Exploration Successes Open Multiple Growth
Fairways, Drilling Opportunities & New
Plays
Consistently Strong Free Cash Flow
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 September 30, 2023 (“Third Quarter” or
“3Q2023”). A conference call to discuss 3Q2023 financial results
will be held on November 9, 2023, at 10:00 am (Eastern Standard
Time).
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, 2023, available
on the Company’s website.
THIRD QUARTER 2023 HIGHLIGHTS
Oil and Gas Production and Operations
- 3Q2023 consolidated average oil and gas production of 34,778
boepd, below its potential mainly due to temporarily shut-in
production in the CPO-5 Block (GeoPark non-operated, 30% WI) in
Colombia and in the Fell Block (GeoPark operated, 100% WI) in
Chile
- Full-year 2023 average production guidance is expected to be
36,000-37,000 boepd, lower than 38,000-40,000 boepd guidance
previously announced mainly due to the delays in bringing back
shut-in production
- In late September 2023, the CPO-5 Block operator received
approval from the regulator (ANH) to resume production in the
Indico 6 and Indico 7 wells, which are currently producing
approximately 8,000 bopd gross in aggregate
- 12 rigs currently in operation (7 drilling rigs and 5 workover
rigs), including 4 drilling rigs on exploration and appraisal
wells
2023 Exploration Campaign Successes Open New Appraisal and
Development Fairways
Llanos 123 Block (GeoPark operated, 50% WI) – Llanos Basin in
Colombia:
- The Toritos 1 exploration well initiated testing in September
and is currently producing 1,300 bopd
- GeoPark is adding a new appraisal well, the Toritos Norte 1, to
be spudded before year-end (subject to joint venture approval)
- Based on these positive results, GeoPark will pursue multiple
potential drilling opportunities to be tested in 20241 (subject to
joint venture approval)
Perico Block (GeoPark non-operated, 50% WI) – Oriente Basin in
Ecuador:
- GeoPark is developing a complete structural and stratigraphic
geological model for the U-sand formation after three successful
wells, Yin-2, Perico Centro 1 and Perico Norte 4, currently
producing more than 2,700 bopd
- The most recent appraisal well, the Perico Norte 4, initiated
testing activities in early November and is currently producing
approximately 1,230 bopd of 29 degrees API with a 6% water cut
- GeoPark is adding a new appraisal well, the Perico Norte 5, to
be spudded before year-end (subject to joint venture approval)
- Based on these positive results, GeoPark will pursue multiple
potential drilling opportunities to be tested in 2024 (subject to
joint venture approval)
CPO-5 Block – Llanos Basin in Colombia:
- The Halcon 1 exploration well reached total depth in late
October, and will test exploration potential in the northern part
of the CPO-5 Block, close to the Llanos 34 Block
- Preliminary logging information indicates hydrocarbon potential
in the Guadalupe formation and production tests are expected to
initiate in late November
- The operator will spud the Perico 1 exploration well (adjacent
to Halcon 1) before year-end to continue delineating the Guadalupe
play in the northern part of the block
____________________________
1 Please refer to the 2024 Work Program
and Shareholder Return Framework published on November 8, 2023.
Llanos 87 Block (GeoPark operated, 50% WI) - Llanos Basin in
Colombia:
- The Zorzal Este 1 exploration well reached total depth in early
November
- Preliminary logging information indicates hydrocarbon potential
in the Barco (Guadalupe) formation and production tests are
expected to initiate in mid-November
- GeoPark plans to add a new appraisal well, the Zorzal Este 2,
to be spudded before year-end (subject to joint venture
approval)
- Based on these positive results, GeoPark will pursue multiple
potential drilling opportunities to be tested in 2024 (subject to
joint venture approval)
Llanos 34 Block (GeoPark operated, 45% WI) - Llanos Basin in
Colombia:
- The first three horizontal wells are currently producing
approximately 4,600 bopd combined
- The fourth horizontal development well initiated testing in
early November 2023 and is currently producing approximately 3,450
bopd from the Mirador formation
- The fourth horizontal well was drilled faster, to a longer
lateral length, and at a lower cost compared to the first three
horizontal wells
Revenue, Adjusted EBITDA and Net Profit
- Revenue of $192.1 million
- Adjusted EBITDA of $115.2 million (60% Adjusted EBITDA
margin)
- Operating profit of $80.5 million (42% operating profit
margin)
- Cash flow from operations of $92.6 million
- Net profit of $24.8 million ($0.44 basic and diluted earnings
per share)
Cost and Capital Efficiency as Key Differentiators
- Capital expenditures of $44.1 million
- 3Q2023 Adjusted EBITDA to capital expenditures ratio of
2.6x
- Last twelve-month return on capital employed (ROCE) of
42%2
Lower Financial Expenses and Strengthened Balance
Sheet
