Mr. Mike Kruchten reports

PAREX RESOURCES ANNOUNCES SECOND QUARTER RESULTS, DECLARATION OF Q3 2023 DIVIDEND, AND OPERATIONAL UPDATE

Parex Resources Inc. has released its financial and operating results for the three-month period ended June 30, 2023, and has declared its third quarter 2023 regular dividend of 37.5 Canadian cents per share. Parex also has provided a guidance update.

All amounts herein are in U.S. dollars unless otherwise stated.

Key highlights:

• Generated second quarter 2023 funds flow provided by operations (FFO) of $155-million and FFO per share of $1.45;
• Continued high performance from the first horizontal wells at Cabrestero (100-per-cent working interest) and LLA-34 (55-per-cent WI); a second horizontal well at LLA-34 was recently completed and put on production; horizontal wells in the Southern Llanos represent new development opportunities for Parex to efficiently maximize recovery and production rates;
• Drilled a successful vertical near-field exploration well at LLA-81 (100-per-cent WI) that resulted in an oil discovery; a follow-up horizontal well has since been spudded to maximize recovery and production;
• Safely resumed full operations at Capachos (50-per-cent WI) and Arauca (50-per-cent WI) in late June, 2023;
• Drilling the first well at Arauca (50-per-cent WI), which is currently at roughly 11,500 feet and expected to reach total depth in late third quarter 2023;
• Moving second rig to Arauca (50-per-cent WI) to drill the Arauca-8 big E exploration well and accelerate the multiyear development program on the block;
• Ramping up production at Capachos (50-per-cent WI), with the block expected to return to production rates of approximately 6,500 barrels of oil equivalent per day net in third quarter 2023;
• Declared third quarter 2023 regular dividend of 37.5 Canadian cents per share or $1.50 (Canadian) per share annualized;
• Repurchased approximately 3.6 million shares year-to-date 2023 under the company's current normal course issuer bid;
• Published ninth sustainability report, which integrates the Task Force on Climate-related Financial Disclosures (TCFD) for the second year.

Q2 2023 results:

• Quarterly average oil and natural gas production was 54,120 barrels of oil equivalent per day, an increase of 6 per cent from the second quarter of 2022 and a 5-per-cent increase from first quarter 2023; the temporary suspension of operations at Capachos (50-per-cent WI) and Arauca (50-per-cent WI) had an estimated production impact of approximately 3,850 boe/d on the quarter;
• Increased production per share by 14 per cent compared with the same quarter in the prior year, as a result of higher production and the reduction of outstanding shares through the NCIB;
• Realized net income of $101-million or 95 cents per share, basic;
• Generated quarterly FFO of $155-million, a 32-per-cent decrease from Q2 2022, and FFO per share of $1.45, a 27-per-cent decrease from Q2 2022, which was primarily driven by lower crude oil pricing;
• Produced an operating netback of $43.46 per boe and an FFO netback of $31.86 per boe from an average Brent price of $77.84 per barrel;
• Incurred $121-million of capital expenditures; participated in the drilling of 17 gross (12.50 net) wells;
• Paid a 37.5-Canadian-cent-per-share regular quarterly dividend and repurchased 1.3 million shares;
• Cash position was $133.4-million, a decrease of $239.0-million from first quarter 2023 primarily due to the timing of Parex's Colombian tax payments.

2023 corporate guidance update

On an annual basis, the temporary shut-ins at Capachos (50-per-cent WI) and delayed drilling operations at Arauca (50-per-cent WI) are estimated to have a combined impact on the company's average production of roughly 3,100 boe/d (Capachos: 1,900 boe/d and Arauca: 1,200 boe/d). The company was also affected by lower-than-expected production from its Soca (Cabrestero (100-per-cent WI) and LLA-34 (55-per-cent WI)) assets as a result of increased downtime. Parex is updating its 2023 annual average production guidance range from 57,000 to 63,000 boe/d to 54,000 to 57,000 boe/d to reflect the aforementioned temporary shut-ins and production impacts in Soca. With normalized operations, Parex expects its fourth quarter 2023 average production to exceed 60,000 boe/d.

Parex is also updating its 2023 capital expenditure guidance to $450-million to $475-million, which is being driven by standby costs associated with the shut-ins at Capachos (50-per-cent WI) and Arauca (50-per-cent WI), as well as increased spending at VIM-43 (100-per-cent WI).

Return of capital update

Q3 2023 dividend

Parex's board of directors has approved a Q3 2023 regular quarterly dividend of 37.5 Canadian cents per share to be paid on Sept. 29, 2023, to shareholders of record on Sept. 15, 2023. The company first initiated a regular quarterly dividend at 12.5 cents per share in 2021.

This quarterly dividend payment to shareholders is designated as an eligible dividend for purposes of the Income Tax Act (Canada).

Active share buyback program under current normal course issuer bid

As at Aug. 1, 2023, year to date, Parex has repurchased approximately 3.6 million shares under its NCIB at an average price of $24.87 (Canadian) per share for total consideration of roughly $90-million (Canadian). Over and above the regular quarterly dividend, the company intends on continuing to utilize its current NCIB to return free funds flow to its shareholders.

Environmental, social and governance update

Parex is pleased to announce that is has published its ninth sustainability report, which integrates the Task Force on Climate-related Financial Disclosures for the second year. As the company works to continuously enhance its ESG performance and disclosure, within the report is a comprehensive ESG strategy that sets targets within four core priorities: communities, greenhouse gas emissions and climate, people and culture, and water.

The full report, including performance metric tables, can be found at the Parex website under sustainability.

Q2 2023 results -- conference call and video webcast

Parex will host a conference call and video webcast to discuss the second quarter 2023 results on Thursday, Aug. 3, 2023, beginning at 9:30 a.m. MT (11:30 a.m. ET). To participate in the conference call or video webcast, please see the access information below.

Conference ID:  1335335

Participant toll-free dial-in number:  1-888-550-5584

Participant toll dial-in number:  1-646-960-0157

A video 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 is 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.