Parex Resources Inc.

Good morning, everyone, and welcome to PARX Resources' second quarter 2023 conference call and webcast. My name is Mike Crookton, Senior Vice President of Capital Markets and Corporate Planning at PARX. On the call with me today are Armand Molson, PARX's President and Chief Executive Officer, Ken Pinsky, Chief Financial Officer, and Eric Furlan, Chief Operating Officer. This quarter, we are pleased to offer a new online video webcast in addition to the regular conference call telephone line for analysts. Please note that at any time, participants on the phone can press star 1 to submit a question. As a reminder, this conference call includes forward-looking statements as well as non-GAAP and other financial measures with associated risks outlined in our news release and MD&A, which can be found on our website or at cdrplus.ca. All amounts discussed today are in U.S. dollars, unless otherwise stated. Please go ahead, Ahmad.

Thank you, Mike. Good morning, everyone. Before I turn it over to Ken for an overview of our quarterly financial and operational results, and to Mike for his comments on our ninth annual sustainability report, I'd like to share some opening remarks regarding the progress of our overall strategy. I will end the call with comments on the momentum that we are building in the northern Llanos, as well as our updated 2023 guidance and outlook. In the first half of 2023, I am proud to say that we continue to progress the three core pillars of our strategy. First, exploitation and technology. In Soka, we are seeing success from the horizontals that we have drilled. And we are continuing to progress our water flood plans. Also, in the year 1938, we had an oil discovery in the C7 reservoir on one of our quick-hit wells, where we have spotted a follow-up horizontal well to maximize recovery. On the gas strategy part, we are making concrete progress in our discussions with Ecopetrol regarding the MOU, and we also made the decision to expand the facility of VIM1 in 2024. And third, on big E exploration, we did drill and test the Shermoya well at WIM43, which was the first of the three big E wells for the 2023 program. Despite the well not delivering the outcome that we hoped for, we continue to see significant exploration upside potential in Colombia. We plan to spot two more high-impact big E wells in the second half of 2023. There's more to follow in 2024. With that said, I continue to be excited about our trajectory and the organic opportunity set that we have in Colombia for the next, for both development and exploration. With that, please go ahead, Kev.

Thank you, Ahmad. Despite production impacts experienced in the Northern Llanos at our Capachos block, the second quarter delivered strong operational and financial results that highlight the robust profitability derived from our Colombia operations. Funds flow provided by operations was US $155 million, which was lower than prior quarters, primarily due to decline in global crude pricing, notwithstanding our production volume growth. Average Q2 2022 production of 54,120 BOE per day was up 6% compared to Q2 2022 and up 5% from the prior quarter. Estimated average production would have been close to 58,000 BOE a day if it not for the temporary shut-ins experienced at our capacials block that were outside of our control. The net effect was lost production and drilling progress at both capacials as well as the rail cut, which overall had an estimated impact of approximately 3,500 or 3,800 barrels of oil equivalent per day on the quarter. Ahmad will discuss the annual impacts and the update to our guidance later in this call. Production per share increased by 14% year over year, which was supported by the higher production levels and the reduction of shares through our normal course issuer bid, or NCIB. Year-to-date 2023, we have repurchased approximately 3.6 million shares, or approximately 3% of the float, as a mechanism to return free funds from this flow to the shareholders over and above our Canadian 37.5 cents per share quarterly regular dividend. We ended up the quarter with a slight working capital deficit, which we expect to turn to working capital surplus by year end due to expected higher fund slope operations, which will be due to increased production, higher benchmark oil prices, and our narrower differential for our heavy crude stream. All the while, capital expenditures are forecast to remain flat based on our first half 2023 run rate. With that, I will pass it on to Mike to provide a brief ESG update.