Stable Production Underpins
Strong Cash Flow Generation
Acquisition in Vaca Muerta Effective July
1
Quarterly Cash Dividend of $0.147 Per
Share
GeoPark Limited (“GeoPark” or the “Company”) (NYSE: GPRK), a
leading independent Latin American oil and gas explorer, operator,
and consolidator, reports its consolidated financial results for
the three-month period ended June 30, 2024 (“Second Quarter” or
“2Q2024”). A conference call to discuss these financial results
will be held on August 15, 2024, at 10:00 am (Eastern Daylight
Time).
SECOND QUARTER 2024 FINANCIAL SUMMARY
In 2Q2024, GeoPark delivered $127.9 million Adjusted EBITDA1, a
margin of 67%, and $25.7 million net profit. Quarterly average oil
and gas production in 2Q2024 reached 35,608 boepd, down 3% compared
to 2Q2023, mainly due to the divestment of the Chilean business on
January 18, 2024, and suspended production at the Manati gas field
in Brazil (GeoPark non-operated, 10% WI) due to unscheduled
maintenance.
GeoPark invested $49.2 million in capital expenditures in
2Q2024, focused on i) continuing the development of its core
operations in the Llanos 34 (GeoPark operated, 45% WI) and CPO-5
(GeoPark non-operated, 30% WI) blocks in Colombia; ii) delineating
the new plays opened in 2023 in the Llanos Basin in Colombia and
the Oriente Basin in Ecuador and iii) preparing the new Llanos 86
and 104 blocks (GeoPark operated, 50% WI) for future
exploration.
Capital efficiency was once again a key feature of the quarter.
Each dollar invested in capital expenditures yielded $2.6 in
Adjusted EBITDA, and the return on average capital employed reached
38%.
These financial achievements and discipline allowed GeoPark to
continue rewarding its shareholders with quarterly dividends of
$7.5 million ($0.147 per share) and a successful tender offer of
4.4 million shares at $10 per share that was launched in 1Q2024 and
ended in April 2024, reducing shares outstanding by approximately
8%. Undersubscription to the tender offer demonstrated shareholder
confidence.
GeoPark’s acquisition in Vaca Muerta was effective July 1, 2024,
and is expected to close by the end of the third quarter. The
acquisition adds to pro forma production, taking consolidated pro
forma production to more than 41,000 boepd as of the effective
date. Following 12,508 bopd gross average production in 2Q2024 from
the unconventional development wells in the Mata Mora Norte Block
(GeoPark non-operated, 45% WI), the operator is currently drilling
three unconventional exploration wells in the Confluencia Norte
Block (GeoPark non-operated, 50% WI) aimed at derisking the full
potential of the block.
Andrés Ocampo, Chief Executive Officer of GeoPark, said:
“GeoPark again delivered strong financial performance in 2Q2024,
underscoring the effectiveness of our strategic initiatives and
disciplined approach to capital allocation, while maintaining a
robust balance sheet. In the second half of 2024, we look forward
to the continued development of our core operations in Colombia and
Ecuador, and the integration of our newly acquired assets in Vaca
Muerta. Our strategy remains centered on delivering consistent
value to our shareholders through prudent financial management and
targeted growth initiatives.”
