PAREX RESOURCES LTD. · Capachos asset (Ecopetrol partnered) is 40-km south of LLA-38 •Near-term...

NBF Energy Conference | SEPTEMBER 2021 11

PAREX RESOURCES LTD.

National Bank 9th Annual Energy Conference

SEPTEMBER 2021


CORPORATE SNAPSHOT

(1) Debt-adjusted production per share (“DAPS”) growth. (2) Parex’ WI per the independent reserve report prepared by GLJ Petroleum Consultants (“GLJ”) effective Dec. 31, 2020.(3) As at June 30, 2021.(4) Estimated annual dividend yield using C$20/sh price.(5) As at July 31, 2021. Shares repurchased is since October 15, 2017.See “Advisories” at the end of this presentation

Capital Structure

Cash - US$ million(3)

~$371Net Working Capital - US$ million(3)

~$352US$200 MM Undrawn Credit Facility(3)

No DebtDividend Yield(4)

2.5%Market Capitalization(5)

~C$2.5 Billion Common Shares Basic Outstanding(5)

(TSX: PXT)

123.8 MMShares Repurchased(5)

C$784 MM

Operating Results 2020 H1 2021

Brent ($/bbl) $43.30 $65.23

Production (boe/d) 46,518 45,332

DAPS Growth(1) -3% 2%

FCF Yield (%) 9% 8%

Capital Expenditures – US$ MM $141 $84

Funds Flow Provided by Operations – US$ MM $297 $257

Free Funds Flow – US$ $156 $172

Shares Repurchased – MM shares 13.9 7.7

Reserves (2020 Year-End)

2P Reserves (Dec. 31)(2) – Mmboe 195 -

2P Reserve Life Index – years 11 -


Profitable reserves conversionOptimizing decline rates

Significant Free Cash Flow generation

Validating Colombian discoveriesAcceleration of exploration portfolio

Long-term profitable growth

Leveraging existing core competenciesComplement Colombian portfolio

Advancement of key ESG initiativesESG governance structure

Enhancement of inclusion and diversity strategy

Technology to reduce emissions

Disciplined Capital Allocation Sustainable Business Model Investigate New Core AreasUncompromised Commitment

to ESG Excellence

Parex has a 360-degree approach: Embracing Communities, Environment, and Stakeholders

PAREX’ STRATEGY: BUILDING A BALANCED PORTFOLIO


Corporate diversity & inclusion planShareholder return through

buybacks & dividends

Environment Social Governance

Introduce GHGs emissions reductions targets (July 2021)

Invest in geothermal and solar energies to

lower carbon footprintfrom operated fields’ power generation

Reduction of GHG emissions intensity rate year-over-year

Biodiversity Protection —

trees planting, repopulation of vulnerable turtles & protection of forests

Water for All - increase community access to clean water

Clean Energy Program —improve community access to electricity using renewables sources

Provide on-going community supportduring the Pandemic

2023 diversity target —30% women on the Board

30% of 2021 variable compensation

linked to ESG metrics

Transparency reporting through TCFD Recommendations & SASB Standards

CURRENT ESG PRIORITIES


EMISSION FREE GEOTHERMAL ENERGY POWERS PAREX PRODUCTION

Parex installed Colombia’s first geothermal power unit that captures the heat from hot water by-product from oil production. Thefirst pilot unit is on the Las Maracas’ field and the second pilot unit is anticipated to be completed in September 2021 on the Rumba

field. The project aims to produce approximately 100kW of energy, replacing the fossil-fuel derived power in the pilot fields.

Parex is committed to building a sustainable low carbon future

Benefits of the Geothermal Unit:• Offset emissions – displace higher carbon intensive energy sources• Modular design, therefore scalable and portable • Smaller footprint compared to solar & wind


CAPITAL ALLOCATION – OPTIONS TO GROW SHAREHOLDER RETURNS

Industry leading Cash Flow generation provides optionality for:oResilient Dividend Program

oGrowth Capex

oFlexible Share Buy-Back

Remaining FFO provides optionality for:• Additional growth (CAPEX)• Share repurchases

$0

$100

$200

$300

$400

$500

$600

FFO DIVIDENDS CAPEX REMAINING FFO

USD

MM

$55/bblBrent

$65/bbl

$75/bbl

~$50

~$275-$300

~$150-$250

Op

tio

nal

ity


GROWTH OPPORTUNITIES – M&A CRITERIA

Conventional Oil & Gas

Onshore/Shallow Water

Clear Path to Asset Growth

Compete Against Colombia Project

Returns

Transparent FX & Payment Regime

M&A is an option, not a requirement for Parex.


