Reserve and Production Growth with Improved Economics
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 reports its consolidated
financial results for the three-month period ended June 30, 2016
(“Second Quarter” or “2Q2016”).
A conference call to discuss 2Q2016 results will be held on August 12,
2016 at 10 am Eastern Daylight Time.
All figures are expressed in US Dollars and growth comparisons refer to
the same period of the prior year, except when specified.
SECOND QUARTER 2016 HIGHLIGHTS
Operational:
-
Oil and Gas Production Up 8% to 21,143 boepd
-
Oil production up 7% to 15,530 boepd
-
Gas production up 11% to 33.7 mmcfpd
-
Estimated average 2016 production of 21,500-22,500 boepd
-
Successful Drilling Results and Reserve Growth in Colombia
-
Drilling campaign in the Jacana Oil Field in the Llanos 34 Block
(GeoPark operated with 45% WI) included Jacana 3 and Jacana 4
wells, which were tested and put on production at approximately
3,600 bopd (gross) in July and extended the field’s western limits
-
Jacana 5 appraisal well was drilled further down-dip and is
currently being completed. Preliminary petrophysical logging
analysis indicates hydrocarbons in the Guadalupe formation and
production testing will be conducted in August
-
Plan to drill approximately 5 additional wells in the Llanos 34
Block in 2H2016
-
Operating Costs Down 38%
-
In Colombia Llanos 34 Block, achieved record low operating costs
of $3.4 per barrel, down 47%
-
In Chile Fell Block, achieved operating costs of $14.8/boe, down
31%
-
Consolidated operating costs of $6.2/boe, down 38% and $7 million
-
Consolidated cash costs of $14.2/boe, down 31%
-
Jacana 4 well drilled and completed for cost of $2.9 million
Financial:
-
Cash and Available Facilities over $210 million
-
Cash on hand of $79.2 million (stable since 4Q2015), $90 million
undrawn in Trafigura prepayment agreement, and $45 million available
in uncommitted facilities
-
Cash coverage of approximately 3 years of interest payments or 18
months of capital expenditures (2016 program)
-
Positive Cash Flow from Operations
-
Adjusted EBITDA of $20.5 million with capital expenditure program
of $5.7 million
-
Adjusted EBITDA of $11.4/boe, up 90% from 1Q2016 (with
accompanying Brent oil price increase of 30%)
-
Net loss for the period of $1.6 million
Strategic:
-
Peru: High potential Morona Block agreement extension
-
Agreement with Petroperu on block with discovered light oil field
Situche Central (83 million bbls gross 3P reserves) and large
exploration resources (GeoPark operated with 75% WI) extended
until March 2017 to obtain regulatory approvals
__________________________
|
1
|
Transaction executed with Petroperu on October 1, 2014 with final
closing subject to Peru Government approval
|
James F. Park, Chief Executive Officer of GeoPark, said: “Our team has
repeatedly demonstrated its ability to innovate and improve cost
efficiencies and economics over the last 18 months. And now, back with
the drill bit, we are using our science and operating capabilities to
find and produce more oil and gas. The successful drilling in the Jacana
oil field in Colombia is opening up another attractive oil field on
trend with the large Tigana oil field on our Llanos 34 Block. These
results both expand our reserve base and enlarge the prospectivity of
our surrounding acreage. In addition, to our continuing success in
Colombia, we are active across our large project platform in Argentina,
Brazil, Peru, and Chile with production, workover and seismic operations
and preparing for impactful exploration and development drilling in
2017. New business acquisition efforts are also underway with national
oil company and bolt-on projects across the region.”
CONSOLIDATED OPERATING PERFORMANCE
The table below sets forth key performance indicators for 2Q2016
compared to those of 2Q2015:
|
Key Indicators
|
2Q2016
|
2Q2015
|
% Chg.
|
Oil productiona (bopd)
|
15,530
|
14,512
|
|
7%
|
Gas production (mcfpd)
|
33,678
|
30,378
|
|
11%
|
Average net production (boepd)
|
21,143
|
19,575
|
|
8%
|
Brent Oil Price ($ per bbl)
|
47.0
|
61.7
|
|
-24%
|
Combined price ($ per boe)
|
25.6
|
37.4
|
|
-32%
|
⁻ Oil ($ per bbl)
|
26.4
|
41.7
|
|
-37%
|
⁻ Gas ($ per mcf)
|
4.3
|
4.7
|
|
-9%
|
Net Oil Revenues ($ million)
|
34.3
|
50.2
|
|
-32%
|
Net Gas Revenues ($ million)
|
11.6
|
11.8
|
|
-2%
|
Net Revenues ($ million)
|
45.9
|
62.0
|
|
-26%
|
Production & Operating Costsb ($ million)
|
-13.8
|
-22.5
|
|
-39%
|
G&G, G&Ac and Selling Expenses ($ million)
|
-11.6
|
-13.1
|
|
-11%
|
Adjusted EBITDA ($ million)
|
20.5
|
28.1
|
|
-27%
|
Adjusted EBITDA per boe ($)
|
11.4
|
17.0
|
|
-33%
|
Operating Netback per boe ($)
|
17.7
|
23.2
|
|
-24%
|
Profit (loss) for the period ($ million)
|
-1.6
|
-9.4
|
|
-83%
|
Capital Expenditures during quarter ($ million)
|
5.7
|
3.7
|
|
54%
|
Cash Position at period-end ($ million)
|
79.2
|
105.3
|
|
-25%
|
Short-Term Debt at period-end ($ million)
|
38.5
|
22.2
|
|
73%
|
Long-Term Debt at period-end ($ million)
|
331.4
|
348.2
|
|
-5%
|
a)
|
|
Includes government royalties paid in kind in Colombia for
approximately 729 bopd in 2Q2016 and 743 bopd in 2Q2015. No
royalties were paid in kind in Chile and Brazil.
