Parex Resources

Report
Compelling Growth Opportunities in Colombia and Trinidad
SEPTEMBER 2012
1
PAREXRESOURCES.COM | TSX: PXT
Value Proposition
Parex Resources’ strategy is to deliver strong operational performance by
combining strategic regional partnerships, technical know-how and
experience operating in Latin America.
• Diverse exploration and resource potential in Colombia and Trinidad
• Compelling organic growth is achievable through cash flow
• Short cycle time and low cost operations provides growth
opportunities
2
Parex Journey
2009 Spin Out Parex
• Exploration blocks in
Colombia and Trinidad
2011 Grow Production & Cash Flow
• Acquire 50% working interest partner
• Average 5,345 bpd
3
2010 First Oil Discovery at Kona
• Initial (December 2010) production
base provides foundation for growth
2012 Deliver on Exploration & Sustainability
• Company delivers Q2 production of 10,389
bpd and reserves upside on 16 exploration
blocks
Colombia
•
•
•
4
Concentrated land base
Numerous discoveries
Diverse opportunities
Colombia: Llanos Oil Trends
Kona
34 API
Tocaria
13 mmbo
33 API
Trinidad
41 mmbo
32 API
Barquereña
7 mmbo
33 API
Cusiana
641 mmbo
La Gloria Norte
16 mmbo
La Gloria
30 mmbo
16 API
La Flora
9 mmbo
5
Cubiro
40 API
Caño Duya
1 mmbo
Rancho Hermoso
12 mmbo
Mirador, Gacheta
& Une plays
Parex’ strategy is
to grow light oil
production and
expand its
resources base
with heavy oil
Remache Sur
3 mmbo
37 API
Laurita
1 mmbo
Santiago
40 mmbo
20 API
C7 play fairway
C3/C5 play
Light oil
Source: Cumulative production, Colombia Ministry of Mines, 2011
Colombia: Llanos Activity
2011
1.
2.
Parex Blocks
Select Oil Pools
Kona
Sulawesi
LLA-17
2012
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Java
Cumbre
Malawi
Samaria
Tua
Max
Kitaro
Maniceño
Celeus
Las Maracas
La Casona
LLA-16
Los
Testing/Completing
Appraising/Producing- Added in 2012
Parex Oil Fields- at Year End 2011
6
3
Sulawesi 2
5
Ocarros
11
4
El Eden
13
LLA-57
Trinidad
LLA-20
Cubiro
Rancho
Hermoso
LLA-29
Cravoviejo
10
Balay
6
7
Drilling
Kona
1
12
Cusiana &
Cupiagua
LLA-40
Corcel
8
Meta River
LLA-30
Santiago
LLA-32
LLA-34
9
Cabrestero
10 km
Development Drilling with Upside
•
•
7
Low-risk development drilling
Follow-up exploration upside
LLA-16 & Los Ocarros
LLA-16 (100% WI)
•
•
Focus on fault trends
Potential reservoirs: C7, Mirador, Gacheta & Une
•
•
Producing light oil 30-37o API
2012 Activity: 8-10 wells
o Kona, Java & Malawi
o Exploration- Maragogi
395 km2 of 3D seismic data define deep prospect
inventory
Appraisal drilling on existing discoveries
•
•
Los Ocarros (50% WI, operator)
•
•
Fulfilled commitments
Proceeding to phase 2; prospects being
developed
Fault Line
Discoveries
Drilled/ Evaluating
8
LLA-16
Prospects
LLA-17
Kona
Java
Los Ocarros
Celeus
Trinidad
Sulawesi
Malawi
Mirador - one producer; 2 additional wells
planned
Gacheta - 2 wells producing
LLA-17 & LLA-20
•
•
LLA
40
Maragogi
Cumbre
Merida
Supremo
Las Maracas
10 km
Kona Field: Align and Optimize
Kona Field
Mirador Structure
Norte
•
Stacked reservoirs: C7, Mirador, Gacheta
& Une
•
Producing light oil 30-37o API
•
