Mr. Mike Kruchten reports

PAREX RESOURCES PROVIDES OPERATIONAL UPDATE HIGHLIGHTED BY THE TIGANA DISCOVERY AND RECORD PRODUCTION

Parex Resources Inc. has provided an operational update.

Tigana (non-operated, block LLA-34, working interest 45 per cent)

The Tigana-1 exploration well was spudded on Sept. 9, 2013. The Tigana Sur-1 exploratory well, targeting the next closure along trend and approximately 1,200 metres from Tigana-1, was spudded on Oct. 1, 2013. Both wells have been cased and both encountered potential oil in the upper Mirador, lower Mirador and Guadalupe formations.

The first interval to be tested in the Tigana-1 well, the Guadalupe formation, was perforated over 38 feet in two separate intervals in the upper portion of the pay zone. On Dec. 6, 2013, an electric submersible pump (ESP) was installed in the well to allow for continuous production testing. After 55 hours of production, the well was producing at a rate of approximately 1,600 barrels of oil per day with a water cut of 0.8 per cent. A total of 3,135 barrels of oil were recovered with field-measured oil gravity of 15 degrees API. The Tigana-1 well will continue its short-term production test in the Guadalupe reservoir.

The service rig has been moved to the Tigana Sur-1 well to perform a production test in the Guadalupe formation, after which the service rig will return to the Tigana-1 well to test the Mirador formation.

Aruco (non-operated, block LLA-34, WI 45 per cent)

The Aruco-1 exploration well was spudded on Nov. 30, 2013, and is currently drilling at a depth of approximately 9,700 feet.

La Casona (operated, El Eden block, WI 60 per cent)

The long-term production test facility for the La Casona-1 well, which includes gas compression and sales, began production from the Une formation in early December, 2013. To date La Casona-1 is producing at restricted rates of approximately 350 bopd and 1.5 million standard cubic feet per day as facility gas compression and trucking is optimized.

La Casona-2 appraisal well was drilled 600 metres away from La Casona-1. On Dec. 10, 2013, service rig operations commenced on the La Casona-2 well with the main objective being testing of the Mirador formation. Parex expects testing to be completed prior to the year-end 2013.

Rumi (operated, El Eden block WI 60 per cent)

The Rumi-1 exploration well was spudded on Nov. 6, 2013, and has reached its target depth of 14,620 feet. The well is being cased and Parex expects to commence completion operations prior to year-end.

La Guira (operated, Los Ocarros block WI 50 per cent)

With an ESP installed, the La Guira-1 well produced at a high water cut until the well watered out. The La Guira-1 is currently suspended.

Akira (operated, Cabrestero block, WI 100 per cent)

The Akira-6 well was directionally drilled to a bottom-hole location approximately 800 metres northwest of the Akira-4 well, near the probable/possible reserves boundary as mapped in the June 30, 2013, GLJ reserve report. Based on log results, the well encountered pay as anticipated in the Guadalupe formation. The drilling rig will be skidded to drill the Akira-5 well to further delineate the down-dip extent of the existing pool. A new surface location is also being constructed to allow further delineation/development of the Akira pool.

Adalia (operated, block LLA-30, WI 100 per cent)

The Adalia-3 well was drilled approximately 600 metres west of the Adalia-1 well to delineate the seismically defined pool outline. Based on log results, the well encountered pay as anticipated and was cased for testing. The drilling rig is being skidded to drill the Adalia-2 well which will further appraise the pool approximately 1,000 metres east of the Adalia-1 well.

Parex believes that the full development of the Adalia pool will require a waterflood, and its 2014 capital plans include water injection facilities. Parex expects to produce the Adalia wells under primary production until regulatory approval for waterflood is received in 2014.

Maragogi Norte-1 (operated, block LLA-16 WI 100 per cent)

Upon further review of well data, Parex has initiated abandonment operations, foregoing testing.

Fourth quarter production

Average production from Oct. 1 to Dec. 6 was approximately 17,000 bopd, an increase of 33 per cent over the fourth quarter of 2012 and in excess of the company's Q4 guidance of 16,800 bopd. The company expects December average production to exceed 17,000 bopd with the addition of Tigana and La Casona volumes.

Drilling schedule

Parex currently has a catalyst-rich program entering the dry season in the Llanos basin. A summary of the current drilling/testing program plus the follow-up locations is provided in the table.

No.   Prospect              Block                 Timing/status           

1     Rumi-1                El Eden               Preparing to test         
2     Adalia-3              LLA-30                Preparing to test         
3     Adalia-2              LLA-30                Drilling                  
4     La Casona-2           El Eden               Preparing to test         
5     Akira-6               Cabrestero            Preparing to test         
6     Akira-5               Cabrestero            Spud following Akira-6    
7     Tigana Sur-1          LLA-34                Preparing to test         
8     Aruco-1               LLA-34                Drilling                  
9     Tua-6                 LLA-34                Spud following Aruco      
10    Celtis-1              LLA-40                Spud following Adalia-2   

We seek Safe Harbor.