|
b)
|
|
Production and Operating costs include operating costs and royalties
paid in cash.
|
c)
|
|
G&A expenses includes $0.1 million and $1.5 million for 2Q2016 and
2Q2015, respectively, of (non-cash) share based payments that are
excluded from the Adjusted EBITDA calculation.
|
Production: Consolidated oil and gas production increased 8% to
21,143 boepd in 2Q2016 compared to 19,575 boepd in 2Q2015. The increase
in production was mainly a result of new production coming from new oil
and gas fields put onto production in 2015 (Jacana and Tilo in Colombia,
Ache in Chile), as well as improved production performance of certain
fields in Llanos 34 (GeoPark operated with 45% WI).
-
Colombia: Average net oil production increased by 12% to 14,084 bopd
in 2Q2016 compared to 12,592 bopd in 2Q2015
-
Chile: Average net oil and gas production increased by 13% to 4,118
boepd in 2Q2016 compared to 3,654 boepd in 2Q2015
-
Brazil: Average net oil and gas production decreased 12% to 2,941
boepd in 2Q2016 compared to 3,329 boepd in 2Q2015 due to low regional
gas demand
For further detail, please refer to 2Q2016 Operational Update released
on July 19, 2016.
Reference and Realized Oil Prices: Brent crude price averaged
$47.0 per barrel during 2Q2016, while consolidated realized oil sales
price averaged $26.4 per barrel in 2Q2016 resulting from commercial and
transportation discounts, both in Colombia and Chile, and the Vasconia
differential in Colombia.
The table below sets forth a breakdown of reference and net
realized oil prices in Colombia and Chile in 2Q2016:
|
2Q2016 - Realized Oil Prices
($ per bbl)
|
Colombia
|
Chile
|
Brent Oil Price
|
47.0
|
47.0
|
Vasconia Differential
|
(6.0)
|
-
|
Commercial and Transportation Discounts
|
(15.3)
|
(7.5)
|
Othera
|
(0.9)
|
-
|
Realized Oil Price
|
24.8
|
39.5
|
Weight on Oil Sales Mix
|
89%
|
11%
|
a)
|
|
Corresponds to a short term agreement to fix the price of 4,000 bopd
of the Company´s production at $45.1/bbl Brent price for a period of
3-months starting May 1, 2016.
|
In Colombia, commercial discounts are mainly related to oil
transportation costs, which are now being deducted from the net price,
following the terms of the Trafigura offtake agreement (announced in
December 2015, with deliveries beginning in March 2016). These discounts
represent a reclassification of costs, with no new impact in the
Adjusted EBITDA ($15.3/bbl of commercial and transportation discounts
compared to $13.1/bbl in 1Q2016, and $0.1/bbl selling expenses compared
to $2.1/bbl in 1Q2016).
Net Revenues: Consolidated net revenues decreased by 26% to $45.9
million in 2Q2016, compared to $62.0 million in 2Q2015, mainly driven by
lower oil prices.
Oil Revenues: Consolidated oil revenues
decreased by 32% to $34.3 million in 2Q2016, mainly due to a 37%
decrease in realized oil prices, offset by increased production. Oil
revenues represent 75% of total net revenues as compared to 81% in
2Q2015.
Gas Revenues: Consolidated gas revenues
remained stable and amounted to $11.6 million in 2Q2016 compared to
$11.8 million in 2Q2015.
