CALGARY - Parex Resources Inc. ('Parex' or the 'Company') (TSX: PXT), a company headquartered in Calgary, Alberta that focuses on sustainable, conventional oil and gas production, is pleased to announce its unaudited financial and operating results for the three months ended March 31, 2021.
All amounts herein are in United States Dollars ('USD') unless otherwise stated.
2021 First Quarter Highlights: Best-in-Class Balance Sheet
Quarterly average production was 46,779 barrels of oil equivalent per day ('boe/d') (consisting of 8,131 barrels per day ('bbls/d') of light crude oil and medium crude oil, 36,948 bbls/d of heavy crude oil and 10,200 thousand cubic feet per day ('mcf/d') of conventional natural gas), an increase of approximately 3% on a per basic share basis over the previous quarter ended December 31, 2020. Production decreased 6% on a per basic share basis over the prior year comparative period ('Q1 2020') as a result of the Company reducing capital investment in the low oil price environment of 2020; Recognized net income of $47.5 million ($0.37 (or CAD $0.47)(1) per share basic) compared to net income of $56.2 million ($0.42 (or CAD $0.55)(1) per share basic) in the previous quarter ended December 31, 2020 and net loss of $3.8 million ($0.03 (or CAD $0.04)(1) per share basic) in Q1 2020; Generated an operating netback(3) of $37.38 per barrel of oil equivalent ('boe') and funds flow provided by operations ('FFO')(3) of $29.98 per boe from an average Brent price of $61.32 per barrel ('bbl'); FFO of $125.0 million ($0.96 (or CAD $1.22)(1) per share basic) as compared to $97.3 million ($0.69 (or CAD $0.93)(1) per share basic) for Q1 2020. FFO increased in the current quarter due to higher global oil prices; Capital expenditures were $39.6 million in the period resulting in free funds flow(3) of $85.4 million; Utilized a portion of free funds flow(3) to purchase 3,501,685 of the Company's common shares for a total cost of $60.1 million (average price of CAD$21.11/share) pursuant to the Company's normal course issuer bid program ('NCIB'); Working capital was $341.7 million at March 31, 2021 compared to $320.2 million at December 31, 2020 and $330.4 million at March 31, 2020. The Company has an undrawn syndicated bank credit facility of $200.0 million and Participated in drilling 9 gross (5.05 net) wells(2) in Colombia resulting in 6 oil wells, 1 disposal well, 1 well under test and 1 abandoned prior to total depth well, for a success rate of 86% compared to drilling 20 gross (13.05 net) wells in Q1 2020.
Contact:
Mike Kruchten
Tel: (403) 517-1733
Email: Investor.relations@parexresources.com
Advisory on Forward Looking Statements
Certain information regarding Parex set forth in this document 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' 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' 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 document include, but are not limited to, statements with respect to the Company's focus, plans, priorities and strategies; expectation that Parex will purchase the maximum allowable shares under its NCIB; 2021 average production and total capital expenditures and the allocation of such capital expenditures; 2021 tax effective rate of FFO and the 2021 estimated for Brent crude price; number of shares repurchased under the NCIB and outstanding shares at end of 2021; significant increase to Parex 2021 FFO and the reasons therefor; year-over-year production growth of approximately 3% in 2021; Parex' 2021 share buy-back program in 2021 and the sources of funding; expectation that FFO will fully fund the increased 2021 capital expenditure program and the NCIB and anticipated timing for quarterly conference call and webcast.
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; impact of the COVID-19 pandemic and the ability of the Company to carry on its operations as currently contemplated in light of the COVID-19 pandemic; 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' 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; risk that other formations do not contain the expected oil bearing sands 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' operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website.
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. With respect to forward-looking statements contained in this document, Parex has made assumptions regarding, among other things: current and anticipated commodity prices and royalty regimes; the impact (and the duration thereof) that COVID-19 pandemic will have on the demand for crude oil and natural gas, Parex' supply chain and Parex' ability to produce, transport and sell Parex' crude oil and natural; gas; 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' 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' 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' 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' 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 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 perspective on 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, 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 document 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 future-oriented financial information and financial outlook information (collectively ('FOFI') about the Corporation's prospective capital expenditures. The FOFI has been prepared by management to provide an outlook of the Company's financial results and activities and may not be appropriate for other purposes. The FOFI has been prepared based on a number of assumptions including the assumptions discussed in this press release. The actual results of operations of the Company and the resulting financial results may vary from the amounts set forth herein, and such variations may be material. The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments. FOFI contained in this press release was made as of the date of this press release and Parex disclaims any intent or obligation to update publicly the press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law.
PAREX RESOURCES INC. 
