Good morning, everyone, and welcome to Parex Resources' Q3 earnings call and webcast. Yesterday, Parex released its unaudited financial and operating results for the quarter ended September 30, 2021. Like all Parex disclosure documents, the complete financial statements and related MD&A are available on the company's website at www.parexresources.com and on SEDAR. Before turning the meeting over to Mr. Ken Pinsky, Chief Financial Officer of Parex Resources Inc., I would like to mention that this event is being recorded, so the recording will be available for playback on the company's website. Parex would like to remind everyone that remarks made during this session are subject to forward-looking statements, which involve significant risk factors and assumptions and have been fully described in the company's continuous disclosure reports.
The information discussed is made as of today's date and time, and Parex assumes no obligation to update or revise this information to reflect new events or circumstances except as required by law. Please note that at any time, participants on the webcast can submit their questions under the Ask a Question tab at the top of the webcast interface, and participants on the phone can press star one. I would now like to pass on the meeting to Parex Chief Financial Officer. Please go ahead, Mr. Pinsky.
Thank you, operator, and thanks to everyone on the line for joining myself and the senior leadership team for our Q3 conference audio webcast. We appreciate your ongoing support for Parex Resources. Before we begin our Q&A session, I would like to provide some highlights of our Q3 financial results. Q3 production averaged approximately 47,500 barrels a day, which was an 8% increase from the previous quarter, whereby our production was temporarily affected from transportation blockades that were experienced across Colombia in the spring of 2021. Parex is not currently experiencing any social disruptions, and our production currently is in excess of 49,000 barrels a day. For the Q3, our funds flow from operations totaled $153 million or $1.24 U.S. per share basic. Our Q3 capital expenditures were $74 million.
We generated free funds flow of $78 million, bringing our year-to-date total of free funds flow to $250 million. We allocated Q3 free funds flow to share buybacks and a regular and special dividend of $0.125 and $0.25 per share each respectively, for a total of $0.375 for the quarter. We also continued to buy back shares under our automatic normal course issuer bid and are over 90% through our 10% share buyback target as we talk. We maintained our financial strength with our working capital of $351 million and continue to have no debt year to date. We exit the Q3 with $200 million of an undrawn credit facility.
I'd also like to point out and note that Parex remains unhedged in 2021, providing full exposure to the current high Brent oil pricing. A further highlight for us in Q3 was Parex expanded its strategic partnership with Ecopetrol, whereby Parex will earn an operated 50% interest in two blocks, the Arauca Block and the LLA-38 Exploration Block, both located in the proven and highly prolific Llanos Basin in the Arauca province of northeastern Colombia, very close to our Capachos Block that we've been operating with Ecopetrol for the past four or five years. Attractive for Parex, the blocks contain proved reserves along with development and drill-ready exploration prospects. This builds on our operational and commercial success at Capachos. Our goal is to start operations in the first quarter of 2022 in the Arauca Block.
Lastly, with ESG as a key value at Parex, we have released our 2020 sustainability report and are committed to reduce our operated Scope 1 and 2 greenhouse gas emissions intensity by 50% by 2030 from a 2019 baseline. I would now like to pass this meeting to Parex's President and CEO, Mr. Imad Mohsen, to go over the Q4 outlook and 2022 guidance, which was provided yesterday as well. Go ahead, Imad.
Thank you, Ken. As we move through the final quarter, Parex will be focused on the capital program to enhance our long-term sustainability in Colombia and to strengthen our commitment to maximize long-term shareholder value. I'm pleased to report the following upcoming operations in Q4. We have a diverse drilling program in Cabrestero, Capachos, and Fortuna Blocks. Based on the very positive results to date, we expect an additional three to four wells to be drilled by year-end in Cabrestero, which is estimated to increase our 2021 exit production to over 9,000 barrels of oil per day there. We are planning also to commence 6-well program at Capachos early 2022, and the Fortuna field has 2 wells already drilled, Cayena Multilateral and Perla Negra, which are awaiting completion activities. We expect to tie in 2 wells prior to year-end this year.
With regards to 2022 guidance. I will now move to our 2022 guidance to provide an update on our framework for returning capital to shareholders, which we are very excited to describe. One of the elements that attracted me most to join Parex was the depth and quality of the company's exploitation and exploration portfolio in Colombia. At current strip pricing, funds flow provided by operations is estimated to be over $725 million. This provides multiple levers to increase shareholder returns. That could be dividends, share buybacks, and asset growth. We are excited to move forward with a capital growth plan that materially expands the boundaries of our current development properties, while also unlocking substantial new opportunities within our portfolio.
