future exchange rates; the price of oil and natural gas; the impact of increasing competition; conditions in general economic

and financial markets; availability of equipment; availability of skilled labour; current technology; cash flow; commodity prices;

production rates; timing and amount of capital expenditures; royalty rates; effects of regulation by governmental agencies;

future operating costs; receipt of all required regulatory approvals for the acquisition; successful completion of the acquisition;

and the Company's ability to obtain financing on acceptable terms. Management has included the above summary of

assumptions and risks related to forward-looking information provided in this presentation in order to provide shareholders

with a more complete perspective on the Company's future operations and such information may not be appropriate for other

purposes.

This is not an offer to sell or a solicitation of an offer to purchase securities by Parex. Before making an investment,

investors should refer to the Offering Documents for more complete information, including investment risks, fees and expenses

and should also thoroughly and carefully review Parex' public disclosure documents available on SEDAR at www.sedar.com

with their financial, legal and tax advisors to determine whether an investment is suitable for them.

Legal Advisory


How to Reach UsParex Resources Inc.1900 - 250 Second Street S.W.,

Calgary, Alberta, Canada T2P 0C1

Tel: 403-265-4800

Fax: 403-265-8216

Email: [email protected]

www.parexresources.com

Michael KruchtenVice President, Investor Relations & Corporate Planning

22

mailto:[email protected]

http://www.parexresources.com/

parex resources corporate_presentation september 5 2014

Investor Relations

otherjulyaugust production

share rhs2p reserve

share rhsh2

share price

share usd rhs3p npv10at

share3p npv10at

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