Parex Resources (PXT) Q3 2024 earnings summary

Executive summary

• Production stabilized at key assets, with Q3 2024 average output of 47,569 BOE/day despite Arauca underperformance and higher downtime.

• Q3 2024 funds flow from operations was $152 million, with FFO per share at $1.50, a 4% decrease in FFO and a 1% increase in FFO per share year-over-year.

• Net income for Q3 2024 was $66 million, or $0.65 per share basic.

• Focus shifted to operational reliability, lower-risk development, and capital efficiency, resulting in a more conservative growth outlook.

• Midpoint production guidance for Q4 raised to 49,500 BOE/day, up 2,000 BOE/day, including allowance for social disruptions.

Financial highlights

• Funds flow from operations reached $152 million, supported by a Brent price of $79/bbl and lower current taxes.

• Free funds flow projected at $220 million at midpoint guidance, reflecting reduced CapEx and stable production.

• Capital expenditures for Q3 were $82 million, below forecast due to deferred projects and slower activity.

• Working capital surplus of $38 million and cash balance of $147 million at period end.

• $20 million of bank debt repaid during the quarter.

Outlook and guidance

• FY 2024 average production guidance increased to 49,000–50,000 boe/d, up from 48,000–50,000 boe/d.

• FY 2024 capital expenditure guidance lowered to $350–370 million from $370–390 million.

• 2025 budget to focus on lower-risk, capital-efficient development and exploitation opportunities.

• 2025 production and capital return guidance to be released in January, with dividend policy updates.

• Q4 capital expected between $85–100 million, with bias to lower end depending on activity.