-
Chile: In 2Q2016, gas revenues increased by 33% to $4.3 million mainly
due to increased production, resulting from new gas projects,
partially offset by lower prices. Gas deliveries increased by 56% and
amounted to 13,516 mcfpd (2,253 boepd) mainly resulting from the
start-up of the Ache gas field (in 4Q2015) and the Pampa Larga 16
development well (in 1Q2016). Gas prices decreased by 14% to $3.5 per
mcf ($21.1 per boe) in 2Q2016
-
Brazil: In 2Q2016, gas revenues decreased by 15% to $7.3 million,
mainly due to temporarily lower gas demand that affected Manati
production levels. Accordingly, gas deliveries temporarily decreased
by 15% and amounted to 16,022 mcfpd (2,670 boepd). Gas prices, net of
taxes, remained stable at $5.0 per mcf ($30.0 per boe) despite the
depreciation of the local currency that was partially offset by an
annual gas-price inflation adjustment of approximately 10% in 1Q2016.
Manati field production capacity remained unaffected but it is
expected to continue at net average levels of 15,600-17,400 mcfpd
(2,600-2,900 boepd) in 2H2016
Production and Operating Costs2: Consolidated
production and operating costs decreased by 39% to $13.8 million in
2Q2016, representing savings of approximately $5.0/boe, compared to
$22.5 million in 2Q2015.
Operating Costs: Consolidated operating
costs (excluding royalties) decreased by 38% to $11.2 million in 2Q2016,
compared to $18.1 million in 2Q2015, due to successful and ongoing cost
reduction initiatives and the impact of the depreciation of the local
currencies against the US Dollar.
-
Colombia: Operating costs decreased by 51% to $4.8 million in 2Q2016.
Operating costs per boe decreased by 56% to $4.0 per boe mainly due to
cost reduction initiatives, including the temporarily shut in of three
marginal fields (La Cuerva and two marginal fields –Max and
Chachalaca- in Llanos 34 Block), the impact of the depreciation of the
Colombian Peso and improved fixed cost absorption from increased
production. Resulting from the above, operating costs per boe reached
the lowest level since our entry into Colombia (maintained flat since
1Q2016). Operating cost of approximately $3.4 per barrel in
GeoPark-operated Llanos 34 block that represents 97% of Colombian
production
-
Chile: Operating costs decreased by 20% to $5.1 million in 2Q2016 due
to lower operating costs per boe, partially offset by higher volumes
sold. Operating costs per boe decreased by 31% to $14.8 per boe due to
cost reduction initiatives
-
Brazil: Operating costs increased to $1.3 million in 2Q2016 resulting
from the impact of higher operating expenses resulting from the
start-up of the compression plant in the Manati Field (approx.
$1.5-2.5 per boe). Operating costs per boe amounted to $5.1
Consolidated operating costs may increase by $1-2/boe during 2H2016 due
to the reopening of temporarily shut in fields during July 2016, that
were not on production during most of 1H2016. These fields are expected
to bring approximately 900 to 1,000 bopd of production, with operating
costs of around $8.0 to $19.0 per bbl.
Royalties: Consolidated royalties paid in
cash (reported in Production and Operating Costs) decreased to $2.6
million in 2Q2016, compared to $4.4 million in 2Q2015, in line with the
decline in net revenues.
Selling Expenses: Consolidated selling expenses decreased by 55%
to $0.5 million in 2Q2016 compared to $1.1 million in 2Q2015, mainly as
a result of lower selling expenses in Colombia and Chile. In Colombia,
selling expenses decreased by 75% to only $0.2 million due to the
Trafigura offtake agreement under which sales occur at well-head, thus
generating lower selling expenses that are translated into lower net
revenues with larger commercial and transportation discounts (as
previously stated in Reference and Realized Oil Prices section). Chilean
selling expenses decreased by 29% in line with lower oil deliveries and
contract renegotiation initiatives to improve margins.
Administrative Expenses and Geological & Geophysical Expenses (G&A,
G&G): Consolidated G&A and G&G expenses decreased by 8% to $11.1
million in 2Q2016 compared to $12.0 million in 2Q2015 mainly due to
continuing financial discipline and cost reduction initiatives.
Adjusted EBITDA: Consolidated Adjusted EBITDA3
decreased by 27% to $20.5 million or $11.4 per boe, in 2Q2016 compared
to $28.1 million or $17.0 per boe, in 2Q2015, mainly caused by a
decrease in revenues resulting from lower international oil prices,
partially offset by a significant reduction in cash costs (including
Production and Operating Costs, G&A, G&G and Selling Expenses).