- Cash in hand of $106.3 million (up from $86.4 million as of
June 30, 2023)
- Financial expenses decreased to $12.5 million (from $14.1
million), after reducing gross debt by $275 million from April 2021
to December 2022
- Net leverage of 0.8x and no principal debt maturities until
2027
- $80 million committed credit facility in place, with no amounts
drawn
Accelerated Shareholder Returns
- Quarterly dividend of $0.134 per share, or $7.5 million in the
aggregate, payable on December 11, 2023
- Equivalent to an annualized dividend of approximately $30
million (or $0.535 per share), a 5% dividend yield3)
- Completed share buyback program after acquiring 2.2 million
shares (or 4% of total shares outstanding) for $23.6 million since
November 2022
- Expected to return over $50 million in 2023 through dividends
and buybacks, exceeding the 40-50% free cash flow target
- Renewed discretionary share buyback program for up to 10% of
shares outstanding until December 2024
Upcoming Activities
- Drilling 10-12 gross wells in 4Q2023, targeting attractive
conventional, short-cycle projects
- Key projects include:
- CPO-5 Block: Testing the Halcon 1 exploration well and spudding
the Perico 1 exploration well before year-end
- Llanos 123 Block: Currently drilling the Bisbita Centro 1
exploration well, expected to reach total depth in mid-November,
and spudding the Toritos Norte 1 appraisal well before year-end
(subject to joint venture approval)
- Llanos 87 Block: Testing the Zorzal Este 1 exploration well and
spudding the Zorzal Este 2 appraisal well before year-end (subject
to joint venture approval)
- Llanos 34 Block: Currently drilling one additional horizontal
development well and spudding an additional horizontal well before
year-end
- Perico Block: Spudding the Perico Norte 5 appraisal well before
year-end (subject to joint venture approval)
- Llanos 86 and Llanos 104 Blocks (GeoPark operated, 50% WI):
Preliminary activities underway targeting the acquisition of over
650 square kilometers of 3D seismic to expand the inventory of
exploration prospects
____________________________
2 ROCE is defined as last twelve-month
operating profit divided by average total assets minus current
liabilities.
3 Based on GeoPark’s average market
capitalization from October 1 to October 31, 2023.
Andrés Ocampo, Chief Executive Officer of GeoPark, said: “Our
team and portfolio have again delivered with the opening up of
multiple new exciting growth fairways for further development
following our recent drilling successes. The 2024 self-funded and
flexible work program, announced today, builds on these successes
to pursue multiple potential drilling opportunities to be tested in
2024. We will continue delivering on our commitment to return value
to shareholders while maintaining a strong balance sheet, reducing
emissions, and strengthening our relationship with our
neighbors.”
CONSOLIDATED OPERATING PERFORMANCE
Key performance indicators:
Key Indicators
3Q2023
2Q2023
3Q2022
9M2023
9M2022
Oil productiona (bopd)
32,510
33,672
34,875
33,323
34,886
Gas production (mcfpd)
13,610
17,453
21,126
15,898
22,799
Average net production (boepd)
34,778
36,581
38,396
35,973
38,686
Brent oil price ($ per bbl)
86.0
78.2
98.2
82.2
101.9
Combined realized price ($ per boe)
68.3
59.5
77.5
62.9
81.2
⁻ Oil ($ per bbl)
74.6
64.3
85.9
68.4
89.7
⁻ Gas ($ per mcf)
4.4
5.0
4.5
4.7
4.8
Sale of crude oil ($ million)
184.7
173.8
248.7
533.6
784.1
Sale of purchased crude oil ($
million)
2.2
1.2
1.0
4.1
6.3
Sale of gas ($ million)
5.3
7.3
8.6
19.1
28.2
Revenue ($ million)
192.1
182.3
258.2
556.9
818.6
Commodity risk management contracts b ($
million)
0.0
0.0
23.0
0.0
(70.7)
Production & operating costsc ($
million)
(58.2)
(60.7)
(87.1)
(171.4)
(282.8)
G&G, G&Ad ($ million)
(14.1)
(13.9)
(16.7)
(39.9)
(43.2)
Selling expenses ($ million)
(3.8)
(2.2)
(2.0)
(8.3)
(5.2)
Operating profit ($ million)
80.5
69.5
145.4
226.6
347.4
Adjusted EBITDA ($ million)
115.2
103.9
141.3
334.0
408.7
Adjusted EBITDA ($ per boe)
41.0
33.9
42.4
37.7
40.6
Net profit ($ million)
24.8
33.8
73.4
84.8
172.2
Capital expenditures ($ million)
44.1
43.4
43.4
132.4
115.2
Cash and cash equivalents ($ million)
106.3
86.4
93.0
106.3
93.0
Short-term financial debt ($ million)
5.7
12.5
6.8
5.7
6.8
Long-term financial debt ($ million)
487.6
486.8
484.3
487.6
484.3
Net debt ($ million)
387.0
412.9
398.1
387.0
398.1
Dividends paid ($ per share)
0.132
0.130
0.127
0.392
0.291
Shares repurchased (million shares)
0.500
1.082
1.110
2.224
1.802
Basic shares – at period end (million
shares)
56.118
56.570
58.543
56.118
58.543
Weighted average basic shares (million
shares)
56.513
57.114
59.029
57.155
59.691
a)
Includes royalties and other economic
rights paid in kind in Colombia for approximately 5,045 bopd, 2,952
bopd and 911 bopd in 3Q2023, 2Q2023 and 3Q2022, respectively. No
royalties were paid in kind in other countries. Production in
Ecuador is reported before the Government’s production share.
