Parex Resources Inc.
TSX VENTURE : PXT

Parex Resources Inc.

June 14, 2010 21:06 ET

Parex Resources Announces Positive Colombia and Trinidad Exploration Drilling Results

CALGARY, ALBERTA--(Marketwire - June 14, 2010) -

NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Parex Resources Inc. ("Parex", "we" or the "Company") (TSX VENTURE:PXT) is pleased to provide an exploration update for the Company's drilling activity in Colombia and in Trinidad.

Colombia Exploration Update

Parex's first well in its Central Llanos exploration program, Kona-1 on the LLA-16 Block (Parex 50 percent working interest), commenced drilling operations on May 16, 2010. As of June 14, 2010, the well has reached a measured depth of 13,004 feet in less than 30 days and is expected to reach a final total depth of 13,250 feet. 

Kona-1 was programmed to test multiple objectives and to date has observed shows of hydrocarbons during drilling in four intervals, at depths ranging from 11,700 to 13,000 feet, comprising the upper C7, Mirador, Gacheta and Une formations. Wireline well logs have been obtained to the base of the Mirador and indicate potential net oil pay, measured as true vertical depth, of 82 feet consisting of 35 feet in the upper C7 and 47 feet in the Mirador. Wireline logging has been completed to 11,970 feet, which is the maximum depth possible given the deviation of the well bore. The Gacheta and the Une formations are below 11,970 feet and cannot be logged using wireline tools, therefore a full logging-while-drilling tool suite will be utilized to log from 11,970 feet to final total depth.

It is premature to estimate potential flow rates or potential hydrocarbon volume at this time. However, given the hydrocarbon shows during drilling, the logging information obtained to date and indications of pay in multiple zones, a comprehensive evaluation program including flow tests is being designed and is expected to be implemented for all four of the prospective zones. We expect initial test results to be available by the end of July, 2010. 

Also in Colombia, Parex has been informed by the National Agency of Hydrocarbons that it has qualified as a Type 1 block operator for the Open Round Colombia 2010. Type 1 blocks are located in the currently producing basins and will be awarded under Exploration and Production contracts for a maximum of 30 years. Offers will be received, opened and publicly disclosed on June 22, 2010. Parex is assessing open blocks in the Llanos Basin for potential bids.

Trinidad Exploration Update

Firecrown-1, the first of three Trinidad exploration wells planned in 2010, has reached a total measured depth of 8,701 feet as of June 14, 2010 and has penetrated and encountered both the primary and secondary objectives in the Herrera formation. The well encountered potential hydrocarbon bearing sandstones with oil and gas shows and is being cased.

There is no certainty at this stage as to the quality of the Firecrown reservoir and whether or not the prospective formations are capable of producing commercial rates of hydrocarbons. Parex is currently in discussions with its partners and the regulator regarding the well potentially being deemed an earning well at the present depth and the timing of the future testing program.

Corporate Overview

Parex, through its direct and indirect subsidiaries, is engaged in oil and natural gas exploration, development and production in South America and the Caribbean region. Parex is conducting exploration activities on its 489,000 acre holdings in the Llanos Basin of Colombia and 223,500 acre holdings onshore Trinidad. Parex is headquartered in Calgary, Canada.

This news release does not constitute an offer to sell securities, nor is it a solicitation of an offer to buy securities, in any jurisdiction.

Advisory on Forward Looking Statements

Certain information regarding Parex set forth in this document contains forward-looking statements that involve substantial known and unknown risks and uncertainties. The use of any of the words "plan", "expect", "project", "intend", "believe", "should", "anticipate", "estimate" or other similar words, or statements that certain events or conditions "may" or "will" occur are intended to identify forward-looking statements. Such statements represent Parex's internal projections, estimates or beliefs concerning, among other things, plans for and results of drilling activity, future growth, results of operations, production, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, environmental matters, business prospects and opportunities. These statements are only predictions and actual events or results may differ materially. Although the Company's management believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, operational, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Parex's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Parex.

In particular, forward-looking statements contained in this document include, but are not limited to, statements with respect to the performance characteristics of the Company's oil properties; the Company's participation in upcoming Colombia bid rounds; supply and demand for oil; financial and business prospects and financial outlook; results of operations; drilling plans; activities to be undertaken in various areas; timing of drilling and completion; and planned capital expenditures, the timing thereof; and the method of funding.

These forward-looking statements are subject to numerous risks and uncertainties, including but not limited to, the impact of general economic conditions in Canada, Colombia and Trinidad & Tobago; industry conditions including changes in laws and regulations including adoption of new environmental laws and regulations, and changes in how they are interpreted and enforced, in Canada, Colombia and Trinidad & Tobago; competition; lack of availability of qualified personnel; the results of exploration and development drilling and related activities in Colombia and Trinidad; the earning of working interest in the Moruga Block; obtaining required approvals of regulatory authorities, in Canada, Colombia and Trinidad & Tobago; risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities; volatility in market prices for oil; fluctuations in foreign exchange or interest rates; environmental risks; changes in income tax laws or changes in tax laws and incentive programs relating to the oil industry; ability to access sufficient capital from internal and external sources and other factors, many of which are beyond the control of the Company.  Readers are cautioned that the foregoing list of factors is not exhaustive.  Additional information on these and other factors that could effect Parex's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

Although the forward-looking statements contained in this document are based upon assumptions which Parex's management believes to be reasonable, the Company cannot assure investors that actual results will be consistent with these forward-looking statements.  With respect to forward-looking statements contained in this document, Parex has made assumptions regarding: current commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; royalty rates, future operating costs, and other matters. Management has included the above summary of assumptions and risks related to forward-looking information provided in this document in order to provide shareholders with a more complete perspective on Parex's current and future operations and such information may not be appropriate for other purposes. Parex's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits Parex will derive there from. These forward-looking statements are made as of the date of this document and Parex disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Parex Resources Inc.
    Michael Kruchten
    Manager, Investor Relations
    (403) 517-1733
    (403) 265-8216 (FAX)
    or
    Parex Resources Inc.
    Kenneth G. Pinsky
    Vice President, Finance and Chief Financial Officer
    (403) 517-1729
    (403) 265-8216 (FAX)