-
Colombia: Adjusted EBITDA decreased 31% to $16.4 million
-
Chile: Adjusted EBITDA increased to $2.2 million
-
Brazil: Adjusted EBITDA decreased 24% to $4.4 million
-
Corporate, Argentina and Peru: Adjusted EBITDA decreased to negative
$2.5 million
__________________________
|
2
|
|
Production and Operating Costs = Operating Costs plus Royalties
|
3
|
|
See “Reconciliation of Adjusted EBITDA to Profit (Loss) Before
Income Tax and Adjusted EBITDA per Boe” included in this press
release
|
The table below shows production, volumes sold and breakdown of the most
significant components of Adjusted EBITDA for 2Q2016 and 2Q2015, on a
per country and on a per boe basis:
Adjusted EBITDA/boe
|
|
|
|
Colombia
|
|
Chile
|
|
Brazil
|
|
Total
|
|
|
|
|
2Q16
|
|
2Q15
|
|
2Q16
|
|
2Q15
|
|
2Q16
|
|
2Q15
|
|
2Q16
|
|
2Q15
|
Production (boepd)
|
|
|
|
14,084
|
|
12,592
|
|
4,118
|
|
3,654
|
|
2,941
|
|
3,329
|
|
21,143
|
|
19,575
|
Stock variation /RIKa
|
|
|
|
(876)
|
|
(823)
|
|
(338)
|
|
(390)
|
|
(227)
|
|
(153)
|
|
(1,441)
|
|
(1,367)
|
Sales Volume (boepd)
|
|
|
|
13,208
|
|
11,769
|
|
3,780
|
|
3,264
|
|
2,714
|
|
3,176
|
|
19,702
|
|
18,208
|
% Oil
|
|
|
|
100%
|
|
100%
|
|
40%
|
|
56%
|
|
2%
|
|
2%
|
|
75%
|
|
75%
|
($ per boe)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Oil Price
|
|
|
|
24.8
|
|
39.9
|
|
39.5
|
|
51.5
|
|
48.0
|
|
65.0
|
|
26.4
|
|
41.7
|
Realized Gas Priceb
|
|
|
|
-
|
|
-
|
|
21.1
|
|
24.6
|
|
30.0
|
|
30.2
|
|
25.9
|
|
28.4
|
Earn-out
|
|
|
|
(1.0)
|
|
(1.5)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(0.7)
|
|
(1.0)
|
Combined Price
|
|
|
|
23.8
|
|
38.4
|
|
28.5
|
|
39.6
|
|
30.3
|
|
30.7
|
|
25.6
|
|
37.4
|
Operating Costs
|
|
|
|
(4.0)
|
|
(9.1)
|
|
(14.8)
|
|
(21.6)
|
|
(5.1)
|
|
(2.3)
|
|
(6.2)
|
|
(10.8)
|
Royalties in cash
|
|
|
|
(1.1)
|
|
(2.6)
|
|
(1.2)
|
|
(1.8)
|
|
(2.8)
|
|
(3.5)
|
|
(1.4)
|
|
(2.6)
|
Selling & Other Expenses
|
|
|
|
(0.1)
|
|
(1.5)
|
|
(0.7)
|
|
(1.2)
|
|
-
|
|
(1.0)
|
|
(0.3)
|
|
(0.8)
|
Operating Netback
|
|
|
|
18.7
|
|
25.0
|
|
11.8
|
|
15.0
|
|
22.4
|
|
23.9
|
|
17.7
|
|
23.2
|
G&A, G&G
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6.3)
|
|
(6.2)
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.4
|
|
17.0
|
a)
|
|
RIK (Royalties in Kind). Includes royalties paid in kind in Colombia
for approximately 729 bopd in 2Q2016 and 743 bopd in 2Q2015. No
royalties were paid in kind in Chile and Brazil.
|
b)
|
|
Conversion rate of $mcf/$boe=1/6.
|
Write-off of Unsuccessful Efforts: Consolidated write-off of
unsuccessful efforts amounted to $0.4 million in 2Q2016, compared to nil
in 2Q2015, due to a non-cash amount expensed during 2Q2016 (originally
incurred in 2013) associated with exploratory activities in the Flamenco
Block (Chile).
Depreciation: Consolidated depreciation charges decreased by 32%
to $16.6 million in 2Q2016, compared to $24.4 million in 2Q2015, mainly
due to lower depreciation costs per boe in Colombia and Chile and stable
depreciation costs per boe in Brazil. In Colombia, the decrease in
depreciation costs per boe is the result of drilling success and
increased reserves, while in Chile, it is mostly related to the
impairment charges recognized in 4Q2015.
Other expenses: Other operating non-recurrent charges decreased
to $0.6 million in 2Q2016, compared to $1.6 million in 2Q2015.
CONSOLIDATED NON-OPERATING RESULTS AND PROFIT FOR THE PERIOD
Financial Costs: Net financial costs decreased by 6% to $7.6
million in 2Q2016, mainly consisting of lower interest costs and bank
charges.
Foreign Exchange Gain: Net foreign exchange charges amounted to a
$9.6 million gain in 2Q2016 compared to $3.7 million in 2Q2015, mainly
related to the impact of the appreciation (approximately 9% in 2Q2016 vs
3% in 2Q2015) of the Brazilian Real over the US Dollar-denominated net
debt incurred at the local subsidiary level, where the functional
currency is the Brazilian Real.
Income Tax loss: Income tax losses amounted to a $6.3 million
loss in 2Q2016 as compared to a $5.5 million loss in 2Q2015.
