Mr. Imad Mohsen reports

PAREX RESOURCES ANNOUNCES RECORD SECOND QUARTER RESULTS, OPERATIONAL UPDATE AND DECLARATION OF Q3 2022 DIVIDEND

Parex Resources Inc. has released its financial and operating results for the three-month period ended June 30, 2022. The company is also providing an operational update as well as the declaration of its third quarter 2022 regular dividend of 25 Canadian cents per share. All amounts herein are in United States dollars unless otherwise stated.

Key highlights:

• Q2 2022 net income of $143.1-million;
• Record Q2 2022 funds flow from operations (FFO) of $227.8-million;
• Declared Q3 2022 regular dividend of 25 Canadian cents per share or $1 (Canadian) per share annualized;
• Year-to-date Q2 2022 returned $184.4-million to shareholders through dividends and share buybacks;
• On track to meet full-year 2022 production guidance of 54,000 to 56,000 barrels of oil equivalent per day (boe/d).

"In the second quarter of 2022, Parex generated the highest quarterly FFO in the company's history of $228-million," commented Imad Mohsen, president and chief executive officer.

"Over the last 18 months, we have strategically increased our capital deployment in operated fields to increase production, allowing Parex to benefit from the current favourable commodity price environment. With increased cash flow and zero debt, we recently made the decision to accelerate our 2022 share buyback program given our compelling valuation. With several high-impact wells expected on-line in the coming months, we are excited for the second half of 2022 as we build into our projected record production numbers."

2022 second quarter results:

• Quarterly average oil and natural gas production was prereleased at 51,143 boe/d, an increase of 16 per cent over the second quarter of 2021; production was relatively consistent with the first quarter of 2022, primarily due to well timing as well as higher-than-expected downtime;
• Net income of $143.1-million or $1.24 per share basic;
• Record quarterly FFO of $227.8-million, up by 73 per cent from the second quarter of 2021 and up by 11 per cent from the first quarter of 2022;
• Generated a strong operating netback of $65.66 per barrel of oil equivalent (boe) and an FFO netback of $50.12 per boe from an average Brent oil price of $111.98 per barrel (bbl);
• Incurred $132.8-million of capital expenditures, participating in the drilling of 15 gross (12.25 net) wells;
• Paid a 25-Canadian-cent-per-share dividend and repurchased 2.7 million shares through the company's normal course issuer bid;
• Working capital surplus was $311.5-million, which increased by $24.8-million from the first quarter of 2022, but is expected to decrease in the third quarter of 2022, due to the timing of capital expenditures as well as the acceleration of share buybacks that were announced on July 13, 2022.

Operational update -- 2022 program

Drilling schedule:

• Seven drilling rigs on operated blocks;
• Three non-operated drilling rigs at block LLA-34.

Llanos basin:

• At the Cabrestero block, accelerating infill drilling and waterflood optimization as previously announced, as well as executing on near-field exploration;
• Drilling rigs are currently moving to execute on previously communicated short-cycle opportunistic production adds in the southern Llanos; spudding of those wells expected in Q3 2022;
• At the Capachos block, have successfully drilled into multiple prospective formations utilizing synthetic drilling fluid with testing actively under way. Debottlenecking of facility to increase capacity is expected to be completed in late 2022;
• At the Arauca block, civil works are completed for the first well, with plans to mobilize a rig and begin drilling operations on the block before year-end.

Llanos basin (block LLA-34):

• Third drilling rig is now on the block, which is expected to start spudding wells in August, 2022, to support the previously revised well program of 28-32 total wells and implementation of the initial waterflood pattern.

Magdalena basin:

• Continuing to assess the exploitation potential of the Boranda block. The company successfully drilled the first ever horizontal well on the block in July, 2022, with testing of this well to commence in August, 2022;
• At the Fortuna block, finalizing the drilling and assessment of the four prospective formations. Three of the four prospective formations have already been tested so far and, once the final well is completed in Q3 2022, all wells will be put on beam pump. Full results of the Fortuna program will be assessed following the completion of the fourth formation, with a full evaluation to be completed prior to further investment;
• Parex believes that multiple technologies that have been utilized by the company in the Boranda and Fortuna programs, such as horizontal drilling, advanced stimulations and synthetic drilling fluid, are already providing long-term benefits across the company's inventory;
• At the VIM-1 block, gas processing facilities were brought on line in Q2 2022, which is expected to increase liquids production following the completion of a development well that is currently being drilled.

Exploration:

• Exploration has approximately four wells to be spudded over the remainder of 2022, of which three are planned in the southern Llanos and one in the Magdalena.

Production guidance:

• Third quarter 2022 production is expected to average 53,000 boe/d to 55,000 boe/d;
• Full-year 2022 production to be 54,000 to 56,000 boe/d, with a projected exit rate of over 60,000 boe/d.

Return of capital update

Dividend

Parex's board of directors has approved a third quarter 2022 regular dividend of 25 Canadian cents per share, to be paid on Sept. 30, 2022, to shareholders of record on Sept. 15, 2022. This quarterly dividend payment to shareholders is designated as an eligible dividend for purposes of the Income Tax Act (Canada).

Share buybacks

As previously disclosed, starting June 23, 2022, Parex accelerated the pace of share buybacks under its current normal course issuer bid (NCIB). As at Aug. 3, 2022, Parex has repurchased over 8.7 million shares and completed nearly 75 per cent of its 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 by more than 32 per cent from approximately 164 million in 2017 to an expected 110 million by year-end 2022.

2022 second quarter conference call and webcast

Parex will host a conference call to discuss the 2022 second quarter results on Thursday, Aug. 4, 2022, beginning at 8:30 a.m. MT (10:30 a.m. ET). To participate in the conference call or webcast, please see access information below.

Toll-free dial number (Canada/United States):  1-800-952-5114

International dial-in numbers:  available on-line

Passcode:  5806112 followed by the pound key

Webcast:  A webcast will be available.

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 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.