Parex Resources Inc.

All participants, please stand by. Your conference is ready to begin. Good morning, everyone, and welcome to Perixx Resources' second quarter earnings call and webcast. Yesterday, Perixx released its unaudited financial and operating results for the quarter ended June 30, 2020. Like all Perixx disclosure documents, the complete financial statements and related MD&A are available on the company's website at www.perixxresources.com and on CDER. Before turning the meeting over to Mr. Dave Taylor, President and CEO of Perixx Resources, Inc., I would like to mention that this event is being recorded, so the recording will be available for playback on the company's website. Perixx would like to remind everyone... that remarks made during this session are subject to forward-looking statements which involve significant risk factors and assumptions and have been fully described in the company's continuous disclosure reports. The information discussed is made as of today's date and time and Perixx assumes no obligation to update or revise this information to reflect new events or circumstances except as required by law. Please note that at any time, participants on the webcast can submit their questions under the Ask a Question tab at the top of the webcast interface, and participants on the phone can press star 1. I would now like to pass on the meeting to Perik's President and CEO. Please go ahead, Mr. Taylor.

Thank you, Operator. And thanks to everyone on the line for joining myself and the senior leadership team for our Q2 conference call. We appreciate your support of PARCC's resources. Before we start our Q&A session, I'd like to provide some highlights of our Q2 financial results and discuss our plans for the remainder of 2020. I begin by stating our priority during the COVID-19 pandemic remains the health and safety of our employees, our contractors, and the communities where we operate. To minimize social interactions, we changed our operating procedures and reduced field activity, which impacted both CAPEX and production in Q2. our office staff in Bogota and Calgary continued to work primarily from home. In the second quarter, our financial results were strong despite declining global oil prices and ongoing market uncertainty. As a result of voluntary shut-ins, Q2 production averaged around 40,900 barrels per day, a 25% decrease from the previous quarter. PAREX cash net back was $9.96 per BOE, generating funds flow of $39 million or $0.28 a share of With limited operational activity, our capital expenditures were $5 million, and we repurchased 1.1 million shares. The company maintained its financial strength with $334 million in cash and no debt. We exited the second quarter with working capital of $339 million and $200 million of undrawn credit facility. For a 2020 outlet, ARCS is an exceptional financial position in the industry as the company continues to maintain a best-in-class balance sheet, with liquidity exceeding $500 million. In early March, we took decisive action to protect our financial position and to weather the ongoing crisis, as well as take advantage of potential growth opportunities that may arise. As stated at the last quarterly conference call, production levels in the second half of 2020 will be dependent on commodity prices showing stabilization. During Q2, we began to observe greater visibility to stronger netbacks, providing options for the company to, firstly, plan a gradual restart of production volumes from shut-in fields, which were reduced to preserve value. Currently, we're producing approximately 44,000 barrels of oil per day and targeting Q3 average production in the range of 42,000 to 44,000 barrels of oil equivalent per day. Secondly, we're going to resume our capital expenditure programs, and that's contingent on ensuring the welfare of our staff and the communities surrounding our operations. We estimate CapEx to be in the range of $65 to $70 million for the second half of 2020, with the priority being Southern Cassinary Core Area Completions and Development Wells, advancing the VIM-1 La Beliza discovery with Civil Works initial facilities and long lead items, and finally drilling a veranda appraisal well and a Fortuna exploration well in the Middle Magdalena Basin. We will continue to review and evaluate business development opportunities in Columbia as well as other jurisdictions. With this brief overview, I'd like to turn the line back to the operator to start the Q&A session. Operator, over to you.

Thank you. We will now take questions from the telephone lines. If you have a question or are using a speaker phone, please lift your hands up before making your selection. Please press star 1 on your telephone keypad if you have a question. Our first question is from Phil Skolnack from Peak Capital. Please go ahead. Your line is now open.