Parex has been a bad memory for me thus far as I bought at 22 and sold at 15 after the Arauca mess (it all started off so well). I even had some of the folks money in it, and then it proceded to drop to 10 and now its back to 18 on no news. No idea why, I gather maybe people are using PXT as a vehicle for regieme change in Colombia? Who knows. But what attracts me to PXT is there foothills position in Llanos basin. PXT have a nice 45k bpd asset portfolio as we speak which generates lots of free cash which they redistribute via dividends and buybacks. No idea why they switched from heavy BBs to heavy divvys of late, but it is what it is. Today you dont get rewarded for for high dividends, but your share price does get rewarded if 10% of shares are being retired each year. And with that they grow shareholders production and reserves per share without even needing to replace 100% of production and keep production flat. Not to mention the tax efficiences Oh well, a flag on there cap allocation anyway.
But back to the foothills. They have a huge position and are operator of one of the last underexplored onshore conventional plays in the world. To the south is Cusiana and Cupiagua, the two behometh fields that have produced >1bn bbls of oil and tons of gas (gas was so affulent in Colombia back then that the gov didnt even pay operators for it, how times have changed). Its elephant country. The catch being, you have to drill deep through complex geology and fight off social issues. Both have plagued the company thus far. The Arantes well they drilled in 2024 was a disaster, mixed with delays in starting, drilling issues and then having to abandon the well before they even hit the prospect. The good thing though is that Parex has the balance sheet to support the blue sky exploration, and Colombia has an underutilsied 42" pipeline adjacent to there blocks and another pipeline which will be re-purposed to transport gas. Gas in the country is fetching almost LNG prices, so any giant discovery will be a rich reward for Parex and might enable them to grow to >100k boepd of high netback and low capital intensity upfront capex. If the stock travelled south again to low teens I'd consider taking a position for the mix of FCF, blue-sky potential, and Petro is due to leave office in place of agovernment more friendly to the energy space.