b)
Please refer to the Commodity Risk
Management Contracts section below.
c)
Production and operating costs include
operating costs, royalties and economic rights paid in cash, share
based payments and purchased crude oil.
d)
G&A and G&G expenses include
non-cash, share-based payments for $1.7 million, $1.7 million, and
$3.9 million in 3Q2023, 2Q2023 and 3Q2022, respectively. These
expenses are excluded from the Adjusted EBITDA calculation.
Production: Oil and gas production in 3Q2023 was 34,778
boepd, down by 9% compared to 3Q2022, due to lower production in
Colombia, Chile, Brazil and Ecuador. Oil represented 93% and 91% of
total reported production in 3Q2023 and 3Q2022, respectively.
Deliveries: Oil and gas deliveries to GeoPark’s offtakers
in 3Q2023 totaled 30,559 boepd, down by 16% compared to 3Q2022,
mainly due to lower consolidated production and higher royalties
and economic rights paid in kind, which was partially offset by a
reduction in inventories.
The mix of royalties and economic rights paid in kind versus in
cash affects Revenue and Production and operating costs but it is
neutral at the Adjusted EBITDA level. In 3Q2023, royalties and
economic rights paid in kind increased significantly compared to
3Q2022, resulting in lower revenue and lower production and
operating costs (due to lower cash royalties and economic rights
paid in cash).
Reference and Realized Oil Prices: Brent crude oil prices
decreased by 12% to $86.0 per bbl during 3Q2023, and the
consolidated realized oil sales price decreased by 13% to $74.6 per
bbl in 3Q2023.
A breakdown of reference and net realized oil prices in relevant
countries in 3Q2023 and 3Q2022 is shown in the tables below:
3Q2023 - Realized Oil Prices
($ per bbl)
Colombia
Chile
Ecuador
Brent oil price (*)
84.8
89.6
83.4
Local marker differential
(4.3)
-
-
Commercial, transportation discounts &
other
(5.8)
(14.2)
(12.3)
Realized oil price
74.7
75.4
71.1
Weight on oil sales mix
96%
1%
3%
3Q2022 - Realized Oil Prices
($ per bbl)
Colombia
Chile
Ecuador
Brent oil price (*)
98.2
98.2
98.2
Local marker differential
(3.8)
-
-
Commercial, transportation discounts &
other
(8.7)
(4.8)
(5.2)
Realized oil price
85.7
93.4
93.0
Weight on oil sales mix
98%
1%
1%
(*) Corresponds to the average month of
sale price ICE Brent for Colombia and Ecuador, and Dated Brent for
Chile.
Revenue: Consolidated revenue decreased by 26% to $192.1
million in 3Q2023, compared to $258.2 million in 3Q2022, mainly
reflecting lower oil and gas prices and lower deliveries.
Sales of crude oil: Consolidated
oil revenue decreased by 26% to $184.7 million in 3Q2023, mainly
due to a 13% decrease in realized oil prices and 13% lower
deliveries. Oil revenue was 96% of total revenue in 3Q2023 and
3Q2022.
The table below provides a breakdown of crude oil revenue in
3Q2023 and 3Q2022:
Oil Revenue (In millions of $)
3Q2023
3Q2022
Colombia (*)
178.0
243.6
Chile
1.0
3.0
Brazil
0.1
0.2
Ecuador
5.6
1.9
Oil Revenue
184.7
248.7
(*) Net of Commodity risk management
contracts designated as cash flow hedges.
- Colombia: 3Q2023 oil revenue decreased by 27% to $178.0
million, reflecting lower realized oil prices and lower oil
deliveries. Realized prices decreased by 13% to $74.7 per bbl due
to lower Brent oil prices while oil deliveries decreased by 16% to
27,022 bopd. Earn-out payments decreased to $7.2 million in 3Q2023,
compared to $9.3 million in 3Q2022 in line with lower oil prices.
Commodity risk management contracts designated as cash flow hedges
amounted to $0.7 million in 3Q2023, reflecting hedges with ceiling
prices below actual Brent oil prices during the quarter.