Drilling delineation wells to test southern limit
(Kona-Sur)
•
Infill development wells to access tighter
reservoir; economic through our low cost
structure
•
Recomplete wells to optimize production
14
3
9
7
1
6
2
5
11
10
12
4
8
New Pad
Kona-Sur
9
13
Gacheta Fault
Drilled
Prospect
Water Disposal
Pad
Emerging Opportunities
•
Southern Llanos provides opportunity to expand Colombian
operations
•
Potential to add to existing reserves and production base
10
LLA-29 & LLA-30
LLA-29 & LLA-30 (100% WI)
•
•
•
•
•
Parex assumed operatorship through partner
acquisition (29/06/2011)
Start exploratory drilling program in 2012/2013
dry season
Untested at present; 3D seismic defined
locations
Phase 1 term extended into 2013
Target C3/C5 light oil at depth up to 5,0008,000 ft
LLA-20
LLA-29
LLA-30
10 km
Discoveries
Drilled/ Evaluating
11
Prospects
LLA-40 & 57
LLA-40 & LLA-57 (100% WI)
LLA-40
•
Prospects defined on 3D seismic
•
Start exploratory drilling program in
2012/2013 dry season
Untested at present; 3D seismic defined
locations
Target C5/C7/Mirador/Gacheta light oil
at depth up to 8,000-10,000 ft
•
•
LLA-17
Celeus
LLA-57
Cumbre
LLA-20
10 km
Discoveries
Drilled/ Evaluating
12
Prospects
LLA-29
El Eden & Morpho
El Eden (60% WI) (1)
Morpho (50% WI) and Guariquies (50% WI)
•
•
•
•
•
•
Farm-in commitment for 1 well (~16,000 ft).
La Casona was spud Sept 4, 2012
Exploration – Chiriguaro Este
Interpret 685 km2 of 3D seismic for additional
prospects
Non-operated
Light oil, low decline
Potential for large resource play
Guariquies
El Eden
Cusiana &
Cupiagua
Ramiriqui
La Gloria Norte
Chiriguaro
La Casona
Chiriguaro Este
La Gloria
Morpho
Discoveries
13
(1)
Drilled/ Evaluating
Prospects
After fulfilling the terms of the Petroamerica farm-in agreement and closing the Talisman purchase, Parex will have a 60% working interest of the block and
50% of the non-producing Chiriguaro oil discovery.
Southern Llanos
Cabrestero (50% WI, Operator)
•
•
Mirador Formation – producing 1,000
bopd of 20o API
Akira- exploration prospect, preparing
to test
Maniceño
Santiago
LLA-32 (30% WI) & LLA 34 (45% WI)
•
•
•
•
•
•
Non-operated
Maniceño producing 27o API
Max-1 on-stream August 1, 2012 at
producing 14.5o API from the
Guadalupe Formation
Tua-1 exploration well spud on May 6,
2012, and tested at 1,700 bopd of 18o
API from the Mirador Formationexpected on-stream Sept 2012
Testing Tua-2
Planned further development drilling
for Max & Tua discoveries in 2012/2013
Prospects
Discoveries
14
Drilled/ Evaluating
Samaria
Tuaromenero
Urraca
LLA-32
Max
LLA-34
Tua
Torre Torre
Corcel
Akira
Kitaro
Cabrestero
Jilguero
High Netback Production
Marketing Strategy
• Use light oil production as diluent
• Minimize infrastructure capital
• Sell into multiple off take points
Operating Netback (per bbl) Q2-2012
Brent
Discount
Realized Sales Price
Royalties
Production
Transportation
Operating Netback
15
$108.04
(0.50)
$107.54
(8.43)
(6.82)
(19.01)
$73.28
Trinidad
•
•
•
16
Extension of Venezuela basin
Material exploration potential
Under-explored onshore
Trinidad Exploration
CENTRAL RANGE BLOCK (CRB)
Parex 50% W.I. (OPER)
Niko 50% W.I.
