Mr. Imad Mohsen reports

PAREX RESOURCES ANNOUNCES THIRD QUARTER RESULTS AND DECLARATION OF Q4 2022 DIVIDEND

Parex Resources Inc. has released its financial and operating results for the three-month period ended Sept. 30, 2022, as well as the declaration of its Q4 2022 regular dividend of 25 cents per share. All amounts herein are in U.S. dollars unless otherwise stated.

Key Highlights

• -- Q3 2022 net income of $65.6 million.
• -- Q3 2022 funds flow provided by operations ("FFO")( 1) of $206.4 million and FFO per share( 2 ) (3) of $1.85
• . -- Production per share( 3 ) increased by 19% in Q3 2022 compared to the same quarter in the prior year.
• -- Declared Q4 2022 regular dividend of C$0.25 per share or C$1.00 per share annualized.
• -- Completed the current normal course issuer bid ("NCIB") at the end of Q3 2022, marking the fourth consecutive year where Parex has purchased the maximum allowable shares under its NCIB programs, and equates to over C$1.1 billion returned to shareholders through share repurchases since 2017.
• -- On track to meet FY 2022 production guidance of 52,000 to 53,000 boe/d.
• -- Recognition for ESG practices through Morgan Stanley Capital International Inc. ("MSCI"), with an upgraded rating of "AA".

Imad Mohsen, President and Chief Executive Officer commented: "This quarter we continued to deliver positive results that surpassed our Q3 2021 performance, and as previously announced, we have had successful drilling results that have translated to crude oil discoveries on multiple Parex blocks. In conjunction with building operating momentum into the end of the year, we continue to return meaningful capital back to our shareholders. With the NCIB complete and the Q4 2022 regular dividend approved, we expect to return roughly C$385 million in 2022, meeting our goal of returning more than one third of annual FFO and 100% of free funds flow to shareholders."

Q3 2022 Results

• -- Quarterly average oil and natural gas production was pre-released at 51,091 boe/d( 4 ), an increase of 8% over Q3 2021 and consistent with Q2 2022; temporary localized blockades are estimated to have lowered total average production for Q3 2022 by approximately 1,500 boe/d.
• -- Production per share( 3 ) increased by 19% compared to the same quarter in the prior year primarily as a result of development drilling and the reduction of 10% of outstanding shares. -- Net income of $65.6 million or $0.59 per share basic( 3).
• -- Quarterly FFO( 1) of $206.4 million, up by 35% from Q3 2021, and FFO per share(2) (3) of $1.85, up by 49% from Q3 2021. -- Generated an operating netback( 2 ) of $59.46/boe and an FFO netback(2) of $45.07/boe from a Brent price of $97.70/bbl.
• -- Incurred $127.4 million of capital expenditures( 5 ), participating in the drilling of 14 gross (9.90 net) wells.
• -- Paid a C$0.25 per share dividend and repurchased 4.5 million shares through the Company's NCIB.
• -- Working capital surplus( 1) was $229.8 million, which decreased by $81.7 million from Q2 2022 due to the acceleration of share buybacks and the purchase of long-lead items, such as well casing, to support the 2023 capital expenditure program.

(1) Capital management measure. See "Non-GAAP and Other Financial Measures Advisory".

(2) Non-GAAP ratio. See "Non-GAAP and Other Financial Measures Advisory".

(3) Based on weighted-average basic shares for the period.

(4) See "Operational and Financial Highlights" for a breakdown of production by product type.

(5) Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures Advisory".

Production Guidance

• -- Q4 2022 production is expected to average 54,000 to 58,000 boe/d, with incremental volume to come from already drilled wells at Capachos, continued drilling at Block LLA-40 for short-cycle opportunistic adds, and the VIM-1 Block gas reinjection project once online.
• -- For the period of October 1 to 14, 2022, estimated total average production was approximately 55,000 boe/d; the remainder of October 2022 averaged production of approximately 51,200 due to impacts from localized blockades at Block LLA-34, Cabrestero and LLA-32. These localized blockades have been lifted and production is actively being brought online.
• -- FY 2022 production guidance to average 52,000 to 53,000 boe/d, with an exit rate of approximately 60,000 boe/d; FY 2021 average production was 46,998 boe/d( 1 ).

2023 Corporate Guidance

Parex plans to release its 2023 corporate guidance in early December 2022 alongside a corporate update outlining the Company's vision, strategy, operations, and future opportunities.

ESG Recognition

Parex is focused on top-tier ESG leadership and was recently recognized by MSCI, which upgraded its rating of the Company to "AA". This is the second consecutive year where Parex has received an increase in its ESG ratings assessment from MSCI.

Return of Capital Update

Dividend

Parex's Board of Directors has approved a Q4 2022 regular dividend of C$0.25 per share to be paid on December 30, 2022, to shareholders of record on December 15, 2022. This quarterly dividend payment to shareholders is designated as an "eligible dividend" for purposes of the Income Tax Act (Canada).

With the payment of the Q4 2022 regular dividend of C$0.25 per share on December 30, 2022, Parex will have paid C$160 million in dividends since Q3 2021.

Share Buybacks

As at September 30, 2022, Parex has completed the maximum allowable share purchases under its NCIB through the purchase of 11.8 million shares, representing 10% of the public float as at December 22, 2021. The share purchases under the NCIB in 2022 returned approximately C$285 million to Parex shareholders.

The completion of this year's NCIB marks the fourth consecutive year where Parex has purchased the maximum allowable shares under its NCIB programs, reducing the fully diluted share count by one third from approximately 164 million in 2017 to 110 million in 2022. Since 2017, Parex has returned over C$1.1 billion to shareholders through share repurchases.

In due course, the Company expects that it will submit a notice of intention to make an NCIB to the Toronto Stock Exchange for calendar 2023.

Capital Allocation Framework

Parex targets at least one third of annual FFO( 2 ) and 100% of free funds flow ("FFF")( 3 ) to be returned to shareholders through dividends and share buybacks. Based on current Management estimates, Parex is on track to meet this goal in 2022.

(1) Production volume for the year ended December 31, 2021 (light and medium crude oil: 6,831 bbl/d, heavy crude oil: 38,449 bbl/d, and conventional natural gas: 10,308 mcf/d).

(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."

Q3 2022 Results - Conference Call & Webcast

We are holding a conference call and webcast for investors, analysts and other interested parties on Friday, November 4, 2022, at 9:30 am MT (11:30 am ET). To participate in the conference call or webcast, please see access information below:

Toll-free dial number (Canada/US):1-800-806-5484

International dial-in numbers: https://www.confsolutions.ca/ILT?oss=7P1R8008065484

Passcode: 8312227#

Webcast: https://edge.media-server.com/mmc/p/babjejdv

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.