Net Income: Loss for the period amounted to $1.6 million in
2Q2016 compared to a net loss $9.4 million in 2Q2015.
BALANCE SHEET
Cash and Cash Equivalents: Cash and cash equivalents totaled
$79.2 million as of June 30, 2016. Year-end 2015 cash and cash
equivalents amounted to $82.7 million, the difference primarily being:
(i) cash used in investing activities amounting to $14.1 million, (ii)
cash used in financing activities amounting to $18.2 million (including
principal payments of $10.1 million related to the Itau Loan, interest
payments of $12.8 million and $5.2 million collected from pending loans
with related parties), and (iii) cash generated from operating
activities that amounted to $28.4 million (including $10.0 million drawn
from the Trafigura prepayment facility in 1Q2016).
The table below shows a reconciliation of cash and cash equivalents as
of March 31, 2016 and June 30, 2016.
($ million)
|
|
|
|
|
|
|
Cash and cash equivalents - March 31, 2016
|
|
|
|
|
|
71.6
|
Cash from Operating activities
|
|
|
|
|
|
8.5
|
Cash from Investing activitiesa
|
|
|
|
|
|
(5.7)
|
Cash from Financing activitiesb
|
|
|
|
|
|
4.5
|
Currency translation effect
|
|
|
|
|
|
0.4
|
Cash and cash equivalents – June 30, 2016
|
|
|
|
|
|
79.2
|
a)
|
|
Including Capex in Colombia amounting to $5.0 million during 2Q2016.
|
b)
|
|
Mainly related to net proceeds collected from pending loans with
related parties amounting to $5.2 million.
|
Prepayment Facility and Credit Lines Available: As of June 30,
2016 the Company has in place an offtake and prepayment agreement with
Trafigura of up to $100 million (with $10 million drawn) and
approximately $45 million in uncommitted credit lines.
Financial Debt: Total financial debt (net of debt issuance costs)
amounted to $369.9 million, including mainly the $300 million 2020 Bond
and the Itau Loan denominated in Brazilian Reais for the acquisition of
an interest in the Brazilian Manati Field amounting to $59.4 million.
There were no principal or interest payments during 2Q2016.
FINANCIAL RATIOSa
($ million)
|
|
|
At period-end
|
|
|
Financial Debt
|
|
|
Cash Position
|
|
|
Gross Debt / LTM Adj. EBITDA
|
|
|
Net Debtb/ LTM Adj. EBITDA
|
|
|
Interest Coverage
|
|
|
|
|
|
|
|
|
|
|
2Q2015
|
|
|
370.4
|
|
|
105.3
|
|
|
2.6x
|
|
|
1.9x
|
|
|
4.7x
|
3Q2015
|
|
|
364.6
|
|
|
90.4
|
|
|
4.0x
|
|
|
3.0x
|
|
|
2.9x
|
FY2015
|
|
|
378.7
|
|
|
82.7
|
|
|
5.1x
|
|
|
4.0x
|
|
|
2.4x
|
1Q2016
|
|
|
363.0
|
|
|
71.6
|
|
|
5.3x
|
|
|
4.3x
|
|
|
2.2x
|
2Q2016
|
|
|
369.9c
|
|
|
79.2
|
|
|
6.1x
|
|
|
4.8x
|
|
|
2.0x
|
a)
|
|
Based on trailing 12 month financial results.
|
b)
|
|
Included for comparative purposes only. Not an incurrence test
covenant included in the 2020 Bond Indenture.
|
c)
|
|
Increased total financial debt in 2Q2016 vs 1Q2016 corresponds to
accrual of interest charges.
|
GeoPark’s consolidated financial incurrence test covenants
included in the 2020 Bond Indenture are:
-
A leverage Ratio, defined as Gross Debt to Adjusted EBITDA, lower than
2.5x from 2015 onwards; and
-
An Interest Coverage Ratio, defined as Adjusted EBITDA divided by
Interest Expenses, above 3.5x
As shown in the table above, as of June 30, 2016 the Company’s Leverage
Ratio was above the 2.5 times threshold included in the 2020 Bond
Indenture and in addition, the Interest Coverage Ratio was below the 3.5
times threshold included in the 2020 Bond Indenture. These ratios were
impacted by the current low oil price environment. Failure to comply
with the incurrence test ratios does not trigger an event of
default. However, this situation may limit the Company’s capacity to
incur additional indebtedness, other than permitted debt, as specified
in the indenture governing the Notes. Incurrence covenants as
opposed to maintenance covenants must be tested by the Company
before incurring additional debt or performing other specific corporate
actions including but not limited to dividend payments and restricted
payments.
