Welcome!

News Feed Item

Parex Resources Announces December 2012 Production of 13,550 bopd and 2013 Guidance Highlighted by 25% Year-Year Production Growth

CALGARY, ALBERTA -- (Marketwire) -- 01/08/13 -- Parex Resources Inc. ("Parex" or the "Company") (TSX:PXT), a company focused on oil exploration and production in Colombia and Trinidad, provides an operational update and announces its 2013 guidance. All amounts below are in United States dollars unless otherwise stated.

Operations Update

2012 was a successful year for Parex. In 2012 the Company participated in drilling 33 gross wells in Colombia and 2 in Trinidad, resulting in 25 oil wells, 6 disposal wells and 4 dry and abandoned, for a success rate of 87 percent. Furthermore, the Company began 2012 with interests in 6 blocks in Colombia and production primarily from the Kona field, and exited 2012 with interests in 14 blocks in Colombia and a diversified production base of ten fields.

December 2012 average production was 13,550 barrels of oil per day ("bopd") and fourth quarter of 2012 average production was approximately 12,800 bopd. Production growth in December was primarily a result of additional volumes being added at the Las Maracas and Tua fields. A summary of recent operational activity is provided below:


--  Las Maracas-6 was brought on-stream at 1,850 bopd in December 2012. The
    Las Maracas-7 well was drilled as a southern delineation well and
    encountered potential pay in both the Mirador and Gacheta formations and
    is currently awaiting testing. The drilling rig will move over and drill
    a dedicated water disposal well off of the same pad as the Las Maracas 7
    well. We expect the Las Maracas field (Parex operated; 50 percent
    working interest) to produce at a rate of approximately 8,000 bopd
    (gross) until the oil treatment plant is commissioned in the second
    quarter of 2013; 
    
--  The Tua field on Block LLA-34 is now producing approximately 3,600 bopd
    (1,620 net) with the addition of Tua-2 producing from the Guadalupe
    Formation in December, 2012. The completion of the Guadalupe Formation
    is the first long term test of this zone in the Tua field and the Tua-2
    well has been producing at a rate of approximately 1,800 bopd gross with
    a water-cut of less than 1 percent. Also on Block LLA-34, a drilling rig
    is mobilizing to the Max-2 development location; 
    
--  Kona-Sur and Kona-16 wells were drilled from the new Kona South pad.
    Kona-Sur was drilled as a southern delineation well for the Gacheta
    Formation to a target depth of 13,200 feet and was cased and is
    currently awaiting testing. Kona-16 was drilled as a delineation well
    for both the Mirador and C7 and was drilled to a total depth of 12,000
    feet and is currently awaiting testing. Parex is mobilizing the drilling
    rig from the Kona field to drill additional exploration prospects in
    LLA-16 during the current dry season; 
    
--  Adalia Norte-1 is the first well to be drilled on Block LLA-30 and is
    expected to be spud the week of January 7, 2013; 
    
--  On Block LLA-32 a surface location is being prepared for the Bandola-1
    well (targeting both the Mirador and Gacheta formations adjacent to the
    Maniceno field) to permit drilling operations to commence in January
    2013; and 
    
--  In Trinidad a 2-D seismic program has commenced on the Central Range
    Block ("CRB"), with immediate focus on firming up prospects on the east
    of the block that can be drilled off existing roads. 

Parex 2013 Guidance Summary

Building on our 2012 operational and exploration success, Parex plans a self funding 2013 capital investment program of approximately $210 million balanced between exploration and development in Colombia and Trinidad. The Company is forecasting a 2013 average production range of approximately 14,000-14,500 bopd as compared to the 2012 average production of approximately 11,400 bopd and the 2011 average production of 5,345 bopd.

Key highlights:


--  Balanced capital portfolio of 18 development and appraisal wells and 14
    exploration wells; 
    
--  High Colombia operating netback production provides for a self-funding
    capital program and year over year production growth of 25 percent; 
    
--  Diversified exploration portfolio across nine Colombia Llanos Basin
    blocks; and 
    
--  Focused program to fulfill exploration commitments and test onshore
    Trinidad prospects. 

