CALGARY, AB--(Marketwired - August 10, 2016) -
NOT FOR DISTRIBUTION OR FOR DISSEMINATION IN THE UNITED STATES
Parex Resources Inc. ("Parex" or the "Company") (
2016 Second Quarter Financial and Operational Highlights
|(1)||Q2 average CAD/USD noon rate of 0.7761|
|(2)||Operating netback excludes gains/losses on commodity risk management contracts|
|(3)||Wells drilled: Jacana-3 (producing), Jaruki-1 (dry & abandoned) and Bacano-1 (abandoned due to mechanical failure; did not reach target depth)|
During the first half of 2016 Brent oil prices averaged approximately $41.21/bbl, while our funds flow from operations of $47.2 million exceeded capital expenditures by $28.8 million and the Company increased production from Q4 2015. Parex anticipates it will continue to increase quarter-over-quarter oil production through ongoing optimization of existing wells, facilities de-bottlenecking and development/appraisal drilling.
Ended June 30,
Ended March 31,
|Average daily production|
|Oil & natural Gas (boe/d)||29,136||27,025||28,900|
|Average daily sales of produced oil & natural gas|
|Oil & Gas (boe/d)||27,664||26,557||30,396|
|Operating netback ($/boe)|
|Reference Price - Brent||47.03||63.50||35.21|
|Financial ($000s except per share amounts)|
|Oil and natural gas revenue(1)||104,571||155,717||81,518|
|Net income (loss)||(185)||1,814||(7,630)|
|Per share - basic||0.00||0.01||(0.05)|
|Funds flow from operations||31,792||50,237||15,457|
|Per share - basic||0.21||0.35||0.10|
|Working capital surplus (2)||97,532||89,754||79,955|
|Bank Debt (3)||-||-||-|
|Outstanding shares (end of period) (000s)|
|Weighted average basic||152,006||144,145||151,525|
|The table above contains Non-GAAP measures. See "Non-GAAP Terms" for further discussion.|
|(1)||Average daily sales and the operating netback calculation includes the Company's working interest sales volumes and excludes purchased oil sales volumes and the Ocensa overlift volumes.|
|(2)||Working capital calculation does not take into consideration the undrawn $175.0 million (June 30, 2015 - $200 million) available under the syndicated bank credit facility.|
|(3)||Syndicated bank credit facility borrowing base of $175 million at June 30, 2016.|
|(4)||Diluted shares as stated include the effects of common shares and in-the-money stock options and RSUs outstanding at the period-end. The June 30, 2016 Parex' closing stock price was CAD$12.51 per share.|
Operational Update: H2 2016 Drilling Focus
On Block LLA-34 in the Llanos Basin, the Jacana-4 (WI 55%) development well began producing oil on July 18, 2016 and is producing approximately 2,000 barrels of oil per day and a water-cut of 1%. We have drilled and cased the Jacana-5 appraisal well, located approximately 780 meters north of Jacana-3, to test the down-dip extent of the Jacana field. We expect Jacana-5 to be tested during August 2016.
In the Middle Magdalena Basin, Parex has the majority of the approvals required to begin the appraisal of the Aguas Blancas field (WI 50%). We are currently conducting civil works and upon receipt of certain regulatory approvals, we plan to drill 5 delineation/production wells plus 2 water-flood pilot injection wells by year-end, increasing our firm 2016 capital budget by $20 million.
Prior to the end of Q3 2016, Parex expects to begin its Magdalena Valley Basin drilling on the VMM-11, Playon and DeMares blocks as well as a seismic acquisition program on the VIM-1 block.
The following is a summary of the firm drilling activities for second half (H2) of 2016:
|#||Prospect/Well||Block||Well Type||Status/ Expected Timing (Spud Date)|
|1||Jacana-4||LLA-34||Development||Producing ~2,000 bopd|
|2||Jacana-5||LLA-34||Appraisal||Drilled - preparing to test|
|10||Boranda -1||Playon||Exploration||Q3 - 1st Playon farm-in well|
|12||Coyote-1||De Mares||Exploration||Q4 (work-over)|
|14||Ponyo-1||Cabrestero||Exploration||Q4 (re-drill Bacano mechanical failure at new location)|
With an expanded appraisal and exploration drilling program, we now anticipate 2016 capital expenditures to be $110-120 million.
|Firm Capital Expenditure Guidance||$90-$100 million|
|Contingent Aguas Blancas (7 wells)||$20 million|
|Total Capital Forecast 2016||$110-$120 million|
Parex has approximately $98 million of net working capital, no debt and an undrawn bank facility available to fund future growth opportunities.
Q2 2016 Conference Call
Parex will host a conference call to discuss the Second Quarter Results on Thursday, August 11, 2016 beginning at 9:30 am Mountain Time. To participate in the call, dial 1-866-696-5910, passcode: 5590031
The live audio will be carried at: http://bell.media-server.com/m/p/irpeeexm.
This news release does not constitute an offer to sell securities, nor is it a solicitation of an offer to buy securities, in any jurisdiction.
This report contains financial terms that are not considered measures under GAAP such as funds flow used in, or from operations, working capital, operating netback per barrel and adjusted net income, but do not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. Management uses these non-GAAP measures for its own performance measurement and to provide shareholders and investors with additional measurements of the Company's efficiency and its ability to fund a portion of its future capital expenditures.
Funds flow from operations is a non-GAAP term that includes all cash generated from operating activities and is calculated before changes in non-cash working capital. Management uses funds from (used in) operations to analyze operating performance and monitor financial leverage, and considers funds from (used in) operations to be a key measure as it demonstrates the Company's ability to generate cash necessary to fund future capital investments. Funds flow from operations is reconciled with net (loss) income in the consolidated statements of cash flows.
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" 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's 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 performance characteristics of the Company's oil properties; supply and demand for oil and the global price of oil; financial and business prospects and financial outlook; results of drilling and testing, results of operations; drilling plans; activities to be undertaken in various areas; capital plans in Colombia and annual production; plans to acquire and process 3-D seismic; timing of drilling and completion; and planned capital expenditures and the timing thereof. In addition, statements relating to "reserves" or "resources" are by their nature forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves described can be profitably produced in the future. The recovery and reserve estimates of Parex' reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered.
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; 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; 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; ability to access sufficient capital from internal and external sources; the risks that any estimate of potential net oil pay is not based upon an estimate prepared or audited by an independent reserves evaluator; that there is no certainty that any portion of the hydrocarbon resources will be discovered, or if discovered that it will be commercially viable to produce any portion thereof; 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's operations and financial results are included in reports on file with Canadian 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 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: current commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil; 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 all required approvals for the Acquisition; royalty rates, future operating costs, 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's current and future operations and such information may not be appropriate for other purposes. Parex's 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.
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
For more information, please contact:
Vice-President Corporate Planning and Investor Relations
Parex Resources Inc.
Phone: (403) 517-1733
Wed, 10 Aug 2016 21:01 GMTPrint