TIDMGPK
RNS Number : 9837B
Geopark Holdings Limited
10 April 2013
2012 Results
GEOPARK HOLDINGS LIMITED
-- Revenues increased 124% to US$250 million in 2012.
-- Full year production increased 49% averaging 11,276 boepd.
-- 2P Reserves increased 15% to 56.9 MMboe.
-- Full year Adjusted EBITDA increased 92% to US$121 million.
Net income increased 264% to US$18 million.
-- Netback per boe produced increased to US$30.8 per boe in
2012, representing an increase of 34.5% from 2011.
-- Acquisition and consolidation of two Colombian Companies -
Winchester Oil and Gas and Hupecol - for a combined consideration
of US$105 million.
-- First gas discovery in Tranquilo block (Chile) in 40 years,
Palos Quemados (with a production test of 4.6 mmcf/day).
-- Operations commenced in Tierra del Fuego, Chile on the Isla
Norte, Flamenco and Campanario blocks.
-- Over US$195 million invested in capital expenditures in 2012
with 44 new wells. Total investment of US$300 million including
Colombian acquisitions.
-- US$300 million bond issue in February 2013 (144A/RegS): more
than 6 times oversubscribed, initial yield of 7 5/8%. Funds will be
used for new investments and refinancing.
INDEX
1. Financial and Operational Highlights 3
2. Summary of Financial Results 5
3. Assets 6
4. Analysis of Consolidated Results 7
5. 4Q2012 Operational Update 8
6. Strategic Developments 11
7. Oil and Gas Reserves 13
8. 2013 Outlook 14
9. Consolidated Financial Statements 15
10. Glossary 18
1. Financial and Operational Highlights
(US$ million) 4Q12 4Q11 % Chg. 2012 2011 % Chg.
Revenues 68.3 37.7 81% 250.5 111.6 124%
Oil 63.3 28.0 126% 221.6 73.5 201%
Gas 5.1 9.7 -47% 28.9 38.1 -24%
Chile 32.7 37.4 -13% 149.9 110.1 36%
Colombia 35.6 - 99.5 -
Argentina 0.1 0.3 -77% 1.1 1.5 -29%
Adjusted EBITDA 26.6 22.2 20% 121.4 63.4 92%
Chile 17.2 26.1 -34% 93.9 70.4 33%
Colombia 10.2 - 34.5 -
Argentina, Corporate
& Others -0.8 -3.9 79% -7.0 -7.0 0%
Adjusted EBITDA Margin
(%) 38.9% 58.7% 48.5% 56.8%
Net Income -6.0 3.7 -263% 18.4 5.1 264%
Net Income Margin (%) -8.7% 9.7% 7.4% 4.5%
Net Cash Flow from Operations 30.6 18.9 62% 131.8 68.8 92%
Weighted Avg. Shares (million) 42.7 41.9
EPS Diluted ($) 0.269 0.001
Stock Price (GBP as of
December) 647.5 440.0
Average Daily Traded Volume
($ '000) 89.9 196.1
Production (average boepd) 10,627 8,710 11,276 7,593 49%
Chile 6,558 8,637 7,802 7,511 4%
Colombia 4,027 - 3,411 - N/A
Argentina 42 73 63 82 -23%
P1 Reserves (MMboe) 18.7 16.5 13%
P1 + P2 Reserves 56.9 49.5 15%
P1 + P2 + P3 Reserves 114.4 106.9 7%
% Oil / Revenues 92.6% 74.4% 88.5% 65.9% 34%
% Gas / Revenues 7.4% 25.6% 11.5% 34.1% -66%
2P Reserve/Production
Ratio (Years) 14.4 17.9 -19%
-- Revenues Up 124%:Total revenues increased to US$250 million
in 2012 from US$112 million in 2011, mainly as a result of an
increase in oil production in Chile and the incorporation of new
production from Colombia, partially offset by lower gas revenues.
Oil revenues from Chilean operations increased by 68% to US$121
million and Colombian operations incorporated additional oil
revenues of US$99 million. Oil revenues represented 88% of total
revenues. Revenues from Columbian operations are accounted from the
date of acquisition and therefore do not represent full 2012
production from the relevant assets.