- Chile: 3Q2023 oil revenue decreased by 66% to $1.0 million,
reflecting lower realized prices and lower oil deliveries. Realized
prices decreased by 19% to $75.4 per bbl due to lower Brent oil
prices while oil deliveries decreased by 57% to 147 bopd, affected
by temporarily shut-in oil production due to commercial
negotiations with ENAP, the oil offtaker in Chile. GeoPark reached
an agreement with ENAP and as of August 2023, it gradually started
reopening temporarily shut-in oil production of 400 bopd.
- Ecuador: 3Q2023 oil revenue increased by 190% to $5.6 million,
reflecting higher deliveries that were partially offset by lower
realized prices. Oil deliveries increased by 279% to 859 bopd while
realized prices decreased by 24% to $71.1 per bbl. Deliveries in
Ecuador are net of the Government’s production share.
Sales of purchased crude oil:
3Q2023 sales of purchased crude oil increased 125% to $2.2 million,
which corresponds to oil trading operations (purchasing and selling
crude oil from third parties with the cost of the oil purchased
being reflected in production and operating costs). Sales of
purchased crude oil were 1% of total revenue in 3Q2023 and
3Q2022.
Sales of gas: Consolidated gas
revenue decreased by 39% to $5.3 million in 3Q2023 compared to $8.6
million in 3Q2022, reflecting 37% lower gas deliveries and 3% lower
gas prices. Gas revenue was 3% of total revenue in 3Q2023 and
3Q2022.
The table below provides a breakdown of gas revenue in 3Q2023
and 3Q2022:
Gas Revenue (In millions of $)
3Q2023
3Q2022
Chile
2.4
4.2
Brazil
2.6
4.3
Colombia
0.3
0.1
Gas Revenue
5.3
8.6
- Chile: 3Q2023 gas revenue decreased by 43% to $2.4 million,
reflecting lower gas deliveries and lower gas prices. Gas
deliveries fell by 32% to 7,988 mcfpd (1,331 boepd). Gas prices
were 16% lower, at $3.2 per mcf ($19.4 per boe) in 3Q2023.
- Brazil: 3Q2023 gas revenue decreased by 40% to $2.6 million,
reflecting lower gas deliveries, partially offset by higher gas
prices. Gas deliveries decreased by 49% from the Manati gas field
to 4,392 mcfpd (732 boepd). Gas prices increased by 18% to $6.4 per
mcf ($38.4 per boe) in 3Q2023.
Commodity Risk Management Contracts: Consolidated
commodity risk management contracts amounted to zero in 3Q2023,
compared to a $23.0 million gain in 3Q2022.
The table below provides a breakdown of realized and unrealized
commodity risk management charges in 3Q2023 and 3Q2022:
Commodity Risk Management (In
millions of $)
3Q2023
3Q2022
Realized loss
-
(13.8)
Unrealized gain
-
36.8
Commodity Risk Management Contracts
-
23.0
In 3Q2023 GeoPark had zero cost collars covering 9,000 bopd
including purchased puts with an average price of $70.0 per bbl and
sold calls at an average price of $94.7 per bbl. As from January 1,
2023 Commodity risk management contracts are designated and qualify
as cash flow hedges, so that realized gains or losses are recorded
in Revenue.
Please refer to the “Commodity Risk Management Contracts”
section below for a description of hedges in place as of the date
of this release.
Production and Operating Costs: Consolidated production
and operating costs decreased to $58.2 million from $87.1 million,
mainly resulting from lower royalties and economic rights paid in
cash (due to lower oil prices and higher royalties and economic
rights paid in kind), partially offset by higher operating
costs.
The table below provides a breakdown of production and operating
costs in 3Q2023 and 3Q2022:
Production and Operating Costs (In
millions of $)
3Q2023
3Q2022
Royalties paid in cash
(0.8)
(15.5)
Economic rights paid in cash
(14.8)
(47.0)
Operating costs
(40.6)
(23.6)
Purchased crude oil
(1.9)
(0.7)
Share-based payments
(0.2)
(0.3)
Production and Operating Costs
(58.2)
(87.1)
Consolidated royalties paid in cash amounted to $0.8 million in
3Q2023 compared to $15.5 million in 3Q2022, in line with lower oil
prices and higher volumes of royalties being paid in kind.
Consolidated economic rights paid in cash (including high price
participation, x-factor and other economic rights paid to the
Colombian Government in cash) amounted to $14.8 million in 3Q2023
compared to $47.0 million in 3Q2022, in line with lower oil prices
and higher volumes of economic rights paid in kind.
Consolidated operating costs increased to $40.6 million in
3Q2023 compared to $23.6 million in 3Q2022, reflecting higher
energy costs due to lower availability of hydroelectric power in
Colombia and inflationary pressures.
