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Parex Resources (TSE:PXT)
TSX:PXT
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Parex Resources
(TSX:PXT)
69Neutral
Positive Factors
Earnings Guidance
With Q4 earnings, the company reaffirmed 2025 guidance, allowing investors to move forward with confidence.
Shareholder Returns
Parex is well-positioned to balance strong per share growth metrics with meaningful shareholder return of capital initiatives in 2025 and beyond.
Valuation
Current valuation appears quite attractive and should bring in new investors as the company reiterates consistent results.
Negative Factors
Geopolitical Risks
Colombia hasn't been kind to Canadian-listed E&P names. Government regulation, drilling exploration risk, and social unrest have historically warranted caution.
Past Production Challenges
Underwhelming production results this past summer had upended multiple successful years.
Production Performance
Underwhelming production results this past summer had upended multiple successful years for Parex.
Parex Resources (PXT) vs. S&P 500 (SPY)
Market Cap
$1.09B
Dividend Yield13.26%
Average Volume (3M)628.86K
Price to Earnings (P/E)13.5
Beta (1Y)1.04
Revenue Growth-5.80%
EPS Growth-87.18%
CountryCA
Employees448
SectorEnergy
Sector Strength53
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.75
Shares Outstanding97,994,130
10 Day Avg. Volume359,414
30 Day Avg. Volume628,864
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.28
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit2.54
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.35Price Target Upside56.33% Upside
Rating ConsensusHold
Number of Analyst Covering3
Parex Resources Business Overview & Revenue Model
Company DescriptionParex Resources Inc. engages in the exploration, development, production of oil and natural gas in Colombia. The company holds interests in onshore exploration and production blocks totaling approximately 6,521,632 gross acres. As of December 31, 2021, it had proved plus probable reserves of 198,825 million barrels of oil equivalent. The company was incorporated in 2009 and is headquartered in Calgary, Canada.
How the Company Makes MoneyParex Resources generates revenue primarily through the exploration, extraction, and sale of crude oil and natural gas. The company's key revenue streams include the sale of produced hydrocarbons, which are marketed and distributed to various domestic and international markets. Parex Resources leverages strategic partnerships and joint ventures to enhance its exploration capabilities and maximize output. The company benefits from its focus on operational efficiency and cost management, which contributes to its profitability. Additionally, Parex Resources' earnings are influenced by global oil prices, production volumes, and its ability to optimize its asset portfolio.
Parex Resources Financial Statement Overview
Summary
Parex Resources shows strong cash flow and balance sheet stability with low leverage, providing a cushion against market volatility. However, challenges in revenue growth and profitability necessitate strategic adjustments to enhance margins and growth.Income Statement
Parex Resources has shown fluctuating revenue trends with recent decline in gross profit margins from 54.1% in 2022 to 42.6% in 2023. The net profit margin also decreased from 37.2% in 2022 to 4.7% in 2023, indicating a significant contraction in profitability. However, the company managed to maintain a positive EBITDA margin of 41.1% in 2023, despite the absence of EBIT, which is a concern. Revenue decreased by 21.4% from 2022 to 2023, indicating a need for growth strategies.64
Positive
Balance Sheet
The company maintains a solid equity position with an equity ratio of 85.0% in 2023, suggesting low leverage and strong financial stability. The debt-to-equity ratio remained low at 0.05 in 2023, indicating conservative use of debt. However, the return on equity (ROE) dropped significantly from 35.6% in 2022 to 3.3% in 2023, reflecting reduced profitability on shareholder investments.75
Positive
Cash Flow
Parex Resources demonstrated significant operating cash flow generation, with $569.9 million in 2023, resulting in a strong operating cash flow to net income ratio of 9.39. Free cash flow grew substantially from $26.1 million in 2022 to $343.9 million in 2023, indicating improved cash generation efficiency. The free cash flow to net income ratio of 5.67 highlights a robust cash flow position despite lower net income.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.29B | 1.17B | 1.64B | 1.06B | 587.52M | Gross Profit |
| 549.07M | 889.83M | 1.02B | 659.64M | 302.59M | EBIT |
| 0.00 | 454.24M | 889.24M | 529.14M | 192.26M | EBITDA |
| 529.40M | 659.18M | 952.60M | 625.22M | 287.16M | Net Income Common Stockholders |
| 60.68M | 459.31M | 611.37M | 303.11M | 99.32M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 98.02M | 140.35M | 419.00M | 378.34M | 330.56M | Total Assets |
| 2.16B | 2.42B | 2.31B | 1.78B | 1.54B | Total Debt |
| 64.62M | 95.74M | 6.08M | 4.51M | 1.82M | Net Debt |
| -33.40M | -44.62M | -412.92M | -373.83M | -328.74M | Total Liabilities |
| 323.74M | 459.90M | 599.38M | 390.53M | 200.60M | Stockholders Equity |
| 1.83B | 1.96B | 1.71B | 1.39B | 1.34B |
| Cash Flow | Free Cash Flow | |||
| 343.89M | 26.11M | 453.36M | 322.15M | 173.10M | Operating Cash Flow |
| 569.91M | 376.47M | 983.60M | 534.30M | 290.02M | Investing Cash Flow |
| -392.24M | -535.51M | -638.10M | -229.04M | -179.80M | Financing Cash Flow |
| -214.90M | -130.63M | -291.98M | -252.35M | -168.44M |
Parex Resources Technical Analysis
Negative
11.10
Price Trends
12.72
Negative
13.26
Negative
13.69
Negative
Market Momentum
-0.35
Negative
43.59
Neutral
75.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PXT, the sentiment is Negative. The current price of 11.1 is below the 20-day moving average (MA) of 11.65, below the 50-day MA of 12.72, and below the 200-day MA of 13.69, indicating a bearish trend. The MACD of -0.35 indicates Negative momentum. The RSI at 43.59 is Neutral, neither overbought nor oversold. The STOCH value of 75.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:PXT.
