Parex Acquires Stakes in Colombia Assets

Colombia-focused Parex Resources Inc. has entered into agreements with Ecopetrol S.A. for a 50 percent working interest in four blocks located in the Putumayo Basin and the Farallones Block in the Llanos Foothills of Colombia.

The Putumayo collaboration agreements “establish a new core area” for Parex, the company said in a news release, adding that over 350 million barrels of oil have been recovered to date in the area through primary recovery methods with limited recent drilling.

Parex said the business collaboration agreements are for the Orito, Area Sur, Occidente, and Nororiente Blocks in the Putumayo Basin of Colombia via an initial work plan commitment with no up-front acquisition cost.

The company noted that the Putumayo Blocks “offer significant upside potential and the ability to meaningfully improve recovery factors” through the application of low-risk infill drilling, re-completions, facility upgrades, and enhanced oil recovery (EOR) implementation.

Parex’s independent qualified reserve evaluator, GLJ Ltd. has recognized company interest proved plus probable reserves (2P) of 18 million barrels, according to the release.

Parex will assume operatorship of all future drilling and capital activities, while Ecopetrol will retain operatorship of current and future production. Proven reserves (1P) were marked at 10 million barrels.

The acquired Putumayo blocks provide a low-risk development drilling inventory with gross 2P future locations of approximately 19, in addition to existing producing wells and re-completion opportunities, Parex said. In addition to development opportunities, the acquired blocks add near-field exploration prospects in proven plays that materially enhance its portfolio.

Parex also acquired a 50 percent working interest and operatorship in the Farallones Block in the Llanos Foothills of Colombia, in exchange for drilling the Farallones exploration well, as well as the further expenditure commitment for carry capital of approximately $30 million on a gross capital program of roughly $60 million.

The acquisition extends Parex’s Foothills position and includes Farallones, which is an exploration prospect that offsets Cusiana by approximately 70 kilometers and represents one of the highest-ranking prospects in the company’s exploration portfolio.

Parex said it plans to begin initial access work to prepare for civil works activity and the expected spud of Farallones in 2026.

Parex added that it expects to achieve its FY 2024 average production guidance of 49,000 to 50,000 barrels of oil equivalent per day (boepd).

“The agreements announced today align with Parex’s strategy and add significant, lower-risk development & exploitation inventory, while consolidating our position in the Llanos Foothills trend where world-class exploration potential exists,” Parex President and CEO Imad Mohsen said.

“The longstanding partnership between Parex and Ecopetrol is further reinforced by these agreements. I am particularly excited about the re-development opportunities that exist in the Putumayo, and Parex’s enhanced exploration position in the Llanos Foothills, the most prolific trend in Colombia,” he remarked.

Parex describes itself as one of the largest independent oil and gas companies in Colombia, focusing on sustainable conventional production. The company’s corporate headquarters are in Calgary, Canada, with an operating office in Bogotá, Colombia.

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