-- Adjusted EBITDA Up 92%:Adjusted EBITDA (adjusted earnings
before interest, tax, depreciation, amortization and certain
non-cash items such as write offs and share based payments)
increased to US$121 million in 2012 compared to US$63 million in
2011. In addition, cash flow from operating activities in 2012
increased by 91% to US$132 million from US$69 million in 2011.
-- Netbacks Up 35%:Netback per boe increased to US$30.8 per boe
in 2012 compared to US$22.9 per boe in 2011 reflecting a higher
weighting of oil in GeoPark's production mix, as well as the
incorporation of Colombian operations into the portfolio.
-- Net Income Up Significantly:Net income for 2012 increased to
US$18 million, compared to US$5 million reported in 2011. The
growth in net results is mainly associated with an improvement in
operating results which increased to US$41 million in 2012
(including US$8.5 million from our new Colombian operations)
compared to US$26 million in 2011, despite higher write off charges
of US$ 25.6 million in 2012 compared to US$ 5.9 million in 2011. In
addition, a gain of US$8.4 million was recognized related to the
acquisition of the Colombian subsidiaries.
-- Total Equity Up 25%:Total Equity increased to US$312 million
as of December 2012 compared to US$251 million as of December 2011.
In addition to the net income generated during the year, net equity
increased due to equity contributions made by LGI in Chile.
-- Available Cash Resources:GeoPark had US$48 million in cash
and cash equivalents at the end of 2012 (US$38 million net of
overdrafts), with a liquidity ratio of 1.28x (current assets
divided by current liabilities), and total financial debt of US$193
million. As of 31 March 2013, after the issuance of the US$ 300
million Notes, total cash amounted to US$179 million.
-- Total Production Up 49%:Production average 11,276 boepd
during 2012 compared to 7,593 boepd in 2011. Resulting from an
increase in production of 291 boepd in Chile (including an increase
of 65% of oil production partially offset by a decrease in gas
production) and the addition of 3,411 bopd in Colombia.
-- 57% Drilling Success:GeoPark's 44 well drilling program
during 2012 represented a balance between exploration, appraisal
and development. 36 wells (operated by GeoPark) were drilled
achieving a success rate of 57%.
-- 2P Reserves Up 15%: 2P reserves increased 15% compared to 2011, to 56.9 Mmboe.
-- US$198 million CAPEX:Geopark invested US$198 during 2012. In
addition, US$ 105 million was invested for the acquisition of the
Colombian operations.
2. Summary of Financial Results
Statement of income
(US$ million) 4Q12 4Q11 % Chg. 2012 2011 % Chg.
Revenues 68.3 37.7 81.2% 250.5 111.6 124.5%
Production Costs (40.6) (17.8) 128.1% (129.2) (54.5) 137.1%
Gross Profit 27.8 19.9 39.3% 121.2 57.1 112.5%
Operating Profit 4.9 11.2 -56.4% 40.7 25.8 58.0%
Financial Income 0.5 (0.2) -364.0% 0.9 0.2 350.0%
Financial Expenses (3.0) (2.7) 9.9% (17.2) (13.7) 25.7%
Gain on Acquisition (0.2) - 8.4 -
Profit Before Income
Tax 2.2 8.3 -73.7% 32.8 12.3 167.7%
Income Tax (8.1) (4.6) 76.4% (14.4) (7.2) 99.8%
Profit for the Year (6.0) 3.7 -262.7% 18.4 5.1 264.4%
Attributable to:
Equity holders of
the company (6.0) 0.4 -1548.7% 11.9 0.5 2099.8%
Minority Interest 0.0 3.7 -100.0% 6.6 5.0 31.1%
Balance sheet
(US$ million) Dec-12 Dec-11 Dec-12 Dec-11
Non-Current
Non-Current Assets 490 234 Liabilities 209 157
PP&E 458 225 Borrowings 165 135
Other Non-Current
Other Non-Current 33 9 Liabilities 43 23
Current
Current Assets 138 238 Liabilities 107 64
Cash and Cash
Equivalents 48 194 Borrowings 28 31
Prepayment and
Other Trade and Other