The breakdown of operating costs is as follows:
- Colombia: Total operating costs increased to $33.5 million in
3Q2023 from $19.4 million in 3Q2022, mainly due to higher operating
costs per boe, partially offset by lower deliveries (deliveries in
Colombia decreased by 16%). Increased operating costs per boe in
3Q2023 mainly reflected higher energy costs due to a drought
affecting the energy matrix in Colombia with lower availability of
hydroelectric power, as well as inflationary pressures (the general
inflation index was approximately 8% in 9M2023).
- Chile: Total operating costs decreased to $1.8 million in
3Q2023 from $2.6 million in 3Q2022, mainly due to lower oil and gas
deliveries (deliveries in Chile decreased by 36%), partially offset
by higher operating costs per boe.
- Brazil: Total operating costs increased to $1.2 million in
3Q2023 from $0.8 million in 3Q2022, due to higher operating costs
per boe, partially offset by lower gas deliveries from the Manati
field (deliveries in Brazil decreased by 49%).
- Ecuador: Total operating costs increased to $4.1 million in
3Q2023 from $0.6 million in 3Q2022, mainly due to higher deliveries
(deliveries in Ecuador increased by 279%) and higher operating
costs per boe.
Consolidated purchased crude oil charges amounted to $1.9
million in 3Q2023 compared to $0.7 million in 3Q2022, which
corresponds to oil trading operations (purchasing and selling crude
oil from third parties with the sale of purchased oil being
reflected in Revenue).
Selling Expenses: Consolidated selling expenses increased
to $3.8 million in 3Q2023 compared to $2.0 million in 3Q2022.
Geological & Geophysical Expenses: Consolidated
G&G expenses increased to $2.6 million in 3Q2023 compared to
$2.3 million in 3Q2022.
Administrative Expenses: Consolidated G&A decreased
to $11.6 million in 3Q2023 compared to $14.3 million in 3Q2022.
Adjusted EBITDA: Consolidated Adjusted EBITDA4 decreased
by 18% to $115.2 million in 3Q2023 (on a per boe basis, Adjusted
EBITDA decreased to $41.0 per boe in 3Q2023 from $42.4 per boe in
3Q2022).
____________________________
4See “Reconciliation of Adjusted EBITDA to
Profit Before Income Tax” included in this press release.
Adjusted EBITDA (In millions of
$)
3Q2023
3Q2022
Colombia
115.6
139.1
Chile
1.0
3.6
Brazil
0.6
2.5
Argentina
(0.9)
(1.6)
Ecuador
0.7
0.7
Corporate
(1.7)
(3.0)
Adjusted EBITDA
115.2
141.3
The table below shows production, volumes sold and the breakdown
of the most significant components of Adjusted EBITDA for 3Q2023
and 3Q2022, on a per boe basis:
Adjusted EBITDA/boe
Colombia
Chile
Brazil
Ecuador
Totald
3Q23
3Q22
3Q23
3Q22
3Q23
3Q22
3Q23
3Q22
3Q23
3Q22
Production (boepd)
31,780
33,338
1,565
2,425
774
1,439
659
1,194
34,778
38,396
Inventories, RIK & Othera
(4,645)
(1,212)
(86)
(121)
(29)
19
202
(967)
(4,219)
(2,175)
Sales volume (boepd)
27,135
32,126
1,479
2,304
745
1,458
861
227
30,559
36,221
% Oil
99.6%
99.8%
10%
15%
2%
1%
100%
100%
93%
90%
($ per boe)
Realized oil price
74.7
85.7
75.4
93.4
88.1
100.1
71.1
93.0
74.6
85.9
Realized gas pricec
28.7
27.1
19.4
23.1
38.4
32.5
-
-
26.3
27.1
Realized commodity risk management
contracts (Cash flow hedge)
(0.3)
-
-
-
-
-
-
-
(0.2)
-
Earn-out
(2.9)
(3.2)
-
-
-
-
-
-
(2.8)
(2.8)
Combined Price
71.4
82.5
24.9
33.7
39.3
33.4
71.1
93.0
68.4
77.5
Realized commodity risk management
contracts
-
(4.7)
-
-
-
-
-
-
-
(4.2)
Operating costse
(14.2)
(6.7)
(14.4)
(12.4)
(21.2)
(8.7)
(51.7)
(30.7)
(15.3)
(7.3)
Royalties & economic rights
(6.1)
(21.0)
(0.9)
(1.3)
(3.1)
(2.6)
-
-
(5.5)
(18.8)
Purchased crude oilb
-
-
-
-
-
-
-
-
(0.7)
(0.3)
Selling & other expenses
(1.3)
(0.5)
(0.4)
(0.4)
-
(0.0)
(4.7)
(19.6)
(1.3)
(0.6)
Operating Netback/boe
49.8
49.6
9.2
19.6
15.0
22.1
14.8
42.7
45.6
46.4
G&A, G&G & other
(4.6)
(4.0)
Adjusted EBITDA/boe
41.0
42.4
a)
RIK (Royalties in kind) & Other:
Includes royalties and other economic rights paid in kind in
Colombia for approximately 5,045 bopd and 911 bopd in 3Q2023 and
3Q2022, respectively. No royalties were paid in kind in Chile,
Brazil or Ecuador. Production in Ecuador is reported before the
Government’s production share.
b)
Reported in the Corporate business
segment.
c)
Conversion rate of $mcf/$boe=1/6.
d)
Includes amounts recorded in the Corporate
business segment.
e)
Operating costs per boe included in this
table include certain adjustments to the reported figures (IFRS 16
and others).
