CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Consolidated Balance Sheets (unaudited)
As at | September 30, | December 31, | ||||
(thousands of United States dollars) | NOTE | 2021 | 2020 | |||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 361,353 | $ | 330,564 | ||
Accounts receivable | 5 | 173,420 | 80,166 | |||
Prepaids and other current assets | 13,767 | 13,457 | ||||
Current income tax receivable | - | 16,534 | ||||
Crude oil inventory | 6 | 2,378 | 1,915 | |||
550,918 | 442,636 | |||||
Deferred tax asset | 6,490 | 42,729 | ||||
Goodwill | 73,452 | 73,452 | ||||
Exploration and evaluation | 7 | 85,149 | 79,365 | |||
Property, plant and equipment | 8 | 953,234 | 902,899 | |||
$ | 1,669,243 | $ | 1,541,081 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | $ | 184,206 | $ | 115,427 | ||
Current income tax payable | 12,490 | - | ||||
Current portion of decommissioning and environmental liabilities | 12 | 4,528 | 7,054 | |||
201,224 | 122,481 | |||||
Lease obligation | 9 | 1,366 | 1,820 | |||
Cash settled share-based compensation liabilities | 14 | 12,877 | 11,843 | |||
Decommissioning and environmental liabilities | 12 | 42,250 | 44,057 | |||
Deferred tax liability | 56,583 | 20,402 | ||||
314,300 | 200,603 | |||||
Shareholders' equity | ||||||
Share capital | 13 | 734,006 | 763,372 | |||
Contributed surplus | 27,336 | 43,228 | ||||
Retained earnings | 593,601 | 533,878 | ||||
1,354,943 | 1,340,478 | |||||
$ | 1,669,243 | $ | 1,541,081 | |||
Commitments (note 20) | ||||||
See accompanying Notes to the Consolidated Interim Financial Statements | ||||||
Approved by the Board: | ||||||
"signed" | "signed" | |||||
Paul Wright | Bob MacDougall | |||||
Director | Director |
Consolidated Statements of Comprehensive Income (unaudited)
For the three months | For the nine months | ||||||||
ended September 30, | ended September 30, | ||||||||
(thousands of United States dollars, except per share amounts) | NOTE | 2021 | 2020 | 2021 | 2020 | ||||
Oil and natural gas sales | 10 | $ | 272,481 | $ | 146,231 | $ | 741,857 | $ | 420,256 |
Royalties | (41,653) | (12,054) | (102,948) | (42,013) | |||||
Revenue | 230,828 | 134,177 | 638,909 | 378,243 | |||||
Commodity risk management contracts (loss) | 18 | - | - | - | (3,940) | ||||
Revenue | 230,828 | 134,177 | 638,909 | 374,303 | |||||
Expenses | |||||||||
Production | 25,798 | 20,339 | 77,741 | 64,773 | |||||
Transportation | 12,966 | 12,130 | 39,818 | 42,209 | |||||
Purchased oil | 3,252 | 7,145 | 8,380 | 20,705 | |||||
General and administrative | 10,043 | 8,572 | 29,645 | 26,110 | |||||
Impairment of exploration and evaluation assets | 7 | 19,600 | - | 19,600 | - | ||||
Impairment of property, plant and equipment assets | 8 | - | - | - | 7,000 | ||||
Equity settled share-based compensation expense | 13 | 283 | 747 | 1,434 | 2,627 | ||||
Cash settled share-based compensation expense (recovery) | 14 | 6,763 | (793) | 19,493 | (3,412) | ||||
Depletion, depreciation and amortization | 8 | 30,406 | 26,285 | 87,729 | 81,204 | ||||
Foreign exchange (gain) loss | 2,208 | (248) | (6,012) | (9,813) | |||||
111,319 | 74,177 | 277,828 | 231,403 | ||||||
Finance (income) | 11 | (340) | (281) | (1,048) | (1,879) | ||||
Finance expense | 11 | 2,108 | 2,363 | 7,623 | 7,858 | ||||
Net finance expense | 1,768 | 2,082 | 6,575 | 5,979 | |||||
Income before income taxes | 117,741 | 57,918 | 354,506 | 136,921 | |||||
Income tax expense | |||||||||
Current tax expense | 26,533 | 6,541 | 75,022 | 9,789 | |||||
Deferred tax expense | 23,266 | 23,758 | 72,420 | 84,002 | |||||
49,799 | 30,299 | 147,442 | 93,791 | ||||||
Net income and comprehensive income for the period | $ | 67,942 | $ | 27,619 | $ | 207,064 | $ | 43,130 | |
