Production, Reserves and Cash Flow Growth
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 September 30, 2016
(“Third Quarter” or 3Q2016”).
A conference call to discuss 3Q2016 Financial Results and 2017 Work
Program and Investment Guidelines will be held on November 15, 2016 at
10 a.m. 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.
THIRD QUARTER 2016 HIGHLIGHTS
Operational:
-
Oil and Gas Production Up 15% to 22,070 boepd
-
Oil production up 15% to 16,942 boepd
-
Gas production up 13% to 30.8 mmcfpd
-
2016 targeted exit production of 23,500-24,500 boepd
-
Unfolding World-Class Oil Play in Colombia
-
Tigana/Jacana oil field complex producing 25,000+ bopd gross from
13 wells in Llanos 34 Block (GeoPark operated with a 45% WI)
-
Recent drilling results expanded field size, with expected
significant reserve impact
-
Jacana 6 appraisal well drilled outside 2P reserve outline,
expected to be tested during November
-
2016 drilling program continuing with 2-3 additional wells
Financial:
-
Adjusted EBITDA up 7%
-
Adjusted EBITDA up 7% to $19.4 million
-
9M2016 Adjusted EBITDA of $52 million, covering full 2016 capital
expenditures
-
Cash cost per boe down 8% to $16.1
-
9M2016 Cash costs down $20.1 million vs. 9M2015
-
Net loss for the period of $21.0 million, after $13.3 million
non-cash write-offs
-
Hedging Secures $50/bbl Minimum Oil Price
-
Secured a minimum Brent price of $50 per barrel for 6,000 bopd
(approximately 30-35% of expected total oil production) through
June 30, 2017
-
$180 Million Cash and Available Facilities
-
Cash on hand of $63.6 million, $80.0 million in available
committed facilities, and $36.0 million in uncommitted facilities
Strategic:
-
2017 Work Program and Investment Guidelines Highlights
-
Focus on unfolding potential of the Tigana/Jacana oil field complex
-
Fully funded $80-90 million adaptable capital program, with 70-75%
allocated to Colombia
-
Base case production growth of 20-25% to 26,500-27,500 boepd
-
Estimated 2017 exit production above 30,000 boepd
-
Drilling of approximately 30-35 wells
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__________________________
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1
|
|
|
Transaction executed with Petroperu on October 1, 2014 with final
closing subject to Peru Government approval
|
For further detail, please refer to 2017 Work Program and Investment
Guidelines released on November 14, 2016.
James F. Park, Chief Executive Officer of GeoPark, said: “Our third
quarter financial results reflect our operating success through the year
– and, despite market volatility in the beginning of the year, our
growing cash flow has already fully-funded our total 2016 work program.
Operating and financial growth is being driven by the successful
production, development and appraisal of the Tigana/Jacana oil field
complex in Colombia – where its attractive geology and low cost
operating structure suggest big economic potential and a powerful engine
of growth for GeoPark for the next 3-4 years. New results from testing
and drilling this play are expected during the Fourth Quarter 2016."
CONSOLIDATED OPERATING PERFORMANCE
The table below sets forth key performance indicators for 3Q2016
compared to those of 3Q2015:
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|
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Key Indicators
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3Q2016
|
|
3Q2015
|
|
% Chg.