Operating costs per boe in Colombia are affected by the mix of
royalties and economic rights paid in kind versus paid in cash, as
operating cost per boe is calculated as total operating costs
(including the cost to produce barrels that are used to pay
royalties and economic rights in kind) divided by barrels delivered
to GeoPark’s offtakers (after royalties and economic rights paid in
kind).
Depreciation: Consolidated depreciation charges increased
to $29.8 million in 3Q2023 compared to $21.4 million in 3Q2022.
Write-off of unsuccessful exploration efforts: The
consolidated write-off of unsuccessful exploration efforts amounted
to $9.3 million in 3Q2023 compared to $5.9 million in 3Q2022.
Amounts recorded in 3Q2023 correspond to unsuccessful exploration
efforts in the Llanos 124 Block (GeoPark operated, 50% WI), and to
a lesser extent in the Llanos 34 Block, both in Colombia.
Other Income (Expenses): Other operating income
(expenses) showed a $3.6 million gain in 3Q2023, compared to a $2.6
million loss in 3Q2022.
CONSOLIDATED NON-OPERATING RESULTS AND PROFIT FOR THE
PERIOD
Financial Expenses: Net financial expenses decreased to
$12.5 million in 3Q2023 from $14.1 million in 3Q2022, mainly
resulting from a sustained deleveraging process that started in
April 2021 and continued in 2022.
Foreign Exchange: Net foreign exchange losses amounted to
$4.0 million in 3Q2023 compared to an $11.5 million gain in 3Q2022.
Foreign exchange losses in 3Q2023 reflected the revaluation of the
local currency in Colombia (the Colombian Peso revalued by
approximately 3% from June 30 to September 30, 2023).
Income Tax: Income taxes totaled $41.2 million in 3Q2023
compared to $70.2 million in 3Q2022, mainly resulting from lower
profits before income taxes plus the effect of fluctuations of the
Colombian Peso on deferred income taxes, partially offset by the
effects of the tax reform in Colombia applicable in fiscal year
2023.
Net Profit: Net profit decreased to $24.8 million in
3Q2023 compared to $73.4 million in 3Q2022.
BALANCE SHEET
Cash and Cash Equivalents: Cash and cash equivalents
totaled $106.3 million as of September 30, 2023, compared to $128.8
million as of December 31, 2022.
This net decrease is explained by the following:
Cash and Cash Equivalents (In millions of
$)
9M2023
Cash flows from operating activities
190.3
Cash flows used in investing
activities
(132.4)
Cash flows used in financing
activities
(81.0)
Currency Translation
0.5
Net decrease in cash & cash
equivalents
(22.5)
Cash flows from operating activities of $190.3 million in the
nine-month period ended September 30, 2023 included income tax
payments of $125.3 million5 (including current income taxes
withholding and self-withholding taxes paid in the nine-month
period ended September 30, 2023).
Cash flows used in financing activities mainly included $27.5
million related to interest payments, $23.6 million related to
executing the Company’s share buyback program and $22.3 million
related to dividend payments.
Financial Debt: Total financial debt net of issuance cost
was $493.3 million, all corresponding to the 2027 Notes. Short-term
financial debt was $5.7 million as of September 30, 2023, and
corresponds to interest accrued on the 2027 Notes.
Financial Debt (In millions of
$)
September 30, 2023
December 31, 2022
2027 Notes
493.3
497.6
Financial debt
493.3
497.6
For further details, please refer to Note 13 of GeoPark’s
consolidated financial statements as of September 30, 2023,
available on the Company’s website.
FINANCIAL RATIOSa
(In millions of $)
Period-end
Financial Debt
Cash and Cash
Equivalents
Net Debt
Net Debt/LTM Adj.
EBITDA
LTM Interest
Coverage
3Q2022
491.1
93.0
398.1
0.8x
12.7x
4Q2022
497.6
128.8
368.8
0.7x
14.9x
1Q2023
491.6
145.4
346.2
0.7x
15.8x
2Q2023
499.3
86.4
412.9
0.8x
15.4x
3Q2023
493.3
106.3
387.0
0.8x
15.5x
a) Based on trailing last twelve-month financial results (“LTM”).
