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• Free Funds Flow: $275 million in 2024, third highest in company history.

• Production: Q4 2024 averaged 45,297 BOE per day; full-year guidance range met at 49,000 to 50,000 BOE per day.

• Funds Flow from Operations: $141 million for Q4 2024.

• Brent Oil Price: $74 per barrel during the quarter.

• Current Tax Recovery: $6 million in Q4 2024, compared to a $9 million expense in the previous quarter.

• Effective Tax Rate Guidance for 2025: 3% to 6% at $70 per barrel Brent.

• Vasconia Differential: Below $2 per barrel, compared to 2024 average of approximately $5 per barrel.

• Capital Expenditures: $82 million for the quarter, at the lower end of guidance.

• Free Funds Flow for Q4 2024: $59 million.

• Reserves Addition: 10 million barrels of 1P and 18 million barrels of 2P in the Putumayo.

• Shareholder Returns: Over CAD1.5 billion returned over the past five years.

• Warning! GuruFocus has detected 4 Warning Signs with PARXF.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Parex Resources Inc (PARXF) achieved $275 million in free funds flow in 2024, marking the third highest result in the company's history.

• The company's core assets, Llanos 34 and Cabrestero, are performing at or above expectations, supported by successful waterflood plans.

• Significant progress was made in the Putumayo region, with potential to increase recovery factors and long-term inventory, production, and reserves.

• The company has aligned its land positions with Ecopetrol in the Llanos Foothills, preparing to drill the Farallones exploration well in 2026.

• Parex Resources Inc (PARXF) reported a reduction in current taxes due to opportunistic tax-driven transactions, contributing to a stronger dividend payout ratio.

Negative Points

• Production for Q4 2024 averaged 45,297 BOE per day, which is below the revised full-year guidance range of 49,000 to 50,000 BOE per day.

• PDP reserves per share decreased slightly in 2024, despite growth in 1P and 2P reserves per share.

• The company faces ongoing tariff tensions affecting global crude prices, although this has led to a favorable Vasconia differential.

• Capital expenditures for the quarter were at the lower end of guidance, which may indicate underinvestment in certain areas.

• The company is undergoing board changes with the retirement of two directors, which may lead to transitional challenges.

Q & A Highlights

Q: Can you elaborate on the financial performance and strategic progress made by Parex Resources in 2024? A: Imad Mohsen, President and CEO, highlighted that Parex Resources achieved strong financial results in 2024, generating $275 million in free funds flow, the third highest in the company's history. The company maintained capital discipline and optimized its conventional assets. Strategic progress included successful waterflood plans and polymer injection pilots at core assets Llanos 34 and Cabrestero, as well as significant redevelopment opportunities in the Putumayo region.