A summary of the 2013 capital plans is provided below:


                  # Wells Planned            Capex (Net $ million)          
                 -----------------------------------------------------------
                   Gross      Net      Wells   Facilities   Seismic    Total
----------------------------------------------------------------------------
Colombia                                                                    
  Dev/Appraisal       17       10    $    65      $    30         -   $   95
  Exploration         13       10    $    75      $     5   $    10   $   90
  --------------------------------------------------------------------------
  Total               30       20    $   140      $    35   $    10   $  185
Trinidad                                                                    
  Dev/Appraisal        1      0.8    $     3            -         -   $    3
  Exploration          1      0.5    $    10            -   $    12   $   22
  --------------------------------------------------------------------------
  Total                2      1.3    $    13            -   $    12   $   25
----------------------------------------------------------------------------
Parex Total           32     21.3    $   153      $    35   $    22   $  210
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Parex' 2012 exploration success has provided a number of lower risk development opportunities and the 2013 capital program is approximately balanced between development and exploration. We expect that activity on Las Maracas, LLA-16, Max and Tua will anchor the 2013 development program. Further, the Company anticipates it can generate production growth on a year over year basis solely with development capital investment. The Company's 2013 production target range assumes some exploration success.

Additionally, Parex could increase its 2013 capital program through accessing its existing $75 million reserve base credit facility or by realizing higher than forecast Brent oil prices. Although the full year capital program is expected to be self-funded through funds flow from operations, the Company expects to access the reserve base credit facility during periods which capital expenditure is more heavily weighted.

Colombia 2013 Capital Program Outlook

During 2013 Parex plans to drill approximately 30 gross wells on nine blocks across its Colombian portfolio as summarized below. The number of wells drilled and the split between exploration and development is expected to vary depending on realized oil prices, timing of regulatory approvals, partner operations, seasonal variability and drilling success.


----------------------------------------------------------------------------
2013 Colombia Drilling Program                                              
----------------------------------------------------------------------------
# of gross wells                         Operated     Non-Operated     Total
----------------------------------------------------------------------------
Development/ Appraisal                         11                6        17
----------------------------------------------------------------------------
Exploration                                     9                4        13
----------------------------------------------------------------------------

Trinidad 2013 Capital Program Outlook

In 2013 Parex is planning a Trinidad exploration program that will further evaluate the Moruga Block potential and fulfill the remaining CRB work commitments. The planned 2013 exploration program is summarized below.


2013 Trinidad Drilling Program                                              
----------------------------------------------------------------------------
                                        Parex Operated                      
----------------------------------------------------------------------------
# of gross wells             Moruga (WI 83.8%)   CRB Deep (WI 50%)     Total
----------------------------------------------------------------------------
Development/Appraisal                       1                   -          1
----------------------------------------------------------------------------
Exploration                                 -                   1          1
----------------------------------------------------------------------------

The planned 2013 Trinidad capital program is reduced from that of 2012 as a result of disappointing exploration drilling results and a less competitive fiscal regime in Trinidad as compared to Colombia.

To fulfill the CRB work commitments, the Company is currently acquiring 2D seismic and expects to spud an exploration well during the third quarter of 2013.

2013 Outlook Key Assumptions

Key assumptions underlining the 2013 capital program are:


--  Brent oil price of approximately $105/bbl; 
    
--  Operating netback of $55/bbl, which reflects royalties and crude oil
    differentials of $18/bbl, transportation costs of $20/bbl and operating
    costs of approximately $11-$13/bbl; 
    
--  Effective cash tax rate on Colombia cash flow of less than or equal to
    20 percent; and 
    
--  Timely access to exploration and development locations. 

Ramshorn Litigation Update

As announced by Parex on April 12, 2012, Parex and its wholly owned subsidiaries Parex Resources (Bermuda) Ltd. ("Parex Bermuda") and Ramshorn International, Limited ("Ramshorn") have been named as defendants in a lawsuit (the "Lawsuit") filed in the 61st Judicial District Court of Harris County, Texas (the "Texas Court") by a Texas based private company (the "Plaintiff"). The Lawsuit relates to a share purchase agreement entered into by the Plaintiff and a third party seller (the "Seller") (prior to the agreement entered into by Parex and the Seller for the purchase of Ramshorn) respecting the proposed purchase by the Plaintiff of the shares of Ramshorn, which prior agreement the Plaintiff claims was improperly terminated by the Seller. Each of Parex, Parex Bermuda and Ramshorn specially appeared in the Lawsuit to challenge the jurisdiction of the Texas Court and to seek dismissal of the claims against them.