Covenants in the 2027 Notes: The 2027 Notes include debt
incurrence covenants that, among others, require that the Net Debt
to Adjusted EBITDA ratio should not exceed 3.25 times and the
Adjusted EBITDA to Interest ratio should exceed 2.5 times in order
for GeoPark to incur new debt.
COMMODITY RISK MANAGEMENT CONTRACTS
The table below summarizes commodity risk management contracts
in place as of the date of this release:
Period
Type
Reference
Volume (bopd)
Contract Terms
(Average $ per bbl)
Purchased Put
Sold Call
4Q2023
Zero cost collar
Brent
9,000
69.4
91.8
1Q2024
Zero cost collar
Brent
8,500
65.6
92.0
2Q2024
Zero cost collar
Brent
9,000
67.5
97.0
3Q2024
Zero cost collar
Brent
7,000
66.4
99.3
4Q2024
Zero cost collar
Brent
1,000
70.0
96.0
____________________________
5 Includes current income tax payments and
withholding taxes from clients for $19.7 million (included within
“Change in working capital” line item of the Statement of Cash
Flow). For further details, please refer to the Statement of Cash
Flow as of September 30, 2023, available on the Company’s
website.
SELECTED INFORMATION BY BUSINESS SEGMENT
Colombia
(In millions of $)
3Q2023
3Q2022
Sale of crude oil
178.0
243.6
Sale of gas
0.3
0.1
Revenue
178.3
243.7
Production and operating costsa
(48.9)
(81.6)
Adjusted EBITDA
115.6
139.1
Capital expenditure
41.3
36.7
Chile
(In millions of $)
3Q2023
3Q2022
Sale of crude oil
1.0
3.0
Sale of gas
2.4
4.2
Revenue
3.4
7.1
Production and operating costsa
(1.9)
(2.9)
Adjusted EBITDA
1.0
3.6
Capital expenditure
0.0
0.2
Brazil
(In millions of $)
3Q2023
3Q2022
Sale of crude oil
0.1
0.2
Sale of gas
2.6
4.3
Revenue
2.7
4.5
Production and operating costsa
(1.4)
(1.2)
Adjusted EBITDA
0.6
2.5
Capital expenditure
0.0
0.0
Ecuador
(In millions of $)
3Q2023
3Q2022
Sale of crude oil
5.6
1.9
Sale of gas
0.0
0.0
Revenue
5.6
1.9
Production and operating costsa
(4.1)
(0.6)
Adjusted EBITDA
0.7
0.7
Capital expenditure
2.8
6.4
a)
Production and operating costs = Operating
costs + Royalties + Share-based payments + Purchased crude oil.
CONSOLIDATED STATEMENT OF INCOME
(QUARTERLY INFORMATION UNAUDITED)
(In millions of $)
3Q2023
3Q2022
9M2023
9M2022
REVENUE
Sale of crude oil
184.7
248.7
533.6
784.1
Sale of purchased crude oil
2.2
1.0
4.1
6.3
Sale of gas
5.3
8.6
19.1
28.2
TOTAL REVENUE
192.1
258.2
556.9
818.6
Commodity risk management contracts
0.0
23.0
0.0
(70.7)
Production and operating costs
(58.2)
(87.1)
(171.4)
(282.8)
Geological and geophysical expenses
(G&G)
(2.6)
(2.3)
(7.6)
(8.0)
Administrative expenses (G&A)
(11.6)
(14.3)
(32.3)
(35.1)
Selling expenses
(3.8)
(2.0)
(8.3)
(5.2)
Depreciation
(29.8)
(21.4)
(86.4)
(66.2)
Write-off of unsuccessful exploration
efforts
(9.3)
(5.9)
(21.5)
(5.9)
Other
3.6
(2.6)
(2.8)
2.7
OPERATING PROFIT
80.5
145.4
226.6
347.4
Financial costs, net
(10.6)
(13.3)
(29.9)
(44.0)
Foreign exchange (loss) gain
(4.0)
11.5
(16.9)
12.0
PROFIT BEFORE INCOME TAX
65.9
143.6
179.7
315.4
Income tax
(41.2)
(70.2)
(94.9)
(143.1)
PROFIT FOR THE PERIOD
24.8
73.4
84.8
172.2
SUMMARIZED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION(QUARTERLY INFORMATION UNAUDITED)
(In millions of $)
Sep '23
Dec '22
Non-Current Assets
Property, plant and equipment
699.9
666.8
Other non-current assets
63.2
69.0
Total Non-Current Assets
763.1
735.8
Current Assets
Inventories
12.2
14.4
Trade receivables
63.3
71.8
Other current assets
27.1
23.1
Cash at bank and in hand
106.3
128.8
Total Current Assets
208.9
238.1
Total Assets
972.0
974.0
Total Equity
157.4
115.6
Non-Current Liabilities
Borrowings
487.6
485.1
Other non-current liabilities
135.8
144.1
Total Non-Current Liabilities
623.4
629.2
Current Liabilities
Borrowings
5.7
12.5
Other current liabilities
185.5
216.6
Total Current Liabilities
191.2
229.2
Total Liabilities
814.6
858.4
Total Liabilities and Equity
972.0
974.0
SUMMARIZED CONSOLIDATED STATEMENT OF CASH FLOW
(QUARTERLY INFORMATION UNAUDITED)
(In millions of $)
3Q2023
3Q2022
9M2023
9M2022
Cash flow from operating activities
92.6
141.1