Receivables 50 25 Payable 55 29
Assets Held for Other Current
Sale - - Liabilites 25 5
Trades Receivables 32 16 TOTAL LIABILITIES 316 222
Equity Owners
Inventories 4 1 Company 239 209
Other Current
Assets 3 3 Minority Interest 73 42
TOTAL EQUITY 312 251
TOTAL EQUITY +
TOTAL ASSETS 628 472 LIABILITIES 628 472
Financial indicators
Units Dec-12 Dec-11 Covenant Limit
Gross Financial Debt $ million 193.0 165.3
Net Financial Debt $ million 144.7 (28.4)
Net Financial Debt / Equity times 0.46x na
Gross Debt / Adjusted
EBITDA times 1.59x 2.61x 2.75x
Coverage Ratio times 7.06x 4.63x 3.50x
Liabilities / Equity times 1.01x 0.88x
Net Financial Debt / Adjusted
EBITDA times 1.19x na
Current Liabilities % 34.0% 29.1%
Non-Current Liabilities % 66.0% 70.9%
Cash and Cash Equivalents $ million 48.3 193.7
Equity $ million 312.1 250.7
3. ASSETS
A summary table of GeoPark interests in oil and gas blocks
follows:
Country Block Operator WI(1) Basin Gross Net 2P Net Production % oil Concession
Area Reserves (boepd)(3) Expiration
(thousand (mmboe)(2) Date
acres)
Chile Fell GeoPark 100% Magallanes 368 45.4 7,802 52% 2032
Chile Tranquilo GeoPark 29% Magallanes 1,232 - - - 2013/2043
Chile Otway GeoPark 25% Magallanes 1,474 - - - 2017/2044
Chile Isla Norte GeoPark 60% Magallanes 130 - - - 2019/2044
Chile Campanario GeoPark 50% Magallanes 192 - - - 2020/2045
Chile Flamenco GeoPark 50% Magallanes 141 - - - 2019/2044
Colombia La Cuerva GeoPark 100% Llanos 47 3.8 2,071 100% 2014/2038
Llanos
Colombia 34 GeoPark 45% Llanos 82 6.5 413 100% 2015/2039
Llanos
Colombia 62 GeoPark 100% Llanos 44 - - - 2017/2041
Colombia Yamú GeoPark 54.5/75% Llanos 11 0.8 602 100% 2013/2036
Llanos
Colombia 17 Ramshorn 36.80% Llanos 109 - - - 2015/2039
Llanos
Colombia 32 P1 Energy 10% Llanos 100 0.3 116 100% 2015/2039
Colombia Jagueyes Columbus 5% Llanos 61 - - - 2014/2038
Colombia Arrendajo Pacific 10% Llanos 78 - 96 100% 2017/2041
Colombia Abanico Pacific 10% Magdalena 32 - 112 100% 2022(4)
Colombia Cerrito Pacific 10% Catatumbo 10 - 1 0% 2028(4)
Del
Argentina Mosquito GeoPark 100% Austral 17.3(5) - 63 76% 2016
C.
Doña
Argentina Juana GeoPark 100% Neuquén 28 - - - 2017
Loma
Argentina Cortaderal GeoPark 100% Neuquén 20 - - - 2017
1 Working Interest
2 Million of barrils
of Oils Equivalent
3 Barrels of oil equivalent
per day
4 Exploration phase has ended.
Currently in production phase
5 In November 2012, we relinquished approximately 85.6% of the Del
Mosquito Concession to the Santa Cruz Province; resulting in a remaining
exploitation area of 17,300 acres.
4. Analysis of Consolidated Results
Revenues in 2012 amounted to US$250 million, a 124% increase
compared to 2011, driven mainly by the Colombian acquisition and
the change in mix towards oil in the Chilean operations. In Chile,
total oil production increased 65% to an average of 4,024 bopd. The
acquisition of two companies in Colombia increased production by
3,408 bopd. Revenues from the Colombian business amounted to US$99.
Revenues for the Colombian subsidiaries were accounted for since
the acquisition date (February and March 2012, respectively).
Gross profit for the year was US$121.2 million leading to a
year-on-year increase of 113% and a gross margin of 48.4%. The
gross margin slightly decreased from 51% in 2011 due to
consolidation of the Colombian acquisitions, higher royalties in
Colombia and accelerated depreciation of the Del Mosquito Block
assets.
Exploration costs increased explained mainly by two factors: the
relinquishment of part of the Del Mosquito block and the write-offs
related to unsuccessful exploration wells, (five in Chile and three
in Colombia) compared to 3 unsuccessful wells in 2011.
