#1Corporate Presentation Unlocking Colombia May 2022 PAREX RESOURCES INC PAREXRESOURCES.COM TSX | PXT#2PXT - Snapshot Largest independent Colombian oil & gas company Land position of ~5.8MM net acres Production and reserves growth く Growing on an absolute and per share basis Industry-leading netbacks Unhedged producer with exposure to Brent oil price No debt and return of capital track record Over C$1B returned to shareholders since 2017(1)(2) Top-tier ESG performance Premium scores from independent ESG agencies Shares Outstanding (basic)(2) Market Capitalization (2) PAREX RESOURCES INC. Venezuela Panama 12' COLOMBIA Brazil 115.5 Million ~C$2.9 Billion Ecuador Peru PXT Blocks (1) Includes share repurchases via normal course issuer bid and dividends. (2) As at April 30, 2022. 2#3Strategy - Focused on Colombia High-Quality Asset Base Financial Strength and Flexibility Prudent Return of Capital Top-Tier ESG Performance ☑ Accelerate exploration and unlock extensive land base using proven technology Competitive cost structure in a highly competitive fiscal regime High netback production with low decline rates Balance sheet strategically designed with zero debt Positioned to endure price cycles and capitalize on first- mover opportunities Full commodity price benefit as an unhedged producer Track record of a focus on total shareholder returns Philosophy to return at least 1/3 of total FFO to shareholders via dividends and share buybacks Base dividend has upside growth potential Targeting GHG intensity reduction of 50% by 2030 and have 2050 net zero ambition (1) Long-term social investments in the communities that we work and operate in Transparent disclosure through recognized ESG frameworks (1) Based on 2019 baseline. PAREX RESOURCES INC. 3#46 5 4 3 2 1 Colombia Running Room Net Acreage (MM) 2021 Colombia Bid Round Increased Position by ~4.3MM 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Base Net Acreage YoY Increase • Conventional, oil-weighted Colombian producer Largest independent acreage holder in Colombia Awarded 18 blocks in 2021 Colombia bid round • 16 out of the 18 blocks were nominated by PXT in areas specifically targeted by the company Activity commitments are US~$100MM over 3-4 years Competitive 9% base royalty rate Commitments are not incremental to current exploration capital plans Strategy to unlock deep portfolio by bringing proven technology to Colombia • Horizontal and multilateral drilling Radial drilling and various stimulation technologies Significantly improved depth and quality of prospect inventory in 2021, which provides long-term resource runway PAREX RESOURCES INC. 4#545 40 35 30 25 20 15 Industry-Leading Profitability 2022E Cash Flow Netback (US$/boe) PXT vs. TSX-Listed Companies with >25,000 boe/d of 2022E crude & liquids production 10 PAREX Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Peer 14 Peer 15 Peer 16 Peer 17 Peer 18 Peer 19 Peer 20 High cash flow netbacks from focused asset base and exposure to global commodity prices PAREX RESOURCES INC. Source: BMO Capital Markets (February 23, 2022); strip assumptions: WTI: US$85.77/bbl, Brent: US$88.56/bbl; USD/CAD: 0.78; all CAD cash flow netbacks converted to USD. Peer List: ARX, ATH, BTE, CNQ, CVE, CPG, ERF, FEC, GTE, IMO, IPCO, MEG, NVA, POU, SDE, SU, TVE, TOU, VET, and WCP (TSX-listed companies under BMO coverage with >25,000 b/d of 2022E crude & liquids production). 5#6Production and Reserves Growth Production Per Share(1) CAGR 18% (2017-2022F) 0.08 0.18 0.14 0.13 0.13 0.10 2017A 2018A 36 mboe/d 2019A 2020A CAGR 21% (2017-2021) 0.31 PDP Reserves Per Share (2) 0.54 0.48 0.39 0.66 2021A 2022F (3) 55 mboe/d 2017A 2018A 2019A 2020A 51 mmboe Absolute PDP Reserve Growth CAGR: 12% 2021A 81 mmboe Absolute Production Growth CAGR: 9% Fully Diluted Shares Outstanding (MM) 164 162 148 >32% (2017-2022F) Reduction 134 122 110 2017A 2018A 2019A 2020A 2021A 2022F (3) Growing on an absolute basis, with per share metrics boosted by share buyback programs PAREX RESOURCES INC. (1) Calculated as total annual production divided by year-end fully diluted shares outstanding. (2) Calculated as PDP gross volume divided by year-end fully diluted shares outstanding; see advisory. (3) See slide 10 for information on 2022 corporate guidance. 