Solid Foundation. Building New Platforms. www.parexresources.com | TSX:PXT | Corporate Presentation | June 2017 Corporate Presentation | June 2017 1 Corporate Presentation | March 2017 1
CORPORATE SNAPSHOT Operating results 2016 2017E Production (boe/d) FY Average 29,715 34,000-36,000 Capital Expenditures (1) (million) US $112 US $200-$225 Exploration Drilling (# prospects) 7 14 Appraisal Drilling (# wells) 4 15-20 Development Drilling (# wells) 6 12 Total (# wells) 17 41-46 Reserves (2016 year end) 2P Reserves (Dec. 31) (2) 112 Mmboe 2P Reserve Life Index (RLI) 10 years Capital structure Net Working Capital (3) US $131 MM US $100 MM Credit Facility (4) Undrawn – No Debt (1) Assuming US $50/bbl Brent oil price in 2017 (2) Parex’ working interest, as per the independent reserve report prepared by GLJ Petroleum Consultants effective Dec. 31, 2016 Market Capitalization (3)(5) ~ CAD $2.5 Billion (3) As at March 31, 2017 (4) As at May 30, 2017 Common Shares Basic Outstanding (TSX listed) (3) 153MM (5) Assuming CAD $16 share price See “Advisories” at the end of this presentation Corporate Presentation | June 2017 2 Corporate Presentation | March 2017 2
REASONS TO OWN PAREX 1. No debt and positive WC of US$131MM 2. High margins: Q1’17 Cash Flow ~US$22.47/bbl @ Brent $55 3. Ability to grow within cash flow: o 2016 Growth: production 8.4% y-y & RLI increases to 10 years from 8 years o 2017 Growth guidance of 15%-21% self-funded 4. Exploration Upside: o Drilled YTD 5 exploration wells with 4 oil discoveries o Scheduled to drill additional 10 exploration prospects in 2017 Llanos Middle Magdalena & Lower Magdalena Focused management: ability to growth within single country Colombia 5. Corporate Presentation | June 2017 3 Corporate Presentation | March 2017 3
2017 GUIDANCE: CASH FLOW FUNDED GROWTH Maintenance Capex Exploration Capex 12 wells 14 wells 30,000 boe/d 2,000-3,000 boe/d Assumptions $45-55MM $85-90MM Oil (Brent) US $50/bbl FFO netback (1)(2) US $17/boe CAPEX Production 34,000-36,000 bopd ALLOCATION Capital Expenditure US $200-225MM Funds Flow From Operations US $211-223MM YOY Production growth/share 16-21% Annualized CF/Basic Share US $1.42 (C$1.92) Appraisal Capex (1) FFO netback is defined as Funds Flow From Operations per bopd. 15-20 wells (2) Netback is a non-GAAP Measure. 2,000-3,000 boe/d $70-80MM Corporate Presentation | June 2017 4 Corporate Presentation | March 2017 4
PAREX CASH NETBACK* 2017 TARGET CASH NETBACKS** $60 Brent $55 Brent $54.61 Brent $51.13 Brent $50 ($ 4.38 ) Royalties $50 ($ 3 . 75 ) Brent $45 ($ 5.89 ) Differential ($ 6 . 29 ) REALIZED PRICE (USD/BOE) $40 Transportation ($ 11.11 ) ($ 11.13 ) Opex ($ 5.09 ) $30 ($ 5 . 56 ) ($ 3.77 ) G&A/Fin. & Other Costs ($ 1.90 ) Tax ($ 4.23 ) $20 ($ 1.43 ) Cash Cash $10 Netback Netback $21 $14 $22.47 $17 $18.74 $0 Q4 2016 Q1 2017 2017 Guidance Brent ~$30/bbl generates sufficient cash flow to maintain production *Cash netbacks are non-GAAP measure defined as Funds Flow From Operations per bopd. ** 2017 Target Cash Netbacks are based on production guidance mid-point excluding hedges. Corporate Presentation | June 2017 5 Corporate Presentation | March 2017 5
MARKETING COSTS TRENDING DOWNWARD $20 Brent $100/bbl $18 Brent $56/bbl $16 Brent $45/bbl $14 Brent $/boe $55/bbl $12 $10 $8 $6 $4 $2 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Transportation Brent Differential Corporate Presentation | June 2017 6 Corporate Presentation | March 2017 6
Trucking Parex Blocks TRANSPORTATION BARRANQUILLA Pipeline River PAREX’ TRANSPORTATION ALTERNATIVES: CARTAGENA 1.Export Cargo – 60% Volume TERMINAL COVENAS o Truck/Pipeline – Tender process 2.Magdalena River - 35% Volume o Truck/Barge o Wellhead sales 3.Casanare Refinery - 5% volume BARRANCABERMEJA Multiple Evacuation Routes VASCONIA Surplus Take-away Capacity HIDROCASANARE CUSIANA MONTERREY Corporate Presentation | June 2017 7 Corporate Presentation | March 2017 7
CONSISTENT & SUSTAINABLE GROWTH: PATH TO 50,000 BOPD 45,000 38,500-43,500 AVERAGE DAILY PRODUCTION 40,000 34,000-36,000 35,000 Q2E RLI 10 yr RLI 8 yr 30,000 (BOE/D) 29,715 27,434 RLI 7 yr 25,000 22,526 20,000 RLI 5 yr 15,000 RLI 3 yr 15,854 10,000 11,407 5,000 - 2012 2013 2014 2015 2016 2017E 2018E In a $50/bbl environment, our portfolio supports reaching 50,000* bopd during 2019 * Refer to February 6, 2017 Press Release “ Parex announces executive and board of directors appointments” Corporate Presentation | June 2017 8 Corporate Presentation | March 2017 8