Administrative expenses increased 58.5% explained by the
incorporation of the Colombian operations for an amount of $8.1
million and higher costs associated to new business
developments.
Selling expenses amounted to US$24.6 million, reflecting an
increase due to higher transportation costs in our Colombian
operations.
Adjusted EBITDA in 2012 showed a record amount for the Company
of US$121 million, representing a 92% increase compared to 2011.
Adjusted EBITDA for 2012 accounts for the EBITDA generated from the
Colombian business since the acquisition dates. Adjusted EBITDA,
calculated on a proforma basis considering the Adjusted EBITDA for
the Colombian business as if the Colombian operations would have
been acquired as of January 1(st) 2012 would have been US$ 132
million. Chile accounted for US$93.9 million representing a 33%
increase. Colombia accounted for US$34.5 million and the remaining
amount relates to results from the Argentine operations and
corporate expenses.
Depreciation and amortization increased mainly due to the
incorporation of the Colombian operations. In Chile, in the Fell
block depreciation charge represents approximately US$ 9 per boe
produced. In Colombia, the depreciation charge ranges from US$ 13
to US$ 16 per boe in the different operated fields.
Financial expenses increased mainly due to higher interest
charges as a result of the US$37.5 million financing facility
executed with Itau BBA and US$ 2.5 million loss arising from
exchange rate differences.
Gain on acquisition of subsidiaries: in accordance with the
acquisition method of accounting, the acquisition cost of the two
Colombian companies was allocated to the underlying assets acquired
and liabilities assumed based primarily upon their estimated fair
values at the date of acquisition. An income approach (being the
net present value of expected future cash flows) was adopted to
determine the fair values of the mineral interestUnder this
methodology a gain of US$8.4 million was recognized.
Net income increased 264% reaching US$18.4 million. Total net
income attributable to owners of the Company reached US$11.9
million which translates in an diluted EPS of USc0.2693 versus
USc0.0012 in 2011.
Consolidated net margin increased to 7.4% versus the 4.5%
obtained in 2011.
5. 4Q2012 Operational Update
Key achievements during 4Q2012 include:
Oil and Gas Production Increase
Oil and gas production increased by 22% to 10,627 barrels of oil
equivalent per day ("boepd") in 4Q2012 from 8,710 boepd in 4Q2011.
Crude oil production increased by 110% to 7,939 barrels of oil per
day ("bopd") in 4Q2012 from 3,783 bopd in 4Q2011.. 1Q2013 average
production was approximately 13,500 boepd.
Drilling Success in Chile and Colombia
Key wells drilled and put into production on the Fell Block in
Chile during 2012 fourth quarter included:
Ø Yagan 2 (currently producing approximately 610 bopd)
Ø Konawentru 4 (currently producing approximately 900 bopd)
Ø Yagan 4 (currently producing approximately 600 bopd)
Key wells drilled and put into production on the Llanos 34 Block
in Colombia included:
Ø Tua 3 (currently producing approximately 1,100 bopd)
Ø Tua 2 (currently producing approximately 1,700 bopd)
Fourth Quarter 2012 Drilling and Work Program
GeoPark's 2012 work program included the drilling of 44 new
wells (gross) with a capital expenditure of $195 million. The
drilling program in 4Q2012 was mainly focused on reserve appraisal
and development in Chile and Colombia. Results are set out
below:
Country Block WI(1) Well Type of Geological Depth Principal Current
Well Formation (Meters) Hydrocarbon Status
Wells Drilled
in 4Q2012
Yagán On
Chile Fell 100% 2 Appraisal Tobífera 3,126 Oil Production
Konawentru On
Chile Fell 100% 4 Appraisal Tobífera 3,102 Oil Production
Yagán On
Chile Fell 100% Norte 4 Development Tobífera 3,105 Oil Production
Manekenk
Chile Fell 100% 2 Development Tobífera On Drilling
Konawentru Waiting for
Chile Fell 100% 3 Development Tobífera Completion
Marcou Sur Waiting for
Chile Tranquilo 29% 1 Exploration Loreto Inferior 1,496 Gas Completion
