Parex Resources (PXT) Q1 2026 earnings summary

Executive summary

• Executed strategic transactions, including the $725M Frontera acquisition, positioning the company as Colombia's largest independent E&P operator and nearly doubling production capacity.

• Expanded partnership with Ecopetrol, securing a 50% interest in Casabe and Llanito blocks via a $250M capital commitment, enhancing long-term growth and operational footprint.

• Focused on integrating new assets, expanding exploration, and optimizing capital allocation for growth and shareholder returns.

• H2 2026 production guidance of 82,000–91,000 boe/d, a 93% increase at midpoint over Q1 2026.

• Chairman Wayne Foo retiring after 23 years, recognized for foundational leadership.

Financial highlights

• Q1 2026 funds flow from operations (FFO) totaled $114M or $1.18/share, impacted by $17M in non-recurring costs, including a $7M wealth tax and $7M site restoration costs.

• Q1 2026 net income: $5M ($0.05/share), down from $81M ($0.82/share) in Q1 2025, mainly due to unrealized losses and one-time costs.

• Adjusted EBITDA: $133M; operating netback: $39.16/boe; FFO netback: $28.35/boe.

• Q1 2026 capital expenditures: $91M; free funds flow: $23M; working capital surplus: $136M; bank debt: $175M; cash: $45M at quarter end.

• Successful placement of $500M in senior unsecured notes due 2031 at 8.5%, strongly oversubscribed.

Outlook and guidance

• H2 2026 guidance: Brent price $90/bbl, production 82,000–91,000 boe/d, FFO $475M–$525M, capital expenditures $275M–$295M, free funds flow $215M (midpoint).

• FY 2026 production expected at 63,000–67,000 boe/d, capital expenditures $495M–$515M.

• Targeting 3%-5% annual base production growth, with potential for higher upside from exploration.

• 2027 CapEx expected to be around $500M, subject to oil price and asset performance.

• VIM-1 gas asset expected to become a major cash generator, with blowdown and sales ramping up in H2 2027.