Supplementary information is available at the following link:
https://ir.geo-park.com/2Q24-SupplementaryRelease/
SECOND QUARTER 2024 HIGHLIGHTS
Oil and Gas Production and Operations
- 2Q2024 consolidated average oil and gas production of 35,608
boepd2
- Production increased 11% in Ecuador and 3% in Colombia,
offsetting suspended production at the Manati gas field in Brazil
due to unscheduled maintenance
- Llanos 34 Block average production in 2Q2024 was 3% lower than
1Q2024 due to sporadic blockades, weather-associated flooding, and
base decline, partly offset by new well production
- The CPO-5 Block reached record average production in 2Q2024
after putting the Indico 3 well on production. The Lark 1
exploration well reached total depth in late July 2024 with no
hydrocarbons in the targeted Ubaque and Guadalupe formations, and
the well was abandoned
- 10 rigs in operation at the end of 2Q2024 (6 drilling rigs and
4 workover rigs), including one drilling rig in Argentina
Revenue, Adjusted EBITDA and Net Profit
- Revenue of $190.2 million, an increase of 14% from 1Q2024,
reflecting higher realized oil prices
- Adjusted EBITDA of $127.9 million (67% Adjusted EBITDA margin),
an increase of 15% from 1Q2024
- Operating profit of $90.3 million (47% Operating profit
margin), an increase of 8% from 1Q2024
- Net profit of $25.7 million, a decrease of 15% from 1Q2024
mainly due to the effect of the devaluation of Colombian peso on
deferred income taxes
Cost and Capital Efficiency
- Capital expenditures of $49.2 million
- 2Q2024 Adjusted EBITDA to capital expenditures ratio of
2.6x
- Last twelve-month return on average capital employed of
38%3
Balance Sheet Reflects Financial Quality
- Cash in hand of $66.0 million, after repurchasing outstanding
shares worth $43.7 million, making a $49.1 million advanced payment
for the Vaca Muerta acquisition in Argentina, and paying $52.5
million income tax (Colombia 2023 full amount)
- Net leverage remained healthy (0.9x), with no principal debt
maturities until January 2027
- Current cash position of $85.8 million (July 31, 2024)
- Fitch Ratings revised GeoPark’s rating outlook to stable (from
negative), reflecting the increase in reserves and improved
geographic footprint resulting from the Vaca Muerta acquisition in
Argentina
Growing Shareholder Returns
- Cash dividends of $7.5 million (representing an annualized
dividend of approximately $30 million, or a 6.8% dividend
yield4)
- Successful tender of 4.4 million shares (8% of outstanding
shares) at a purchase price of $10 per share on April 2024
- Quarterly cash dividend of $0.147 per share payable on
September 12, 2024, to shareholders of record at the close of
business on August 29, 2024
Commercial Agreements Improve Price Realizations and Add
Financial Flexibility
- Vitol Agreement: Commercial agreement in effect as of July 1,
delivering production from the Llanos 34 Block and improving price
realizations by $0.60/barrel vs the average price realizations from
January 2021 to July 2024. Access to committed funding for up to
$300 million, with an option to increase by another $200 million
for a total of $500 million, in prepaid future oil sales over the
period of the offtake contract. As of today, GeoPark has not drawn
any amounts for prepaid sales
- Trafigura Agreement: New commercial agreement in effect as of
August 1, delivering production from the CPO-5 Block and improving
price by $2.65/barrel vs the average price realizations from
January 2021. This agreement is associated with a prepayment
facility for up to $100 million of financing to be repaid in future
oil sales over the period of the offtake contract (12 months). Upon
completion of the legal documentation, the prepayment agreement
will provide GeoPark with immediate liquidity that will further
strengthen its balance sheet and expand existing cash availability.
As of today, GeoPark has not drawn any amounts for prepaid sales
and the prepayment facility is subject to final signature of the
contracts
2H2024 PRODUCTION UPDATE
During 1H2024, GeoPark averaged 35,540 boepd production, at the
lower end of the 35,500-39,000 boepd organic production range
indicated for 2024. During 2H2024, the main risks to production are
(i) increased uncertainty around the effective restart date of the
Manati field, originally planned by end of May 2024, and now
expected by the operator to initiate end of October, (ii) new well
activity and performance in the Llanos 34 Block may not offset the
natural base decline of the fields, and (iii) increased frequency
and duration of blockades around the operations in Colombia. The
downside associated to these risks could be approximately 1,500 -
2,500 boepd.
Potential positive results from ongoing exploration drilling in
the Llanos 123, Espejo, and PUT-8 Blocks (GeoPark operated, 50% WI)
may offset the impact of these risks and have not been included in
the 2024 guidance. GeoPark will continue the appraisal drilling
campaign by adding wells in the CPO-5 and Llanos 123 blocks.
Importantly, since July 1, production from the Vaca Muerta
blocks in Argentina belongs to GeoPark and is already at 5,000 –
5,500 boepd net. These volumes will be consolidated on a
line-by-line basis once the transaction is closed (expected by the
end of September). Current production levels do not include the
potential result from the 2H2024 development drilling campaign in
Mata Mora Norte, nor the outcome of three exploration wells to be
completed in Confluencia Norte.
GeoPark’s Adjusted EBITDA guidance of $420 - $550 million5
remains unchanged for 2024.