Palos
Quemados Waiting for
Chile Tranquilo 29% 1 Exploration Loreto Superior 1,600 Gas Completion
Ea Ma
Antonieta Waiting for
Chile Tranquilo 29% 1 Exploration El Salto Inferior 1,191 Gas Completion
Injecting
Llanos Maniceño in
Colombia 32 10% 1 Disposal - C1
Llanos On
Colombia 34 45% Tua 3 Development Mirador/Guadalupe 3,276 Oil Production
On
Colombia Arrendajo 10% Azor 3 Development C5 2,033 Oil Production
Completions/Workovers Performed
in 4Q2012
Plug &
Chile Otway 25% Tatiana 1 Completion Agua Fresca 2,202 Gas Abandon
Nika Oeste Springhill Waiting for
Chile Fell 100% 4 Completion / Tobifera 3,204 Gas Fracture
On
Chile Fell 100% Kosten 1 Workover Springhill Gas Production
Waiting for
Chile Fell 100% Ovejero 2 Deepening Tobifera 3,184 Oil Fracture
Converted
to
Chile Fell 100% Guanaco 10 Workover Springhill Oil Injector
On
Chile Fell 100% Maku 1 Workover Springhill Gas Production
On
Chile Fell 100% Guanaco 16 Workover Springhill Oil Production
Alakaluf
Chile Fell 100% 3 Workover Springhill Oil Injector
Llanos On
Colombia 34 45% Tua 2 Completion Guadalupe 3,374 Oil Production
On
Colombia Arrendajo 10% Azor 2 Completion C5 1,947 Oil Production
Drilling Highlights:
Ø Appraisal well Yagan 2 on the Fell Block in Chile (GeoPark
operated with a 100% working interest ("WI")) was put into
production from the Tobifera formation in November 2012 and is
currently producing approximately 610 bopd-
Ø Appraisal well Konawentru 4 on the Fell Block in Chile
(GeoPark operated with a 100% WI) was put into production from the
Tobifera formation in November 2012 and is currently producing
approximately 900 bopd.
Ø Appraisal well Yagan Norte 4 on the Fell Block in Chile
(GeoPark operated with 100% WI) was put into production from the
Tobifera formation in December 2012 and is currently producing
approximately 600 bopd.
Ø Appraisal well Manekenk 2 on the Fell Block in Chile (GeoPark
operated with a 100% WI) was drilled and is waiting on completion
and testing in the Tobifera and Springhill formations.
Ø Development well Konawentru 3 on the Fell Block in Chile
(GeoPark operated with a 100% WI) was drilled and is waiting on
completion and testing in the Tobifera formation.
Ø Exploration well Tatiana 1 on the Otway Block in Chile
(GeoPark operated with a 25% WI) was drilled and completed in
December 2012. The well encountered gas in the targeted objective
but with a tight reservoir (low permeability) and no commercial
production. The well was plugged and abandoned.
Ø Appraisal well Tua 3 on the Llanos 34 Block in Colombia
(GeoPark operated with a 45% WI) was put into production from the
Mirador formation in December 2012 and is currently producing
approximately 1,100 bopd gross.
Ø Appraisal well Tua 2 on the Llanos 34 Block in Colombia
(GeoPark operated with a 45% WI) was put into production from the
Guadalupe formation in December 2012 and is currently producing
approximately 1,700 bopd gross.
Ø Appraisal well Azor 2 on the Arrendajo Block in Colombia
(Non-operated with a 10% WI) was put into production from the C5
formation in October 2012 and is currently producing approximately
580 bopd gross.
Ø Appraisal well Azor 3 on the Arrendajo Block in Colombia
(Non-operated with a 10% WI) was put into production from the C5
formation in December 2012 and is currently producing approximately
490 bopd gross.
Oil and Gas Production
GeoPark's daily average oil and gas production increased to
10,627 boepd in 4Q2012 from an average of 8,710 boepd in 4Q2011.
This increase resulted from a growth in Chilean oil production
(from 3,723 bopd to 3,879 bopd) and new production from Colombian
assets acquired (4,018 bopd). Oil production accounted for 75% of
the total oil and gas production compared to 43% in 4Q2011.
Fourth Quarter
Fourth Quarter 2012 2011
Total (boepd) Oil (Bopd) Gas (mcfpd) Total (boepd) % Chg.
Chile 6,558 3,879 16,080 8,637 -24%
Colombia 4,027 4,018 50 - N/A
Argentina 42 42 - 73 -42%
TOTAL 10,627 7,939 16,130 8,710 22%
Full Year 2012 Full Year 2011
Total (boepd) Oil (Bopd) Gas (mcfpd) Total (boepd) % Chg.
