Parex Resources (TSE:PXT) used its fourth-quarter 2025 conference call to highlight operational execution in Colombia, progress on enhanced recovery and exploration programs, and continued capital returns to shareholders. Management also discussed early 2026 activity levels, commodity price and differential dynamics, and the company’s rationale for pursuing Colombian-focused M&A, while noting it would not take questions on its proposal regarding Frontera Energy’s Colombian E&P assets.
2025 operational results and asset performance
President and CEO Imad Mohsen said 2025 was defined by “disciplined execution” and “meaningful strategic progress,” with full-year average production of approximately 45,000 barrels per day, matching the company’s budgeted guidance range. Mohsen attributed the result to asset quality, operational uptime, and the ability to grow efficiently with capital spending.
Chief Operating Officer Eric Furlan said fourth-quarter production averaged 48,606 BOE per day, driven by base assets and growth in Llanos Block 32 and Block 74. Looking to 2026, he said Parex has a front-end-weighted activity plan with six rigs running (five operated by Parex and one on Block 34), and year-to-date 2026 production is roughly 46,000 BOE per day.
Block 32 and multilateral drilling progress
Management emphasized the performance and technical learnings from Block 32 following the Takema acquisition completed early in 2025. Mohsen said peak production has increased to more than three times pre-acquisition levels, with significant reserves additions since the company assumed full control.
Furlan added that Parex has drilled Colombia’s first four-leg multilateral well in Block 32, calling it a major technical milestone. He said the multilateral is expected to deliver strong production by maximizing reservoir contact and improving capital efficiency, and that the result is intended to serve as a proof of concept for additional applications, including in the Putumayo region.
Putumayo activity and near-field exploration
Mohsen said Parex and strategic partner Ecopetrol made progress strengthening alignment and growing future production, including gaining operational access and starting drilling activities in the Putumayo. He described the Putumayo blocks as “sizable and underexplored,” and said the company is moving from vertical production to multilaterals to support inventory growth.
Furlan provided details across three Putumayo blocks:
- Arida block: An initial well with 1,700 feet of horizontal length is currently producing 600 barrels of oil per day gross. A second horizontal injection well has been completed and will begin injection shortly. Furlan said the shallow horizontal well is low cost, and the company plans to test a multilateral producing well next as it evaluates producer-injector patterns.
- Area Sur block: Parex is targeting low-cost recompletions. Furlan said the most recent success produced at an initial rate of 1,500 barrels per day gross.
- Occidente block: The first well delivered “encouraging logging results,” and further confirmation of down-dip oil extension could translate into incremental locations and development upside.
On near-field exploration, Furlan said the company is advancing programs such as LLA-111 using a streamlined, cost-efficient rig to reduce capital intensity. He said the first well in that program delivered positive log results and will be tested in the near term, with potential to add visible inventory ahead of 2027.
Mohsen also noted Parex’s 2025 near-field exploration program delivered a 75% success rate, which he said reflected refinements to the company’s approach and its ability to deliver repeatable near-field results.
Reserves metrics and NAV sensitivities discussed
Furlan said the company’s 2025 reserves report was positive across PDP, 1P, and 2P categories. He said Parex grew reserves per share, achieved over 100% reserves replacement (including 152% in 2P), and delivered FD&A recycle ratios of 2x or higher.
He also said Parex asked its reserves auditor to evaluate after-tax net asset value per share using a constant $70 per barrel Brent price (approximately $65 per barrel WTI). Under that scenario, the resulting Canadian-dollar NAV per share figures were:
- CAD 23 (PDP basis)
- CAD 28 (1P basis)
- CAD 39 (2P basis)
Financial performance, shareholder returns, and market backdrop
Chief Financial Officer Cam Grainger said Parex generated strong financial results in 2025 despite a softer commodity price environment. For the fourth quarter, he reported funds flow provided by operations (FFO) of $123 million, or $1.28 per share, aided by production growth, improving production expense, and lower current tax versus the prior quarter. Grainger said production expense benefited from improved fixed-cost absorption on new production, corporate efficiency initiatives to reduce fixed and variable costs, and a low level of absolute current tax.
Mohsen said Parex returned $134 million to shareholders in 2025, bringing total capital returned over the last eight years to CAD 2 billion. He added that share repurchase programs have reduced diluted share count by over 40%.
On pricing, Grainger noted Brent had moved to over $80 per barrel due to global issues compared with the company’s budget assumption of $60 per barrel. However, he said part of that benefit was being offset by wider heavy oil differentials, with Vasconia “upwards of $8 per barrel,” which he linked to expectations for incremental heavy oil supply, primarily from Venezuela. He said any reassessment of guidance would require commodity prices to be sustained at higher levels, and that the company’s full-year 2026 production and capital guidance remained unchanged.
In the Q&A, Grainger said it was “really hard to say” how differentials would evolve and that the company did not have visibility on how the Iran situation would impact differentials going forward.
Mohsen also addressed the company’s interest in M&A in Colombia, arguing Parex is positioned to acquire and optimize Colombian assets due to its operational track record, partnerships (including with Frontera at VIM-1 and with Ecopetrol), and what he described as a clean balance sheet and operational capabilities that could support synergies. Senior Vice President Mike Kruchten reiterated the company would not provide additional commentary or take questions on its proposal to acquire Frontera Energy’s Colombian E&P assets at this time.
About Parex Resources (TSE:PXT)
Parex Resources Inc engages in exploration, development, and production of crude oil. The company brings technology utilized in the Western Canada Sedimentary Basin to South American basins with large oil-in-place potential. Majority of the company’s properties are focused in Colombia, where it pays a royalty or tax to the government for its operations. Parex depends on a team of geologists and geophysicists, in partnership with technologies such as 3D seismic surveying, to help exploration efforts.
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