Parex Resources Inc. reports preliminary results for the Kona-2 well drilled on Block-LLA 16 in the Llanos basin in Colombia. Parex also provides an update on the exploration drilling program in Colombia, the award of an additional exploration block in Colombia and status of testing in Trinidad.

Colombia Exploration Update The Kona-2 well on Block LLA-16 (Parex 50 percent working interest), reached a final total depth of 13,200 feet. Kona-2 was drilled to a bottom hole location at the Mirador formation level of approximately 625 meters south of the Parex Kona-1 oil discovery well to appraise the C7 and Mirador formations and to test the deeper Gacheta/Une intervals.

Kona-2 penetrated multiple objectives as programmed and encountered shows of hydrocarbons during drilling from the C7, Mirador and Gacheta/Une formations. The well was logged to its final total depth of approximately 13,200 feet using logging while drilling tools which indicate potential net oil pay, measured as true vertical depth, of approximately 130 feet consisting of 50 feet in the C7, 60 feet in the Mirador and 20 feet in the Gacheta formation. Subsequently, the well was successfully cased to allow testing of these potential pay intervals.

The drilling rig used on the Kona-2 well will be mobilized to the Company's next exploration prospect, Goroka over the following week. A service rig is on stand-by and is expected to arrive on the Kona location to test Kona-2 after the drilling rig has been moved and subsequently, to perform remediation work on the Kona-1 well prior to testing and completing that well. As previously disclosed in our press release dated July 21, 2010, Kona-1 encountered 82 feet of pay in the C7 and Mirador formations but could not be cased to the final total depth due to poor hole conditions. Due to the casing not reaching final total depth cementing of the casing could not be properly completed, preventing proper testing of each prospective oil pay zone at that time.

The testing program for both Kona wells is expected to take several weeks and an update of these operations will be included in the Company's third quarter 2010 release. Further Kona field delineation drilling will commence in early 2011 subject to receiving regulatory approvals and site preparation.

As previously disclosed by the Company, with the encouraging Mirador formation test results on Kona-1, Parex began to design and build a seven kilometre oil pipeline to transport produced fluids from the Kona location to a treatment facility and terminal to be located on the main paved all-season road. That facility construction is ongoing with first oil production from the Kona drilling pad expected to commence in late fourth quarter of this year.

Further, Parex has contracted a 1,500 hp light triple drilling rig to drill the Supremo exploration prospect on Block LLA-16. Supremo is programmed to drill to a depth of 11,900 feet and test the C7 through to the Gacheta/Une formations. The rig is currently being mobilized to the site. Drilling and casing operations are expected to take 45 days after rig up is complete. The drilling rig used on the Kona-2 prospect will be mobilized to the Goroka prospect which is programmed to drill to a depth of 12,100 feet and test the C7 through to the Gacheta/Une formations. Drilling time for Goroka is expected to be approximately the same as for the Supremo prospect.

On Block LLA-20 (Parex 50 percent working interest) Conoto-1 was drilled and cased to a depth of 8,100 feet. Wireline logs and mud gas logs identified reservoir quality sand in the C7 and Mirador formations, although we caution that nearby wells suggest that it is difficult on the basis of wireline log interpretation in this area to differentiate between oil saturated reservoirs and those that have been flushed by fresh water. We have identified several intervals that look prospective to be perforated and tested following completion of testing operations on the Block LLA-16 wells.

The next exploration well on Block LLA-20, Zocay-1, is scheduled to be drilled in December. The Zocay-1 well is programmed to be drilled to a depth of 8,700 feet and test the C7 and Mirador formations.

Parex expects that at least one other Block LLA-16 exploration well will be spud prior to year-end 2010 but will likely not reach total final depth until late January 2011. Further, Parex has been advised by the operator of Block LLA-30 (Parex 50 percent working interest) that the 2010 scheduled exploration well for that block will not likely spud until the first quarter of 2011. Accordingly, in 2010 we expect to participate in drilling six wells in Colombia versus the eight originally budget. The Company anticipates that it will enter 2011 operating two drilling rigs and a service rig in Colombia on a continuous basis.

Colombia New Exploration Block The Company has received final confirmation from the National Agency of Hydrocarbons ("ANH") that it has been awarded Llanos basin Block LLA-57. Block LLA-57 covers 104,532 acres and lies immediately north of Parex operated Block LLA-20. The Company's bid terms for Block LLA-57 (100 percent working interest) were a Phase 1 work program of $10.1 million and a supplemental royalty (x-factor) of one percent over the base ANH royalty. Parex anticipates signing the block award contract in the first quarter of 2011. After signing the contract Parex is required to place a guarantee of approximately US$3.85 million with the ANH.

Trinidad Exploration Update We had previously reported on June 14, 2010 that Firecrown-1, the first of three Trinidad exploration wells planned in 2010, reached a total measured depth of 8,701 feet and penetrated both the primary and secondary objectives in the Herrera Formation. The well was cased in to a depth of 8,400 feet to evaluate the potential of these prospective zones. Testing of this well has been delayed as regulatory approval has not yet been received. Snowcap-1 the second Trinidad Moruga Block exploration well was drilled and cased in the second quarter of 2010 and is also waiting on testing pending regulatory approval. Based on the Company's interpretation of wireline logs, mud gas, and cuttings samples, this well also encountered potential hydrocarbon bearing sandstones. A multi-zone testing program for this well has been submitted for regulatory approval. Although both Firecrown-1 and Snowcap-1 are ready for testing the Company has not secured a firm date by which the regulatory approvals required for testing these wells will be received.

The third exploration well of the 2010 Trinidad program is also awaiting regulatory approval and the drilling of this well could be delayed into 2011.

Tags: Parex Resources Inc.