Caribbean Sea
TRINIDAD
MORUGA BLOCK
Parex 83.8% W.I. (OPER)
VENEZUELA
0
El Furrial
Orinoco Delta
•
•
•
17
Acquiring 2D seismic on CRB Deep
Plan to drill CRB Deep commitment well mid 2013
Test and evaluate Moruga wells: Snowcap, Firecrown and Green Hermit
Kilometers
40
Corporate Information
18
Snapshot
(As of June 30, 2012)
Exit rate guidance (2012e)
Production Q2
13,000-14,000 bopd
10,389 bopd
Oil sales price Q2
$108/bbl
Operating netback Q2
Market capitalization at $5.00/share
Common shares outstanding
$73/bbl
~C$540 MM
108.4 MM - Basic
112.1 FD1 MM - FD
Convertible debenture PXT.DB
(5.25% coupon with 2016 maturity)
(1) Fully diluted shares does not include out of the money options and convertible debenture potential shares based on June 30, 2012 share price of $4.72. Fully diluted
shares including the effects of out of the money options and convertible debenture potential shares is 125.1 million shares.
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C$85 MM
The Team
Management Team
Wayne Foo
President, Chief Executive Officer
Barry Larson
VP Operations, Chief Operating Officer
Ken Pinsky
VP Finance, Chief Financial Officer
Dave Taylor
Board of Directors
Norman McIntyre
Chairman
Curtis Bartlett
John Bechtold
Robert Engbloom
VP Exploration, Business Development
Stu Davie
Ron Miller
VP Human Resources and Administration
W. A. (Alf) Peneycad
Paul Wright
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Growth Catalysts
Colombia
• Light oil, high netback production
• Active 2012 exploration drilling program over 14 blocks
• Producing from 9 fields over 6 blocks
Trinidad
• Access to large resource potential
• Moruga appraisal & exploration drilling
• Preparing for high impact CRB Deep exploration program
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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: [email protected]
www.parexresources.com
Michael Kruchten
Mgr. Investor Relations & Corporate Planning
22
Trinidad
Colombia
Appendix
23
1)
2)
3)
Block
Operated/NonOperated
Working
Interest
Gross
Acres
Remaining
Commitments (Initial
Phase)
Basin
Initial Royalty
Rate
LLA-16
Operated
100%
157,611
-
Llanos
9%
LLA-17
Operated
40%
108,726
-
Llanos
9%
LLA-20
Operated
100%
144,292
-
Llanos
9%
LLA-29
Operated
100%
69,914
5 wells June 2013
Llanos
9%
LLA-30
Operated
100%
117,321
3 wells April 2013
Llanos
9%
LLA-32
Non-Operated
30%
100,325
-
Llanos
9%
LLA-34
Non-Operated
45%
82,286
-
Llanos
9%
LLA-40
Operated
50%
163,090
4 wells June 2014
Llanos
9%
LLA-57
Operated
100%
104,532
2 wells April 2014
Llanos
9%
Cabrestero (1)
Operated
50%
29,562
-
Llanos
8%
El Eden
Operated
60%
109,249
1 well Sep. 2012
Llanos
8%
Guariquies
Non-Operated
50%
N/A(2)
-
Middle Magdalena
8%
Los Ocarros
Operated
50%
110,436
-
Llanos
8%
Morpho
Non-Operated
50%
51,398
-
Middle Magdalena
14.5%
CRB Deep (3)
Operated
50%
211,478
1 deep well Sep. 2013
340 km 2D seismic
-
PSC
CRB Shallow(3)
Operated
50%
Moruga
Operated
83.8%
PSC
7,443
-
-
After fulfilling the terms of the CEPSA farm-in agreement, Parex will have a 50% WI in the block. Post farm-in earning, WI are subject to ANH approval.
Risk Sharing Contract - gross acres is the drainage area of Guariquies-1 well. Parex’ production rights are 45% WI
The joint operating agreements allow a third party to participate in the development phase that would reduce Parex’ WI in the Deep and Shallow blocks to 40% and 32.5%
respectively.
~30%
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 2012 exit rate production 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, 2011 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. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward-looking statements
contained herein are expressly qualified by this cautionary statement.
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. Any such offer or solicitation, if any, will only be made by means of Offering Documents
of Parex (e.g., prospectus, private placement memorandum, subscription agreement and or similar documents) and only in jurisdictions where permitted by law. 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.
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