BUILDING A SUSTAINABLE BUSINESS – 2021 ACTIVITIES

VIM-43

LLA-26LLA-34

LLA-134

CPO-11

LLA-94 CabresteroLLA-32

VSM-36

VSM-25

Boranda VMM-46

Capachos

AraucaLLA-38

Fortuna

Merecure

LLA-30

DeMaresVMM-9

VIM-43Commence 3D seismic

VIM-1Planadas-1 exploration well spud

on July 30, 2021. Continuing to evaluate oil and CNG

development plans for La Belleza

BorandaDrilling 1-2 appraisal wells

LLA-34Infill drilling & waterflood

expansion

LLA-94Drill Humea exploration well

AraucaEntered into initial work plan with

Ecopetrol and the first of four wells planned to begin Q1 2022

VMM-46Acquisition of 215 sq km of 3D seismic expected October 2021

FortunaDrilling Perla Negra horizontal well testing

the Olini carbonate Formation

CapachosCommenced permitting a 6 well drilling program

(3 appraisal wells & 3 exploration wells)

Cabrestero4-6 well program – drilling

commenced June 2021

Parex has assembled a breadth of inventory

opportunities. Building on our world-class SoCa base,

we are accelerating our capital investments to unlock

the growth chapter

VIM-1


• On Strategy: Partnership with Ecopetrol in the highly prolific Llanos Basin in Arauca

• Meaningful Portfolio Additions: Near term, proven production potential and reserves plus drill ready exploration prospects and future exploration leads. Company 2P Reserves(1) of 7.8 mmboe

• Regional Expansion: Parex operated Capachos asset (Ecopetrol partnered) is 40-km south of LLA-38

• Near-term Catalyst: Parex as operator will deliver an initial work plan with activity beginning in 2021 and a continuous drill program targeted in early 2022

STRATEGIC PARTNERSHIP WITH ECOPETROL

Regional Arauca Map

(1) GLJ Ltd. Proved plus Probable Reserves As of January 1, 2021


Arauca Block – Reactivation, Existing Infrastructure

• Partially developed, proven light oil field

• Leveraging existing 3D seismic & infrastructure accelerates timeline to production and cash flow

• High deliverability wells with historical initial production rates between 1,800 – 4,000+ bbl/d from the Barco formation

• Multiple pool extension/upside opportunities

LLA-38 – Drill Ready Exploration Prospect

• Califa-1 prospect, 3D seismic defined and technically drill ready

• Multiple 2D seismic defined leads waiting on expanded 3D program to improve confidence and identify new targets

ASSET OVERVIEW – POTENTIAL FOR SUSTAINABLE DEVELOPMENT

(1) GLJ Ltd. Proved plus Probable Reserves As of January 1, 2021

Arauca Block & LLA-38 Map

LLA38

3D Seismic

Pipelines

Planned 3D(outline approx.)

Infill well

Step-Out well

Exploration lead

Exploration well


VIM-1: LA BELLEZA DISCOVERY

VIM-1 (50% WI, Operator)• Main target is a Cienaga De Oro formation draped over

a basement high

• Analogue fields at Cicuco, Boquete and El Dificil

• Advancing La Belleza discovery with civil works and long-lead items related to facilities

• Tested 2,696 bopd and 11.8 MMcf/d of gas (4,663 boe/d combined)

• 43 API crude, selling at Brent less $5/Bbl

Source: IHS Data

La Belleza

El Dificil FieldDiscovered: 1943*Cum Production = 12 MMBO, 352 BCF

Cicuco FieldDiscovered: 1956*Cum Production = 48 MMBO, 194 BCF

VIM-1

La Creciente

Boquete FieldDiscovered: 1961*Cum Production = 18.5 MMBO, 41 BCF

Gas fields

Oil fields

Gas pipeline

Oil Pipeline

River

Basilea-1

Planadas-1

La Belleza-1

Basilea-1

Planadas-1

• Completing civil works on two new prospects, Basilea and Planadas as follow-up to the successful exploration discovery La Belleza-1o Drilling program commenced

Note: Distances are approximate and from bottom hole location to bottom hole location.