Chile 7,802 4,024 22,665 7,511 4%
Colombia 3,411 3,408 50 - N/A
Argentina 63 48 85 82 -23%
TOTAL 11,276 7,480 22,800 7,593 49%
In accordance with the AIM Rules, the information in this
announcement has been reviewed by Salvador Minniti, a geologist
with 32 years of oil and gas experience and Director of Exploration
of GeoPark.
6. Strategic Developments
LGI partnership
On 12 March 2010, LGI and the Company agreed to form a strategic
partnership to jointly acquire and develop upstream oil and gas
projects in Latin America.
During 2011, GeoPark and LGI entered into the following
agreements through which LGI acquires an equity interest in the
Chilean Business of the Group:
-- On 20 May 2011, the Company (through its wholly owned
subsidiaries GeoPark Chile Chilean Branch and GeoPark Chile S.A.)
and LGI signed a subscription agreement in which LGI subscribed 10
million of ordinary shares representing 10% equity interest in
GeoPark Chile S.A, the Company owner of the Chilean assets, for a
total consideration of $70 million.
-- On 4 October 2011, an addendum to the agreement dated 20 May
2011 was signed whereby 12.5 million of ordinary shares in GeoPark
Chile S.A. were subscribed by LGI, for a consideration of $78
million, representing an additional 10%.
The transactions mentioned above have been considered to be a
deemed disposal and in accordance with IAS 27 it has been accounted
for as a transaction with Non-controlling interest. Consequently,
the gain as a result of US$ 111.2 million has been recognized
through equity rather than in the income statement for the year.
Under the terms of this agreement LGI also committed to provide
additional equity funding of US$ 18 million to GeoPark Chile S.A.
over the next three years, being LGI's share of GeoPark Chile
S.A.'s commitments under the minimum work program of the three
Tierra del Fuego licenses.
In December 2012, LGI joined GeoPark's operations in Colombia
through the acquisition of a 20% interest in GeoPark Colombia S.A.,
a company that holds GeoPark's Colombian assets and which includes
interests in 10 hydrocarbon blocks. A capital contribution in
GeoPark Colombia S.A. for an amount of $14.9 million was made in
2013. In addition, as part of the transaction, $5 million was
transferred directly to the Colombian subsidiary as a loan. In
addition, in March 2013 GeoPark and LGI announced their agreement
to extend their strategic alliance to build a portfolio of upstream
oil and gas assets throughout Latin America through 2015.
Agreement with Methanex
In March 2012, the Company and Methanex signed a third addendum
and amendment to the Gas Supply Agreement to incentivise the
development of gas reserves. Through this new agreement, the
Company completed the drilling of five new gas wells during 2012.
Methanex contributed to the cost of drilling the wells in order to
improve the project economics. As of 31 December, the Company has
fulfilled all the commitments under this agreement.
The Agreement also included monthly commitments of delivering
certain volume of gas; in case of failure, the Company could meet
the obligation from future deliveries without penalties during a
period of three months. Otherwise, the Company has to recognise the
corresponding liability. As of 31 December 2012, the accrued
penalty amounts to $1.7 million.
Gas Market
Methanex Corporation, which purchases all of GeoPark's Chilean
gas production, announced it expects to idle its Chile operation in
March 2013 and restart it later in the present year due to
anticipated insufficient natural gas supply. Gas supply for the
plant is expected to decrease during the winter months of 2013
given the seasonal gas demand increase from the city of Punta
Arenas, which is 100% supplied by the Chilean State Oil Company
ENAP, and whose gas production is supplemental to GeoPark's gas
supply to the Methanex plant.
However, the plant is still on production, given that according
to public information, Methanex is receiving gas from Argentina
under non disclosed conditions. Despite, Methanex idles its Chile
operations, they has agreed to continue to purchase gas from
GeoPark in 2013 in accordance with the minimum committed gas
volumes per the Gas Sales Agreement.
Portfolio Restructuring
In Argentina, GeoPark, in November 2012, relinquished
approximately 85.6% of the Del Mosquito Concession to the Santa
Cruz Province; resulting in a remaining exploitation area of 17,300
acres.
