Parex Resources Inc. (PXT.TO)

PXT has staged a small recovery, up 30% YTD now. It remains very cheap at 8X earnings, with an 8.13% dividend. The balance sheet remains strong, with $75M net cash. Financials are still lower than they were several years ago, but consensus calls for growth to resume next year. The Q2 numbers were solid, with good control on costs and favourable differentials. Guidance was maintained at 43,000 to 47,000 B/d. All in, its valuation and dividend make it attractive, with offsets to its high volatility and cyclicality. But it is buyable at current levels and momentum has improved.
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Yield is 13%. Dividend not sustainable. Great candidate for tax-loss selling, and buy another high yielder (such as WCP) with the proceeds. WCP has meaningfully better assets, reliable management, with no Colombian geopolitical risk. 

Last year was a complete disaster. They wasted hundreds of millions in Colombia that turned out to be non-productive. They are deeply in the penalty box in a risk-off market. It's a value trap.

PXT is targeting average production of 45,000 boe/day in 2025. Capital expenditures will be $300M. Cash flow $445M and free cash flow $145M after dividends. This is essentially down a fraction from Q4 production results. The balance sheet is still strong and cash flow good. The dividend can still be paid IF the company wants to. It has renewed its share buyback. Essentially, analysts comments are reflecting 'lacklustre growth' and this forecast is not likely to be a catalyst for the stock, even though it remains very cheap on all metrics. 
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Tricky. In penalty box based on disastrous year. Dividend needs $80 to be truly sustainable. Based on poor share performance, CEO's job may be on the line. Risk in Colombia, sentiment remains challenged. He owns a very small position, gathering option premiums. Better names out there for new $$.

It has broken its support resistance at $20 and the previous resistance at $30. If it forms a base then that might be a time to buy.

The company still is in a net cash position. We do not think a dividend cut is imminent, but we are sure management is discussing the possibility, unless they feel operational setbacks are just temporary. We would still be comfortable holding it at current levels due to its very cheap valuation and balance sheet. 
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On paper, looked pretty good. Problem was the bad neighbourhood, all production was in Colombia. Change in government, civil unrest. Production growth is negative, calling dividend growth into question. Yield is 13%, not sustainable. Get out while the getting's good.

Company spent too much money on recent oil play. Major disaster. Company will have to find a new strategy going forward. NAV = $16/share. Would not recommend investing at this time. Dividend appears safe. 

PXT EPS was $4.32, vs estimates $4.19; revenue of $1.17B missed estimates of $1.26B. But production guidance was lowered. Parex's disappointing operational performance again in 2Q  was caused by flooding at LLA-34 and lower-than-expected results at Arauca. Still, solid financial results suggest free-cash-flow momentum may extend into 2H amid a constructive oil price backdrop. Suppressed 1H volume indicates full-year production may be at or below the low end of guidance of 54,000-60,000 barrels a day, amid an operational halt at Arauca. Climbing operating cash should cover capital outlays, which will likely be at the lower end of $390-$430 million range this year. A 32% surge in 2Q free cash underscores Parex's cash-generative profile and should accommodate its annual dividend payout of $115 million (8% yield), suggesting scope for share buybacks in 3Q. But the CFO resignation adds uncertainty, and investors will probably start questioning the dividend. The stock is VERY cheap, but it was cheap three months ago as well. Operational performance needs to improve. We think, while it is generally OK due to the revised valuation and balance sheet, buyers can wait for this to shake out some more. 
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Yield is 8.8%, sustainable for the time being, watching very closely. He also writes calls for a really juicy premium. Sold off because nothing but disappointing news. New drilling required to backfill shortfalls. If you want dividends, this is not the one. Try FRU instead.

If you invest in Colombia, you just have to be cognizant that small communities will shake them down for payoffs from time to time. Likely to be a value trap for that reason. Very cheap, but challenged to see what the catalyst for capital appreciation is. He owns it in an income fund, for a yield of 7.2%. You can also write calls.

Doesn't own shares currently, but is familiar with the company. Performance has been frustrating. Production located in Colombia (~60,000 boe/d). Dividend consistent with share buybacks well executed. Colombia very unstable - geopolitical tensions are putting pressure on company. Current share price is cheap, but better names available - too risky. 

It remains a value trap and doesn't see this changing. A Colombian strike took production offline. Management faces other troubles, like exploration risk.