Parex Resources Inc.
TSX VENTURE : PXT

Parex Resources Inc.

April 19, 2011 08:48 ET

Parex Resources' Kona-2 Well Tests 2,634 BOPD in the Gacheta Formation

CALGARY, ALBERTA--(Marketwire - April 19, 2011) -

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

Parex Resources Inc. ("Parex" or the "Company") (TSX VENTURE:PXT) an oil focused exploration and production company with operations in Colombia and Trinidad, is pleased to provide an update on the initial test results of the Company's Kona-2 well in Colombia. Parex' average working interest is 50 percent in its Colombia properties.

Kona-2 Gacheta Formation Test Rate of 2,634 Barrels per Day

Parex previously stated that a drilling rig had re-entered the Kona-2 well to drill out below the existing casing to re-drill the Gacheta Formation and prepare to complete this deeper zone. The Company previously reported log results of 20 net feet of potential oil pay in this formation.

On Sunday April 17, 2011 a swabbing unit became available on short notice and the Company commenced testing the Kona-2 well that had been previously perforated. After swabbing, at approximately 10:00 am MDT on April 17, 2011 the Kona-2 well began to flow naturally. After 38 hours, the final flow rate was approximately 3,045 barrels of fluid per day, comprised of 2,634 barrels of 32 degree API oil per day ("bopd") (net 1,317 bopd) and approximately 411 barrels of water per day. The well is currently shut-in to allow measurement of the down-hole pressure prior to completion of the short-term test.

The Company expects Kona-2 to be tied-in and on production by the end of April 2011.

As stated in the Company's press release dated April 15, 2011, based on test results or log analysis of Kona-1, Kona-2, Kona-3, Kona-4 and Supremo-1 and after the commissioning of the Kona oil treatment plant and completing the water disposal wells, Parex expects production of approximately gross 4,000-6,000 bopd (net 2,000-3,000 bopd).

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 595,000 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", "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' 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' 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, specifically the Kona-2 well; construction of the Kona oil treatment plant and water disposal wells; effect of commissioning the Kona oil treatment plant and water disposal wells on Parex' future operations; expected production as a result of commissioning the Kona oil treatment plant; financial and business prospects and financial outlook; results of drilling and testing, results of operations; drilling and shut-in plans; activities to be undertaken in various areas; the Company's expectations regarding exit rate production from Parex' current asset base; timing of drilling and completion.

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; the risks that any estimate of potential net oil pay is not based upon an estimate prepared or audited by an independent reserves evaluator; that there is no certainty that any portion of the hydrocarbon resources will be discovered, or if discovered that it will be commercially viable to produce any portion thereof; 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' operations and financial results are included in reports on file with Canadian securities regulatory authorities, including in the Company's Annual Information Form for the year ended December 31, 2010, 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 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' current and future operations and such information may not be appropriate for other purposes. Parex' 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

    Parex Resources Inc.
    Kenneth G. Pinsky
    Vice President, Finance and Chief Financial Officer
    (403) 517-1729
    (403) 265-8216