Parex Resources Peers Comparison
Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Performance Comparison
TSE:PXT
Parex Resources
11.10
-10.47
-48.53%
BTE
Baytex Energy
1.54
-1.93
-55.62%
CNNEF
Canacol Energy
2.10
-1.46
-41.01%
MEGEF
MEG Energy
14.02
-8.16
-36.79%
SPGYF
Whitecap Resources
5.68
-1.17
-17.08%
GENGF
Gear Energy
0.34
-0.17
-33.33%
Parex Resources Earnings Call Summary
Earnings Call Date:Mar 05, 2025
(Q4-2024)
| % Change Since: -8.99%|
Next Earnings Date:May 07, 2025
Earnings Call Sentiment Positive
The earnings call outlined a strong financial and operational performance with significant progress in reserves and strategic initiatives. Tax and pricing improvements, alongside a robust plan for shareholder returns, further contribute to a positive outlook. Despite a minor decrease in PDP reserves, the overall sentiment is optimistic.Q4-2024 Updates
Positive Updates
Strong Financial Performance
Generated $275 million in free funds flow, the third highest in the company's history, and $141 million in funds flow provided by operations for the quarter.
Positive Reserves Report
Grew 1P and 2P reserves per share in 2024, with strategic application of technology leading to increased recovery factors in key assets like LLA-34 and Cabrestero.
Operational Progress
Production averaged 45,297 BOE per day, meeting the revised guidance. Significant progress in waterflood and polymer activities and gas exploration plans.
Tax and Pricing Improvements
Achieved a $6 million current tax recovery, with an expected lower effective tax rate of 3% to 6% in 2025. Vasconia differential improved to below $2 per barrel.
Shareholder Returns
Returned C$1.5 billion to shareholders over the past five years, more than the current market cap, with plans to continue strengthening returns.
Best Safety Performance
2024 marked the company's best safety performance, highlighting employee dedication.
Negative Updates
Slight Decrease in PDP Reserves
While 1P and 2P reserves per share grew, PDP reserves per share decreased slightly.
Company Guidance
During Parex Resources' 2024 year-end conference call, the company reported robust financial and operational performance despite facing headwinds throughout the year. Key metrics highlighted include generating $275 million in free funds flow, achieving a quarterly funds flow of $141 million, and maintaining a production average of 45,297 BOE per day. Their 2024 results also saw a growth in 1P and 2P reserves per share, although PDP per share decreased slightly. Operational efforts included advancing waterflood and polymer injection techniques at key blocks, contributing to improved recovery factors. The company anticipates a reduced effective tax rate of 3% to 6% for 2025 at $70 per barrel Brent, alongside a Vasconia differential currently below $2 per barrel, down from the 2024 average of $5 per barrel. Looking forward, Parex plans to ramp up to four rigs in the second quarter of 2025 and focus on low-risk activities to enhance shareholder returns, which have amounted to C$1.5 billion over the past five years.Parex Resources Corporate Events
Executive/Board ChangesDividendsBusiness Operations and StrategyFinancial Disclosures
Parex Resources Reports Strong 2024 Results and Strategic Advancements
Positive
Mar 5, 2025
Parex Resources announced its 2024 financial results, highlighting a strong performance with $622 million in funds flow and a net income of $61 million. The company declared a Q1 2025 dividend and appointed a new CFO, Cameron Grainger. Parex achieved strategic milestones, including successful waterflood implementations and polymer injection pilots, and expanded its exploration activities in the Llanos Foothills. The company aims to maintain steady production and shareholder returns while preparing for future exploration opportunities.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.