Mr. Imad Mohsen reports

PAREX RESOURCES ANNOUNCES RECORD FIRST QUARTER RESULTS, INCREASED PRODUCTION GUIDANCE AND 79 per cent INCREASE TO REGULAR DIVIDEND

Parex Resources Inc. has released its financial and operating results for the three-month period ended March 31, 2022. The company is also announcing updated 2022 guidance as well as the declaration of a second quarter 2022 regular dividend of 25 cents per share. All amounts herein are in U.S. dollars unless otherwise stated.

Highlights:

• Net income of $152.7-million and record first quarter 2022 funds flow from operations ("FFO")(1) of $205.5-million.
• Quarterly regular dividend increased by 79 per cent to C$0.25 per share.
• Accelerated share buyback, repurchasing so far in 2022 nearly 50 per cent of our planned 10 per cent share buyback.
• FY 2022 midpoint production guidance increased from 53,000 boe/d to 55,000 boe/d, with projected 2022 exit production rate of over 60,000 boe/d.
• Updated capital expenditure(3) guidance from $425-million to $550-million.

"With zero debt, surplus cash and a favourable commodity price environment, Parex remains steadily focused on execution and taking advantage of the opportunity that lies ahead. We are positioned to meaningfully grow production and free funds flow through quick payback projects in an environment where global oil supply is constrained -- and build on our strong return of capital track record," commented Imad Mohsen, president and chief executive officer. "It is paramount to Parex that we continue to reward our shareholders while we make investments in our high-quality portfolio."

2022 first quarter results:

• Quarterly average oil and natural gas production was 51,688 barrels of oil equivalent per day (96 per cent crude oil and 4 per cent natural gas), an increase of 10 per cent over the first quarter of 2021 and a 4-per-cent increase over the fourth quarter of 2021;
• Net income of $152.7-million or $1.29 per share basic;
• Record quarterly funds from operations (1) of $205.5-million, up by 64 per cent from the first quarter of 2021 and up by 22 per cent from the fourth quarter of 2021;
• Generated an operating netback (2) of $59.31/boe and an FFO netback (2) of $43.73/boe from an average Brent price of $97.90/bbl;
• Incurred $122.5-million of capital expenditures (3), participating in the drilling of 17 gross (12.40 net) wells;
• Paid a 14-cent-per-share dividend, which represented a 12-per-cent increase from the fourth quarter 2021 dividend of 12.5 cents per share and repurchased 4.4 million shares through the normal course issuer bid (NCIB). In total, returned $110.5-million in the quarter to shareholders;
• Working capital surplus (1) was $286.7-million, which was reduced by $39.1-million from the fourth quarter of 2021 predominantly through the acceleration of share buybacks and procurement of long-lead inventory items.

(1) "Capital management measure," which is not a standardized financial measure under International Financial Reporting Standards ("IFRS") and might not be comparable to similar financial measures disclosed by other issuers. See "Non-GAAP and Other Financial Measures Advisory."

(2) "Non-GAAP ratio," which is not a standardized financial measure under IFRS and might not be comparable to similar financial measures disclosed by other issuers. See "Non-GAAP and Other Financial Measures Advisory."

(3) "Non-GAAP financial measure," which is not a standardized financial measure under IFRS and might not be comparable to similar financial measures disclosed by other issuers. See "Non-GAAP and Other Financial Measures Advisory."

Return of capital -- 79-per-cent dividend increase and share buyback maximized

As previously disclosed, the company's long-term capital allocation framework is to target the return of at least one-third of annual FFO (1) to shareholders, with the remaining FFO (1) to be reinvested in the business. Under this framework, and with zero debt, Parex is positioned to target the return of 100 per cent of annual free funds flow (FFO (1) less capital expenditures) (2) to shareholders through dividends and share buybacks.

Parex's board of directors has approved a second quarter 2022 regular dividend of 25 cents per share to be paid on June 30, 2022, to shareholders of record on June 15, 2022, representing a 79-per-cent increase from the company's first quarter 2022 regular dividend and a 100-per-cent increase from the company's fourth quarter 2021 regular dividend. This quarterly dividend payment to shareholders is designated as an "eligible dividend" for purposes of the Income Tax Act (Canada).

