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Highlights:
- Q3 2024 Funds Flow from Operations (FFO) of $152 million and FFO per share of $1.50.
- Production guidance for FY 2024 increased to 49,000-50,000 boe/d.
- Declared regular Q4 2024 dividend of C$0.385 per share, or C$1.54 annualised.
Parex Resources Inc. (TSX:PXT), a leading independent oil and gas exploration and production company, has announced its financial and operating results for the three-month period ended September 30, 2024. In addition to solid quarterly results, Parex also declared its regular quarterly dividend and provided an operational update for its ongoing projects.
For Q3 2024, Parex generated funds flow from operations (FFO) of $152 million, or $1.50 per share, demonstrating resilience despite some operational challenges. While FFO was down by 4% compared to the same period in 2023, the FFO per share saw a modest 1% increase. The company’s operating netback stood at $39.64 per barrel of oil equivalent (boe), with an FFO netback of $34.58/boe, supported by an average Brent oil price of $78.71 per barrel during the quarter.
"Following lower-than-expected results, Management is focused on driving production efficiency and optimizing performance from our key assets," stated Imad Mohsen, President and CEO of Parex. He emphasized that as the company transitions into the planning phase for 2025, it remains committed to improving operational outcomes, ensuring safe and reliable production, and positioning Parex for better performance.
Parex reported quarterly average production of 47,569 boe/d, in line with the company’s expectations. However, the company has revised its full-year 2024 production guidance upwards from the previous range of 48,000-50,000 boe/d to 49,000-50,000 boe/d, thanks to successful well results in key areas such as Capachos and LLA-32. The company continues to see stable operations across its major assets, supporting this optimistic outlook.
Additionally, Parex updated its capital expenditure guidance for 2024, lowering it from the previous range of $370-390 million to a more conservative $350-370 million. This adjustment reflects the company’s focus on capital discipline, prioritizing high-return projects to maximize value for shareholders.
In line with Parex's commitment to return value to shareholders, the company repurchased approximately 4.5 million shares year-to-date in 2024 under its normal course issuer bid (NCIB). As a part of its capital returns strategy, Parex also declared a regular Q4 2024 dividend of C$0.385 per share, representing an annualized dividend of C$1.54 per share. The dividend reflects the company’s solid financial position, with $147 million in cash and a $38 million working capital surplus as of the quarter’s end.
In Q3 2024, Parex also reported a net income of $66 million, or $0.65 per share, reflecting the company’s ability to generate strong cash flow despite fluctuating global oil prices. Operating cash flow during the quarter was also bolstered by a $39 million decrease in current taxes, driven by lower corporate production and a reduction in the surtax from 15% to 10%, due to the dip in global Brent oil prices.
With an eye on 2025, Parex remains focused on optimizing its asset base and improving its operational efficiency. The company continues to execute its strategy of high-return investments while maintaining a conservative capital program. Parex’s ongoing capital returns initiatives, including share repurchases and dividends, underscore its strong commitment to delivering shareholder value while ensuring future growth and sustainability.
