Parex Resources Inc. press release

Parex Resources Announces Q2 2026 Results, Highlights Strong July Production, Reaffirms Step-Change Guidance, and Declares Q3 2026 Dividend

2026-07-31

TSX - Toronto Stock Exchange · Oil · Natural Gas · Canada · Corporate Finance

CALGARY, Alberta, July 30, 2026 (GLOBE NEWSWIRE) -- Parex Resources Inc. (“Parex” or the “Company”) (TSX: PXT) is pleased to announce its financial and operational results for the three-month period ended June 30, 2026, updated independent reserves reports that reflect recent transactions, an operational update, and the declaration of its Q3 2026 regular dividend of C$0.385 per share._All amounts herein are in United States Dollars (“USD”) unless otherwise stated._

Imad Mohsen, President & Chief Executive Officer, commented: "The integration of the Frontera assets and its talented team has exceeded our expectations, with a seamless transition and strong execution across the combined organization. This milestone highlights the complementary strengths of the two organizations and enhances Parex’s ability to deliver on its long-term growth strategy. Parex is now a larger, more resilient company with greater scale, reduced volatility, and enhanced capital allocation flexibility. The pro forma reserve reports highlight this transformation, with PDP and 1P reserves increasing more than 80% from our year-end 2025 reserves report. Strong performance across our portfolio, together with contributions from the Frontera assets and new production from Eastern Llanos discoveries, positions us well to deliver our step-change 2026 guidance and supports a strong outlook underpinned by multiple growth engines."

Key Highlights

Successfully closed the Frontera E&P ("Frontera") transaction, becoming Colombia's largest independent oil & gas producer(1). Added new assets in the Magdalena Basin, where Parex expects to earn 50% production participation on roughly 15,000 bbl/d in H2 2026 following the commencement of initial activity at the Casabe & Llanito blocks(2). Released updated reserves, which include the Frontera and Magdalena assets (Casabe & Llanito), highlighting that on an indicative basis, the combined Company has increased its PDP, 1P and 2P reserves by 82%, 83% and 71%, respectively(3). Building positive operational momentum in H2 2026, with July 2026 average production of approximately 83,500 boe/d(4). Reaffirming H2 2026 average production guidance of 82,000 to 91,000 boe/d(4). Exploration success at LLA-111 is supporting a growing multi-field development area, with current production averaging over 5,000 bbl/d and expected to increase by an additional 2,000 to 3,000 bbl/d in Q4 2026 as the return of the dry season enables continued development(4). Declared Q3 2026 regular dividend of C$0.385 per share(5)(C$1.54 per share annualized).

Q2 2026 Highlights

Average production was 54,121 boe/d(6), compared to 44,735 boe/d(6)in Q1 2026, with the positive step change primarily driven by the closing of the Frontera transaction on June 1, 2026. Recognized net income of $444 million or $4.62 per share basic(7) compared to net income of $49 million or $0.50 per share basic(7)in the comparative quarter of 2025, primarily attributed to the gain on acquisition. Generated Q2 2026 adjusted funds flow provided by operations ("FFO")(8)of $191 million and adjusted FFO per share(7)(8)of $1.99. Adjusted FFO(8)for the quarter incorporates one-time costs of approximately $59 million, comprised of $28 million of nonrecurring transaction-related costs and $31 million of realized losses on hedging contracts.

Realized adjusted EBITDA(9)of $192 million. Produced an operating netback(10)of $45.14/boe and an adjusted FFO netback(10)of $37.26/boe from an average Brent crude oil price of $96.68/bbl. Incurred $134 million of capital expenditures(9), primarily from activities at LLA-111, LLA-34, VIM-1, and Capachos. Repaid $175 million of bank debt; at quarter end, had access to $459 million of liquidity via cash, marketable securities, and available capacity under the $240 million undrawn credit facility. Paid a regular quarterly dividend of C$0.385 per share(5).