CONSOLIDATED OPERATING
PERFORMANCE
Key performance indicators:
Key Indicators
2Q2024
1Q2024
2Q2023
1H2024
1H2023
Oil productiona (bopd)
35,504
34,255
33,672
34,880
33,736
Gas production (mcfpd)
623
7,305
17,453
3,964
17,061
Average net production (boepd)
35,608
35,473
36,581
35,540
36,580
Brent oil price ($ per bbl)
85.0
81.8
78.2
83.4
80.3
Combined realized price ($ per boe)
72.0
65.1
59.5
68.6
60.4
- Oil ($ per bbl)
74.9
69.5
64.3
72.3
65.4
- Gas ($ per mcf)
8.9
5.4
5.0
5.7
4.8
Sale of crude oil ($ million)
187.2
162.2
173.8
349.4
348.9
Sale of purchased crude oil ($
million)
2.4
1.8
1.2
4.2
1.9
Sale of gas ($ million)
0.6
3.5
7.3
4.1
13.9
Commodity risk management contracts ($
million)
—
(0.1
)
—
(0.1
)
—
Revenue ($ million)
190.2
167.4
182.3
357.6
364.8
Production & operating costsb ($
million)
(41.4
)
(38.5
)
(60.7
)
(80.0
)
(113.2
)
G&G, G&Ac ($ million)
(16.0
)
(12.7
)
(13.9
)
(28.7
)
(25.8
)
Selling expenses ($ million)
(4.4
)
(4.1
)
(2.2
)
(8.5
)
(4.6
)
Operating profit ($ million)
90.3
84.0
69.5
174.3
146.1
Adjusted EBITDA ($ million)
127.9
111.5
103.9
239.4
218.8
Adjusted EBITDA ($ per boe)
48.4
43.4
33.9
45.9
36.2
Net profit ($ million)
25.7
30.2
33.8
55.9
60.0
Capital expenditures ($ million)
49.2
48.8
43.4
98.0
88.3
Cash and cash equivalents ($ million)
66.0
150.7
86.4
66.0
86.4
Short-term financial debt ($ million)
12.5
5.7
12.5
12.5
12.5
Long-term financial debt ($ million)
490.2
489.3
486.8
490.2
486.8
Net debt ($ million)
436.7
344.3
412.9
436.7
412.9
Dividends paid ($ per share)
0.147
0.136
0.130
0.283
0.260
Shares repurchased (million shares)
4.369
—
1.082
4.369
1.724
Basic shares – at period end (million
shares)
51,163
55,475
56,570
51,163
56,570
Weighted average basic shares (million
shares)
52,246
55,381
57,114
53,787
57,481
_________________________
a)
Includes royalties and other economic
rights paid in kind in Colombia for approximately 6,956 bopd, 5,916
bopd, and 2,952 bopd in 2Q2024, 1Q2024 and 2Q2023, respectively. No
royalties were paid in kind in other countries. Production in
Ecuador is reported before the Government’s production share.
b)
Production and operating costs include
operating costs, royalties and economic rights paid in cash,
share-based payments and purchased crude oil.
c)
G&A and G&G expenses include
non-cash, share-based payments for $1.3 million, $1.5 million, and
$1.7 million in 2Q2024, 1Q2024 and 2Q2023, respectively. These
expenses are excluded from the Adjusted EBITDA calculation.
All figures are expressed in US Dollars and growth comparisons
refer to the same period of the prior year, except when specified.
Definitions and terms used herein are provided in the Glossary at
the end of this document. This press release and its supplementary
information do not contain all the Company’s financial information
and the Company’s consolidated financial statements and
corresponding notes for the period are available on the Company’s
website.
RECONCILIATION OF ADJUSTED EBITDA TO
PROFIT BEFORE INCOME TAX
1H2024 (In millions of $)
Colombia
Ecuador
Brazil
Chile
Other(a)
Total
Adjusted EBITDA
238.9
6.5
(0.8
)
(0.1
)
(5.1
)
239.4
Depreciation
(59.1
)
(3.0
)
(0.9
)
—
(0.0
)
(63.0
)
Write-off of unsuccessful exploration
efforts
(3.4
)
—
—
—
—
(3.4
)
Share based payment
(0.6
)
(0.0
)
(0.0
)
—
(2.6
)
(3.2
)
Lease Accounting - IFRS 16
3.2
0.0
0.5
—
—
3.6
Others
0.9
0.1
0.0
0.0
(0.3
)
0.8
OPERATING PROFIT (LOSS)
179.9
3.6
(1.2
)
(0.1
)
(7.9
)
174.3
Financial costs, net
(17.8
)
Foreign exchange charges, net
6.1
PROFIT BEFORE INCOME TAX
162.6
1H2023 (In millions of $)
Colombia
Ecuador
Brazil
Chile
Other(a)
Total
Adjusted EBITDA
215.6
1.4
4.0
2.6
(4.8
)
218.8
Depreciation
(47.3
)
(2.5
)
(1.2
)
(5.5
)
(0.0
)
(56.6
)
Write-off of unsuccessful exploration
efforts
(12.2
)
—
—
—
—
(12.2
)
Share based payment
(0.5
)
(0.0
)
(0.0
)
(0.0
)
(2.8
)
(3.4
)
Lease Accounting - IFRS 16
4.1
0.0
0.5
0.5
—
5.1
Others
(0.7
)
(2.0
)
(0.2
)
(2.1
)
(0.8
)
(5.7
)
OPERATING PROFIT (LOSS)
159.0
(3.1
)
3.1
(4.6
)
(8.4
)
146.1
Financial costs, net
(19.3
)
Foreign exchange charges, net
(13.0
)
PROFIT BEFORE INCOME TAX
113.8
_________________________
(a) Includes Argentina and Corporate.
