Parex Resources Announces Q3 2026 Results, Delivers Step Change in Production, and Declares Q4 2026 Dividend

2026-11-06

TSX - Toronto Stock Exchange · Oil · Natural Gas · Canada · Production & Operations

CALGARY, Alberta, Nov. 06, 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 September 30, 2026, an operational update and an updated H2 2026 outlook, and the declaration of its Q4 2026 regular dividend of C$0.385 per share._All amounts herein are in United States Dollars (“USD”) unless otherwise stated._

"Parex is making strong progress toward closing out a transformational year, underpinned by a low-decline production base and exceptional recent exploration results," commented Imad Mohsen, President & Chief Executive Officer.

"While wider differentials, energy costs, and foreign exchange are weighing on near-term cash flow expectations, our operational momentum remains strong. In the Eastern Llanos, LLA-111 is nearing one million barrels of cumulative production, highlighting its potential to become one of Parex’s most significant discoveries in recent years. At the same time, we are advancing our Foothills exploration program toward execution, while continuing to integrate Frontera and capture the value of the combined business. Together, these efforts build on the strength of our existing production base and advance the next phase of our growth."

Key Highlights

Recognized the first full-quarter results of the newly acquired Colombian assets from Frontera Energy, highlighting successful initial integration into the Company's operations, with optimization and synergy realization initiatives underway. Updated H2 2026 production outlook to 85,500-87,500 boe/d, reflecting steady operational performance, and revised financial guidance to account for external factors and increased capital expenditures associated with successful exploration and development activities(1). Delivered positive operational momentum to begin Q4 2026, with October 2026 average production of approximately 85,800 boe/d(8). Began earning 50% production participation on roughly 14,000 bbl/d in late October 2026, following the start of initial activities in the Middle Magdalena (Casabe and Llanito)(1). Achieved strong 2026 near-field exploration results, with seven new discoveries to date and several awaiting infrastructure tie-in; success rates of 70% in the Eastern Llanos and 100% across three other prospects underscore growth potential and portfolio-wide repeatability(1). Advanced development in the Eastern Llanos (LLA-111), sustaining production above 6,000 bbl/d, with a further 2,000 bbl/d increase expected by YE 2026 and significant multi-field upside in 2027 as egress constraints are addressed and field drilling continues(1). Successfully drilled a near-field exploration well in the Lower Magdalena (VIM-1), which tested at 6,600 boe/d, further supporting the planned mid-2027 gas export pipeline that is expected to enable sales of up to 25,000 mcf/d into Colombia’s premium natural gas market(1). Declared Q4 2026 regular dividend of C$0.385 per share(2)(C$1.54 per share annualized).

Q3 2026 Highlights

Average production was 83,264 boe/d(3), compared to 54,121 boe/d(3)in Q2 2026, with the positive step change primarily driven by the first full-quarter results from the Frontera E&P transaction that closed on June 1, 2026, and continued strong production from LLA-111. Recognized net income of $75 million or $0.78 per share basic(4) compared to net income of $50 million or $0.52 per share basic(4)in the comparative quarter of 2025, primarily attributed to an increased operating netback driven by higher crude oil prices and higher volumes. Generated Q3 2026 funds flow provided by operations ("FFO")(5)of $196 million and FFO per share(4)(5)of $2.04; a build in crude oil inventories of 316,900 bbls resulted in an estimated $10 million temporary FFO impact, with the volumes sold post-Q3. Realized adjusted EBITDA(6)of $238 million. Produced an operating netback(7)of $37.25/boe and an FFO netback(7)of $26.33/boe from an average Brent crude oil price of $91.29/bbl; lower margins were primarily driven by wider crude oil differentials, increased production expense, and higher purchased oil costs related to the acquired Frontera E&P assets. Incurred $162 million of capital expenditures(6), primarily from activities at LLA-34, Quifa, LLA-111, VIM-1, and LLA-74; additional capital for certain projects was accelerated based on successful exploration outcomes.