In Chile in January 2013, GeoPark formally advised the Ministry
of Energy of a decision by the Tranquilo Block JV partners to not
proceed with the Second Exploratory Period of the Tranquilo Block
CEOP. GeoPark and its partners will relinquish the Tranquilo Block,
except for an area of 92,417 acres consisting of protected
exploitation zones for the Cabo Negro, Marcou Sur, Maria Antonieta
and Palos Quemados prospects.
Notes Issuance
During February 2013, the Company successfully placed US$ 300
million notes which were offered under Rule 144A and Regulation S
exemptions of the United States Securities laws.
The Notes, issued by the Company's wholly-owned subsidiary
GeoPark Latin America Limited Agencia en Chile ("the Issuer"), were
priced at 99.332% and will carry a coupon of 7.50% per annum to
yield 7.625% per annum. Final maturity of the notes will be 11
February 2020.
The Notes are guaranteed by GeoPark and secured with a pledge of
all of the equity interests of the Issuer in GeoPark Chile S.A. and
GeoPark Colombia S.A. and a pledge of certain intercompany loans.
Notes were rated single B by both Standard & Poor's and Fitch
Ratings.
The net proceeds of the notes will be used to finance the
Company's expansion plans in the region and also to repay existing
debt of approximately US$170 million, including the existing Reg S
Notes due 2015. The transaction extends GeoPark's debt maturity
significantly, allowing the Company to allocate more resources to
its investment programs and inorganic growth in the coming
years.
7. Oil and Gas Reserves
DeGolyer and McNaughton ("D&M") concluded its independent
reserve certification of GeoPark's properties in Chile and Colombia
dated 31 December 2012 with a 2P reserve estimate of 56.9 million
barrels of oil equivalent, comprising 49% oil and 51% gas. These
figures consider a write off of the Argentinian reserves due to
lack of activity and proximity of the end of concession.
Country Reserve Type Oil Gas BOE
(MMBBL) (BCF) (MMBOE)
Chile P1 5.5 39.4 12.0
(Certified) P2 10.9 135.0 33.4
P3 10.8 253.5 53.1
P1 + P2 16.3 174.4 45.4
P1 + P2 +
P3 27.2 427.9 98.5
Colombia P1 6.7 - 6.7
(Certified) P2 4.8 - 4.8
P3 4.5 - 4.5
P1 + P2 11.4 - 11.4
P1 + P2 +
P3 15.9 - 15.9
Total P1 12.1 39.4 18.7
P2 15.7 135.0 38.2
P3 15.3 253.5 57.5
P1 + P2 27.8 174.4 56.9
P1 + P2 +
P3 43.1 427.9 114.4
8. 2013 Outlook
GeoPark has begun 2013 with strong fundamentals in place:
-- Continuous track record of execution and growth performance,
-- Improved capabilities and organization,
-- Healthy financial position resulting from significant cash
reserves and supporting operating cash flows, and
-- Increased portfolio of new project opportunities.
During 2013, the Company expects to realize important
operational and financial performance gains following an aggressive
investment plan, which will include:
-- Risk-balanced production, development and exploration work
programs on 16 blocks in 2 countries (Chile and Colombia),
-- Capital expenditures of US$200-230 million,
-- Drilling of 35-45 new wells - with approximately 40%
representing exploration for new reserves,
-- EBITDA projection in the range of $160 MM - $170 MM,
-- Average annual production increase of 20% to 25% over 2012 average production.
9. Consolidated Financial Statements
CONSOLIDATED STATEMENT OF INCOME
Amounts in US$ '000 Note 2012 2011
NET REVENUE 7 250,478 111,580
Production costs 8 (129,235) (54,513)
GROSS PROFIT 121,243 57,067
Exploration costs 11 (27,890) (10,066)
Administrative costs 12 (28,798) (18,169)
Selling expenses 13 (24,631) (2,546)
Other operating income (expenses) 823 (502)
OPERATING PROFIT 40,747 25,784
Financial income 14 892 162
Financial expenses 15 (17,200) (13,678)
Bargain purchase gain on acquisition
of subsidiaries 35 8,401 -
PROFIT BEFORE INCOME TAX 32,840 12,268
Income tax 16 (14,394) (7,206)
PROFIT FOR THE YEAR 18,446 5,062
Attributable to:
Owners of the Company 11,879 54
Non-controlling interest 6,567 5,008
Earnings per share (in US$)
for
profit attributable to owners
of the Company. Basic 18 0.2784 0.0013
Earnings per share (in US$)
for
profit attributable to owners
of the Company. Diluted 18 0.2693 0.0012
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Amounts in US$ '000 Note 2012 2011
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 19 457,837 224,635
Prepaid taxes 21 10,707 2,957
Other financial assets 24 7,791 5,226
Deferred income tax asset 17 13,591 450
Prepayments and other receivables 23 510 707
TOTAL NON CURRENT ASSETS 490,436 233,975
CURRENT ASSETS
Other financial assets 24 - 3,000
Inventories 22 3,955 584
Trade receivables 23 32,271 15,929
Prepayments and other receivables 23 49,620 24,984
Prepaid taxes 21 3,443 147
Cash at bank and in hand 24 48,292 193,650
TOTAL CURRENT ASSETS 137,581 238,294
TOTAL ASSETS 628,017 472,269
TOTAL EQUITY
Equity attributable to
owners of the Company
Share capital 25 43 43
Share premium 116,817 112,231
Reserves 128,421 115,164
Accumulated losses (5,860) (18,549)
Attributable to owners
of the Company 239,421 208,889
Non-controlling interest 72,665 41,763
TOTAL EQUITY 312,086 250,652
LIABILITIES
NON CURRENT LIABILITIES
Borrowings 26 165,046 134,643
Provisions and other long-term
liabilities 27 25,991 9,412
Deferred income tax liability 17 17,502 13,109
TOTAL NON CURRENT LIABILITIES 208,539 157,164
CURRENT LIABILITIES
Borrowings 26 27,986 30,613
Current income tax liabilities 7,315 187
Trade and other payable 28 54,890 28,535
Provisions for other liabilities 29 17,201 5,118
TOTAL CURRENT LIABILITIES 107,392 64,453
TOTAL LIABILITIES 315,931 221,617
TOTAL EQUITY AND LIABILITIES 628,017 472,269
Amounts in US$ '000 Note 2012 2011
Cash flows from operating activities
Income for the year 18,446 5,062
Adjustments for:
Income tax for the year 16 14,394 7,206
Depreciation of the year 9 53,317 26,408
Loss on disposal of property, plant
and equipment 546 2,010
Write-off of unsuccessful efforts 11 25,552 5,919
Impairment loss 11 - 1,344
Accrual of interest on borrowings 12,478 11,130
Amortisation of other long-term liabilities 27 (2,143) (1,038)
Unwinding of long-term liabilities 27 1,262 350
Accrual of share-based payment 10 5,396 5,298
Exchange difference generated by borrowings 35 (15)
Gain on acquisition of subsidiaries (8,401) -
Deferred income 27 5,550 5,000
Income tax paid (408) -
Changes in working capital 5 5,778 89
Cash flows from operating activities
- net 131,802 68,763
Cash flows from investing activities
Purchase of property, plant and equipment (198,204) (98,651)
Acquisitions of companies, net of cash
acquired 35 (105,303) -
Purchase of financial assets - (2,625)
Cash flows used in investing activities
- net (303,507) (101,276)
Cash flows from financing activities
Proceeds from borrowings 37,200 9,668
Proceeds from transaction with non-controlling
interest 12,452 142,000
Principal paid (12,382) (9,150)
Interest paid (10,895) (10,779)
Cash flows from financing activities
- net 26,375 131,739
Net (decrease) increase in cash and
cash equivalents (145,330) 99,226
Cash and cash equivalents at 1 January 183,622 84,396
Cash and cash equivalents at the end
of the year 38,292 183,622
Ending Cash and cash equivalents are
specified as follows:
Cash in bank 48,268 193,642
Cash in hand 24 8
Bank overdrafts (10,000) (10,028)
Cash and cash equivalents 38,292 183,622
10. Glossary
boe barrels of oil equivalent
boepd barrels of oil equivalent per day
bopd barrels of oil per day
CEOP Contrato Especial de Operacion Petrolera (Special Petroleum Operations Contract)
mmboe million barrels of oil equivalent
mcfpd thousands of cubic feet per day
mm3/day thousands of cubic metres per day
EPS earnings per share
This information is provided by RNS
The company news service from the London Stock Exchange
END
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