Q2 2024 Parex Resources Inc Earnings Call Transcript
Key Points
- Parex Resources Inc (PARXF) reported an 80% year-on-year increase in free funds flow, driven by strong pricing realizations and reduced capital expenditures.
- The company is generating significant free funds flow from core areas like Cabrestero and Block 34, attributed to pre-investment activities in drilling patterns and facility investments.
- Encouraging results from water flooding and polymer injection pilot projects at Cabrestero and Block 34, with plans for full field expansion.
- Despite production shortfalls, Parex Resources Inc (PARXF) had a strong financial quarter with $181 million in funds flow from operations, supported by a $21 million one-time foreign exchange gain.
- The company maintains a working capital surplus of $34 million and cash reserves of $119 million, indicating strong financial health.
- Operational and reservoir challenges at Arauca have led to underperformance, causing a pause in the in-year drilling campaign.
- Production expenses remain elevated due to a strong Colombian peso, increased well service costs, and one-time maintenance and facility costs.
- The company's net income was reduced due to an increase in deferred tax expense, influenced by exchange rate movements.
- Production volumes are expected to remain flat in Q3 2024, with growth anticipated only in Q4 2024 and into year-end.
- The company has faced disappointing subsurface results and challenges in the first half of the year, impacting overall production and necessitating capital reallocation.
Hello, and welcome to the Parex Resources' Q2 2024 operating and financial results conference. (Operator Instructions)
I will now turn the call over to Mike Kruchten, Senior Vice President of Capital Planning. You may begin.
Good morning, everyone, and welcome to Parex's second quarter 2024 conference call and webcast. My name is Mike Kruchten, Senior Vice President at Parex. And on the call with me today are our President and Chief Executive Officer, Imad Mohsen; our Chief Financial Officer, Sanjay Bishnoi; and our Chief Operating Officer, Eric Furlan.
(Event Instructions)
As a reminder, this conference call includes forward-looking statements as well as non-GAAP and other financial measures with the associated risks outlined in our news release and MD&A, which can be found on our website or at www.sedarplus.ca. Note that all amounts discussed today are in US
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