FORTUNA

Fortuna (100% WI, Operator)

• Target conventional oil prospects in Lisama and La Luna Formations

• Acquired 3D seismic in 2019

• 2021 Plan: Drill 2 horizontal appraisal wells

• Drilled Cayena-1 exploration well into Galembo formation which has produced 74,700 bbls over 170 producing days

• Next steps:o Increase contact area with multi lateral or extended

reach technology

o Increase simulation capabilities

o Target low cost per foot of horizontal

o Drilling Perla Negra horizontal well to ~4,200 ft

Fortuna

Boranda

Midas (Acordianero)

VMM-46

Cayena-1


ADVISORIESThis presentation is provided for informational purposes only as of August 25, 2021, is not complete and may not contain certain material information about Parex Resources Inc.("Parex" or the "Company"), including important disclosures and risk factors associated with an investment in Parex. This presentation does not take into account the particularinvestment objectives or financial circumstances of any specific person who may receive it and does not constitute an offer to sell or a solicitation of an offer to buy any securityin Canada, the United States or any other jurisdiction. The contents of this presentation have not been approved or disapproved by any securities commission or regulatoryauthority in Canada, the United Sates or any other jurisdiction, and Parex expressly disclaims any duty on Parex to make disclosure or any filings with any securities commissionor regulatory authority, beyond that imposed by applicable laws.

Forward-Looking Statements and FOFI

Certain information regarding Parex set forth in this document contains forward-looking statements that involve substantial known and unknown risks and uncertainties. Theuse of any of the words "plan", "expect", “prospective”, "project", "intend", "believe", "should", "anticipate", "estimate" or other similar words, or statements that certain eventsor 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), plansfor and results of drilling activity, business prospects and opportunities. These statements are only predictions and actual events or results may differ materially. Although theCompany’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 performance characteristics of theCompany's oil properties; the Company's vision, strategy and values; exploration prospects; the Company's exploration schedule; the Company's drilling plans and productioncapability/potential; anticipated drilling locations, including the Company's delineation and drilling plans; the Company's future plans for its business, including financial outlook;the Company’s ESG initiatives and the benefits to be derived therefrom; and activities to be undertaken in various areas. Statements relating to "reserves" or "resources" areforward-looking statements, as they involve the implied assessment, based on estimates and assumptions that the reserves and resources described exist in the quantitiespredicted or estimated and can be profitably produced in the future.

These forward-looking statements are subject to numerous risks and uncertainties, including but not limited to, the impact of general economic conditions in Canada andColombia; industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpretedand enforced, in Canada and Colombia; impact of the COVID-19 pandemic and the ability of Parex to carry on its operations as currently contemplated in light of the COVID-19pandemic; determinations by OPEC and other countries as to production levels; competition; lack of availability of qualified personnel; the results of exploration anddevelopment drilling and related activities; risks related to obtaining required approvals of regulatory authorities, in Canada and Colombia and partner and community approvalsin Colombia; risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities; volatility in market prices foroil; fluctuations in foreign exchange or interest rates; environmental risks; changes in income tax laws, tax rates and/or incentive programs relating to the oil industry; changes topipeline capacity; ability to access sufficient capital from internal and external sources; failure of counterparties to perform under the terms of their contracts; risk that Parex’evaluation of its existing portfolio of assets and exploration and development opportunities is not consistent with its expectation’s; that production test results may not beindicative of long-term performance or ultimate recovery and other factors, many of which are beyond the control of the Company. Readers are cautioned that the foregoing listof factors is not exhaustive. Additional information on these and other factors that could effect Parex' operations and financial results are included in reports on file withCanadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

Although the forward-looking statements contained in this document are based upon assumptions which management believes to be reasonable, the Company cannot assureinvestors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this document, Parex has madeassumptions regarding, among other things: current commodity prices and royalty regimes; the impact (and the duration thereof) that covid-19 pandemic will have on thedemand 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 andamount of capital expenditures; future exchange rates; the price of oil, including the anticipated Brent oil price; the impact of increasing competition; conditions in generaleconomic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; receipt of partner, regulatory and communityapprovals; royalty rates; future operating costs; effects of regulation by governmental agencies; 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 successfulexploration wells; operational performance of non-operated producing fields; pipeline capacity; that Parex will have sufficient cash flow, debt or equity sources or other financialresources required to fund its capital and operating expenditures and requirements as needed; that Parex' conduct and results of operations will be consistent with itsexpectations; that Parex will have the ability to develop it's oil and gas properties in the manner currently contemplated; current or, where applicable, proposed industryconditions, laws and regulations will continue in effect or as anticipated as described herein; that the estimates of Parex' 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 contractualobligations required to retain its rights to explore, develop and exploit any of its undeveloped properties; and other matters.