(1) As previously announced on June 1, 2026. (2) As previously announced on May 4, 2026. (3) See "GLJ Reserves Update for Acquired Assets" section. (4) See "Operational Update" section. (5) Supplementary financial measure. See “Non-GAAP and Other Financial Measures Advisory.” (6) See “Operational and Financial Items” for a breakdown of production by product type. (7) Based on weighted average basic shares for the period. (8) Capital management measure. See “Non-GAAP and Other Financial Measures Advisory.” (9) Non-GAAP financial measure. See “Non-GAAP and Other Financial Measures Advisory.” (10) Non-GAAP ratio. See “Non-GAAP and Other Financial Measures Advisory.”

| Operational and Financial Items | Three Months Ended | Six Months Ended | | | | | | | | (unaudited) | Jun. 30, | | Jun. 30, | | Mar. 31, | | Jun. 30, | | | | 2026 | | 2025 | | 2026 | | 2026 | | | Operational | | | | | | | | | | Average daily production | | | | | | | | | | Light Crude Oil and Medium Crude Oil (bbl/d) | 14,515 | | 10,182 | | 13,726 | | 14,126 | | | Heavy Crude Oil (bbl/d) | 37,130 | | 31,047 | | 29,269 | | 33,222 | | | Natural gas liquids (boe/d) | 765 | | 316 | | 254 | | 508 | | | Crude Oil (bbl/d) | 52,410 | | 41,545 | | 43,249 | | 47,856 | | | Conventional Natural Gas (mcf/d) | 10,266 | | 5,982 | | 8,916 | | 9,594 | | | Oil & Gas (boe/d)(1) | 54,121 | | 42,542 | | 44,735 | | 49,455 | | | | | | | | | | | | | Operating netback ($/boe) | | | | | | | | | | Reference price - Brent ($/bbl) | 96.68 | | 66.71 | | 78.38 | | 87.60 | | | Oil & gas sales price ($boe/d)(4) | 90.84 | | 61.35 | | 67.67 | | 80.67 | | | Purchased crude oil(4)(7) | (7.16 | ) | 0.00 | | 0.00 | | (4.02 | ) | | Oil and natural gas sales(2), net of purchased crude oil(4)(7) | 83.68 | | 61.35 | | 67.67 | | 76.65 | | | Royalties(4) | (14.22 | ) | (7.93 | ) | (9.17 | ) | (12.01 | ) | | Net revenue(4) | 69.46 | | 53.42 | | 58.50 | | 64.64 | | | Production expense(4) | (17.69 | ) | (12.70 | ) | (14.29 | ) | (16.20 | ) | | Transportation expense(4) | (6.63 | ) | (4.47 | ) | (5.05 | ) | (5.94 | ) | | Operating netback ($/boe)(2) | 45.14 | | 36.25 | | 39.16 | | 42.50 | | | | | | | | | | | | | Funds flow provided by operations netback ($/boe)(2) | 25.74 | | 26.90 | | 28.35 | | 26.88 | | | Adjusted funds flow provided by operations netback ($/boe)(2) | 37.26 | | 26.60 | | 29.06 | | 33.66 | | | | | | | | | | | | | Financial ($000s except per share amounts) | | | | | | | | | | | | | | | | | | | | Net income | 444,296 | | 49,113 | | 4,589 | | 448,885 | | | Per share - basic(6) | 4.62 | | 0.50 | | 0.05 | | 4.67 | | | | | | | | | | | | | Funds flow provided by operations(5) | 132,054 | | 104,821 | | 113,702 | | 245,756 | | | Per share - basic(2)(6) | 1.37 | | 1.08 | | 1.18 | | 2.56 | | | | | | | | | | | | | Adjusted funds flow provided by operations(5) | 191,155 | | 103,653 | | 116,548 | | 307,703 | | | Per share - basic(2)(6) | 1.99 | | 1.06 | | 1.21 | | 3.20 | | | | | | | | | | | | | Capital expenditures(3) | 133,693 | | 88,690 | | 91,043 | | 224,736 | | | | | | | | | | | | | Free funds flow(3) | (1,639 | ) | 16,131 | | 22,659 | | 21,020 | | | | | | | | | | | | | EBITDA(3) | 487,551 | | 124,000 | | 95,830 | | 583,381 | | | Adjusted EBITDA(3) | 192,063 | | 127,745 | | 132,684 | | 324,747 | | | | | | | | | | | | | Dividends paid | 26,483 | | 27,561 | | 26,937 | | 53,420 | | | Per share - Cdn$(4)(6) | 0.385 | | 0.385 | | 0.385 | | 0.770 | | | | | | | | | | | | | Shares repurchased | — | | 6,025 | | — | | — | | | Number of shares repurchased (000s) | — | | 630 | | — | | — | | | | | | | | | | | | | Outstanding shares (end of period) (000s) | | | | | | | | | | Basic | 96,180 | | 97,184 | | 96,115 | | 96,180 | | | Weighted average basic | 96,179 | | 97,501 | | 95,991 | | 96,086 | | | Weighted average diluted | 96,440 | | 97,501 | | 96,174 | | 96,305 | | | | | | | | | | | | | Net debt (net cash)(5) | 906,598 | | (2,048 | ) | 39,694 | | 906,598 | | | Cash | 163,286 | | 98,825 | | 44,775 | | 163,286 | | | (1) References to crude oil or natural gas in the above table and elsewhere in this press release refer to the light and medium crude oil and heavy crude oil and conventional natural gas, respectively, product types as defined in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. | | | | | | | | | | (2) Non-GAAP ratio. See “Non-GAAP and Other Financial Measures Advisory”. | | | | | | | | | | (3) Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures Advisory". | | | | | | | | | | (4) Supplementary financial measure. See "Non-GAAP and Other Financial Measures Advisory". | | | | | | | | | | (5) Capital management measure. See "Non-GAAP and Other Financial Measures Advisory". | | | | | | | | | | (6) Per share amounts (with the exception of dividends) are based on weighted average common shares. Dividends paid per share are based on the number of common shares outstanding at each dividend record date. | | | | | | | | | | (7) Purchased crude oil cost includes ~$9.4 million of non-cash inventory fair value adjustment as a result of the purchase price allocation, equivalent to $1.83/boe and $1.02/boe for the three months and six months ended June 30, 2026, respectively. | | | | | | | | | | | | | | | | | | |

