Imad Mohsen - President, Chief Executive Officer Ken Pinsky - Chief Financial Officer Mike Kruchten - Sr. Vice President, Capital Markets & Corporate Planning

Thank you, operator, and thanks everyone on the line for joining myself and the Senior Leadership for our Q3 conference audio webcast. We appreciate your ongoing support of Parex Resources.

Before we began our Q&A session, I would like to provide some highlights of our Q3 financial results. Q3 production averaged approximately 47,500 barrels a day which was an 8% increase from the previous quarter, whereby our production is temporarily affected from transportation blockades that were experience across Colombia in the spring of 2021.

Parex is not currently experiencing any social disruptions, and our production currently is in excess of 49,000 barrels a day. For the third quarter our funds flow provided by operations totaled $153 million or $1.24 U.S.

per share basic and our Q3 capital expenditures were $74 million. We generated free funds flow of $78 million, bringing our year-to-date total of free funds flow to $250 million.

We allocated Q3 free funds flow to share buybacks at a regular and special dividend of $0.125 and $0.25 per share each respectively for a total of $0.375 for the quarter. We also continue to buy back shares under our automatic normal course issuer bid and are over 90% through our 10% share buyback target as we talk.

We maintained our financial strength of our working capital of $351 million and continue to have no debt year-to-date. We exit the third quarter with $200 million of undrawn credit facility.

I'd also like to point out and note that Parex remains unhedged in 2021, providing full exposure to the clarified Brent oil prices. A further highlight for us in Q3 was Parex expanded a strategic partnership with Ecopetrol, whereby Parex will earn an operated 50% interest in two blocks; the Arauca block and the LLA-38 exploration Block, both located in the proven and highly prolific Llanos basin in the Arauca province of Northeastern Colombia, very close to our Capachos Block that we’ve been operating with Ecopetrol for the past four or five years.

Attractive for Parex the blocks contain crude reserves along with development and drill ready exploration prospects. This builds on our operational and commercial success at Capachos.

Our goal is to start operations in the first quarter of 2022 in the Arauca block. Lastly with ESG as a key value of Parex, we have released our 2020 sustainability report, and are committed to reduce our operated scopes 1 and 2 greenhouse gas emissions intensity by 50% by 2030 from a 2019 baseline.

I would now like to pass this meeting to Parex’s President and CEO, Mr. Imad Mohsen to go over the Q4 outlook and 2022 guidance, which was provided yesterday as well.

Go ahead Imad.

Thank you, Ken. As we move through the final quarter, Parex will be focused on the capital program to announce our long term sustainability in Columbia and to strengthen our commitment to maximize long term shareholder value.

I’m pleased to report the following upcoming operations in Q4. We have a diverse drilling program in Cabrester, Capachos and Fortuna blocks.

Based of the very first test results to-date, we expect an additional three to four wells to be driven by year end in Cabrester, which is estimated to increase our 2021 exit-production to over 9,000 barrels of oil per day there. Planning also to commence six well program in Capachos early 2022, and the Fortuna field has two wells already drilled, Cayena a multilateral and [inaudible] which are awaiting completion activities, and we expect to turn to us prior to year end this year.

With regard to 2022 guidance, I will now move to our 2022 guidance, provide an update on our frameworks for return to capital to shareholders, which we are very excited to describe. One of the elements that attracted me most to join Parex was the best in quality of the company's exploitation and exploration portfolio.

The current third party funds flow provided by operations is estimated to be over $725 million. This provides multiple levers to increase shareholder returns that could be dividends, share buybacks and assets growth.

We are excited to move forward with it, a capital growth plan that materially expands the boundaries of our current development properties, while also unlocking substantial new opportunities within our portfolio. Underpinning the plan is the portfolio was substantially discovered in place volumes that are being unlocked right now using techniques which are unfamiliar in Columbia, but long proven elsewhere.

To name a few multi-lateral drilling, hydraulic stimulation, synthetic drilling models, stimulation grounds range in drilling or Airborne Geophysics that could be incorporated in survey operations. They are all tools we have at our fingertips to unlock our Colombian asset base.