How to reach us

PAREX RESOURCES INC.

2700 Eighth Avenue Place, West Tower

585 8th Avenue SW Calgary, AB

T2P 1G1 Canada

Tel: 403-265-4800

Fax: 403-265-8216

Email: [email protected]

Website: www.parexresources.com

Mike Kruchten

Sr. Vice President, Capital Markets & Corporate Planning

http://www.sedar.com/


ADVISORIESManagement 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, theseforward-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, futureevents or results or otherwise, other than as required by applicable securities laws. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement.

Oil and Gas Information

• Estimates of the net present value of the future net revenue from Parex' reserves do not represent the fair market value of Parex' reserves. The estimates of reserves and future net revenue from individual propertiesor wells may not reflect the same confidence level as estimates of reserves and future net revenue for all properties and wells, due to the effects of aggregation.

• "BOEs" may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 mcf:1 bbl) is based on an energy equivalency conversionmethod primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantlydifferent from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

• All of Parex’ crude oil reserves disclosed herein are located in Colombia. The Company has light, medium and heavy crude oil, natural gas liquids and conventional natural gas product types. The recovery and reserveestimates of reserves provided in this document are estimates only, and there is no guarantee that the estimated reserves will be recovered. Actual reserves may eventually prove to be greater than, or less than, theestimates provided herein. All evaluations and reviews of future net revenue contained in GLJ's reports are stated prior to any provision for interest costs or general and administrative costs and after the deduction ofroyalties, development costs, production costs, well abandonment costs and estimated future capital expenditures for wells to which reserves have been assigned.

• Certain other information contained in this presentation has been prepared by third-party sources, which information has not been independently audited or verified by Parex. No representation or warranty, expressor implied, is made by Parex as to the accuracy or completeness of the information contained in this document, and nothing contained in this presentation is, or shall be relied upon as, a promise or representation byParex.

• This presentation contains references to type well production and economics, which are derived, at least in part, from available information respecting the well economics of other companies and, as such, there is noguarantee that Parex will achieve the stated or similar results, capital costs and return costs representative per well.

• References in this presentation to initial production test rates, initial "flow" rates, initial flow testing, and "peak" rates are useful in confirming the presence of hydrocarbons, however such rates are not determinativeof the rates at which such wells will commence production and decline thereafter and are not indicative of long-term performance or of ultimate recovery. While encouraging, investors are cautioned not to placereliance on such rates in calculating the aggregate production for Parex. Parex has not conducted a pressure transient analysis or well-test interpretation on the wells referenced in this presentation. As such, all datashould be considered to be preliminary until such analysis or interpretation has been done.

Financial Matters

• The Company discloses several financial measures that do not have any standardized meaning prescribed under International Financial Reporting Standards ("IFRS"). These financial measures include funds flow fromoperations. Management believes that these financial measures are useful supplemental information to analyze operating performance and provide an indication of the results generated by the Company’s principalbusiness activities. Investors should be cautioned that these measures should not be construed as an alternative to net income or other measures of financial performance as determined in accordance with “Oil andGas Information” and IFRS. Parex’s method of calculating these measures may differ from other companies, and accordingly, they may not be comparable to similar measures used by other companies. Please see theCompany’s most recent Management’s Discussion and Analysis, which is available at www.sedar.com for additional information about these financial measures.

• Funds Flow from Operations per boe is a non-GAAP measure that includes all cash generated from operating activities and is calculated before changes in non-cash working capital, divided by sales volumes for theperiod. In Q2 2019, the Company changed how it presents funds flow provided by (used in) operations to present a more comparable basis to industry presentation.

PAREX RESOURCES LTD. · Capachos asset (Ecopetrol partnered) is 40-km south of LLA-38 •Near-term...

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