Oil exploration and production company Parex Resources Inc will increase its upstream spend in the second half of 2016, drilling 11 wells in Colombia in the process.
The firm’s capital expenditure for the year has been raised from the anticipated bracket of between $80 and $100 million to between $110 and $120 million. Of the 11 wells scheduled to be drilled in 2H, five will be within the LLA-34 Block and the rest will be spread across the LLA-32, Playon, VMM-11, De Mares, Cebucan and Cabrestero blocks.
Early drilling results in Parex’s campaign will be “influential” for the company’s 2017 capital program, said FirstEnergy Capital in a brief research note sent to Rigzone.
Parex’s oil production in the second quarter of 2016 averaged 28,913 barrels of oil per day, marking a slight increase from the previous quarter and a seven percent increase year-on-year. Combined oil and natural gas production for the quarter was 29,136 barrels of oil equivalent per day.
The company recorded cash flow from operations of $31.8 million, which was up 106 percent from the previous quarter primarily due to a 34 percent increase in crude oil prices quarter-over-quarter. This figure was still below expectations, however, according to a statement from FirstEnergy Capital, due to a build in inventory during the quarter and a hedging loss.
Parex remains debt free and exited 2Q with $97.5 million in working capital and a $175 million undrawn bank credit facility.
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