SELECTED INFORMATION BY BUSINESS SEGMENT
(unaudited)
|
|
|
|
|
|
|
Colombia
|
|
|
2Q2016
|
|
|
2Q2015
|
Net oil Revenues ($ million)
|
28.6
|
|
|
41.2
|
Production and Operating Costs* ($ million)
|
|
|
-6.3
|
|
|
-12.6
|
Adjusted EBITDA ($ million)
|
|
|
16.4
|
|
|
23.6
|
Capital expenditures ($ million)
|
|
|
4.9
|
|
|
2.1
|
Chile
|
|
|
2Q2016
|
|
|
2Q2015
|
Net Oil Revenues ($ million)
|
|
|
5.5
|
|
|
8.5
|
Net Gas Revenues ($ million)
|
|
|
4.3
|
|
|
3.2
|
Net Revenues ($ million)
|
|
|
9.8
|
|
|
11.8
|
Production and Operating Costs* ($ million)
|
|
|
-5.5
|
|
|
-7.0
|
Adjusted EBITDA ($ million)
|
|
|
2.2
|
|
|
-1.1
|
Capital Expenditures ($ million)
|
|
|
0.3
|
|
|
1.1
|
Brazil
|
|
|
2Q2016
|
|
|
2Q2015
|
Net Oil Revenues ($ million)
|
|
|
0.2
|
|
|
0.3
|
Net Gas Revenues ($ million)
|
|
|
7.3
|
|
|
8.6
|
Net Revenues ($ million)
|
|
|
7.5
|
|
|
8.9
|
Production and Operating Costs* ($ million)
|
|
|
-2.0
|
|
|
-1.7
|
Adjusted EBITDA ($ million)
|
|
|
4.4
|
|
|
5.8
|
Capital Expenditures ($ million)
|
|
|
0.9
|
|
|
0.4
|
* Production and Operating = Operating Costs + Royalties
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
|
|
|
|
|
|
|
|
(In millions of $)
|
|
|
|
2Q2016
|
|
|
2Q2015
|
NET REVENUES
|
|
|
|
|
|
|
|
Sale of crude oil
|
|
|
|
34.3
|
|
|
50.2
|
Sale of gas
|
|
|
|
11.6
|
|
|
11.8
|
TOTAL NET REVENUES
|
|
|
|
45.9
|
|
|
62.0
|
Production and operating costs
|
|
|
|
-13.8
|
|
|
-22.5
|
Geological and Geophysical expenses (G&G)
|
|
|
|
-2.9
|
|
|
-3.6
|
Administrative expenses (G&A)
|
|
|
|
-8.2
|
|
|
-8.4
|
Selling expenses
|
|
|
|
-0.5
|
|
|
-1.1
|
Depreciation
|
|
|
|
-16.6
|
|
|
-24.4
|
Write-off of unsuccessful efforts
|
|
|
|
-0.5
|
|
|
-
|
Other operating
|
|
|
|
-0.6
|
|
|
-1.6
|
OPERATING PROFIT (LOSS)
|
|
|
|
2.8
|
|
|
0.5
|
|
|
|
|
|
|
|
|
Financial costs, net
|
|
|
|
-7.6
|
|
|
-8.1
|
Foreign Exchange Gain (Loss)
|
|
|
|
9.6
|
|
|
3.7
|
PROFIT (LOSS) BEFORE INCOME TAX
|
|
|
|
4.7
|
|
|
-3.9
|
|
|
|
|
|
|
|
|
Income tax
|
|
|
|
-6.3
|
|
|
-5.5
|
PROFIT (LOSS) FOR THE PERIOD
|
|
|
|
-1.6
|
|
|
-9.4
|
Non-controlling interest
|
|
|
|
-0.3
|
|
|
-1.9
|
ATTRIBUTABLE TO OWNERS OF GEOPARK
|
|
|
|
-1.3
|
|
|
-7.6
|
RECONCILIATION OF ADJUSTED EBITDA TO PROFIT (LOSS) BEFORE INCOME TAX
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
2Q2016
|
|
|
Colombia
|
|
Chile
|
|
Brazil
|
|
Other
|
|
Total
|
Adjusted EBITDA
|
|
|
16.4
|
|
1.3
|
|
5.4
|
|
-1.7
|
|
20.5
|
Depreciation
|
|
|
-5.9
|
|
-9.0
|
|
-3.9
|
|
-0.1
|
|
-16.6
|
Write-offs unsuccessful efforts
|
|
|
0.0
|
|
-0.4
|
|
0.0
|
|
0.0
|
|
-0.4
|
Share Based Payments
|
|
|
-0.2
|
|
-0.1
|
|
0.0
|
|
0.0
|
|
-0.2
|
Others
|
|
|
-0.3
|
|
0.4
|
|
0.0
|
|
-0.4
|
|
-0.3
|
OPERATING PROFIT (LOSS)
|
|
|
10.1
|
|
-5.4
|
|
1.1
|
|
-3.1
|
|
2.8
|
Financial costs, net
|
|
|
|
|
|
|
|
|
|
|
-7.6
|
Foreign Exchange charges, net
|
|
|
|
|
|
|
|
|
|
|
9.6
|
PROFIT (LOSS) BEFORE INCOME TAX
|
|
|
|
|
|
|
|
|
|
|
4.7
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q2015
|
|
|
Colombia
|
|
Chile
|
|
Brazil
|
|
Other
|
|
Total
|
Adjusted EBITDA
|
|
|
23.6
|
|
-1.0
|
|
5.8
|
|
-0.3
|
|
28.1
|
Depreciation
|
|
|
-11.8
|
|
-9.0
|
|
-3.5
|
|
-0.1
|
|
-24.4
|
Share Based Payments
|
|
|
-0.2
|
|
-0.2
|
|
0.0
|
|
-1.6
|
|
-2.0
|
Others
|
|
|
-0.4
|
|
-0.5
|
|
0.2
|
|
-0.7
|
|
-1.3
|
OPERATING PROFIT (LOSS)
|
|
|
3.8
|
|
-16.2
|
|
3.2
|
|
-7.7
|
