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  5. PXT: Dear 5i [Parex Resources Inc.]
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Q: Dear 5i:
I sent in a number of questions yesterday. Thanks very much for the replies, however, you answered the question twice for parkland but no answer for PAREX.
Thanks, BEN.
Asked by BEN on December 02, 2024
5i Research Answer:

Parex's 2024 operational performance appears to be stabilizing, though at a much lower scale than the prior year, after a rapid production decline at Arauca in 3Q almost eliminated the field's contribution for the year. The recently-narrowed 2024 production guidance of 49,500 barrels of oil equivalent a day (vs. 57,000 at the start of 2024) sets the stage for next year and underscores broader growth concerns for the portfolio that management needs to address. Beyond below-ground issues, Parex continues to face protest disruption risk across its Colombian footprint, while President Gustavo Petro's strong opposition to oil development remains a headwind for investor sentiment in the region. PXT still has lots of cash, and the high dividend does not 'need' to be cut, but management is likely looking at it anyway. We do expect a fairly sharp decline in EPS and cash flow next year, and while the stock is very cheap it is simply not as interesting as before with its production declines.