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Parex Resources (TSE:PXT)
TSX:PXT
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Parex Resources
(TSX:PXT)
Select Model
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Rating:76Outperform
Price Target:
C$20.00
▲(11.48% Upside)
Parex Resources scores well due to strong technical indicators and positive earnings call sentiment. The company benefits from a robust balance sheet and attractive valuation metrics. However, concerns about declining revenue and free cash flow growth slightly temper the overall score.
Positive Factors
Negative Factors
Parex Resources (PXT) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$1.73B
Dividend Yield8.58%
Average Volume (3M)593.75K
Price to Earnings (P/E)10.0
Beta (1Y)1.35
Revenue Growth-20.60%
EPS Growth-56.33%
CountryCA
Employees448
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.70
Shares Outstanding96,564,130
10 Day Avg. Volume485,647
30 Day Avg. Volume593,754
Financial Highlights & Ratios
PEG Ratio-0.20
Price to Book (P/B)0.56
Price to Sales (P/S)0.80
P/FCF Ratio2.99
Enterprise Value/Market Cap0.72
Enterprise Value/Revenue1.20
Enterprise Value/Gross Profit2.61
Enterprise Value/Ebitda3.18
Forecast
1Y Price Target
$22.92Price Target Upside27.76% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Parex Resources Business Overview & Revenue Model
Company DescriptionParex Resources Inc. engages in the exploration, development, production of oil and natural gas in Colombia. The company holds interests in onshore exploration and production blocks totaling approximately 6,521,632 gross acres. As of December 31, 2021, it had proved plus probable reserves of 198,825 million barrels of oil equivalent. The company was incorporated in 2009 and is headquartered in Calgary, Canada.
How the Company Makes MoneyParex Resources generates revenue primarily through the production and sale of crude oil and natural gas. The company earns income by extracting hydrocarbons from its exploration sites, particularly in Colombia, where it holds multiple production blocks. Key revenue streams include the sale of crude oil at market prices, which can fluctuate based on global oil demand and pricing. Additionally, Parex often engages in strategic partnerships and joint ventures that allow it to share operational costs and risks, thereby enhancing profitability. The company also focuses on cost-effective production techniques and operational efficiency, which contribute positively to its margins. Factors such as geopolitical stability in Colombia, commodity price trends, and effective management of resources play significant roles in influencing its overall earnings.
Parex Resources Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive sentiment with strong financial results, efficient operational execution, and strategic exploration plans. Despite facing some challenges like commodity price volatility and a higher tax rate, the company's outlook remains optimistic with continued production growth and cost management.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Netback performance was supported by favorable Colombian crude oil differentials and lower production costs. Funds flow provided by operations was $105 million, and FFO netback was $26.90 per BOE.
Efficient Operational Execution
Achieved several key milestones, including a 6-well infill drilling program with time and cost improvements, and encouraging results from near-field exploration with 3 wells producing approximately 2,500 BOE per day.
Production Growth on Track
Production averaged 42,542 BOE per day with expectations of reaching 44,000 to 47,000 BOE per day by year's end, setting up favorably for 2026.
Successful Cost Management
Realized meaningful internal efficiency gains, including lower power costs and optimized operations, contributing to improved netbacks.
Strategic Investment in Exploration
Advancing the Llanos Foothills exploration plans for 2026, and planning to spud 1 to 2 exploration wells in the Foothills next year.
Negative Updates
Commodity Price Volatility
The company hedged roughly 50% of planned production due to recent global volatility, indicating some uncertainty in future cash flow profiles.
Higher Effective Tax Rate
Current taxes were $9 million for the quarter, with a full-year effective current tax rate expected to be between 5% to 10%, slightly higher than previous forecasts.