|
0.5
|
Financial costs, net
|
|
|
|
|
|
|
|
|
|
|
-8.1
|
Foreign Exchange charges, net
|
|
|
|
|
|
|
|
|
|
|
3.7
|
PROFIT (LOSS) BEFORE INCOME TAX
|
|
|
|
|
|
|
|
|
|
|
-3.9
|
CONSOLIDATED SUMMARIZED STATEMENT OF FINANCIAL POSITION
|
|
|
|
|
June '16
|
|
|
Dec '15
|
|
|
|
|
|
|
|
|
|
Non Current Assets
|
|
|
|
|
|
|
|
|
Property, Plant and Equipment
|
|
|
|
|
510.9
|
|
|
522.6
|
Other Non Current Assets
|
|
|
|
|
43.1
|
|
|
49.4
|
Total Non Current Assets
|
|
|
|
|
554.0
|
|
|
572.0
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
|
3.4
|
|
|
4.3
|
Trade Receivables
|
|
|
|
|
11.4
|
|
|
13.5
|
Other Current Assets
|
|
|
|
|
29.9
|
|
|
31.3
|
Cash at bank and in hand
|
|
|
|
|
79.2
|
|
|
82.7
|
Total Current Assets
|
|
|
|
|
123.9
|
|
|
131.8
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
|
|
677.9
|
|
|
703.8
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Equity attributable to owners of GeoPark
|
|
|
|
|
141.6
|
|
|
146.7
|
Non-controlling interest
|
|
|
|
|
50.5
|
|
|
53.5
|
Total Equity
|
|
|
|
|
192.1
|
|
|
200.2
|
|
|
|
|
|
|
|
|
|
Non Current Liabilities
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
|
|
331.4
|
|
|
343.2
|
Other Non Current Liabilities
|
|
|
|
|
75.7
|
|
|
79.0
|
Total Non Current Liabilities
|
|
|
|
|
407.1
|
|
|
422.2
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
|
|
38.5
|
|
|
35.4
|
Other Current Liabilities
|
|
|
|
|
40.1
|
|
|
46.0
|
Total Current Liabilities
|
|
|
|
|
78.6
|
|
|
81.4
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
|
|
485.8
|
|
|
503.6
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
|
|
|
|
677.9
|
|
|
703.8
|
OTHER NEWS / RECENT EVENTS
Successful appraisal and development drilling in Llanos 34 Block in
Colombia
GeoPark’s 2016 drilling program in the Llanos 34 Block commenced at the
end of the 2Q2016 with the spudding of the Jacana 3 appraisal well and
continued with the drilling of the Jacana 4 development well, both
tested and completed during July 2016 with the following highlights:
-
The Jacana 3 appraisal well was drilled to a total depth of 11,008
feet. Petrophysical logging analysis in the well demonstrated
hydrocarbons throughout the Guadalupe formation without identifying an
oil-water contact, thereby extending the size of the field. A
seven-day production test in the Guadalupe formation resulted in a
production rate of approximately 1,650 bopd (gross) of 15 degrees API,
with approximately 1% water cut
-
The Jacana 4 development well was drilled to a total depth of 10,370
feet. A production test in the Guadalupe formation resulted in a
production rate of approximately 1,950 bopd (gross) of 16 degrees API,
with 1% water cut
-
Surface facilities are in place and the Jacana 3 and Jacana 4 wells
are already in production. Further production history is required to
determine stabilized flow rates of these wells
-
Jacana 5 appraisal well was drilled further down-dip and is currently
being completed. Preliminary petrophysical logging analysis indicates
hydrocarbons in the Guadalupe formation and production testing will be
conducted in August
For further detail, please refer to GeoPark releases dated June 14, July
7 and July 25, 2016.
CONFERENCE CALL INFORMATION
GeoPark will host its Second Quarter 2016 Financial Results conference
call and webcast on Friday, August 12, 2016, at 10:00 a.m. Eastern
Daylight Time.