At forecast oil price of $70 in 2022, Parex corporate guidance consists of the following: Average production range of 52,000 to 54,000 BoE a day. Capital expenditures totaling $400 million to $450 million, split between developments, appraisals and exploration programs, two-thirds of which is allocated to exploitation activities.

We have substantially increased our CapEx program in ’22 for multiple reasons. One is, we are beginning operations on our Arauca & LLA-38 Ecopetrol partnerships that Ken referred to them earlier.

Second, we are catching up on the exploration and growth capital that we differed from 2021, while we were focusing on the health and safety of our communities during the COVID-19 pandemic. And finally is, we have – at first and unlock the deep and diverse portfolio of exploration discoveries already made and that we have amassed over the last three years.

All of this is a critical step to demonstrate Parex’s future sustainability. With this brief overview, I’d like to turn to the line back to the operator to start the Q&A session.

Operator, over to you.

Yeah, thanks. Good morning.

I had a few questions today. The first one is, what contributed to the rise in production to an excess of 49,000.

Hi Phil, it’s Ken. Mostly that’s coming from Cabrestero.

Okay.

We drilled eight wells to-date on that program. We continue to drill more as Imad was saying, and we’ll keep drilling in 2022.

But yeah, that’s where the production volumes increase is primarily coming from.

Okay perfect. When you are going through your 2022 budget, how should we think about - how is your maintenance CapEx requirements?

Does it change much versus 2021 and 2020 or is it kind of pretty much the same. I mean outside the fact that you did a little bit higher production.

Alright Phil, it’s Mike Kruchten. No, it’s pretty well the same.

You know the maintenance capital is still primarily allocated to keep producing blocks in silica and we don't see too much of a change there. Certainly you know when we look at the development capital, that's really accelerating the discoveries we've had in the past such as La Belleza and so we can get that production on stream in 2022.

Okay, perfect. And finally what kind of triggers or targets do you look at in deciding these special dividends, just kind of give us kind of a way to gage them.

I guess we looked at it Phil with respect of, we're mindful of our growth, of our balance sheet and we didn't want to continue to grow working capital. So we looked at how our working capital is forecast to grow at strip prices and our free cash flow and our CapEx program for Q4, looked at where we were at Q3 and wanted to make sure that we came in well below $400 million of working capital for Q4.

So that led us to have incremental dollars to either do a share buyback or special dividend. As I noted, we're almost through our 10% in CIB.

Didn’t feel the need to continue the buy, you know do an incremental SIB or something this year. So the board approved a special dividend of $0.25.

And how you should look at this going forward is, we’re giving a strong signal to the market that we are going to be managing our working capital at these current levels for the short term, near term. And that as cash flow, as free cash flow then starts to build, we will be allocating it back to the shareholder in some fashion and some form.

Great! Perfect!

Thanks.

Hey guys! Good morning.

You outlined a fairly robust exploration program for 2022. So just wondering if you can provide some details or rankings, I guess in terms of prospect viability and just if possible some parameters around potential resource additions if drilling is successful there.

So just really trying to get a sense for potential impacts there.

Hi Luke! It’s Mike Kruchten.

We have a pretty diverse set of exploration blocks, specially the blocks that we've accumulated over the last three years, about five blocks and plus the Ecopetrol partnership. So those are the blocks we’ll be targeting.

Obviously we didn't do a lot of work in 2020 as we worked our way through COVID. The blocks that we really will focus on include Boranda, Capachos, which is Block 38, includes the Califa prospect, CPO-11, Fortuna continuation, 134 veanous [ph] and some of the lower Magdalena blocking, including VIM-1 and VIM-43.

Now we generally don't disclose what the resource assessments are. What I can tell you is, you know it's a diverse portfolio and we're always targeting to keep our reserve life index in that 9 to 11 years, while at the same time accelerating some of those production volumes up front.

So that's the way we approach our exploration programs for the year.

Okay, helpful. Thanks Mike.

Thank you all for attending this session, and looking forward to even more results next quarter. Thank you.