GLJ Reserves Update for Acquired Assets(1)(2)(3)

Below is a summary of information contained in the reserves reports (collectively, the "GLJ Reports") prepared by GLJ Ltd. ("GLJ"), an independent qualified reserves evaluator:

Parex assets (dated March 3, 2026, with an effective date of December 31, 2025; as previously announced March 4, 2026); Frontera assets (dated June 23, 2026, with an effective date of December 31, 2025)(4); and Magdalena assets (Casabe & Llanito) (dated July 20, 2026, with an effective date of May 31, 2026)(5).

(1) All reserves are presented as Parex’s working interest before royalties and in certain tables set forth below, the columns may not add due to rounding. (2) Each GLJ Report was prepared in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”) and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). (3) All reserves presented based on GLJ’s forecast pricing, effective January 1, 2026. GLJ pricing is available on their website at www.gljpc.com. (4) Frontera transaction closed on June 1, 2026. (5) Entitlement remains subject to business collaboration agreement earnings terms; Parex expects to spud its first wells during H2 2026 to trigger its participating share on each block.

Accounting for transactions that occurred in 2026, the Company’s reserves have been presented on a combined basis using the GLJ Reports for the Parex assets, Frontera assets, and Magdalena assets (Casabe & Llanito). The GLJ Reports have different effective dates and should be read accordingly: two reports are effective as of December 31, 2025, and one report is effective as of May 31, 2026. The information presented is provided on an indicative, pro forma basis.

| Reserve Category_Mboe_ | PXT 2025 | Frontera | Magdalena (Casabe & Llanito) | Total(1) | Change over PXT 2025 | | | PDP | 72,807 | 47,863 | 11,729 | 132,399 | 82 | % | | 1P | 113,177 | 71,902 | 21,491 | 206,570 | 83 | % | | 2P | 178,182 | 99,802 | 27,489 | 305,473 | 71 | % | | (1) The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. | | | | | | | | | | | | | | |

Operational Update

2026 Guidance: Reflecting Step-Change Growth

The Company has reaffirmed its H2 2026 and FY 2026 guidance, reflecting continued confidence in its operational outlook following the Frontera transaction and the expected timing of production from the Magdalena assets.