Chief Executive Officer, James F. Park, Chief Financial Officer, Andres
Ocampo, and Chief Operating Officer, Augusto Zubillaga will discuss
GeoPark's financial results for 2Q2016, with a question and answer
session immediately following.
Interested parties can access the conference call by dialing the
following number from outside the United States: +1 920-663-6208. From
within the United States, interested parties can access the call by
dialing 866-547-1509 (Conference ID: 49661000). To listen to the
webcast, please visit the Investor Support section of the Company’s
website (www.geo-park.com).
NEW INFORMATION AVAILABLE
From 2Q2016 onwards, spreadsheets containing sequential, quarterly
financial information in excel format will be uploaded on a quarterly
basis to the Investor Support section of the Company’s website.
GeoPark can be visited online at www.geo-park.com
GLOSSARY
Adjusted EBITDA
|
|
|
|
|
Adjusted EBITDA is defined as profit for the period before net
finance cost, income tax, depreciation, amortization, certain
non-cash items such as impairments and write-offs of unsuccessful
efforts, accrual of share-based payment and other non-recurring
events
|
|
|
|
|
|
|
Adjusted EBITDA per boe
|
|
|
|
|
Adjusted EBITDA divided by total boe deliveries
|
|
|
|
|
|
|
Operating Netback per boe
|
|
|
|
|
Net revenues, less production costs (net of depreciation charges and
accrual of stock options and stock awards) and selling expenses,
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
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
D&M
|
|
|
|
|
DeGolyer and MacNaughton
|
|
|
|
|
|
|
mboe
|
|
|
|
|
Thousand barrels of oil equivalent
|
|
|
|
|
|
|
mmbo
|
|
|
|
|
Million barrels of oil
|
|
|
|
|
|
|
mmboe
|
|
|
|
|
Million barrels of oil equivalent
|
|
|
|
|
|
|
mcfpd
|
|
|
|
|
Thousand cubic feet per day
|
|
|
|
|
|
|
mmcfpd
|
|
|
|
|
Million cubic feet per day
|
|
|
|
|
|
|
Mm3/day
|
|
|
|
|
Thousand cubic meters per day
|
|
|
|
|
|
|
PRMS
|
|
|
|
|
Petroleum Resources Management System
|
|
|
|
|
|
|
SPE
|
|
|
|
|
Society of Petroleum Engineers
|
|
|
|
|
|
|
WI
|
|
|
|
|
Working interest
|
|
|
|
|
|
|
NPV10
|
|
|
|
|
Present value of estimated future oil and gas revenues, net of
estimated direct expenses, discounted at an annual rate of 10%
|
|
|
|
|
|
|
Sqkm
|
|
|
|
|
Square kilometers
|
NOTICE
Additional information about GeoPark can be found in the “Investor
Support” 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.
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 expected 2016 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.
Information about oil and gas reserves: The SEC permits oil and
gas companies, in their filings with the SEC, to disclose only proven,
probable and possible reserves that meet the SEC's definitions for such
terms. GeoPark uses certain terms in this press release, such as "PRMS
Reserves" that the SEC's guidelines do not permit GeoPark from including
in filings with the SEC. As a result, the information in the Company’s
SEC filings with respect to reserves will differ significantly from the
information in this press release.
NPV10 for PRMS 1P, 2P and 3P reserves is not a substitute for the
standardized measure of discounted future net cash flows for SEC proved
reserves.
The reserve estimates provided in this release are estimates only, and
there is no guarantee that the estimated reserves will be recovered.
Actual reserves may eventually prove to be greater than, or less than,
the estimates provided herein. Statements relating to reserves are by
their nature forward-looking statements.
Adjusted EBITDA: The Company defines Adjusted EBITDA as profit
for the period before net finance cost, 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 stock awards, bargain purchase gain on acquisition of
subsidiaries and other non-recurring events. Adjusted EBITDA is not a
measure of profit or cash flows as determined by IFRS. The Company
believes Adjusted EBITDA is useful because it allows us to more
effectively evaluate our operating performance and compare the results
of our operations from period to period without regard to our financing
methods or capital structure. 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 flows 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. The Company’s computation of Adjusted
EBITDA may not be comparable to other similarly titled measures of other
companies. For a reconciliation of Adjusted EBITDA to the IFRS financial
measure of profit for the year or corresponding period, see the
accompanying financial tables.
Operating netback per boe should not be considered as an alternative to,
or more meaningful than, profit for the period or cash flows from
operating activities as determined in accordance with IFRS or as an
indicator of our 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 computation of Operating Netback per boe may not be comparable
to other similarly titled measures of other companies. For a
reconciliation of Operating Netback per boe to the IFRS financial
measure of profit for the year or corresponding period, see the
accompanying financial tables.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160811006146/en/
Copyright Business Wire 2016