As at May 11, 2022, Parex has repurchased over 5.7-million shares and completed nearly 50 per cent of the 2022 share buyback, with the continued expectation that under the current NCIB Parex will purchase the maximum allowable shares of 11.8-million during the year. This would mark the fourth year in a row where Parex has purchased the maximum allowable shares under its NCIBs, reducing the fully diluted share count from 165-million in 2017 to an expected 110-million by year end 2022.

(1) "Capital management measure," which is not a standardized financial measure under International Financial Reporting Standards ("IFRS") and might not be comparable to similar financial measures disclosed by other issuers. See "Non-GAAP and Other Financial Measures Advisory."

(2) "Non-GAAP financial measure," which is not a standardized financial measure under IFRS and might not be comparable to similar financial measures disclosed by other issuers. See "Non-GAAP and Other Financial Measures Advisory."

The increase over the previous capital guidance at the midpoint is broken down in the below table, with the capital increase guided by our previously outlined long-term capital allocation framework. Most of the incremental capital is expected to be spent in the second half of 2022 and is expected to support Parex's second half 2022 and full year 2023 production, with the majority of capital directed towards operated activities.

With the accelerated Llanos investments, Parex expects 2022 production to increase approximately 2,000 boe/d at the midpoint to a range of 54,000 boe/d to 56,000 boe/d. By the fourth quarter of 2022, Parex expects to achieve record production with an expected exit rate in excess of 60,000 boe/d that will provide a strong foundation for 2023. At the midpoint of updated 2022 production guidance, Parex is now forecasting to grow production by 17 per cent year over year and, combined with the company's planned share repurchases, is forecasting production per share growth of 29 per cent year over year.

Consistent with prior commodity cycles, Parex actively adjusts its capital allocation to maximize shareholder value. The acceleration of infill drilling and waterflood optimization, which is an additional $55-million of capital, as well as adding $30-million of capital focused on increasing short-cycle activity on existing Southern Llanos fields, is to accelerate production of our reserves in the current high price environment as well as add additional reserves by achieving higher recovery factors. More details regarding these two categories of capital increases can be found in our full 2022 Program Update table below.

Rising inflation as well as material and service cost increases are impacting operational costs industry wide. Parex has proactively worked to minimize the impact through previously securing rigs under long-term contracts, increasing critical organizational capabilities, as well as acquiring long-lead items for the foreseeable future. Long-lead inventory build represents roughly $40-million of additional capital and includes, but is not limited to, steel casing, compressors, and turbines. Parex is extremely well positioned to execute our program and in total currently expects these inflationary and industry cost increases to account for less than 4 per cent of the revised 2022 capital expenditure guidance.

Sustainability Update - Solar Farm Online

Subsequent to the first quarter of 2022, Parex brought its first ever solar farm project online. Located on the Cabrestero Block in the Southern Llanos, the system comprises of 7,200 individual panels and at full capacity will generate approximately 5.9-million kilowatts-hour per year of power. This is a significant sustainability milestone for Parex, creating approximately 50 local job opportunities during the construction phase and projecting to avoid approximately 3,500 tCO2-e per year through the utilization of renewable power.

Netback Sensitivity Estimates

With the updated guidance, Parex is providing revised netback sensitivity estimates to reflect the higher oil price environment:

2022 First Quarter Conference Call & Webcast

Parex will host a conference call to discuss the 2022 first quarter results on Thursday, May 12, 2022, beginning at 8:30 am MT (10:30 am ET). To participate in the conference call or webcast, please see access information below:

• Toll-free dial number (Canada/US): 1-800-952-5114
• Passcode: 7300823 #

2022 Annual General Meeting

Parex will hold its Annual General Meeting of Shareholders on Thursday, May 12, 2022 at 9:30 am MT (11:30 am ET) in a virtual-only format that provides all shareholders an opportunity to participate.

The meeting will be conducted via webcast.

About Parex Resources Inc.

Parex is the largest independent oil and gas company in Colombia, focusing on sustainable, conventional production. Parex's corporate headquarters are in Calgary, Canada, and the Company has an operating office in Bogota, Colombia. Parex is a member of the S&P/TSX Composite ESG Index and its shares trade on the Toronto Stock Exchange under the symbol PXT.

We seek Safe Harbor.