2024 ANNUAL GENERAL MEETING
GeoPark’s 2024 Annual General Meeting was held on July 24, 2024.
The results were: (i) All candidates were re-elected as members of
the Board of Directors; (ii) Ernst & Young Audit S.A.S. (a
member of Ernst & Young Global) was appointed as auditor of the
Company; (iii) the Audit Committee was authorized to determine the
remuneration of the Auditor; and (iv) The Audit Committee was
authorized to amend Section 49 of the Company’s By-laws in the
manner set forth in the notice of the meeting and proxy
materials.
CONFERENCE CALL INFORMATION
GeoPark management will host a conference call on Thursday,
August 15, 2024, at 10:00 am (Eastern Daylight Time) to discuss the
2Q2024 financial results.
To listen to the call, participants can access the webcast
located in the Invest with Us section of the Company’s website at
www.geo-park.com, or by clicking below:
https://events.q4inc.com/attendee/332625400
Interested parties may participate in the
conference call by dialing the numbers provided below:
United States Participants: +1 404-975-4839
Global Dial-In Numbers:
https://www.netroadshow.com/conferencing/global-numbers?confId=68476
Passcode: 027838
Please allow extra time prior to the call to visit the website
and download any streaming media software that might be required to
listen to the webcast.
An archive of the webcast replay will be made available in the
Invest with Us section of the Company’s website at www.geo-park.com
after the conclusion of the live call.
GLOSSARY
2027 Notes
5.500% Senior Notes due 2027
Adjusted EBITDA
Adjusted EBITDA is defined as profit for
the period before net finance costs, income tax, depreciation,
amortization, the effect of IFRS 16, certain non-cash items such as
impairments and write-offs of unsuccessful efforts, accrual of
share-based payments, unrealized results on commodity risk
management contracts and other non-recurring events
Adjusted EBITDA per boe
Adjusted EBITDA divided by total boe
deliveries
Operating Netback per boe
Revenue, less production and operating
costs (net of depreciation charges and accrual of stock options and
stock awards, the effect of IFRS 16), selling expenses, and
realized results on commodity risk management contracts, divided by
total boe deliveries. Operating Netback is equivalent to Adjusted
EBITDA net of cash expenses included in Administrative, Geological
and Geophysical and Other operating costs
Bbl
Barrel
Boe
Barrels of oil equivalent
Boepd
Barrels of oil equivalent per day
Bopd
Barrels of oil per day
G&A
Administrative Expenses
G&G
Geological & Geophysical Expenses
Mcfpd
Thousand cubic feet per day
Net Debt
Current and non-current borrowings less
cash and cash equivalents
WI
Working interest
NOTICE
Additional information about GeoPark can be found in the Invest
with Us section of the website at www.geo-park.com.
Rounding amounts and percentages: Certain amounts and
percentages included in this press release and its supplementary
information have been rounded for ease of presentation. Percentage
figures included in this press release and its supplementary
information have not in all cases been calculated on the basis of
such rounded figures, but on the basis of such amounts prior to
rounding. In addition, certain other amounts that appear in this
press release and its supplementary information may not sum due to
rounding.
This press release and its supplementary information contain
certain oil and gas metrics, including information per share,
operating netback, reserve life index and others, which do not have
standardized meanings or standard methods of calculation and
therefore such measures may not be comparable to similar measures
used by other companies. Such metrics have been included herein to
provide readers with additional measures to evaluate the Company’s
performance; however, such measures are not reliable indicators of
the future performance of the Company and future performance may
not compare to the performance in previous periods.
