CALGARY, Alberta, April 15, 2021 (GLOBE NEWSWIRE) — Parex Resources Inc. (“Parex” or the “Company”) (TSX:PXT), is a company headquartered in Calgary that focuses on sustainable, profitable, conventional oil and gas production. All currency amounts are in United States dollars, unless otherwise stated.
Operational Update – Applying Free Cash Flow to Accelerate Colombian Appraisal & Exploration Portfolio
Higher Brent oil prices to date in 2021 and Parex’ unhedged oil price exposure are expected to contribute to a significant increase to Parex’ 2021 funds flow provided by operations (FFO), compared to the 2021 Budget Guidance released on November 4, 2020. With estimated higher FFO, an increasing cash position and a debt-free balance sheet, Parex is strategically accelerating assessment of its portfolio of operated assets, through increasing exploration and appraisal activity to provide for a strengthened future development inventory. Highlights of the capital expenditure increase are provided below:
- Cabrestero Block (100% WI, Operator): Continue the Bacano Field development and appraisal drilling program and expand the water injection pressure support program;
- Boranda Block (50% WI, Operator): The Boranda Sur-2 appraisal well, located 2.6 kilometers to the southwest of the Boranda-3 discovery is currently producing approximately 200 barrels of oil per day (bopd) in a new horizon. Testing of the main target will begin in approximately two weeks. Parex is also completing the Boranda Centro-1 well, which is the second well in the appraisal program, located 840 meters from Boranda-3 and structurally downdip. The company believes a successful oil test at Boranda Centro-1 would confirm a significant areal extent of the block;
- VIM-1 Block (50% WI, Operator): In Q2 2021 Parex anticipates commencing a two well exploration drilling program to further assess the VIM-1 block. The wells, Basilea and Planadas are located 2.6 and 6.3 kilometers respectively from the La Belleza-1 discovery. The Company is currently evaluating development plans for the La Belleza discovery that include the possible reinjection of gas to increase liquids recovery and maximize the project value, subject to partner approval;
- Fortuna Block (100% WI, Operator): Parex drilled the horizontal exploration well Cayena-1 to a depth of 8,560 feet and logged potential oil-bearing zones in multiple formations. The Company then successfully drilled 3,042 feet horizontally in the shallower Galembo Formation resulting in a current medium oil (24 API) production rate of approximately 340 bopd and approximately 54,900 cumulative barrels of oil. Building on the success of Parex’ first horizontal well, the Company plans to drill 2 new horizontal wells targeting the Salada and Olini formations.
The 2021 capital expenditure budget increase targets operated assets and is summarized as follows: