What Parex Resources (TSX:PXT)'s Expanded Ecopetrol Alliance And Llanos Drilling Plans Mean For Shareholders

• Parex Resources and Ecopetrol recently reported further progress in their Llanos Foothills exploration alliance, securing regulatory approvals and outlining 2026 plans to drill the Floreña Huron and Farallones wells, while reaffirming that 2025 production is tracking near the midpoint of guidance.
• A distinctive feature of the update is Parex funding the key Floreña Huron and Farallones exploration wells at 100% of capital costs in exchange for a 50% participation in future production from a high-potential area, highlighting a calculated risk-reward approach to Colombia’s resource expansion.
• We’ll now examine how Parex’s expanded Ecopetrol alliance and fully funded Llanos Foothills drilling plans may influence its investment narrative.

Find companies with promising cash flow potential yet trading below their fair value.

Parex Resources Investment Narrative Recap

To own Parex, you need to believe that Colombia-focused exploration and development can keep converting into resilient cash flow, even as assets mature and politics ebb and flow. The Llanos Foothills update supports that thesis by pairing progress on high-impact wells with confirmation that 2025 production is tracking near the midpoint of guidance, slightly easing near term volume concerns but not changing the core risk around Colombian concentration and permitting.

Among recent developments, the company’s continued quarterly dividend of C$0.385 per share stands out in this context, because it directly relies on Parex turning its exploration and development spending in Colombia, including the fully funded Floreña Huron and Farallones wells, into sustainable free cash flow that can support both shareholder returns and future growth projects.

Yet investors should also weigh how dependent these cash returns are on Colombia’s evolving regulatory and fiscal environment...

Read the full narrative on Parex Resources (it's free!)

Parex Resources' narrative projects $956.5 million revenue and $243.7 million earnings by 2028. This assumes a 0.6% yearly revenue decline and an earnings increase of about $117 million from $126.5 million today.

Uncover how Parex Resources' forecasts yield a CA$19.80 fair value, a 3% upside to its current price.

Exploring Other Perspectives

Nine fair value estimates from the Simply Wall St Community span roughly C$12.72 to about C$89.01 per share, reflecting very different expectations. Against that spread, Parex’s concentrated exposure to Colombian regulation and licensing could significantly influence which of these scenarios comes closer to reality.

Explore 9 other fair value estimates on Parex Resources - why the stock might be worth over 4x more than the current price!

Build Your Own Parex Resources Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Parex Resources research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Parex Resources research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Parex Resources' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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