CAUTIONARY STATEMENTS RELEVANT TO
FORWARD-LOOKING INFORMATION
This press release and its supplementary information contain
statements that constitute forward-looking statements. Many of the
forward-looking statements contained in this press release can be
identified by the use of forward-looking words such as
‘‘anticipate,’’ ‘‘believe,’’ ‘‘could,’’ ‘‘expect,’’ ‘‘should,’’
‘‘plan,’’ ‘‘intend,’’ ‘‘will,’’ ‘‘estimate’’ and ‘‘potential,’’
among others.
Forward-looking statements that appear in a number of places in
this press release include, but are not limited to, statements
regarding the intent, belief or current expectations, regarding
various matters, including, the drilling campaign and share buyback
program. Forward-looking statements are based on management’s
beliefs and assumptions, and on information currently available to
the management. Such statements are subject to risks and
uncertainties, and actual results may differ materially from those
expressed or implied in the forward-looking statements due to
various factors.
Forward-looking statements speak only as of the date they are
made, and the Company does not undertake any obligation to update
them in light of new information or future developments or to
release publicly any revisions to these statements in order to
reflect later events or circumstances, or to reflect the occurrence
of unanticipated events. For a discussion of the risks facing the
Company which could affect whether these forward-looking statements
are realized, see filings with the U.S. Securities and Exchange
Commission (SEC).
Oil and gas production figures included in this press release
and its supplementary information are stated before the effect of
royalties paid in kind, consumption and losses. Annual production
per day is obtained by dividing total production by 365 days.
Non-GAAP Measures: The Company believes Adjusted EBITDA,
free cash flow and operating netback per boe, which are each
non-GAAP measures, are useful because they allow the Company to
more effectively evaluate its operating performance and compare the
results of its operations from period to period without regard to
its financing methods or capital structure. The Company’s
calculation of Adjusted EBITDA, free cash flow, and operating
netback per boe may not be comparable to other similarly titled
measures of other companies.
Adjusted EBITDA: The Company defines Adjusted EBITDA as
profit for the period before net finance costs, income tax,
depreciation, amortization and certain non-cash items such as
impairments and write-offs of unsuccessful exploration and
evaluation assets, accrual of stock options and stock awards,
unrealized results on commodity risk management contracts and other
non-recurring events. Adjusted EBITDA is not a measure of profit or
cash flow as determined by IFRS. The Company excludes the items
listed above from profit for the period in arriving at Adjusted
EBITDA because these amounts can vary substantially from company to
company within our industry depending upon accounting methods and
book values of assets, capital structures and the method by which
the assets were acquired. Adjusted EBITDA should not be considered
as an alternative to, or more meaningful than, profit for the
period or cash flow from operating activities as determined in
accordance with IFRS or as an indicator of our operating
performance or liquidity. Certain items excluded from Adjusted
EBITDA are significant components in understanding and assessing a
company’s financial performance, such as a company’s cost of
capital and tax structure and significant and/or recurring
write-offs, as well as the historic costs of depreciable assets,
none of which are components of Adjusted EBITDA. For a
reconciliation of Adjusted EBITDA to the IFRS financial measure of
profit, see the accompanying financial tables and the supplementary
information.
Operating Netback per boe: Operating netback per boe
should not be considered as an alternative to, or more meaningful
than, profit for the period or cash flow from operating activities
as determined in accordance with IFRS or as an indicator of the
Company’s operating performance or liquidity. Certain items
excluded from operating netback per boe are significant components
in understanding and assessing a company’s financial performance,
such as a company’s cost of capital and tax structure and
significant and/or recurring write-offs, as well as the historic
costs of depreciable assets, none of which are components of
operating netback per boe. The Company’s calculation of operating
netback per boe may not be comparable to other similarly titled
measures of other companies.
_____________________________
1
For reconciliations, see “Reconciliation
of Adjusted EBITDA to Profit Before Income Tax” in the
Supplementary information.
2
Not including production from Vaca
Muerta.
3
ROACE is defined as last twelve-month
operating profit divided by average total assets minus current
liabilities.
4
Based on GeoPark’s market capitalization
as of August 5, 2024
5
Assuming $80-$90 per bbl Brent.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240814543918/en/
INVESTORS: Stacy Steimel Shareholder Value Director T:
+562 2242 9600 ssteimel@geo-park.com Miguel Bello Market Access
Director T: +562 2242 9600 mbello@geo-park.com Diego Gully Investor
Relations Director T: +55 21 99636 9658 dgully@geo-park.com
MEDIA: Communications Department
communications@geo-park.com
Grafico Azioni GeoPark (NYSE:GPRK)
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Da Nov 2024 a Dic 2024
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