(1) See "Operational Update" section. (2) Supplementary financial measure. See “Non-GAAP and Other Financial Measures Advisory.” (3) See “Operational and Financial Items” for a breakdown of production by product type. (4) Based on weighted average basic shares for the period. (5) Capital management measure. See “Non-GAAP and Other Financial Measures Advisory.” (6) Non-GAAP financial measure. See “Non-GAAP and Other Financial Measures Advisory.” (7) Non-GAAP ratio. See “Non-GAAP and Other Financial Measures Advisory.” (8) Estimated average production; light & medium oil: ~25,416 bbl/d, heavy oil: ~55,655 bbl/d, conventional natural gas: ~16,805 mcf/d, natural gas liquids: 1,928 boe/d; rounded for presentation purposes.

| Operational and Financial Items | Three Months Ended | Nine Months Ended | | | | | | | | (unaudited) | Sep. 30, | Sep. 30, | Jun. 30, | Sep. 30, | | | | | | | 2026 | | 2025 | | 2026 | | 2026 | | | Operational | | | | | | | | | | Average daily production | | | | | | | | | | Light Crude Oil and Medium Crude Oil (bbl/d) | 24,665 | | 10,257 | | 14,515 | | 17,676 | | | Heavy Crude Oil (bbl/d) | 54,010 | | 32,026 | | 37,130 | | 40,227 | | | Natural gas liquids (boe/d) | 1,871 | | 268 | | 765 | | 969 | | | Crude Oil (bbl/d) | 80,546 | | 42,551 | | 52,410 | | 58,872 | | | Conventional Natural Gas (mcf/d) | 16,308 | | 8,412 | | 10,266 | | 11,856 | | | Oil & Gas (boe/d)(1) | 83,264 | | 43,953 | | 54,121 | | 60,848 | | | | | | | | | | | | | Operating netback ($/boe) | | | | | | | | | | Reference price - Brent ($/bbl) | 91.29 | | 68.17 | | 96.68 | | 88.86 | | | Oil & gas sales price ($boe/d)(4) | 84.97 | | 62.41 | | 90.84 | | 82.63 | | | Purchased crude oil(4)(7) | (6.80 | ) | — | | (7.16 | ) | (5.27 | ) | | Oil and natural gas sales(2), net of purchased crude oil(4)(7) | 78.17 | | 62.41 | | 83.68 | | 77.36 | | | Royalties(4) | (11.59 | ) | (7.61 | ) | (14.22 | ) | (11.83 | ) | | Net revenue(4) | 66.58 | | 54.80 | | 69.46 | | 65.53 | | | Production expense(4) | (22.13 | ) | (15.36 | ) | (17.69 | ) | (18.87 | ) | | Transportation expense(4) | (7.20 | ) | (4.73 | ) | (6.63 | ) | (6.51 | ) | | Operating netback ($/boe)(2) | 37.25 | | 34.71 | | 45.14 | | 40.15 | | | | | | | | | | | | | Funds flow provided by operations netback ($/boe)(2) | 26.33 | | 26.04 | | 25.74 | | 26.65 | | | Adjusted funds flow provided by operations netback ($/boe)(2) | 26.33 | | 26.82 | | 37.26 | | 28.39 | | | | | | | | | | | | | Financial ($000s except per share amounts) | | | | | | | | | | | | | | | | | | | | Net income | 75,255 | | 50,476 | | 444,296 | | 524,140 | | | Per share - basic(6) | 0.78 | | 0.52 | | 4.62 | | 5.45 | | | | | | | | | | | | | Funds flow provided by operations(5) | 196,341 | | 105,298 | | 132,054 | | 442,097 | | | Per share - basic(2)(6) | 2.04 | | 1.09 | | 1.37 | | 4.60 | | | | | | | | | | | | | Adjusted funds flow provided by operations(5) | 196,341 | | 108,491 | | 191,155 | | 471,097 | | | Per share - basic(2)(6) | 2.04 | | 1.12 | | 1.99 | | 4.90 | | | | | | | | | | | | | Capital expenditures(3) | 161,770 | | 79,961 | | 133,693 | | 386,506 | | | | | | | | | | | | | Free funds flow(3) | 34,571 | | 25,337 | | (1,639 | ) | 55,591 | | | | | | | | | | | | | EBITDA(3) | 242,588 | | 113,648 | | 487,551 | | 825,969 | | | Adjusted EBITDA(3) | 238,024 | | 121,132 | | 192,063 | | 562,771 | | | | | | | | | | | | | Dividends paid | 26,772 | | 26,892 | | 26,483 | | 80,192 | | | Per share - Cdn$(4)(6) | 0.385 | | 0.385 | | 0.385 | | 1.155 | | | | | | | | | | | | | Shares repurchased | — | | 7,606 | | — | | — | | | Number of shares repurchased (000s) | — | | 620 | | — | | — | | | | | | | | | | | | | Outstanding shares (end of period) (000s) | | | | | | | | | | Basic | 96,196 | | 96,564 | | 96,180 | | 96,196 | | | Weighted average basic | 96,185 | | 96,874 | | 96,179 | | 96,119 | | | Weighted average diluted | 96,440 | | 96,956 | | 96,440 | | 96,352 | | | | | | | | | | | | | Net debt(5) | 911,364 | | 13,167 | | 906,598 | | 911,364 | | | Cash | 142,725 | | 69,810 | | 163,286 | | 142,725 | |