Basic net income per common share | 15 | $ | 0.55 | $ | 0.20 | $ | 1.63 | $ | 0.31 |
Diluted net income per common share | 15 | $ | 0.55 | $ | 0.20 | $ | 1.63 | $ | 0.30 |
See accompanying Notes to the Consolidated Interim Financial Statements
2 | September 30, 2021 |
Consolidated Statements of Changes in Equity (unaudited)
For the nine months ended September 30, | ||||
(thousands of United States dollars) | 2021 | 2020 | ||
Share capital | ||||
Balance, beginning of period | $ | 763,372 | $ | 812,684 |
Issuance of common shares under share-based compensation plans | 29,394 | 10,736 | ||
Repurchase of shares | (58,760) | (33,523) | ||
Balance, end of period | 734,006 | 789,897 | ||
Contributed surplus | ||||
Balance, beginning of period | 43,228 | 48,573 | ||
Share-based compensation | 1,434 | 2,627 | ||
Options, RSUs and PSUs exercised | (17,326) | (6,374) | ||
Balance, end of period | 27,336 | 44,826 | ||
Retained earnings | ||||
Balance, beginning of period | 533,878 | 541,188 | ||
Net income for the period | 207,064 | 43,130 | ||
Repurchase of shares | (135,320) | (60,819) | ||
Dividends | (12,021) | - | ||
Balance, end of period | 593,601 | 523,499 | ||
$ | 1,354,943 | $ | 1,358,222 |
See accompanying Notes to the Consolidated Interim Financial Statements
3 | September 30, 2021 |
Consolidated Statements of Cash Flows (unaudited)
For the three months | For the nine months | |||||||
ended September 30, | ended September 30, | |||||||
(thousands of United States dollars) | NOTE | 2021 | 2020 | 2021 | 2020 | |||
Operating activities | ||||||||
Net income | $ | 67,942 | $ | 27,619 | $ | 207,064 | $ | 43,130 |
Add (deduct) non-cash items | ||||||||
Depletion, depreciation and amortization | 8 | 30,406 | 26,285 | 87,729 | 81,204 | |||
Non-cash finance expense | 11 | 1,605 | 1,556 | 5,238 | 5,331 | |||
Equity settled share-based compensation expense | 13 | 283 | 747 | 1,434 | 2,627 | |||
Cash settled share-based compensation expense (recovery) | 14 | 6,763 | (793) | 19,493 | (3,412) | |||
Deferred tax expense | 23,266 | 23,758 | 72,420 | 84,002 | ||||
Impairment of exploration and evaluation assets | 7 | 19,600 | - | 19,600 | - | |||
Impairment of property, plant and equipment assets | 8 | - | - | - | 7,000 | |||
Unrealized foreign exchange (gain) loss | 2,986 | (162) | (3,927) | (4,769) | ||||
Loss (gain) on settlement of decommissioning liabilities | 12 | (138) | 374 | 233 | 361 | |||
Net change in non-cash working capital | 16 | (34,415) | (9,291) | (50,986) | (12,444) | |||
Cash provided by operating activities | 118,298 | 70,093 | 358,298 | 203,030 | ||||
Investing activities | ||||||||
Property, plant and equipment expenditures | 8 | (51,637) | (15,857) | (135,699) | (82,022) | |||
Exploration and evaluation expenditures | 7 | (22,652) | (1,899) | (23,029) | (12,310) | |||
Net change in non-cash working capital | 16 | 16,274 | (3,078) | 29,114 | (47,257) | |||
Cash (used in) investing activities | (58,015) | (20,834) | (129,614) | (141,589) | ||||
Financing activities | ||||||||
Issuance of common shares under equity-settled plans | 13 | 781 | 1,670 | 12,068 | 4,362 | |||
Common shares repurchased | 13 | (58,049) | (30,816) | (194,080) | (94,342) | |||
Dividends | 13 | (12,021) | - | (12,021) | - | |||
Payments on lease obligation | 9 | (151) | (229) | (610) | (649) | |||
Net change in non-cash working capital | 16 | - | - | - | (2,046) | |||
Cash (used in) financing activities | (69,440) | (29,375) | (194,643) | (92,675) | ||||
Increase (decrease) in cash for the period | (9,157) | 19,884 | 34,041 | (31,234) | ||||
Impact of foreign exchange on foreign currency-denominated | (843) | (3,252) | ||||||
cash balances | (1,016) | (12,348) | ||||||
Cash, beginning of period | 371,353 | 334,389 | 330,564 | 396,839 | ||||