SOLID FOUNDATION SUPPORTS GROWTH TRACK RECORD OF PROGRESSING RESERVES* FROM 3P TO CASH FLOW 2P Reserve Life Proved + Probable Annual Proved + Probable Proved Index + Possible Production (mmboe) (mmboe) based on annualized (mmboe) (mmboe) Q4 Production 31-Dec-11 18 11 5 2 3 years 31-Dec-12 23 16 10 4 4 years 31-Dec-13 50 32 17 6 5 years 31-Dec-14 104 68 40 8 7 years 31-Dec-15 125 82 46 10 8 years 31-Dec-16 169 112 64 11 10 years Gross 2P Development FDC FDC Per Boe (USD MM) (USD/boe) Locations (#) 169 mmboe ~46,500 boe/d 31-Dec-15 102 318 $3.90 31-Dec-16 157 347 $3.10 & 10 yr RLI *Per the independent reserve reports prepared by GLJ Petroleum Consultants Ltd. effective December 31 of the reported year. Corporate Presentation | June 2017 9 Corporate Presentation | March 2017 9
CONVENTIONAL OIL RESERVES: INDUSTRY LEADING RESULTS $18 Total Company (1) 2016 PDP 1P 2P $15 FD&A $/boe $6.47 $6.99 $3.40 Recycle Ratio (FD&A) 2.9x 2.7x 5.5x $12 2P FD&A (USD/BOE) Company (3) 2P Reserves 3 Yr 2P 3 Yr PDP 3 Yr 2P Total per share FD&A FD&A Recycle FDC/2017E $9 Growth YoY Incl. FDC Ratio Cash Flow Incl. FDC $6 Parex (4) 35% $7.90 $13.48 1.9 1.5 Median Cdn Oil E&P 3% $14.02 $23.76 1.2 3.8 (1) Per the independent reserve reports prepared by GLJ Petroleum Consultants Ltd. effective Dec. 31, 2014; Dec. 31, $3 2015 and Dec. 31, 2016, including Future Development Cost. Recycle Ratio is calculated using Q4 2016 Funds Flow From Operations per barrel divided by annual F&D or FD&A as applicable, except for 3 Year which uses 3 year average Funds Flow From Operations. (2) Finding, development and acquisition costs per barrel of oil equivalent are calculated by dividing capital $0 expenditures, acquisition costs and disposition proceeds by reserve additions for the reported period. (3) Source: Peters & Co. March 30, 2017. Reserves Comparison – E&P Producers Peer Companies: RRX, BNE, WCP, CPG, 2014 2015 2016 SGY, CJ, TOG, SPE, GXE, GTE, BTE (4) All values are in US$ based on 3 year average CAD/USD rates. 1 Year $/boe 3 Year $/boe Corporate Presentation | June 2017 10 Corporate Presentation | March 2017 10
SOUTHERN LLANOS: FOUNDATION FOR GROWTH Carmentea CABRESTERO (100% WI, operator) • Akira: swing producer LLA-32 Calona • Successful Bacano appraisal in 2017 (4 wells to date) Kananaskis Chiricoca LLA-34 Tilo Max LLA-34 (55% WI, Non-operated) Chachalaca Tigana Tarotaro • Current production ~45,000 bopd gross (25,000 bopd net) Tua • Drill 7 exploration wells and 12 dev. wells in 2017 Jacana • Objective in 2017 to test extent of Jacana-Tigana trend to SW Aruco Akira Explore core position, appraise & develop discoveries, and Bacano leverage Parex’ costs and exploration strengths Cabrestero As per the independent reserve report prepared by GLJ Petroleum Consultants Ltd. effective Dec. 31/16 Faults GLJ 3P (YE 2016) New pads Corporate Presentation | June 2017 11 Corporate Presentation | March 2017 11
Cabrestero & LLA-34: 2017 FOCUS - TEST EXTENT Field GLJ 3P Reserves GLJ 2P Reserves (Parex ’ WI) (MMBO) (MMBO) 2015 GLJ 3P Outline 2016 GLJ 3P Outline YEAR END 2015 2016 2015 2016 2017 Prospective Area YTD Tigana 41 51 28 34 Jacana Guadalupe 7 5 6 Jacana 14 45 5 30 Jacana Sur-2 2 3 Guadalupe 1 4 Other LLA 34 41 33 27 23 8 JS1 Jacamar Jacana-11 LLA 34 TOTAL 96 129 60 87 Cabrestero 8 18 6 11 LLA-34 Bacano-3 Akira Cabrestero 2017YTD: Expanding prospective area Bacano-5 Bacano-2 with results from Jacana-11, Jacana-8 Bacano Bacano-4 & Bacano-3 2017 Exploration 2017 Appraisal Potential Stratigraphic Edge As per the independent reserve report prepared by GLJ Petroleum Consultants Ltd. effective Dec. 31, 2016 Corporate Presentation | June 2017 12 Corporate Presentation | March 2017 12
LLA-34 GUAD TREND – PRODUCTION HISTORY • IP Range: 500-3,500 bopd 5000 • Flat production profile 4500 Tigana-4 Jacana-1 • Low decline 4000 PRODUCING DAY BOPD Jacana-5 Tigana Sur-1 Tigana Norte-1 3500 3000 Jacana-4 2500 TREND AVERAGE 2000 Tigana-3 1500 Jacana-2 GLJ Tigana 1000 2P Representative Well Tigana Sur-2 Jacana-3 500 GLJ Jacana Jacana-6 Tilo-1 Tigana Sur Oeste-1 Tilo-2 0 2P Representative Well 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 PRODUCING MONTHS Source: GLJ 2016 Report; internal company reports as at April 19, 2017 Corporate Presentation | June 2017 13 Corporate Presentation | March 2017 13
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