190.3
354.1
Cash flow used in investing activities
(44.1)
(42.6)
(132.4)
(100.1)
Cash flow used in financing activities
(28.6)
(127.5)
(81.0)
(262.4)
RECONCILIATION OF ADJUSTED EBITDA TO PROFIT BEFORE INCOME
TAX
9M2023 (In millions of $)
Colombia
Chile
Brazil
Ecuador
Other(a)
Total
Adjusted EBITDA
331.2
3.6
4.5
2.2
(7.4)
334.0
Depreciation
(71.7)
(7.8)
(1.7)
(5.1)
(0.0)
(86.4)
Write-off of unsuccessful exploration
efforts
(21.5)
-
-
-
-
(21.5)
Share based payment
(0.9)
(0.1)
(0.0)
(0.0)
(4.3)
(5.3)
Lease Accounting - IFRS 16
6.1
0.7
0.7
0.0
-
7.6
Others
2.2
(2.2)
(0.2)
(0.5)
(1.1)
(1.9)
OPERATING PROFIT (LOSS)
245.4
(5.9)
3.3
(3.4)
(12.8)
226.6
Financial costs, net
(29.9)
Foreign exchange charges, net
(16.9)
PROFIT BEFORE INCOME TAX
179.7
9M2022 (In millions of $)
Colombia
Chile
Brazil
Ecuador
Other(a)
Total
Adjusted EBITDA
401.1
9.1
10.0
1.5
(13.0)
408.7
Depreciation
(52.8)
(10.9)
(2.2)
(0.0)
(0.2)
(66.2)
Unrealized commodity risk management
contracts
10.3
-
-
-
-
10.3
Write-off of unsuccessful exploration
efforts
(5.9)
-
-
-
-
(5.9)
Share based payment
(1.2)
(0.2)
(0.0)
(0.0)
(6.1)
(7.6)
Lease Accounting - IFRS 16
3.4
0.8
1.0
0.0
0.1
5.4
Others
1.6
0.5
0.4
(0.0)
0.2
2.7
OPERATING PROFIT (LOSS)
356.4
(0.7)
9.2
1.5
(19.1)
347.4
Financial costs, net
(44.0)
Foreign exchange charges, net
12.0
PROFIT BEFORE INCOME TAX
315.4
a) Includes Argentina and Corporate.
LAST TWELVE-MONTH RETURN ON AVERAGE CAPITAL EMPLOYED
(In millions of $)
Sept 2023
Sept 2022
Last twelve-month Operating Income
308.3
Total Assets – Period-end
972.0
902.7
Current Liabilities – Period-end
(191.2)
(204.8)
Capital Employed – Period-end
780.8
697.9
Average Capital Employed
739.4
-
Average Return on Average Capital
Employed
42%
CONFERENCE CALL INFORMATION
Reporting Date and Conference Call for 3Q2023 Financial
Results
In conjunction with the 3Q2023 results press release, GeoPark
management will host a conference call on November 9, 2023, at
10:00 am (Eastern Standard Time).
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/344411932
Interested parties may participate in the conference call by
dialing the numbers provided below:
United States Participants: +1 (646)
904-5544
International Participants: +1 (833)
470-1428
Passcode: 865697
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
ANH
Agencia Nacional de Hidrocarburos
(Colombia)
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
LTM
Last Twelve Months
Mboe
Thousand barrels of oil equivalent
Mcfpd
Thousand cubic feet per day
Net Debt
Current and non-current borrowings less
cash and cash equivalents
WI
Working interest
NPV10
Present value of estimated future oil and
gas revenue, net of estimated direct expenses, discounted at an
annual rate of 10%
NOTICE
Additional information about GeoPark can be found in the Invest
with Us section on the website at www.geo-park.com.
Rounding amounts and percentages: Certain amounts and
percentages included in this press release have been rounded for
ease of presentation. Percentage figures included in this press
release have not in all cases been calculated on the basis of such
rounded figures, but on the basis of such amounts prior to
rounding. For this reason, certain percentage amounts in this press
release may vary from those obtained by performing the same
calculations using the figures in the financial statements. In
addition, certain other amounts that appear in this press release
may not sum due to rounding.
This press release contains 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 contains 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, production guidance, shareholder
returns, Adjusted EBITDA, capital expenditures, cash income taxes
and free cash flow. 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 release 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.
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107352474/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
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