Parex Resources (TSE:PXT)
TSX:PXT
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Parex Resources
(TSX:PXT)
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Rating:71Outperform
Price Target:
C$30.00
▲(21.65% Upside)
Action:Reiterated
Date:05/14/26
The score is driven primarily by strong financial durability (notably the balance sheet) and a constructive technical trend, reinforced by a positive earnings-call outlook tied to major transactions and higher pro forma production. The main limiter is valuation, with an exceptionally high P/E despite an attractive dividend yield, alongside recent free-cash-flow weakness.
Positive Factors
Strong balance sheet and low leverage
Parex's low-leverage balance sheet and large equity base provide durable financial flexibility to fund development, absorb commodity shocks, and pursue M&A or opportunistic investments without immediate reliance on dilutive equity. This underpins sustained capital allocation and dividend capacity.
Negative Factors
Higher debt and elevated coupon
The new $500M 8.5% notes increase interest expense and raise structural financing costs. While proceeds support transformational deals, the higher coupon reduces netbacks and adds refinancing risk if oil prices weaken, constraining cash available for reinvestment or deleveraging.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong balance sheet and low leverage
Parex's low-leverage balance sheet and large equity base provide durable financial flexibility to fund development, absorb commodity shocks, and pursue M&A or opportunistic investments without immediate reliance on dilutive equity. This underpins sustained capital allocation and dividend capacity.
Read all positive factors
Parex Resources (PXT) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$2.60B
Dividend Yield8.48%
Average Volume (3M)556.51K
Price to Earnings (P/E)104.5
Beta (1Y)0.47
Revenue Growth-14.73%
EPS Growth123.98%
CountryCA
Employees448
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)1.86
Shares Outstanding95,974,140
10 Day Avg. Volume644,367
30 Day Avg. Volume556,510
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.67
Price to Sales (P/S)1.46
P/FCF Ratio5.72
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$35.17Price Target Upside42.61% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)4.48
Revenue Forecast (FY)C$1.74B
Parex Resources Business Overview & Revenue Model
Company Description
Parex 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, ...
How the Company Makes Money
Parex Resources primarily makes money by producing and selling crude oil (and, to a lesser extent, natural gas and associated liquids) from its Colombian upstream assets. Revenue is generated when Parex markets its entitlement production and recei...
Parex Resources Earnings Call Summary
Earnings Call Date:May 12, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call presents a broadly positive transformation story: major strategic transactions (Frontera acquisition and Ecopetrol partnership) substantially increase scale, reserves and pro forma production (to 82k–91k BOE/day), while strong exploration results (Block 111) and material cost efficiencies (≈65% lower exploration well costs) support attractive near- and medium-term cash generation. Financial execution (oversubscribed $500M note issuance) and solid FFO guidance ($475M–$525M H1 on a $90 Brent, and FFO netbacks of $30–$33/BOE) further bolster confidence. Offsetting items are near-term production softness, $17M of one-off costs, added debt at an 8.5% coupon and the potential for nonrecurring integration/financing charges to depress reported FFO in the short term. Overall, the strategic upside and strong execution metrics outweigh the near-term costs and risks.Positive Updates
Transformational Frontera Acquisition
Completed $725 million acquisition of Frontera adding ~37,000 BOE/day of production, materially increasing reserves and scale. Transaction expected to drive synergies (marketing, tax) and enable more efficient capital allocation across the portfolio.
Negative Updates
Near-Term Production Below Q1 Averages
Standalone production in Q1 averaged just under 45,000 BOE/day and current production levels were below Q1 averages; management expects improvement and to exit at or above 45,000 BOE/day but near-term softness remains.
Read all updates
Q1-2026 Updates
Positive
Negative
Transformational Frontera Acquisition
Completed $725 million acquisition of Frontera adding ~37,000 BOE/day of production, materially increasing reserves and scale. Transaction expected to drive synergies (marketing, tax) and enable more efficient capital allocation across the portfolio.