(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 for the nine months ended September 30, 2026, equivalent to $0.56/boe.

Operational Update

2026 Guidance Update: Production Steady; Reflecting Wider Differentials and Increased Energy Expense

The Company is updating its H2 2026 guidance to reflect operating performance to date and its latest expectations for the balance of the year. Production remains in line with expectations, allowing the Company to narrow its H2 2026 production guidance range while maintaining the midpoint at 86,500 boe/d.

The revised outlook reflects evolving market conditions, including movements in benchmark oil prices and wider differentials across Brent, WTI and Colombia’s Vasconia benchmark. The current commodity price environment is also influencing operating costs, with higher oil prices driving increased diluent and diesel expenses, El Niño-related seasonal conditions raising power generation costs, and Colombian peso appreciation contributing to higher production expenses. Under more normalized market conditions, the Company would expect crude oil differentials and operating costs to moderate.

To manage a portion of its exposure to currency movements, the Company has implemented Colombian peso collars covering approximately 50% of its Colombian peso-denominated costs for Q4 2026 and has begun building a hedge position for 2027. In parallel, following the Frontera Transaction, the Company continues to advance operational integration and assess opportunities to optimize its operating model and realize efficiencies over time.

These measures and market considerations are reflected in the Company’s updated expectations for realized pricing and operating costs for the remainder of 2026. Partially offsetting these pressures, the Company expects improvements in its projected effective tax rate, providing a benefit to the financial outlook.

The Company’s revised outlook also reflects increased capital investment to support ongoing development activities in the Middle Magdalena (Llanito and Casabe) and advance exploration successes in the Eastern Llanos (LLA-111) and Lower Magdalena (VIM-1). This investment will support the advancement of farm-in commitments and progress infrastructure required to capitalize on positive exploration results, positioning the Company to support its 2027 outlook and longer-term growth objectives.

(1) Non-GAAP ratio. See “Non-GAAP and Other Financial Measures Advisory”. (2) Capital management measure. See “Non-GAAP and Other Financial Measures Advisory”. (3) Non-GAAP financial measure. See “Non-GAAP and Other Financial Measures Advisory”.

The following table summarizes the key assumptions underlying the Company’s updated H2 2026 guidance:

| Category | H2 2026 Guidance (May 12, 2026) | Updated H2 2026 Guidance(1) (November 6, 2026) | | Differential (Vasconia) | $4.00/bbl | $8.00-12.00/bbl | | Production Expense (Opex + Energy) | $16.00-20.00/boe | $22.00-23.00/boe | | Effective Tax Rate | 12-15% | 7-10% |

(1) All other key H2 2026 assumptions unchanged: operational downtime: ~5%; transportation expense: ~$7.50/boe; G&A expense: ~$5.00/boe; finance expense: ~$2.50/boe; see “Non-GAAP and Other Financial Measures Advisory”.

For FY 2026, average production is expected to exceed the previous guidance range of 63,000 to 67,000 boe/d, while capital expenditure guidance is increased to $510 to $540 million.

Frontera E&P Update

Parex’s first full quarter following the June 1, 2026 acquisition of Frontera Energy's Colombian exploration and production assets advanced as planned, with operational continuity maintained and integration progressing. Priorities include integrating teams and business processes, optimizing development and production across the combined asset base, and pursuing capital-efficient deployment to maximize returns from the portfolio.

The Company is advancing opportunities to enhance operating efficiency and realize synergies, primarily across administration, marketing, supply chain, and tax. Synergy realization remains on track, with Management expecting 2027 annualized run-rate synergies in excess of the previously disclosed $20 to $50 million range, as realization efforts ramp up in Q4 2026 to support long-term value creation.

