GeoPark Limited (“GeoPark” or the “Company”) (NYSE: “GPRK”), a leading
independent Latin American oil and gas explorer, operator and
consolidator with operations and growth platforms in Colombia, Chile,
Brazil, Argentina, and Peru1, today announced the execution
of an offtake and prepayment agreement with Trafigura, one of the
world’s leading commodity trading and logistics companies.
The offtake agreement provides for GeoPark to sell and deliver to
Trafigura a portion of GeoPark’s Colombian crude oil production and will
benefit GeoPark by (i) improving crude oil sales prices; (ii) improving
operating netbacks by reducing transportation costs; (iii) simplifying
logistics and reducing risks; and (iv) improving working capital.
Pricing will be determined at future spot market prices, net of
As part of the transaction, GeoPark and Trafigura have also entered into
an agreement which provides GeoPark access to funding up to $100
million, subject to applicable volumes corresponding to the terms of the
agreement, in the form of prepaid future oil sales. Funds committed by
Trafigura will be made available to GeoPark upon request and will be
repaid by GeoPark, through future oil deliveries over the period of the
contract (2.5 years with a 6-month grace period).
The prepayment agreement will provide GeoPark with immediately
accessible liquidity up to $100 million, which will further strengthen
GeoPark’s balance sheet and expand existing cash and cash equivalents up
to $190.4 million. GeoPark’s 3Q2015 cash position was $90.4 million.
James F. Park, Chief Executive Officer of GeoPark, said: “We are pleased
to begin this strategic partnership with Trafigura and look forward to a
long term relationship. Trafigura’s world-class trading and commodity
expertise will be an important complement to our operations and
continuing expansion in Latin America. Three key pillars of our success
in managing through the current oil market headwinds are the quality and
durability of our assets, the experience and track-record of our team,
and our financial strength and resilience. The partnership with
Trafigura further strengthens our balance sheet by improving our
bottom-line netbacks, reducing oil marketing risks, and providing a
bigger and more solid liquidity cushion.”
GeoPark can be visited online at www.geo-park.com
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
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 expected production growth and capital expenditures plan.
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.
Oil and gas production figures included in this release are stated
before the effect of royalties paid in kind, consumption and losses.
1 Transaction executed with Petroperu on October 1, 2014 with
final closing subject to Peru Government approval
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