CALGARY, Alberta, Jan. 10, 2018 (GLOBE NEWSWIRE) — Parex Resources Inc. (“Parex” or the “Company”) (TSX:PXT), a company headquartered in Calgary, Alberta and focused on Colombian oil exploration and production, provides an operational update.
Production: We estimate that Q4 2017 production averaged 39,000 barrels of oil equivalent per day (“boe/d”) and that the Company’s 2017 debt adjusted production per share annual growth exceeded 25% compared to 2016. We expect average Q1 2018 production to exceed 40,000 boe/d.
Llanos-34 (“LLA-34”) (working interest (“WI”) 55%): Parex continues to delineate and expand the Jacana/Tigana trend on LLA-34.
The Company recorded a very successful drilling program in 2017, with 23 wells drilled in the Bacano-Jacana-Tigana trend and 21 wells currently producing oil. Of the 21 oil wells, 10 wells were successfully drilled outside the areas included in the GLJ Petroleum Consultants Ltd. (“GLJ”) December 31, 2016 proved plus probable reserves assessment prepared for the Company.
In Q4 2017, delineation drilling targeted the Tigana Sur Oeste and Tigana Norte areas. New wells added to production (approximate gross rates as at January 9, 2018) include:
- Tigana Sur Oeste-2: 1,050 barrels of oil per day (“bopd”);
- Tigana Sur Oeste-3: 1,170 bopd;
- Tigana Sur Oeste-7: 650 bopd;
- Tigana Norte-3: 1,800 bopd;
- Tigana Norte-4: 1,850 bopd;
- Tigana Norte-5: testing;
Through 2018, we expect to drill approximately a total of 20 development, appraisal and exploration wells.
Cabrestero (WI 100%): The appraisal well, Bacano-6, is currently being drilled and we expect to reach total depth by January 15, 2018. Bacano-6 is a long-reach well (approximately 9,800 feet vertical section) drilling from the Bacano-2 pad. The well is currently at 12,645 feet with a planned total depth of 15,300 feet.
Capachos (WI 50%): The Capachos Sur-2 well was spud on November 12, 2017 and is currently conditioning the drill hole to install intermediate casing at approximately 15,360 feet with a planned total depth of 16,700 feet. The Capachos-2 well is producing at a restricted rate of approximately 1,000 bopd and we expect to increase the rate after commissioning the permanent production facilities during Q3 2018.
VMM-11 (WI 100%): The Iguazu-1 exploration well was drilled and abandoned.
For more information, please contact:
Vice-President Capital Markets & Corporate Planning
Parex Resources Inc.
Phone: (403) 517-1733
NOT FOR DISTRIBUTION OR FOR DISSEMINATION IN THE UNITED STATES
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”, “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, 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; the Company’s anticipated drilling, development, exploration and other growth plans, including the anticipated number of wells to be drilled through 2018; the planned total drilling depths of the certain of the Company’s wells and the anticipated timing of reaching such depths; the Company’s expectation that the production rate of the Capachos Sur-2 well will increase after commissioning permanent production facilities; estimated Q4 2017 production and 2017 debt adjusted production per share annual growth; forecasted Q1 2018 average production; Parex’ anticipated debt levels; and activities to be undertaken in various areas.
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; 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; 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 (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, among other things: current and anticipated commodity prices and royalty regimes; 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.
The term “Boe” means a barrel of oil equivalent on the basis of 6 Mcf of natural gas to 1 barrel of oil (“bbl”). Boe’s may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion ratio at 6:1 may be misleading as an indication of value.
The independent reserves report prepared by GLJ referred to herein is dated February 6, 2017 with an effective date of December 31, 2016 and was prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. “Proved” reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. “Probable” reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
This press release contains a number of oil and gas metrics, including debt adjusted production per share annual growth, which metrics have been prepared by management and do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. “Debt adjusted production per share annual growth” is calculated as annual production divided by year-end basic shares outstanding adjusted by the change in estimated working capital divided by current share price. Such metrics have been included herein to provide readers with additional measures to evaluate the Company’s performance; however, such measures are not reliable indicators of the future performance of the Company and future performance may not compare to the performance in previous periods and therefore such metrics should not be unduly relied upon. Management uses these oil and gas metrics for its own performance measurements and to provide security holders with measures to compare the Company’s operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this news release, should not be relied upon for investment or other purposes.