6#7Return of Capital Track Record Summary (C$ MM) $1,350 $1,200 $1,050 $900 $750 $600 $450 $300 $150 $55 $9 $0 2017A 2018A PAREX RESOURCES INC. Levers $300 2019A Share Buyback $230 $334 ~$430 >$1,350 2020A 2021A 2022F (3) Total Dividend • Active normal course issuer bid (NCIB) program Over past three years have purchased full 10% allowable pursuant to NCIBS In 2022, committed to full 10% share buyback for the fourth year in a row Since 2017, have returned over C$1B to shareholders through share repurchases (1) Quarterly regular dividend • Initiated regular dividend in Q3 2021 Approved 12% increase in February 2022 and subsequent 50% increase in May 2022 No debt and US$287MM (2) of working capital provides optionality to further enhance shareholder returns Management track record of consistent and prudent return of capital measures (1) From 2017 to Apr. 29, 2022. (2) As at Mar. 31, 2021; capital management measure; see advisory. (3) PXT share price assumption of C$28 per share; USD/CAD assumption: 0.80; based on paid Q1 2021 dividend and C$0.25 per share quarterly dividend for the remainder of the year. 7#8Top-Tier ESG Performance E S Approximately 33% reduction in scope 1 & 2 GHG emissions intensity since 2019 Invested in geothermal and solar power to lower carbon footprint Spend on biodiversity and land protection Strong safety record with zero employee LTIs since 2018 • Increased clean drinking water access for over 30,000 people since 2017 Infrastructure spend of US$13MM+ via Works for Taxes Program since 2018 ● G 30% Board gender diversity by May 2023 target • 8 out of 9 independent directors 30% of 2021 variable compensation linked to ESG metrics TCFD PAREX RESOURCES INC. UN GLOBAL C COMPACT SUSTAINABI ACCOUNTING Ratings(1) Bloomberg ESG Score Rating: 75 Top 3 among TSX Capped Energy Index Scale: 0 to 100 top score SUSTAINALYTICS Rating: 29.5 9th percentile among global E&Ps Scale: 0 to 50 high exposure MSCI Rating: A 2nd Quartile - E&Ps in MSCI ACWI Index Scale: CCC to AAA ISS➤ Environment: 1 | Social: 1 | Governance: 2 Top quartile among TSX Energy peers Scale: 1 low risk to 10 high risk SASB STANDARDS BOARD GRI Empowering Sustainable Decisions CDP (1) As at May 2022; ESG ratings/data/logo do not constitute a sponsorship, endorsement, recommendation, or promotion of Parex by the agency; ratings and data are the property of the agencies and are provided 'as-is' and without warranty. 8#92022 and Long-Term Vision PAREX RESOURCES INC PAREXRESOURCES.COM TSX | PXT#102022 Corporate Guidance 2020A 2021A 2022F(1) Brent (US$/bbl) Production (boe/d) $43 $71 $100 46,518 46,998 55,000 Production Growth -12% 1% 17% Production Growth (per share) (2) -7% 12% 29% Shares Repurchased (MM) 14 13 12 Year-End Shares Outstanding (fully diluted; MM) 134 122 110 US$ Funds Flow Provided by Operations (FFO) (MM)(3) $297 $578 $903 FFO (per share basic) (4) $2.15 $4.61 $7.91 Capital Expenditures (MM) (5) $141 $277 $550 Free Funds Flow (MM) (5) $156 $301 $353 C$ FFO (per share basic)(4) Quarterly Dividend (per share) (6) $2.88 $5.76 $9.88 $0.00 $0.125 $0.25(7) Combination of profitable production growth and return of capital measures PAREX RESOURCES INC. (1) US$100/bbl Brent case based on netback sensitivity estimate from most recent guidance (see May 11, 2022 news release); mid-point of guidance; USD/CAD assumption: 0.80. (2) Weighted-average basic shares outstanding used. (3) Capital management measure; see advisory. (4) Non-GAAP ratio; see advisory. (5) Non-GAAP financial measure; see advisory. (6) Supplementary financial measure; see advisory. (7) Based on C$0.25 per share quarterly dividend as approved on May 11, 2022. 10#112022 First-Mover Advantage ALIVIO Π SICO GAS DE PRUEPA 00 Entering the year with the most extensive land base in the company's history Secured rigs under long-term contracts to have equipment in place to successfully execute capital investment programs Increased critical organizational capabilities, hiring significant staff in Canada and Colombia over the past 12 months Acquired long-lead items for the foreseeable future to provide insulation from supply chain issues and limit cost inflation exposure Parex is 100% unhedged to commodity prices and positioned to harvest the upside opportunity from the current market cycle PAREX RESOURCES INC. 11#12Capital Allocation Framework and Delivery FFO Capital Allocation Long Term >33% Return of Capital (1) ~$900MM $265MM Share Buyback(4)(5) $80MM Dividend(2)(5) ~66% Investment $550MM Capex(3) Increased quarterly regular dividend by 79% to C$0.25 per share marking the third increase in the past year Committed to full 10% share buyback for the fourth year in a row Return of capital supported by strong operating results and debt-free balance sheet with surplus working capital Increasing capex to add productive capacity for 2022 and build foundation for 2023 and the long term Framework 2022F • Being responsive to oil prices through the deployment of capital to take advantage of attractive pricing and develop quick payback projects Target the return of at least 1/3 of total FFO and 100% of free funds flow to shareholders PAREX RESOURCES INC. (1) FFO based on netback sensitivity estimate from most recent guidance (see May 11, 2022 news release); capital management measure; see advisory. (2) Based on paid Q1 2021 dividend and annualized C$0.25 per share quarterly dividend for the remainder of the year. (3) Non-GAAP measure financial measure; see advisory. (4) PXT share price assumption of C$28 per share. (5) USD/CAD assumption: 0.80. 