Underpinning the plan is a portfolio with substantial discovered in-place volumes that are being unlocked right now using techniques which are unfamiliar in Colombia but long proven elsewhere. To name a few, multilateral drilling, hydraulic stimulation, synthetic drilling muds, stimulation guns, radial drilling, or airborne geophysics that could be incorporated in surveying operations. They are all tools we have at our fingertips to unlock our Colombian asset base. At forecast oil price of $70 in 2022, Parex corporate guidance consists of the following. Average production range of 52,000-54,000 BOE a day. Capital expenditure totaling $400 million-$450 million, split between developments, appraisals, and exploration programs, two-thirds of which is allocated to exploitation activities. We have substantially increased our CapEx program in 2022 for multiple reasons.
One is we are beginning operations on our Arauca and LLA-38 Ecopetrol partnership that Ken referred to earlier. Second is we catching up on the exploration and growth capital that we deferred from 2021 while we were focusing on the health and safety of our communities during the COVID-19 pandemic. Finally is we have to assess and unlock the deep and diverse portfolio of exploration discoveries already made that we have amassed over the last three years. All of this is a critical step to demonstrate Parex future sustainability. With this brief overview, I would like to return the line back to the operator to start the Q&A session. Operator, over to you.
Thank you. You may press star one at this time if you have a question. We have a question from Phil Skolnick from Eight Capital. Please go ahead.
Yeah, thanks. Good morning. Got a few questions. The first one is, what contributed to the rise in production to an excess of 49,000?
Hi, Phil. It's Ken. Mostly that's coming from Cabrestero.
Okay.
We're drilling wells to date on that program. We continue to drill more, as Imad was saying, and we'll keep drilling in 2022. Yeah, that's where the production volumes increase is primarily coming from.
Okay, perfect. When you were going through your looking at your 2022 budget, I guess how should we think about how's your maintenance CapEx requirements? Has it changed much versus 2021 and 2020, or is it kind of pretty much the same? I mean, outside the fact that you do have a little bit higher production.
Hi, Phil. It's Mike Kruchten. No, it's pretty well the same. You know, the maintenance capital is still primarily allocated to the key producing blocks in SOCA. Yeah, we don't see too much of a change there. Certainly, you know, when we look at the development capital, that's really accelerating the discovery we've had in the past, such as La Belleza, you know, so we can get that production on stream in 2022.
Okay, perfect. Finally, what kind of triggers or targets do you look at, you know, in deciding these special dividends? Just kinda give us kind of a way to gauge them.
I guess we looked at it, Phil, in respect of, we're mindful of our growth of our balance sheet, and we didn't want to continue to grow working capital. We looked at how our working capital was forecasted to grow at strip prices and our free cash flow on our CapEx program for Q4, looked at where we were at Q3, and wanted to make sure that we came in well below $400 million of working capital for Q4. That led us to have incremental dollars to either do a share buyback or a special dividend. As I noted, we're almost through our 10% NCIB. Didn't feel the need to continue to buy, you know, do an incremental SIB or something this year. The board approved a special dividend of $0.25.
How you should look at this going forward is we're giving a strong signal to the market that we are going to be managing our working capital at these current levels for the short term, near term. That, as free cash flow then starts to build, we'll be allocating it back to the shareholder in some fashion, some form.
Good. Perfect. Thanks.
Thank you. Once again, you may press star one if you have a question. The next question is from Luke Davis from RBC. Please go ahead.
Hey, guys. Good morning. You've outlined a fairly robust exploration program for 2022. Just wondering if you could provide some details or rankings, I guess, in terms of prospect viability and just if possible, some parameters around potential resource additions if drilling is successful there. Just really trying to get a sense for potential impacts here.
Hi, Luke. It's Mike Kruchten. You know, we have a pretty diverse set of exploration blocks, especially the blocks that we've accumulated over the last three years, about five blocks and plus the Ecopetrol partnership. Those are the blocks we'll be targeting. Obviously, we didn't do a lot of work in 2020 as we worked our way through COVID. The blocks that we really will focus on include, you know, Boranda, Capachos, which is block 38, includes the Califa prospect, CPO-11, Fortuna Continuation, 134 in Llanos, and some of the lower Magdalena blocks, including VIM-1 and VIM-43. Now, we generally don't disclose what the resource assessments are.
What I can tell you is, you know, it's a diverse portfolio and, you know, we're always targeting to keep our reserve life index in that nine to 11 years, while at the same time accelerating some of those production volumes up front. That's the way we approach our exploration programs for the year.
Okay. Helpful. Thanks, Mike.
Thank you. There are no further questions registered at this time. I would like to turn the meeting back over to Mr. Mohsen.
Thank you all for attending this session, and looking forward to even more results next quarter. Thank you.