For FY 2026, average production is expected to be 63,000 to 67,000 boe/d, with capital expenditures of $495 to $515 million.

| Category | H2 2026 Guidance_(May 12, 2026)(1)_ | | Brent Crude Oil Average Price | $90/bbl | | Average Production | 82,000-91,000 boe/d | | Funds Flow Provided by Operations Netback(2) | $30-33/boe | | Funds Flow Provided by Operations(3) | $475-525 million | | Capital Expenditures(4) | $275-295 million | | Free Funds Flow(4) | $215 million (midpoint) | | (1) H2 2026 assumptions: operational downtime: ~5%; Vasconia differential: ~$4.00/bbl; production expense: $16.00-20.00/bbl; transportation expense: ~$7.50/bbl; G&A expense: ~$5.00/bbl; finance expense: ~$2.50/bbl, effective tax rate: 12-15%; see “Non-GAAP and Other Financial Measures Advisory”. | | | (2) Non-GAAP ratio. See “Non-GAAP and Other Financial Measures Advisory”. | | | (3) Capital management measure. See “Non-GAAP and Other Financial Measures Advisory”. | | | (4) Non-GAAP financial measure. See “Non-GAAP and Other Financial Measures Advisory”. | | | | |

The Company continues to monitor market conditions that may influence operating costs and realized pricing. Currently, elevated energy costs, driven in part by El Niño-related weather impacts and broader market conditions, together with adverse foreign exchange movements resulting from Colombian peso appreciation, are contributing to production expenses trending to the upper end of guidance. Vasconia differentials also remain elevated, reflecting current market dynamics.

Corporate Production Update

The Company’s production profile has experienced a step-change following recent transactions, which is reflected in the Company's upgraded 2026 guidance, as previously announced on May 12, 2026. For the period of July 1, 2026, to July 29, 2026, average production was approximately 83,500 boe/d(1), demonstrating positive operational momentum.

(1) Estimated average production; light & medium crude oil: ~22,071 bbl/d, heavy crude oil: ~58,409 bbl/d, conventional natural gas: ~16,424 mcf/d, natural gas liquids: 333 boe/d; rounded for presentation purposes.

Frontera E&P Update

On June 1, 2026, Parex successfully closed its previously announced acquisition of Frontera Energy Corporation's Colombian exploration and production assets. The addition of the Frontera assets transforms Parex’s portfolio by adding high-quality reserves, enhancing long-term production visibility and unlocking greater capital allocation flexibility to accelerate value creation across its premier development and exploration opportunities.

Following close, Parex’s transition activities were completed smoothly and safely, with a strong focus on maintaining operational continuity and enabling a seamless transition. Significant progress is now being made with regards to integrating the acquired assets and talent.

The Company continues to actively review the strengthened portfolio to identify opportunities to optimize development, enhance oil recovery, and capture operational and strategic synergies across areas including marketing, supply chain, tax, and other functions. These initiatives are expected to drive further efficiency improvements and support long-term value creation, with foundational work underway and the associated benefits expected to scale over the coming periods.

Addition of Producing Assets in the Magdalena Basin Update

Previously, on May 4, 2026, Parex announced that it had executed an agreement with its strategic partner Ecopetrol S.A., whereby Parex will earn a 50% participating share in the Casabe and Llanito blocks in the Magdalena Basin of Colombia, upon spudding the first well on each block. The assets currently produce approximately 15,000 bbl/d of medium crude oil (gross). This production is expected to add a stable, cash-generating base to Parex’s portfolio while also establishing a new core operating and development area for future growth.