12#13Long-Term Production Vision 100,000 Illustrative Production Growth (boe/d)(1) Ambition 80,000 60,000 Exploration plus Magdalena exploitation upside that can provide a possible step change in the production profile Low-risk base development can provide ~5% per annum growth High-risk, high-reward exploration Longer-term exploitation upside using proven technology to unlock material original oil in place 40,000 Llanos - Base Development 20,000 Llanos - LLA-34 0 2021A 2022F 2023F PAREX RESOURCES INC. 2024F 2025F 2026F 2027F Low-risk, short- and medium-term production growth "Parex's bread and butter" Continue optimizing block to maximize free cash flow Ambition to grow to 100,000 boe/d and become multi-field operator (1) 2023 and beyond provided for illustrative purposes only; budgets and forecast beyond 2022 have not been finalized and are subject to a variety of factors, including prior year result; see advisory. 13#14Key Takeaways Focused on unlocking Colombian asset portfolio through technology First-mover advantage: acreage to explore, secured rigs and long-lead items, and strengthened team Forecast year-over-year absolute production growth of 17% and 29% on per share basis Repurchased over 50 million shares since 2017(1) and have increased dividend 100% to C$1.00 per share annualized ESG performer with ambition to become one of the least GHG-intensive O&G E&P companies (1) As at Apr. 29, 2022. PAREX RESOURCES INC. 200 ALTA PRESION 14#15Appendix - Long-Term Return of Capital Framework 1. Sustainable business - invest approximately two thirds of FFO into our business Invest in long-term growth and replenish development inventory Continuous investment required to maintain high-quality portfolio in order to support future return of capital activity and maximize total shareholder returns over the long term Investing ~US$550MM across development, exploitation and exploration work in 2022(1) 2. Return capital to shareholders - return at least one third of FFO to shareholders A) Quarterly base dividend Maintain dividend and work to grow it with earnings and macroeconomic outlook Robust even in low commodity price environments; at $40/bbl Brent, the current base dividend is forecast to be <30% of total FFO(2) B) Further enhance shareholder returns through share buybacks Continue to have best-in-class balance sheet and leverage working capital balance as needed Share buybacks are a key mechanism to enhance returns and working capital can be used to supplement returns when deemed appropriate Increased quarterly regular dividend by 79% to C$0.25 per share in May 2022 Plan to buyback 10% of public float for the fourth straight year in 2022 Target the return of at least 1/3 of total FFO and 100% of free funds flow to shareholders (1) Non-GAAP measure financial measure; see advisory. (2) Capital management measure; see advisory. PAREX RESOURCES INC. 15#16Advisories This presentation is provided for informational purposes only as of May 11, 2022, is not complete and may not contain certain material information about Parex Resources Inc. ("Parex" or the "Company"), including important disclosures and risk factors associated with an investment in Parex. This presentation does not take into account the particular investment objectives or financial circumstances of any specific person who may receive it and does not constitute an offer to sell or a solicitation of an offer to buy any security in Canada, the United States or any other jurisdiction. The contents of this presentation have not been approved or disapproved by any securities commission or regulatory authority in Canada, the United Sates or any other jurisdiction, and Parex expressly disclaims any duty on Parex to make disclosure or any filings with any securities commission or regulatory authority, beyond that imposed by applicable laws. Forward-Looking Statements and Financial Outlook Certain information regarding Parex set forth in this document contains forward-looking statements that involve substantial known and unknown risks and uncertainties. The use of any of the words "plan", "expect", "prospective", "project", "intend", "believe", "should", "anticipate", "estimate" or other similar words, or statements that certain events or conditions "may" or "will" occur are intended to identify forward-looking statements. Such statements represent Parex' internal projections, estimates or beliefs concerning, among other things, future growth, results of