Company Guidance
During the Parex Resources Q2 2025 conference call, the company provided guidance on various operational and financial metrics, projecting steady production growth in the second half of the year. They anticipate achieving their annual production guidance of 44,000 to 47,000 barrels of oil equivalent per day, supported by a robust netback of $26.90 per BOE, despite an average Brent oil price of $67 per barrel. The company highlighted key advancements, including the completion of a 6-well drilling program at LLA-34 and a 5-well campaign at LLA-32, contributing to an average production of 42,542 BOE per day for Q2. Favorable oil pricing differentials, with Vasconia benchmark differentials improving to less than $2 per barrel, and lower production costs have bolstered netbacks. The balance sheet remains strong, with $105 million in funds flow provided by operations and capital expenditures of $89 million for the quarter. Looking ahead, Parex plans to maintain a similar level of capital spending in Q3 while executing on share buybacks and sustaining a robust dividend, aiming for a strong production exit rate to set a favorable trajectory into 2026.Parex Resources Financial Statement Overview
Summary
Parex Resources shows strong profitability margins and a robust balance sheet with low leverage. However, the decline in revenue and free cash flow growth rates are concerns that need addressing for sustained growth.Income Statement
Parex Resources has shown a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue growth rate by 5.8%, which is a concern. However, the company maintains a healthy gross profit margin of 45.8% and a net profit margin of 12.1%. The EBIT and EBITDA margins are also strong at 18.0% and 37.6% respectively, indicating operational efficiency despite the revenue decline.65
Positive
Balance Sheet
The balance sheet of Parex Resources is robust with a very low debt-to-equity ratio of 0.012, suggesting minimal leverage risk. The return on equity (ROE) is moderate at 6.7%, reflecting decent profitability relative to shareholder equity. The equity ratio stands at a solid level, indicating a strong capital structure with a high proportion of equity financing.78
Positive
Cash Flow
The cash flow statement reveals some challenges, with a negative free cash flow growth rate of 19.65% in the TTM period. However, the operating cash flow to net income ratio is strong at 2.19, indicating good cash generation relative to net income. The free cash flow to net income ratio is 56.7%, which is satisfactory but shows room for improvement in cash flow management.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.05B | 1.29B | 1.17B | 1.31B | 900.20M | 531.87M |
| Gross Profit | 480.05M | 549.07M | 889.83M | 1.11B | 728.57M | 357.20M |
| EBITDA | 394.11M | 529.40M | 649.37M | 957.67M | 625.22M | 290.71M |
| Net Income | 126.48M | 60.68M | 459.31M | 611.37M | 303.11M | 99.32M |
Balance Sheet | ||||||
| Total Assets | 2.22B | 2.16B | 2.42B | 2.31B | 1.78B | 1.54B |
| Cash, Cash Equivalents and Short-Term Investments | 98.83M | 98.02M | 140.35M | 419.00M | 378.34M | 330.56M |
| Total Debt | 22.53M | 64.62M | 95.74M | 6.08M | 4.51M | 1.82M |
| Total Liabilities | 326.94M | 323.74M | 459.90M | 599.38M | 390.53M | 200.60M |
| Stockholders Equity | 1.90B | 1.83B | 1.96B | 1.71B | 1.39B | 1.34B |
Cash Flow | ||||||
| Free Cash Flow | 271.96M | 343.89M | 26.11M | 453.36M | 322.15M | 173.10M |
| Operating Cash Flow | 479.98M | 569.91M | 376.47M | 983.60M | 534.30M | 290.02M |
| Investing Cash Flow | -315.80M | -392.24M | -535.51M | -638.10M | -229.04M | -179.80M |
| Financing Cash Flow | -190.72M | -214.90M | -130.63M | -291.98M | -252.35M | -168.44M |
Parex Resources Technical Analysis
Neutral
17.94
Price Trends
17.93
Positive
16.34
Positive
14.34
Positive
Market Momentum
0.05
Positive
47.40
Neutral
55.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PXT, the sentiment is Neutral. The current price of 17.94 is below the 20-day moving average (MA) of 18.18, above the 50-day MA of 17.93, and above the 200-day MA of 14.34, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 47.40 is Neutral, neither overbought nor oversold. The STOCH value of 55.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:PXT.
Parex Resources Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | C$1.27B | 14.35 | 9.64% | 9.35% | -9.20% | -25.28% | |
| ― | $1.73B | 10.02 | 6.62% | 8.58% | -20.60% | -56.33% | |
| ― | C$1.77B | 10.18 | 23.55% | 5.81% | 6.44% | -6.74% | |
| ― | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
| ― | $1.33B | 17.81 | 6.73% | ― | 6.97% | 9.34% | |
| ― | $1.63B | -8.79 | 4.40% | 4.86% | -1.60% | 76.21% | |
| ― | C$1.23B | ― | -26.19% | 5.75% | ― | -523.86% |
* Energy Sector Average
TSE:PXT
Parex Resources
17.94
6.28
53.79%
TSE:VET
Vermilion Energy
10.49
-2.25
-17.67%
TSE:HWX
Headwater Exploration
7.40
0.92
14.20%
TSE:MER
Africa Oil
1.82
0.13
7.44%
TSE:KEL
Kelt Exploration
6.67
0.20
3.09%
TSE:CJ
Cardinal Energy
7.98
2.21
38.30%
Parex Resources Corporate Events
Parex Resources Reports Strong Q2 2025 Results
Jul 31, 2025
Parex Resources Inc., a leading independent oil and gas company in Colombia, focuses on sustainable conventional production with headquarters in Calgary, Canada, and operations in Bogotá, Colombia. The company trades on the Toronto Stock Exchange under the symbol PXT.
Parex Resources Shines in Earnings Call with Strong Growth
Jul 31, 2025
The recent earnings call for Parex Resources painted a picture of strong operational and financial performance. The company showcased steady production growth and significant achievements in exploration and operational efficiency. Despite a slight increase in the tax rate, the overall impact was minor compared to the extensive progress and financial stability demonstrated by Parex.
Business Operations and StrategyDividendsFinancial Disclosures
Parex Resources Reports Strong Q2 2025 Results and Declares Q3 Dividend
Positive
Jul 30, 2025
Parex Resources reported strong financial results for Q2 2025, driven by favorable crude differentials and operational efficiency, with a funds flow of $105 million. The company declared a Q3 2025 dividend of C$0.385 per share and highlighted successful exploration in the Southern Llanos, expecting increased production by year-end.
The most recent analyst rating on (TSE:PXT) stock is a Hold with a C$15.00 price target. To see the full list of analyst forecasts on Parex Resources stock, see the TSE:PXT Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.