Read all positive updates
Company Guidance
The company guided to a transformed second-half 2026 profile that, on a pro forma basis including Frontera and the Ecopetrol Magdalena agreement, targets average production of 82,000–91,000 BOE/d (stand‑alone Q1 production was just under 45,000 BOE/d with an expected exit ≥45,000 BOE/d), with the $725M Frontera deal adding roughly 37,000 BOE/d and the Magdalena blocks currently producing ~15,000 bbl/d; financial guidance assumes $90 Brent and implies FFO netbacks of ~$30–$33/BOE, half‑year FFO of ~$475M–$525M and half‑year CapEx of ~$275M–$295M (noting Q1 FFO was $114M or $1.18/share and included $17M of one‑time costs), alongside a medium‑term net debt/EBITDA target of ≤0.5x and a recently issued $500M of 8.5% notes due 2031; operational metrics supporting this outlook include 6 Block 111 exploration wells (4 positives, 1 already producing ~1,500 bbl/d), ~$2M all‑in cost per exploration well (vs ~$6M typical, ~65% lower), plans for up to 7 development/appraisal wells in H2, identified >15 prospects, a $250M gross 5‑year CapEx earn‑in for 50% of Casabe/Llanito, and an indicative order‑of‑magnitude ~$500M aggregate CapEx for 2027 at a $70 oil base case.Parex Resources Financial Statement Overview
Summary
Income Statement
70
Positive
Balance Sheet
86
Very Positive
Cash Flow
66
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 916.45M | 896.40M | 1.29B | 1.17B | 1.31B | 900.20M |
| Gross Profit | 374.80M | 375.77M | 549.07M | 889.83M | 1.11B | 728.57M |
| EBITDA | 428.30M | 458.06M | 529.40M | 659.18M | 957.67M | 628.62M |
| Net Income | 179.49M | 259.55M | 60.68M | 459.31M | 611.37M | 303.11M |
Balance Sheet | ||||||
| Total Assets | 2.50B | 2.34B | 2.16B | 2.42B | 2.31B | 1.78B |
| Cash, Cash Equivalents and Short-Term Investments | 183.22M | 108.64M | 98.02M | 140.35M | 419.00M | 378.34M |
| Total Debt | 183.92M | 42.07M | 64.62M | 95.74M | 6.08M | 4.51M |
| Total Liabilities | 563.77M | 387.45M | 323.74M | 459.90M | 599.38M | 390.53M |
| Stockholders Equity | 1.93B | 1.95B | 1.83B | 1.96B | 1.71B | 1.39B |
Cash Flow | ||||||
| Free Cash Flow | 161.57M | 228.09M | 343.89M | 26.11M | 453.36M | 322.15M |
| Operating Cash Flow | 361.20M | 432.19M | 569.91M | 376.47M | 983.60M | 534.30M |
| Investing Cash Flow | -394.04M | -309.36M | -392.24M | -535.51M | -638.10M | -229.04M |
| Financing Cash Flow | -5.90M | -165.72M | -214.90M | -130.63M | -291.98M | -252.35M |
Parex Resources Technical Analysis
Neutral
24.66
Price Trends
23.96
Positive
21.17
Positive
18.77
Positive
Market Momentum
0.36
Positive
45.11
Neutral
27.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PXT, the sentiment is Neutral. The current price of 24.66 is below the 20-day moving average (MA) of 26.37, above the 50-day MA of 23.96, and above the 200-day MA of 18.77, indicating a neutral trend. The MACD of 0.36 indicates Positive momentum. The RSI at 45.11 is Neutral, neither overbought nor oversold. The STOCH value of 27.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:PXT.
Parex Resources Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | C$2.60B | 104.50 | 13.39% | 8.48% | -14.73% | 123.98% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | C$2.25B | 44.59 | 1.14% | 8.25% | -8.46% | -91.52% | |
62 Neutral | C$2.82B | -47.96 | 9.84% | ― | 54.45% | 189.64% | |
61 Neutral | C$1.69B | 15.88 | 6.59% | ― | 11.26% | ― | |
60 Neutral | C$2.69B | -5.03 | -33.68% | 4.60% | -7.04% | -2448.68% | |
59 Neutral | C$2.02B | 685.06 | 3.96% | ― | 14.75% | -15.94% |
* Energy Sector Average
TSE:PXT
Parex Resources
27.11
15.35
130.51%
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Parex Resources Corporate Events
Business Operations and StrategyExecutive/Board ChangesFinancial DisclosuresShareholder Meetings
Parex flags short-term production dip but maintains 2026 guidance and pulls GeoPark board slate
Neutral
Apr 9, 2026
Parex Resources reported first-quarter 2026 average production of 44,735 barrels of oil equivalent per day, reflecting weather-related downtime and weaker results at its LLA-32 block that pulled February and March volumes below January levels. The...
Business Operations and StrategyM&A Transactions
Parex to Buy Frontera’s Colombian Assets, Becoming Largest Independent Producer in Country
Positive
Mar 11, 2026
Parex Resources has agreed to acquire Frontera Energy’s Colombian exploration and production business, Frontera Petroleum International Holdings B.V., for US$500 million in cash, the assumption of US$225 million of net debt, and a contingent...
Business Operations and StrategyDividendsFinancial Disclosures
Parex Resources Delivers Solid 2025 Results, Boosts Reserves and Raises Payouts
Positive
Mar 4, 2026
Parex Resources reported solid 2025 financial and operating performance, generating $455 million in funds flow from operations and $145 million in free funds flow, while averaging 44,701 boe/d and meeting its annual production guidance. The compan...
Business Operations and StrategyM&A Transactions
Parex Tables Premium US$500 Million Bid for Frontera’s Colombian Assets
Positive
Feb 23, 2026
Parex Resources has tabled an all-cash US$500 million offer, plus assumed debt and a US$25 million contingent payment, to acquire Frontera Energy’s Colombian upstream assets, topping the consideration under Frontera’s existing acquisit...
Business Operations and StrategyExecutive/Board ChangesM&A TransactionsShareholder Meetings
Parex Steps Up Activist Push With Six Independent Nominees to GeoPark Board
Neutral
Feb 20, 2026
Parex Resources has moved to assert greater influence at GeoPark by nominating six independent director candidates for election to GeoPark’s board at the 2026 annual shareholder meeting, leveraging its roughly 11.8% ownership stake. The nomi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.