operations, production, future capital and other expenditures (including the amount, nature and sources of funding thereof), plans for and results of drilling activity, business prospects and opportunities. These statements are only predictions and actual events or results may differ materially. Although the Company's management believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Parex' actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Parex. In particular, forward-looking statements contained in this document include, but are not limited to, statements with respect to the performance characteristics of the Company's oil properties; the Company's vision, strategy and values; Parex's expectations that it will return approximately one third of FFO to shareholders through dividends and share buybacks; the Company's (and its peer's) estimated 2022 cash flow netbacks; the Company's expectations of the amount of capital it will return to its shareholders through dividends, including its regular quarterly dividend, and share repurchases; the Company's plans to repurchase 10% of its public float pursuant to its NCIB in 2022; that Parex will continue to pay its regular quarterly dividend and the anticipated amount of such dividend for the remainder of 2022; Parex's target board representation of women and the anticipated timing thereof; Parex's GHG emissions intensity reduction targets and the anticipated timing thereof; Parex's 2022 production guidance; Parex' anticipated shares outstanding at the end of 2022; Parex's 2022 corporate guidance and in particular the information contained on slide 10; Parex's anticipated 2022 capital allocation as disclosed on slide 11 and its plans to return over US$300MM to shareholders while growing production and inventory; the anticipated activities to be taken in certain areas in 2022 including Parex's anticipated capex allocation and well program; Parex's anticipated growth in production and the anticipated timing thereof, in particular the long-term illustrative production growth information on slide 14; anticipated drilling locations; Parex' ability to unlock large original oil in place and grow production and become a multi-field operator; Parex's expectations that it will invest approximately two thirds of FFO into its business and the anticipated benefits to be derived therefrom; Parex's expected investments in development, exploitation and exploration work in 2022; Parex's expectations that its quarterly dividend will be robust in lower commodity price environments; and Parex's plans to become one of the least GHG-intensive O&G E&P companies. Statements relating to "reserves" or "resources" are forward-looking statements, as they involve the implied assessment, based on estimates and assumptions that the reserves and resources described exist in the quantities predicted or estimated and can be profitably produced in the future. PAREX RESOURCES INC. 2700 Eighth Avenue Place, West Tower 585 8th Avenue SW Calgary, AB T2P 1G1 Canada Tel: 403-265-4800 Fax: 403-265-8216 Email: [email protected] Website: www.parexresources.com Mike Kruchten Sr. Vice President, Capital Markets & Corporate Planning Steven Eirich Investor Relations & Communications Advisor PAREX RESOURCES INC. 16#17Advisories Forward-Looking Statements and Financial Outlook (Continued) These forward-looking statements are subject to numerous risks and uncertainties, including but not limited to, the impact of general economic conditions in Canada and Colombia; industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced, in Canada and Colombia; competition; lack of availability of qualified personnel; the results of exploration and development drilling and related activities; risks related to obtaining required approvals of regulatory authorities, in Canada and Colombia and partner and community approvals in Colombia; risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities; volatility in market prices for oil; fluctuations in foreign exchange or interest rates; environmental risks; changes in income tax laws, tax rates and/or incentive programs relating to the oil industry; changes to pipeline capacity; ability to access sufficient capital from internal and external sources; failure of counterparties to perform under the terms of their contracts; risk that Parex' evaluation of its existing portfolio of assets and exploration and development opportunities is not consistent with its expectation's; that production test results may not be indicative of long-term performance or ultimate recovery; risk that Parex will not have sufficient financial resources in the future to pay a dividend at the intended rate or at all; risk that the Board does not declare dividends in the future, that there is no base dividend growth and/or that Parex' dividend policy changes; risk that the amount of FFO to be returned to shareholders is less than anticipated; risk that Parex's anticipated capital expenditure guidance, production guidance and FFO guidance is less than anticipated; risk that the amount invested by Parex in development, exploitation and exploration in 2022 will be less than anticipated; that Parex will not repurchase 10% of the Company's float in 2022; that Parex will be unable to meet its GHG emissions intensity reduction targets or lower its carbon footprint; and other factors, many of which are beyond the control of the Company. