Wayne Foo - CEO Ken Pinsky - CFO Dave Taylor - President Mike Kruchten - VP of Corporate Planning and IR

Nathan Piper - RBC Capital Markets Darrell Bishop - Haywood Securities Ian Macqueen - Paradigm Capital David Dudlyke - Dundee Securities Ltd.

Thank you, operator. And thank you all for joining us today on Parex second quarter earnings conference call.

With me today is Ken Pinsky, our Chief Financial Officer; Dave Taylor, our President; and Mike Kruchten, our VP of Corporate Planning and Investor Relations. The format for today’s conference call will be a question-and-answer session with our audience.

So we’re opening the line to questions right away. And look forward to speaking with you.

Operator, over to you.

It's Nathan from RBC. Just a couple of quick questions on the drilling results and the outlook please.

So, on the Jacana wells that you’ve drilled, you’ve mentioned previously, you’ve got to the extent to the 3P locations, or the 3P year-end 2015 number, following the success at four and obviously turning results to five. And are we significantly stepped out the non-oil on Jacana there?

Nathan, it's Dave. The Jacana-5 wells drilled, basically one full-sand, taken us down deep of the Jacana-3 well down two.

And so from an area perspective, it’ll add some areas, assuming we cut positive oil out of it. And it will move the oil down to contact, down significantly down structure.

And I guess you don’t give us anything specific, too specific this morning. But I guess thinking about the drilling that’s going on at Tigana as well this year.

Is that drilling purely development in the sense that you’re going for 1P, 2P locations? Or is that also got an appraisal element here?

Tigana will mostly be development at this point in time, trying to make sure we’ve got take plans for production here.

And the final one on drilling, and can you give us a sense of the risk profile of the outcome in exploration? I mean, I realized the Jacana’s appraisal, but it's probably quite a few exploration wells across your portfolio.

And just want to get a sense of how risky you see that?

Well, it's quite a diverse program actually, Nathan. Between Llanos program and the mid-Mag program are probably testing five different types of concepts, give or take, if you include Aguas Blancas as well in there.

So, we go from some very high risk high reward types of opportunities for example VMM-11, one of the prospects there is a new play type, to some moderate risk stratographic plays in the mid-Mag, to some just traditional structure that we’re drilling in Llanos. So, it really is pretty diverse program.

I am not going to numerically go through each well. But there is eight exploration prospects coming up in the second half and it should be very interesting program for us in terms of lot of good ideas.

And then final one from me is just on Aguas Blancas. What is the nature of the final approvals that you need to get in place to really get started on that?

We actually got everything in place to physically move. We’re missing one document that relates to the setting of the base line for the incremental production.

That’s within in each we expect to get it shortly. In the meantime, we’re going to start moving dirt out there, and make a decision on whether we actually move a rig on depending on the time line for getting that document.

Nathan, covered on the majority of my questions there, but two follow on. First on Jacana, any comments around the testing of the connectivity between the Jacana and Tigana fields this year?

And second would be related to Aguas Blancas, the timing of the accelerated capital commitment there prior to drilling your first well. Is that more of a -- more work that’s been done from a technical perspective by you guys in the last couple of months?

Or is it more related to commodity pricing in general?

Darrell, it's Dave. Testing, by that I mean, drilling between the two fields that won’t happen this year.

We need to build a pad. We’ve been working with our partner on 2017 program.

Looks like it’ll be a fulsome program next year, and then we hope to cut at least one or two wells in between the two fields next year. In terms of accelerated capital, I think, we’ve just gotten, on Aguas, we’ve gotten a little more comfortable now with oil price just settling-in in the range where we want to move forward and see what have there.

And we’ve been able to move in the field quicker than we thought we were going to be able to. Ecopetrol has been very cooperative with us and working well with us.

So since we have the capital to do the program and things are ready to go other than this one piece stay for the time but we’re ready to get going.

Couple of questions, Jacana-5 is obviously a big topic. So, I’ll ask you those questions first.

So, with respect to what you saw in the well, you’ve got indications of oil on logs. Can you comment on whether or not the Mirador is present in the well?

The Mirador is present in the well.

Would you be testing both the Mirador and the Guadalupe formations?

We’ll probably start at the bottom and test flows within.

And the other one question, are you going to be press releasing the test results once you do actually test the well?

Traditionally, we haven’t. And I’ll let Mike answer that.

No, Ian. Just given the scale of our operations, we traditionally have quite an operational update together for a series of results.

And that would likely be the course of action once we have, once we get to the September.

Okay, there is lots going on so, I understand. We’ll move on to something else then.

You did actually say that you were going to bring some of your higher cost fields back on production now with increasing oil prices. You did give us some guidance on increasing operating costs.

But just wondering how much production might that be that you would bring on?

It's been 400 to 500 barrels a day, but we wouldn’t bring it on as incremental production right now over the corporate poles. As you know, we like to manage our production.

We’re comfortable with our production guidance right now, which was the same as it has been for the last quarter. So, we’re just telling people, we’re bringing on some higher cost fields as they impact slightly operating costs.

But we’ll look at overall production in the mix here after we drill some wells.

Good. Okay.

Well, thanks very much and obviously, very excited about upcoming results. Thanks for the update.

Apologies if this is already been covered up, but just couple of more questions on Jacana-5. Can you perhaps set the context to the upcoming testing, do the logs that you have today, indicate any oil well to context or the log responses within the wellbore now in Guadalupe and the Mirador?

I guess, without giving anything away, it looks pretty encouraging that we perforated a fairly large interval.

And second question, based on the Guadalupe oil down to that you observed in Jacana-3, which I believe is the most to-date in Jacana-5. How much deeper do the Guadalupe stands live in this well?

I just -- on top off top of head, it's 200 feet.

And if I want to ask the same question with the Mirador, would that be response again, oil down in Mirador in J-3 versus J-5?

We haven’t commented on whether there is oil or not in the Mirador, David.

I didn’t sure about it, Ian, asked the question -- just, okay fair enough. Would you like to comment on whether there was oil present in Mirador?

No not at this time. We’re still -- the well is confidential, so we’re not talking too much on those results.

Thanks operator. I’d like to take this opportunity to thank all of you on the call, for your interest in Parex Resources, and your continued support of Company.

For further information, we invite you to visit our Web site or call us. Thank you again.

Have a good day.