With the agreement closed as of July 29, 2026, and all regulatory approvals received, Parex plans to spud its first wells during H2 2026 and trigger its participating share on each block.

Eastern Llanos Exploration Success

Exploration success at LLA-111 continues to support the expansion of a growing, multi-field development in the Eastern Llanos. Following four discoveries made across the block in 2026, Parex is advancing with development and continuing to pursue further exploration opportunities. Success to date is highly encouraging and reinforces the broader potential of the Company’s over 1.6 million-acre position within the Eastern Llanos.

While seasonal wet weather continues to influence operations, Parex has established an efficient model designed to optimize activity around seasonal conditions. By leveraging streamlined well and pad designs together with a fast-moving rig, exploration well costs have been reduced by approximately 65% compared to conventional offsets, establishing a repeatable, low-cost blueprint for the wider region.

Current production at LLA-111 is averaging over 5,000 bbl/d of medium crude oil, with weather-related road access currently limiting production levels. To support the long-term growth of the area, the Company is advancing a phased egress expansion plan, with ongoing drilling results informing the timing and scope of required infrastructure. With the return of the dry season, in Q4 2026 the Company expects to increase production by an additional 2,000 to 3,000 bbl/d from existing wells.

Building on recent exploration successes and a significant prospect inventory, Parex plans to drill 15 to 20 additional exploration and development wells in the area over the next 12 months to further advance its discoveries and grow regional production.

Llanos Foothills Update

Parex continues to prioritize exploration in the Foothills, targeting premier onshore exploration plays with transformational upside potential. The Company plans to spud its first well at the Piedemonte prospect in the Fall of 2026, with civil works commencing shortly. Parex is also advancing early-stage activities at Farallones, the second planned Foothills prospect, which remains on track to begin civil works in H2 2026.

Q3 2026 Dividend

Parex’s Board of Directors has declared a Q3 2026 regular dividend of C$0.385 per share to shareholders of record on September 8, 2026, to be paid on September 15, 2026. This regular dividend payment to shareholders is designated as an “eligible dividend” for purposes of the Income Tax Act (Canada).

ESG Update

Parex is pleased to announce that it has published its 12thannual sustainability report, which integrates TCFD for the fifth year. The full report, including performance metric tables, can be found at www.parexresources.com under Sustainability.

Q2 2026 Results - Conference Call & Webcast

Parex will host a conference call and webcast to discuss its Q2 2026 results on Friday, July 31, 2026, beginning at 9:30 am MT (11:30 am ET). To participate in the conference call or webcast, please see the access information below:

| Conference ID: | 723 230 174 | | Participant Dial-In Number: | 1-833-439-1904 | | Participant Toll-Free Dial-In Number: | 1-833-504-8260 | | Webcast: | https://events.q4inc.com/attendee/723230174 | | | |

About Parex Resources Inc.

Parex is the largest independent oil and gas company in Colombia, focusing on sustainable conventional production. The Company’s corporate headquarters are in Calgary, Canada, with an operating office in Bogotá, Colombia. Parex shares trade on the Toronto Stock Exchange under the symbol PXT.

For more information, please contact:

Mike Kruchten Senior Vice President, Capital Markets & Corporate Planning Parex Resources Inc. 403-517-1733 investor.relations@parexresources.com

Steven Eirich Senior Investor Relations & Communications Advisor Parex Resources Inc. 587-293-3286 investor.relations@parexresources.com

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Oil & Gas Matters Advisory

This press release contains a number of oil and gas metrics, including, operating netbacks and FFO netbacks. These oil and gas metrics have been prepared by management and do not have standardized meanings or standard methods of calculation; therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. Such metrics have been included herein to provide readers with additional measures to evaluate the Company’s performance; however, such measures are not reliable indicators of the future performance of the Company and future performance may not compare to the performance in previous periods. Therefore such metrics should not be unduly relied upon. Management uses these oil and gas metrics for its own performance measurements and to provide security holders with measures to compare the Company’s operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this news release, should not be relied upon for investment or other purposes.