GeoPark Reports 3rd Quarter 2021 Results

Source: www.gulfoilandgas.com 11/10/2021, Location: South America

GeoPark Limited, a leading independent Latin American oil and gas explorer, operator and consolidator with operations and growth platforms in Colombia, Ecuador, Chile, Brazil and Argentina reports its consolidated financial results for the three-month period ended September 30, 2021 (“Third Quarter” or “3Q2021”).

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 release does not contain all of the Company’s financial information and should be read in conjunction with GeoPark’s consolidated financial statements and the notes to those statements for the period ended September 30, 2021, available on the Company’s website.

THIRD QUARTER 2021 HIGHLIGHTS

Operations and Production
• Consolidated oil and gas production of 37,859 boepd, up 4% compared to 2Q2021
• Oil production of 32,844 bopd, up 6% compared to 2Q2021 due to increased production in Colombia
• Full-year 2021 average production revised to 37,000-38,000 boepd (from 38,000-40,000 boepd) due to blockades in the Platanillo block (GeoPark operated, 100% WI) affecting production and development drilling activities since mid-October
• Platanillo production fully restored on November 4, 2021 with drilling activities to restart by mid-November, 2021
• Consolidated oil and gas production is currently 39,000 boepd

Cash Flow and Profits
• Revenue of $174.0 million
• Operating Profit of $81.3 million
• Profit of $37.0 million
• Adjusted EBITDA of $86.8 million (including cash hedge losses of $22.4 million)

Investments and Balance Sheet
• Capital expenditures of $30.6 million
• Every $1 invested in Capital expenditures yielded $2.8 in Adjusted EBITDA
• Cash in hand of $76.8 million
• Net debt to LTM Adjusted EBITDA ratio of 2.2x (2.7x in December 2020)

Portfolio Consolidation and Management
• Argentina: accepted an offer to divest non-core Argentina assets for a consideration of $16 million, with closing expected by 2021 year-end or early 2022
• Peru: obtained final approval to transfer 100% of the Morona block to Petroperu following the Supreme Decree issued by the Peruvian Government
• Brazil: Manati gas field divestment process ongoing, expected to close in 1H2022

SPEED / ESG+ Achievements and Recognitions
• Fast, aggressive and immediate actions to reduce emissions: a 35-40% reduction by 2025 or sooner, a 40-60% reduction by 2025-2030 and Net zero emissions intensity by 2050 or sooner (all Scope 1 and 2)
• GeoPark honored with the Equipares Silver Award by Colombian Ministry of Labor, measuring commitment to promote equality, inclusion and diversity
• Released GeoPark’s 2020 annual sustainability report (the SPEED Report), available on the Company’s website

Giving Back to Shareholders and Expanding Investor Base
• Quarterly Dividend of $0.041 per share, or $2.5 million, payable on December 7, 2021
• Completed share buyback program having acquired 692,707 shares for $8.5 million since November 2020, while executing self-funded and flexible work programs, and paying down debt
• Renewed discretionary share buyback program for up to 10% of shares outstanding until November 2022
• In September 2021, GeoPark was included in the S&P Global BMI Index and sub-indexes, including the S&P Emerging BMI, the S&P Colombia BMI, the S&P Latin America BMI, and the S&P Global BMI Energy, among others

James F. Park, Chief Executive Officer of GeoPark, said: “Thanks very much to the GeoPark team for delivering again strong free cash flow and profits from our high-quality low-breakeven production. We also are gearing up for 2022, with a powerful work program consisting of a very active drilling campaign with 40-48 wells, targeting continued production and cash flow growth, as well as 15-20 low cost exploration targets to potentially open up new fields on our big low-risk high-impact acreage position that can quickly be brought to cash flow if successful. We also announced an actionable and concrete roadmap to lower greenhouse gas emissions that provides real results in the short-term – as well as continue to provide tangible shareholder returns by our active dividend and share buy-back programs. This means for 2022 we will be generating significant free cash flow that will self-fund all of our objectives including shareholder returns, balance sheet strengthening, emission reductions, new business efforts, growing our production base, and an exciting exploration drilling program. We believe that being able to self-fund from cash flow and simultaneously achieve these objectives represent the right business model for our industry today and provide GeoPark with a comparative advantage in an energy-transitioning world.”

BLOCKADES IN PUTUMAYO
In mid-October 2021, some communities in the Putumayo basin started protests against the Government and as a result, GeoPark shut in Platanillo production of 2,100 bopd and suspended drilling activities in the block. Revised 2021 production guidance results from shut in production and delayed drilling of two development wells that were expected to start producing in 4Q2021 and are now expected in late 4Q2021 or early 2022. Production was fully restored on November 4, 2021 and development drilling activities are expected to restart by mid-November 2021.

SALE OF NON-CORE ASSETS IN ARGENTINA
On November 3, 2021, GeoPark accepted an offer from Oilstone Energía S.A. to purchase GeoPark's 100% WI in the Aguada Baguales, El Porvenir and Puesto Touquet blocks in the Neuquen basin in Argentina for a total consideration of $16 million.

Closing of the transaction is subject to customary regulatory approvals and is expected by the end of 2021 or early in 2022. GeoPark will continue operating the Aguada Baguales, El Porvenir and Puesto Touquet blocks until the completion of the divestment process. The sale of these blocks will allow GeoPark to reallocate resources to its core operations in Colombia and to continue streamlining its operations.

During the first nine months of 2021, the Aguada Baguales, El Porvenir and Puesto Touquet blocks produced approximately 2,200 bopd (58% oil, 42% natural gas), representing 6% of GeoPark's net consolidated oil and gas production during that period.

The Aguada Baguales, El Porvenir and Puesto Touquet blocks have net proven PRMS reserves of approximately 3.7 million barrels of oil equivalent, based on the December 2020 DeGolyer and MacNaughton’s certification, and adjusted by production during the nine month period ended September 30, 2021.


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