A hearing on the jurisdictional aspects of the case took place on November 19 and 20, 2012 and the decision of the Texas Court on these jurisdictional matters has now been received. The Texas Court found that it does not have jurisdiction over Parex Bermuda and ordered that all of the Plaintiff's claims against Parex Bermuda be dismissed. The Texas Court overruled Parex and Ramshorn's jurisdictional challenges such that the Plaintiff's claims against Parex and Ramshorn have not been dismissed. Parex and Ramshorn intend on filing a Notice of Appeal of the Texas Court's rulings in this regard and will be requesting that all future proceedings in the Lawsuit, including discovery, be stayed pending the outcome of the appeal on these jurisdictional matters. Parex and Ramshorn believe that the Lawsuit and the Plaintiff's claims against it are baseless and without merit and will continue to vigorously defend the Lawsuit, including by way of appealing the Texas Court's recent jurisdictional rulings against Parex and Ramshorn.

Corporate Overview

Parex, through its direct and indirect subsidiaries, is engaged in oil and natural gas exploration, development and production in South America and the Caribbean region. Parex is conducting exploration activities on its 1,349,000 gross acre holdings primarily in the Llanos Basin of Colombia and 219,000 gross acre holdings onshore Trinidad. Parex is headquartered in Calgary, Canada.

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.

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; 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 exit rate 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, Colombia and Trinidad & Tobago; 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, Colombia and Trinidad & Tobago; 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, Colombia and Trinidad & Tobago; 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 effect 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 there from. 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 Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contacts:
Parex Resources Inc.
Michael Kruchten
Manager, Investor Relations
(403) 517-1733
(403) 265-8216 (FAX)

Parex Resources Inc.
Kenneth G. Pinsky
Vice President, Finance and Chief Financial Officer
(403) 517-1729
(403) 265-8216 (FAX)

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that Enzu, a leading provider of cloud hosting solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to foc...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
SYS-CON Events announced today that Stratoscale, the software company developing the next generation data center operating system, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Stratoscale is revolutionizing the data center with a zero-to-cloud-in-minutes solution. With Stratoscale’s hardware-agnostic, Software Defined Data Center (SDDC) solution to store everything, run anything and scale everywhere...
Digital payments using wearable devices such as smart watches, fitness trackers, and payment wristbands are an increasing area of focus for industry participants, and consumer acceptance from early trials and deployments has encouraged some of the biggest names in technology and banking to continue their push to drive growth in this nascent market. Wearable payment systems may utilize near field communication (NFC), radio frequency identification (RFID), or quick response (QR) codes and barcodes...
Angular 2 is a complete re-write of the popular framework AngularJS. Programming in Angular 2 is greatly simplified – now it's a component-based well-performing framework. This immersive one-day workshop at 18th Cloud Expo, led by Yakov Fain, a Java Champion and a co-founder of the IT consultancy Farata Systems and the product company SuranceBay, will provide you with everything you wanted to know about Angular 2.
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
Unless you don’t use the internet, don’t live in California, or haven’t been paying attention to the recent news… you should be aware that self-driving cars are on their way to becoming a reality. I have seen them – they are real. If you believe in the future reality of self-driving cars, then continue reading on. If you don’t believe in the future possibilities, then I am not sure what to do to convince you other than discuss the very real changes that will roll out with the consumer producti...
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
You deployed your app with the Bluemix PaaS and it's gaining some serious traction, so it's time to make some tweaks. Did you design your application in a way that it can scale in the cloud? Were you even thinking about the cloud when you built the app? If not, chances are your app is going to break. Check out this webcast to learn various techniques for designing applications that will scale successfully in Bluemix, for the confidence you need to take your apps to the next level and beyond.
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
In the world of DevOps there are ‘known good practices’ – aka ‘patterns’ – and ‘known bad practices’ – aka ‘anti-patterns.' Many of these patterns and anti-patterns have been developed from real world experience, especially by the early adopters of DevOps theory; but many are more feasible in theory than in practice, especially for more recent entrants to the DevOps scene. In this power panel at @DevOpsSummit at 18th Cloud Expo, moderated by DevOps Conference Chair Andi Mann, panelists will dis...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
See storage differently! Storage performance problems have only gotten worse and harder to solve as applications have become largely virtualized and moved to a cloud-based infrastructure. Storage performance in a virtualized environment is not just about IOPS, it is about how well that potential performance is guaranteed to individual VMs for these apps as the number of VMs keep going up real time. In his session at 18th Cloud Expo, Dhiraj Sehgal, in product and marketing at Tintri, will discu...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.