Parex_Resources_Corporate_Presentation_November 7 2014

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Published on November 7, 2014

Author: 1900ParexResources

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1. November 2014 Corporate Presentation PAREXRESOURCES.COM | TSX:PXT Building The Runway

2. Snapshot Financial Q3 2014 Operating Netback US $53.39/bbl Q3 2014 Production ~25,175 bopd Q3 Funds Flow (Sales 24,490 bopd) US $89 MM Reserves 2P (June 30, 2014) 58 MMboe(1)  2P Reserve Life Index (RLI) of 6.7 years NPV 10 AT $1,326 MM Capital Structure Market capitalization at $10/share ~Cdn$1,343 MM Net Bank Surplus(2) (Credit Facility $175 MM) US$ 3.0 MM Common shares outstanding (TSX listed, added to S&P/TSX Composite Index in June 2014) Basic 134.3 MM Fully Diluted 141.3 FD(3) MM (1) Parex net working interest, as per the independent reserve report prepared by GLJ Petroleum Consultants Ltd. effective June 30, 2014. (2) Defined as bank debt minus working capital (3) Fully diluted shares does not include out of the money options based on a share price of $10.50 2014: Building The Runway 2

3. Colombia Focused 2014: Building The Runway 3 VIM-1 VMM-9 VMM-11 Morpho Capachos LLA-10 LLA-40 LLA-57 LLA-24 LLA-30 LLA-29 LLA-16 LLA -17 Los Ocarros El Porton El Eden LLA-26 LLA-32 LLA-34 Cerrero Cabrestero LLA-20 Santa Marta Barranquilla Cartagena Covenas Medellin BOGOTA VENEZUELA COLOMBIA OBC 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 Reserves Cebucan /BLOCK

4. 0.80 0.60 0.40 0.20 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 ($0.50) 100 80 60 40 20 $400 $300 $200 $100 $0 ($100) 2009 2010 2011 2012 2013 2014E Funds Flow ($/share) Funds Flow ($MM) Funds Flow Growth Debt Adjusted Funds Flow LHS Funds Flow per share RHS Track Record of Consistent Growth 4 200 160 120 80 40 $16.00 $12.00 $8.00 $4.00 $0.00 25,000 20,000 15,000 10,000 5,000 $2,000 $1,600 $1,200 $800 $400 $0 2009 2010 2011 2012 2013 June 2014 3P NPV10AT per share 3P NPV10AT ($MM) NPV Growth Debt Adjusted 3P NPV10AT (USD) - LHS 3P NPV10AT per share (USD) - RHS 3P NPV10AT per share (CAD) - RHS 0.00 0 2009 2010 2011 2012 2013 June 2014 Reserves per share Reserves (MMboe) Reserve Growth Debt Adjusted Possible - LHS 2P - LHS 3P Reserve per share - RHS 2P Reserve per share - RHS Q4 2014E 0 0 2009 2010 2011 2012 2013 2014E Production per share Production (bopd) Production Growth Debt Adjusted Production (bopd) LHS Production per share RHS

5. 2015 Guidance: Self Funded 30% Growth 2015 Full Year Average Production 28,500-30,000 bopd 2015 Capital expenditure program to be fully funded through cash flow 2014: Building The Runway 5 # Wells Capex (Net $ million) Gross Net Wells Facilities Seismic Total Development/Appraisal (existing fields) 16 9.4 $54 $91 - $145 Exploration (new prospects) 17 12.9 $120 - $10 $130 Exploration Appraisal (contingent follow-up) 5 4.3 $21 $9 - $30 New Concept (Magdalena Basin) 1 1 $5 - $20 $25 Base (Firm) Total 39 27.6 $200 $100 $30 $330

6. Grow & Diversify Production LLA-16 LLA-20 Los Ocarros Cabrestero LLA-32 LLA-34 LLA-30 Other Third Quarter production averaged 25,175 bopd 2014: Building The Runway 27 24 21 18 15 12 9 6 3 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 est. Bopd (000) by block 2010 2011 2012 2013 2014 6

