Parex Resources Inc.

Parex Resources Inc.

October 21, 2010 10:12 ET

Parex Resources Increases Bought Deal Equity Financing to $67.6 Million

CALGARY, ALBERTA--(Marketwire - Oct. 21, 2010) -


Parex Resources Inc. ("Parex" or the "Company" or "we") (TSX VENTURE:PXT) is pleased to announce that, in connection with its previously announced public offering, the Corporation and the syndicate of underwriters led by FirstEnergy Capital Corp. and including Scotia Capital Inc., Haywood Securities Inc., Raymond James Ltd., TD Securities Inc., Peters & Co. Limited, and Wellington West Capital Markets Inc. (the "Underwriters"), have agreed to increase the size of the offering to 11,650,000 common shares ("Common Shares"). Under the revised terms, the Underwriters have agreed to purchase, on a bought deal basis, an aggregate of 11,650,000 Common Shares at $5.80 per Common Share for aggregate gross proceeds of $67,570,000 (the "Offering"). Parex has also granted the Underwriters an over allotment option, exercisable in whole or in part, for a period commencing at closing of the Offering and ending 30 days following closing of the Offering, to purchase an additional 1,350,000 common shares at the same Offering price which, if exercised, would increase the total gross proceeds to $75,400,000.

Prior to this Offering, Parex has 63.9 million common shares issued and outstanding.

The net proceeds from this Offering will be used to increase net working capital and subsequently to accelerate the development of Parex' Colombian operations, notably the development of the Llanos basin Block LLA-16 Kona prospect, fund ongoing Colombia and Trinidad exploration, fund future growth opportunities and for general corporate purposes.

This Offering is subject to certain conditions including normal regulatory approvals and specifically, the approval of the TSXV. The common shares will be offered in all provinces of Canada by way of short form prospectus. Closing is anticipated to occur on or about November 16, 2010.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities law and may not be offered or sold in the United States absent registration or applicable exemption from those registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

For additional information please see the Company's website at

Corporate Overview

Parex, through its direct and indirect subsidiaries, is engaged in oil 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.

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", "prospective", "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, future growth, results of operations, production, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, plans for and results of drilling activity, 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, 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 concerning the Offering, including the timing of closing of the Offering, the common shares to be issued pursuant to the Offering, regulatory and other approvals required for the Offering and the use of proceeds from the Offering.

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; 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; risk that the board of directors of Parex determines that it would be in the best interests of Parex to deploy the proceeds of the Offering for some other purpose; failure to receive all required regulatory and other approvals for the Offering; 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 (

Although the forward-looking statements contained in this document are based upon assumptions which 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: receipt of regulatory and other approvals for the Offering; 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)
    Parex Resources Inc.
    Kenneth G. Pinsky
    Vice President, Finance and Chief Financial Officer
    (403) 517-1729
    (403) 265-8216 (FAX)