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could effect Parex' operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Although the forward-looking statements contained in this document are based upon assumptions which management believes to be reasonable, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained in this document, Parex has made assumptions regarding, among other things: current commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil, including the anticipated Brent oil price; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; receipt of partner, regulatory and community approvals; royalty rates; future operating costs; effects of regulation by governmental agencies; uninterrupted access to areas of Parex' operations and infrastructure; recoverability of reserves and future production rates; the status of litigation; timing of drilling and completion of wells; on-stream timing of production from successful exploration wells; operational performance of non-operated producing fields; pipeline capacity; that Parex will have sufficient cash flow, debt or equity sources or other financial resources required to fund its capital and operating expenditures and requirements as needed; that Parex' conduct and results of operations will be consistent with its expectations; that Parex will have the ability to develop it's oil and gas properties in the manner currently contemplated; current or, where applicable, proposed industry conditions, laws and regulations will continue in effect or as anticipated as described herein; that the estimates of Parex' reserves volumes and the assumptions related thereto (including commodity prices and development costs) are accurate in all material respects; that Parex will be able to obtain contract extensions or fulfill the contractual obligations required to retain its rights to explore, develop and exploit any of its undeveloped properties; that Parex will have sufficient financial resources in the future to pay a dividend; that the Board will declare dividends in the future; that Parex will have sufficient financial resources to repurchase shares under its NCIB; that investments in geothermal and solar energies will lead to a lower carbon footprint; and other matters. Management has included the above summary of assumptions and risks related to forward-looking information provided in this document in order to provide shareholders with a more complete perspective on Parex' current and future operations and such information may not be appropriate for other purposes. Parex' actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits Parex will derive. These forward-looking statements are made as of the date of this document and Parex disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement. This document also contains a financial outlook, in particular: Parex's estimated 2022 cash flow netbacks; Parex's 2022 corporate guidance and in particular the information contained on slide 10; Parex's anticipated 2022 capital allocation as disclosed on slide 11; Parex's anticipated 2022 capex allocation; Parex's expectations with respect to the amount of FFO to be returned to shareholders through dividends and share buybacks and the amount investment into its business; and Parex's expected investments in development, exploitation and exploration work in 2022. Such financial outlook has been prepared by Parex's management to provide an outlook of the Company's activities and results. The financial outlook has been prepared based on a number of assumptions including the assumptions discussed above and assumptions with respect to the costs and expenditures to be incurred by the Company, capital equipment and operating costs, foreign exchange rates, taxation rates for the Company, general and administrative expenses and the prices to be paid for the Company's production. Management does not have firm commitments for all of the costs, expenditures, prices or other financial assumptions used to prepare the financial outlook or assurance that such operating results will be achieved and, accordingly, the complete financial