7. Building A Sustainable Business Track record of progressing reserves from 3P to cash flow Focus on increasing reserve life index (RLI) & sustainability Proved + Probable + Possible Proved + Probable Proved 2P Reserves Life Index (1) (2) After Tax PV10(3) (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 (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. (3) Value based on GLJ ‘s Ice Brent Price Forecast : US $107.50 in 2015 , US $105.00 in 2016 and US $102.50 in 2017 *Reserves are independently evaluated by GLJ Petroleum Consultants Ltd. 2014: Building The Runway 7

8. Progressively Larger Discoveries Median Llanos 100 acres Kona 300 acres Akira / Tigana 500 +1000 acres Las Maracas 300 acres Bottom water drive Edge water drive Edge water drive Oil Water Sandstone Shale 2014: Building The Runway 8 1. Size 2. Drive

9. Parex Exploration Life Cycle Cabrestero, LLA-34, LLA-10 Continue to deliver on our strategy to expand the asset base and added meaningful positions for future sustainable growth 2014: Building The Runway Develop Concept Acquire Land Test Concept Initial Development Expand Land Exploitation Traditional 3-Ways Low Side Closures Stratigraphic Traps New Plays LLA-26, Cebucan LLA-24, LLA-30, Akira, Tigana Magdalena Basin, Llanos Deep, Capachos 9

10. Southern Llanos: Play Trends 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+ LLA-32 (70% WI, Operator) Kananaskis, Carmentea & Calona discoveries Follow-up appraisal drilling and exploration LLA-32 Carmentea Tigana Tua Maniceño -Bandola Explore core position, appraise & develop discoveries, and leverage Parex’ costs and exploration know-how 2014: Building The Runway Discoveries 2013 3D Seismic 2010/11 Seismic 10 Cabrestero Santiago Max Tarotaro LLA-34 Tigana Sur Akira Balay El Palmar Los Trompillos Kitaro Kananaskis Drillable exploration prospects on new 3D seismic for 2015

11. Traditional Llanos Structures 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 Activity Explore on blocks untested by Parex exploration wells on LLA-26/40/Cebucan Manage existing production LLA-40 Sulawesi 2014 Drilling Discoveries Continue to exploit and manage producing fields 2014: Building The Runway 11 La Casona Rumi Las Maracas Kona Celeus Cumbre LLA-16 LLA-17 LLA-57 LLA-20 Los Ocarros El Porton LLA -26 Cebucan El Eden

12. Capachos Farm-in: Ecopetrol Partnership Capachos (50% WI, Operator) Development & exploration opportunities ANH royalty contract Large structure, light oil, 2 mmbbls produced from 2 wells Leverages our strengths: low cost drilling strong operator working with communities 2014: Building The Runway 12 Prospect/Extension Capachos-1 Capachos Sur-1 Capachos LLA-16 LLA-40 LLA-17 LLA-57 LLA-10

13. Deep Llanos: New Play Concepts *Transition Zone *Underexplored due to well depths and historic drilling costs Apply low cost operator advantage to explore the Llanos Transition Zone 2014: Building The Runway 13 Foothills US $50-75MM Llanos Backland US $5-15MM Parex’ Performance US $10-15MM Industry well costs:

14. Middle Magdalena Basin: New Play Concepts Middle Magdalena Basin VMM-11 Morpho VMM-9 40 km 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 New Play Concepts: applying proven technology in Colombia 2014: Building The Runway Discoveries 14 Nare Palagua Cocorna PP Velasquez

15. Operating Netback: Colombia Premium $63 Operating Netback $71 $67 $71 $82 Opex & Royalties Transportation $73 $71 $69 $67 Brent Price US $/BBL $58 $64 $61 $62 $62 $53 $26 $22 $22 $23 $26 $26 $29 $29 $27 $28 $29 $29 $28 $28 $30 $7 $12 $8 $8 $9 $8 $8 $8 $15 $14 $14 $12 $14 $15 $11 140 120 100 80 60 40 20 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Realized Price (US $/bbl) 2014: Building The Runway Price Royalties Costs Parex’ Take 2011 2012 2013 2014 15

16. Parex’ Value Proposition Proven Management’s track record Self-funded growth Exposure to Brent Oil Pricing LATAM exposure 2014: Building The Runway 16