Addition of Producing Assets in the Magdalena Basin Update

Parex commenced earning a 50% production participation interest in approximately 14,000 bbl/d of medium crude oil in late October 2026, following the initiation of activities in the Middle Magdalena at both the Casabe and Llanito blocks. In the near to medium term, the Company will focus on sustaining and optimizing production through waterflood management, reservoir optimization and targeted workovers, while advancing development opportunities including horizontal drilling, field re-patterning and enhanced oil recovery through the use of polymers and surfactants to support longer-term production growth.

Eastern Llanos Exploration Success

Field production in the Eastern Llanos has remained strong with volumes over 6,000 bbl/d of medium crude oil on natural flow. Current production is constrained primarily by infrastructure capacity and weather-related road access, rather than well performance. To support continued growth, Parex is advancing a phased egress expansion plan, with ongoing drilling results helping inform the timing and scope of infrastructure investment. As drier conditions return in Q4 2026, the Company expects to unlock a further 2,000 bbl/d of production by YE 2026.

Exploration success at LLA-111 is establishing the foundation for a new, growing multi-field production hub in the Eastern Llanos. Following four discoveries in early 2026, Parex is advancing development while continuing to pursue additional exploration opportunities, positioning the block to deliver further resource and production growth. Results to date also reinforce the significant potential of the Company’s over 1.6 million-acre position in the Eastern Llanos.

With strong momentum from recent discoveries and an extensive prospect inventory, Parex plans to drill approximately 20 additional exploration and development wells in the area over the next 12 months. This ambitious program is expected to be the largest single investment area in 2027, supporting the continued expansion of Parex’s production base in the area.

Lower Magdalena Exploration Discovery at VIM-1

In Q3 2026, the Company successfully drilled a near-field exploration well, resulting in a discovery within the same formation as the producing La Belleza field. To minimize gas flaring, the well was tested over a limited 35-hour period. During the final ten hours, following recovery of completion load fluids, the well flowed at average rates of 22,000 mcf/d of gas and 3,000 bbl/d of light crude oil (approximately 6,600 boe/d), with a 1% water cut. The well is currently being tied into the La Belleza gas facility, with completion expected by YE 2026.

In parallel, the Company is progressing arrangements for a dedicated gas export pipeline on the block, targeted to be operational by mid-2027. The pipeline will establish access to Colombia's domestic natural gas market and enable the monetization of up to 25,000 mcf/d of gas currently being reinjected into the reservoir. Against a backdrop of constrained domestic gas supply, the project is expected to contribute incremental volumes to the Colombian market while providing the Company with an opportunity to capture attractive domestic natural gas pricing.

Llanos Foothills Exploration Update

Parex continues to advance its Foothills exploration strategy, focused on premier onshore prospects with transformational growth potential. The Company is progressing toward drilling at Piedemonte, where civil works are underway and spud is targeted before YE 2026. This represents a key near-term milestone in Parex’s big 'E' exploration program. Early-stage activities have also commenced at Farallones, the second planned Foothills prospect, with drilling anticipated in 2027.

2026 Capital Markets Day

Parex plans to host an investor presentation on December 9, 2026, beginning at 12:30 p.m. Calgary time (1:30 p.m. EST) in Bogotá, Colombia. The event will provide an overview of the Company’s strategy, transformed portfolio, and long-term vision and growth potential. A webcast will also be available, with access details to be provided in due course.

Q4 2026 Dividend

Parex’s Board of Directors has declared a Q4 2026 regular dividend of C$0.385 per share to shareholders of record on December 8, 2026, to be paid on December 15, 2026. This regular dividend payment to shareholders is designated as an “eligible dividend” for purposes of the Income Tax Act (Canada).

Q3 2026 Results - Conference Call & Webcast

Parex will host a conference call and webcast to discuss its Q3 2026 results on Friday, November 6, 2026, beginning at 9:30 a.m. Calgary time (10:30 a.m. EST). To participate in the conference call or webcast, please see the access information below:

Conference ID: 128 354 764 Participant Dial-In Number: 1-833-461-5787 Participant Toll-Free Dial-In Number: 1-585-542-9983 Webcast: https://events.q4inc.com/attendee/128354764

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

NOT FOR DISTRIBUTION OR FOR DISSEMINATION IN THE UNITED STATES

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.

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