Cash, end of period | $ | 361,353 | $ | 353,257 | $ | 361,353 | $ | 353,257 |
Supplemental Disclosure of Cash Flow Information (note 16) | ||||||||
See accompanying Notes to the Consolidated Interim Financial Statements |
4 | September 30, 2021 |
Notes to the Condensed Interim Consolidated Financial Statements
For the period ended September 30, 2021
(Tabular amounts in thousands of United States dollars, unless otherwise stated. Amounts in text are in United States dollars unless otherwise stated.)
1. Corporate Information
Parex Resources Inc. and its subsidiaries ("Parex" or "the Company") are in the business of the exploration, development, production and marketing of oil and natural gas in Colombia.
Parex Resources Inc. is a publicly traded company, incorporated and domiciled in Canada. Its registered office is at 2400, 525-8th Avenue S.W., Calgary, Alberta T2P 1G1. The Company was incorporated on August 17, 2009, pursuant to the Business Corporations Act (Alberta).
The condensed interim consolidated financial statements were approved and authorized for issuance by the Board of Directors on November 3, 2021.
2. Basis of Presentation and Adoption of International Financial Reporting Standards ("IFRS")
a) Statement of compliance
The condensed interim consolidated financial information for the three and nine months ended September 30, 2021 has been prepared in accordance with IAS 34, 'Interim financial reporting'. The condensed interim consolidated financial information should be read in conjunction with the annual financial statements for the year ended December 31, 2020, which have been prepared in accordance with IFRS as issued by the International Accounting Standards Board ("IASB").
The policies applied in these condensed interim consolidated financial statements are based on IFRS issued and outstanding as of November 3, 2021, the date of approval by the Board of Directors.
b) Basis of measurement
The condensed interim consolidated financial statements have been prepared under the historical cost convention except for derivative financial instruments and share-based compensation transactions which are measured at fair value. The methods used to measure fair values are discussed in note 4 - Determination of Fair Values.
- Use of management estimates, judgments and measurement uncertainty
The timely preparation of the consolidated financial statements requires that management make estimates and use judgment (including those affected by and related to the future effects of the COVID-19 pandemic) regarding the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Such estimates primarily relate to unsettled transactions and events as at the date of the consolidated financial statements. Accordingly, actual results could differ from estimated amounts as future confirming events occur.
In preparing these condensed interim consolidated financial statements, the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended December 31, 2020.
3. Summary of Significant Accounting Policies
The accounting policies adopted are consistent with those of the previous financial year as described in note 3 of the Company's consolidated financial statements for the year ended December 31, 2020 with the addition of the dividend policy below for dividends recorded in the interim period ended September 30, 2021.
Dividends on common shares are recognized in the Company's financial statements in the period in which the dividends are declared by the Board of Directors.
5 | September 30, 2021 |
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Parex Resources Inc. published this content on 03 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2021 21:41:08 UTC.