effects of all of those costs, expenditures, prices and operating results are not objectively determinable. The actual results of operations of the Company and the resulting financial results will likely vary from the amounts set forth in the analysis presented in this presentation, and such variation may be material. The Company and its management believe that the financial outlook has been prepared on a reasonable basis, reflecting the best estimates and judgments, and represent, to the best of management's knowledge and opinion, Parex's expected expenditures and results of operations. However, because this information is highly subjective and subject to numerous risks including the risks discussed above, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, Parex undertakes no obligation to update such financial outlook. The future acquisition by the Company of the Company's shares pursuant to a NCIB, if any, and the level thereof is uncertain. Any decision to continue with an NCIB or acquire shares of the Company will be subject to the discretion of the Board and may depend on a variety of factors, including, without limitation, the Company's business performance, financial condition, financial requirements, growth plans, expected capital requirements and other conditions existing at such future time including, without limitation, contractual restrictions, satisfaction of the solvency tests imposed on the Company under applicable corporate law and receipt of regulatory approvals for any renewal of the NCIB. There can be no assurance that the Company will buyback any shares of the Company in the future. PAREX RESOURCES INC. 17#18Advisories Non-GAAP and Other Financial Measures Advisory This presentation uses various "non-GAAP financial measures", "non-GAAP ratios", "supplementary financial measures" and "capital management measures" (as such terms are defined in National Instrument 52-112 - Non-GAAP and Other Financial Measures Disclosure ("NI 52-112")). Such measures are not standardized financial measures under generally accepted accounting principles ("GAAP") for publicly accountable enterprises in Canada, and might not be comparable to similar financial measures disclosed by other issuers. Such financial measures should not be considered as alternatives to, or more meaningful than measures determined in accordance with GAAP. These measures facilitate management's comparisons to the Company's historical operating results in assessing its results and strategic and operational decision-making and may be used by financial analysts and others in the oil and natural gas industry to evaluate the Company's performance. Further, management believes that such financial measures are useful supplemental information to analyze operating performance and provide an indication of the results generated by the Company's principal business activities. Please refer to the Company's Management's Discussion and Analysis of the financial condition and results of operations for the three months and year ended December 31, 2021 and 2020 dated March 1, 2022 and for the three months ended March 31, 2022 and 2021 (collectively, the "MD&A"), which are available at the Company's website at www.parexresources.com and on the Company's profile on SEDAR at www.sedar.com for additional information about such financial measures, including reconciliations to the nearest GAAP measures, as applicable, which reconciliations (where applicable) are incorporated by reference herein. Supplementary financial measures • Dividend yield, is a supplementary financial measure and defined as annualized dividends per share divided by Parex' share price. Dividends per share, is a supplementary financial measure comprised of dividends declared, dividends by the number of shares outstanding. Capital Management Measures • • Working capital, is a capital management measure that the Company uses to describe its liquidity position and ability to meet its short-term liabilities. Working capital is defined as current assets less current liabilities. See the MD&A. Funds flow provided by operations, is a capital management measure that includes all cash generated from operating activities and is calculated before changes in non-cash working capital. See the MD&A. Non-GAAP Ratios • Funds flow provided by operations per share, is a non-GAAP ratio that is calculated by dividing funds flow provided by operations (a capital management measure) by the weighted average number of basic shares outstanding. See the MD&A. Non-GAAP Financial Measures Capital expenditures, is a non-GAAP financial measure which the Company uses to describe its capital costs associated with Oil and Gas expenditures. The measure considers both Property, Plant and Equipment expenditures