17. Expanding Capacity Source: Ecopetrol, Feb 2013 New take-away capacity exceeds basin production growth 2500 2000 1500 1000 500 0 2014: Building The Runway Colombian Throughput vs. Pipeline Capacity* (mbd) 988 1,133 1,287 1,377 1,446 1,472 2010 2011 2012 2013 2014 2015 2016 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 2,020 17

18. 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. Block Operated/ Non-Operated Working Interest Partners Gross Acres Basin LLA-10 Operated 50% Petro America 189,544 Llanos LLA-16 Operated 100% N/A 157,611 Llanos LLA-17 Operated 63% Geopark 108,726 Llanos LLA-20 Operated 100% N/A 144,292 Llanos LLA-24 Operated 100% N/A 147,100 Llanos LLA-26 Operated 100% N/A 184,061 Llanos LLA-29 Operated 100% N/A 69,914 Llanos LLA-30 Operated 100% N/A 117,321 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 LLA-57 Operated 100% N/A 104,532 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 & Touchstone 7,443 - 18

19. Appendix – Summary of Quarterly Results (Unaudited) 2014 2013 2012 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 OPERATING Production (thousands of bopd) 25.2 19.9 18.4 15.9 17.3 16.2 15.5 14.4 11.4 12.7 10.9 10.4 11.7 Average realized prices, prior to hedging 94 105 103 104 102 106 99 110 109 106 108 108 117 Brent Price ($/bbl) 104 110 108 109 109 110 103 112 112 110 110 108 119 Operating Netback ($/bbl) 53 62 61 63 61 64 58 67 73 69 71 73 82 Cash Netback ($/bbl) 39 46 45 47 48 46 45 50 56 47 42 58 75 FINANCIAL (millions of US dollars, except per share amounts) Sales of crude oil 229 183 180 637 167 157 148 165 524 150 131 113 130 Funds flow from operations 89 77 77 270 76 68 66 60 242 54 42 61 84 Per share – basic 0.70 0.70 0.70 2.49 0.70 0.63 0.61 0.56 2.23 0.50 0.39 0.57 0.77 Net income (loss) 17 11 10 13 22 (28) 8 11 40 (16) 8 21 27 Per share – basic 0.13 0.10 0.09 0.20 0.20 (0.26) 0.07 0.10 0.37 (0.15) 0.07 0.19 0.25 EBITDA 114 84 97 325 92 82 80 72 258 46 62 68 83 Cash and cash equivalents 34 63 40 57 57 26 45 27 32 32 27 51 121 Working Capital 45 31 37 24 24 19 9 17 (13) (13) (9) (0.6) 116 Net Debt (Surplus) (1) (3) 110 29 70 70 85 104 88 107 107 94 86 (31) Capital Expenditures 57 95 62 234 59 50 78 47 268 65 51 93 59 Weighed average shares outstanding 126 111 109 108 108 108 108 109 108 108 108 108 108 Weighed average shares outstanding, diluted 130 122 111 124 124 108 130 129 126 110 109 117 118 TRADING STATISTICS (CAD) (based on intra-day trading) High 15.49 13.25 9.50 6.8 6.80 6.30 4.89 6.50 8.67 6.03 5.18 7.15 8.67 Low 11.98 9.33 6.59 4.05 5.60 4.10 4.05 4.39 4.07 4.27 3.85 4.29 6.49 Close (end of period) 12.45 12.55 9.50 6.58 6.58 5.83 4.12 4.63 5.80 5.80 4.83 4.72 7.04 Average daily volume (thousands) 602 556 360 216 258 193 203 210 236 235 148 335 264 (1) Defined as Bank Debt + Convertible Denture Face Value ( C$ 85 million) - Working Capital Bank credit facility currently has a borrowing base of US $175 million Debentures were converted at C$10.15 for an aggregated of 8,339,991 shares during August and September 2014: Building The Runway 19

20. Legal Advisory 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. How to Reach Us Parex Resources Inc. 1900 - 250 Second Street S.W., Calgary, Alberta, Canada T2P 0C1 Tel: 403-265-4800 Fax: 403-265-8216 Email: investor.relations@parexresources.com www.parexresources.com Michael Kruchten Vice President, Investor Relations & Corporate Planning 2014: Building The Runway 20

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