and Exploration and Evaluation asset expenditures which are items in the Company's statement of Cash Flows for the period. See the MD&A. Free funds flow, is a non-GAAP financial measure that is defined as funds flow provided by operations less capital expenditures. The Company considers free funds flow or free cash flow to be a key measure as it demonstrates Parex's ability to fund return of capital, such as the NCIB, without accessing outside funds. See the MD&A. Dividend Advisory Future dividend payments, if any, and the level thereof is uncertain. The Company's dividend policy and any decision to pay further dividends on the common shares, including any special dividends, will be subject to the discretion of the Board and may depend on a variety of factors, including, without limitation the Company's business performance, financial condition, financial requirements, growth plans, expected capital requirements and other conditions existing at such future time including, without limitation, contractual restrictions and satisfaction of the solvency tests imposed on the Company under applicable corporate law. The actual amount, the declaration date, the record date and the payment date of any dividend are subject to the discretion of the Board. There can be no assurance that dividends will be paid at the intended rate or at any rate in the future. Oil & Gas Information and Reserve Advisory "BOES" may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 mcf:1 bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. "Proved Developed Producing Reserves" are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty. The estimates of Parex's reserves set forth in this presentation have been prepared by GLJ Ltd. ("GLJ") Each GLJ Report was prepared in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") as at December 31 of the applicable year. Additional reserve information as required under NI 51-101 has been included in the Company's Annual Information Form for the applicable fiscal year which is available on SEDAR. The recovery and reserve estimates provided in this presentation are estimates only, and there is no guarantee that the estimated reserves will be recovered. Actual reserves may eventually prove to be greater than, or less than, the estimates provided herein. PAREX RESOURCES INC. 18#19Advisories Oil & Gas Information and Reserve Advisory (Continued) This presentation contains a number of oil and gas metrics, including operating netbacks and FFO netbacks. These oil and gas metrics have been prepared by management and do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. Such metrics have been included herein to provide readers with additional measures to evaluate the Company's performance; however, such measures are not reliable indicators of the future performance of the Company and future performance may not compare to the performance in previous periods and therefore such metrics should not be unduly relied upon. Management uses these oil and gas metrics for its own performance measurements and to provide security holders with measures to compare the Company's operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this presentation, should not be relied upon for investment or other purposes. Market, Independent Third-Party and Industry Data Certain market, independent third party and industry data contained in this presentation is based upon information from government or other independent industry publications and reports or based on estimates derived from such publications and reports. Government and industry publications and reports generally indicate that they have obtained their information from sources believed to be reliable, but none of Parex or its affiliates have conducted their own independent verification of such information. This presentation also includes certain data derived from independent third parties, including, but not limited to, the anticipated cash flow netbacks of Parex's peers. While Parex believes this data to be reliable, market and industry data is subject to variations and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. None of Parex or its affiliates have independently verified any of the data from independent third-party sources referred to in this presentation or ascertained the underlying assumptions relied upon by such sources. Information Regarding Public Issuer Counterparties Certain information contained in this presentation relating to the Company's public issuer counterparties and the nature of their respective businesses is taken from and based solely upon information published by such issuers. None of Parex or its affiliates have independently verified the accuracy or completeness of any such information. PAREX RESOURCES INC. 19