|
|
Oil productiona (bopd)
|
|
|
16,942
|
|
14,712
|
|
15%
|
|
Gas production (mcfpd)
|
|
|
30,774
|
|
27,188
|
|
13%
|
|
Average net production (boepd)
|
|
|
22,070
|
|
19,244
|
|
15%
|
|
Brent Oil Price ($ per bbl)
|
|
|
46.9
|
|
52.0
|
|
-10%
|
|
Combined price ($ per boe)
|
|
|
26.3
|
|
28.2
|
|
-7%
|
|
⁻ Oil ($ per bbl)
|
|
|
26.9
|
|
30.1
|
|
-11%
|
|
⁻ Gas ($ per mcf)
|
|
|
4.5
|
|
4.2
|
|
7%
|
|
Net Oil Revenues ($ million)
|
|
|
38.4
|
|
38.6
|
|
-1%
|
|
Net Gas Revenues ($ million)
|
|
|
11.5
|
|
9.3
|
|
24%
|
|
Net Revenues ($ million)
|
|
|
49.9
|
|
47.8
|
|
4%
|
|
Production & Operating Costsb ($ million)
|
|
|
-19.6
|
|
-18.2
|
|
8%
|
|
G&G, G&Ac and Selling Expenses ($ million)
|
|
|
-11.3
|
|
-12.8
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|
-12%
|
|
Adjusted EBITDA ($ million)
|
|
|
19.4
|
|
18.2
|
|
7%
|
|
Adjusted EBITDA per boe ($)
|
|
|
10.2
|
|
10.7
|
|
-5%
|
|
Operating Netback per boe ($)
|
|
|
15.8
|
|
17.6
|
|
-10%
|
|
Profit (loss) for the period ($ million)
|
|
|
-21.0
|
|
-37.7
|
|
-44%
|
|
Capital Expenditures during quarter ($ million)
|
|
|
10.1
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26.3
|
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-62%
|
|
Cash Position at period-end ($ million)
|
|
|
63.6
|
|
90.4
|
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-30%
|
|
Short-Term Debt at period-end ($ million)
|
|
|
32.5
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|
26.2
|
|
24%
|
|
Long-Term Debt at period-end ($ million)
|
|
|
320.4
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338.2
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-5%
|
|
a)
|
|
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Includes government royalties paid in kind in Colombia for
approximately 690 bopd in 3Q2016 and 726 bopd in 3Q2015. No
royalties were paid in kind in Chile and Brazil.
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b)
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Production and Operating costs include operating costs and royalties
paid in cash.
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c)
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|
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G&A expenses include $0.9 million and $1.0 million for 3Q2016 and
3Q2015, respectively, of (non-cash) share based payments that are
excluded from the Adjusted EBITDA calculation.
|
Production: consolidated oil and gas production increased 15% to
22,070 boepd in 3Q2016 compared to 19,244 boepd in 3Q2015. The increase
was mainly attributed to higher production in Colombia (production from
Jacana Field - discovered in 3Q2015 - with three new wells put into
production during 3Q2016) and Chile (increased gas production from the
Ache Field - put into production in 3Q2015), partially offset by lower
gas production in the Manati Field, due to lower gas consumption in
northeastern Brazil.
-
Colombia: Average net oil production increased by 20% to 15,678 bopd
in 3Q2016 compared to 13,033 bopd in 3Q2015
-
Chile: Average net oil and gas production increased by 17% to 3,756
boepd in 3Q2016 compared to 3,207 boepd in 3Q2015
-
Brazil: Average net oil and gas production decreased 12% to 2,636
boepd in 3Q2016 compared to 3,004 boepd in 3Q2015
For further detail, please refer to 3Q2016 Operational Update released
on October 11, 2016.
Reference and Realized Oil Prices: Brent crude price averaged
$46.9 per barrel during 3Q2016, while consolidated realized oil sales
price averaged $26.9 per barrel in 3Q2016 resulting from commercial and
transportation discounts, both in Colombia and Chile, and the Vasconia
differential in Colombia.
The table below sets forth a breakdown of reference and net realized oil
prices in Colombia and Chile in 3Q2016:
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3Q2016 - Realized Oil Prices
($ per bbl)
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Colombia
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Chile
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Brent Oil Price
|
|
46.9
|
|
46.9
|
|
Vasconia Differential
|
|
(5.7)
|
|
-
|
|
Commercial and Transportation Discounts
|
|
(15.2)
|
|
(9.1)
|
|
Othera
|
|
(0.1)
|
|
-
|
|
Realized Oil Price
|
|
25.9
|
|
37.8
|
|
Weight on Oil Sales Mix
|
|
92%
|
|
8%
|
|
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 ended July 31, 2016.
|
In Colombia, commercial discounts are mainly related to oil
transportation costs, which are deducted from the net price, following
the terms of the Trafigura offtake agreement (announced in December
2015, with deliveries that began in March 2016).
The Company secured a minimum Brent price of $50 per barrel on
production of 6,000 bopd (approximately 30-35% of GeoPark expected total
oil production), through a zero-cost collar structure that includes a
maximum price of $57 per barrel for the same volumes. This hedge is
effective from November 1, 2016 to June 30, 2017.
Net Revenues: Consolidated net revenues increased by 4% to $49.9
million in 3Q2016, compared to $47.8 million in 3Q2015, mainly driven by
higher gas revenues, partially offset by a slight decrease in oil
revenues.
Oil Revenues: Consolidated oil revenues
decreased by 1% to $38.4 million in 3Q2016, mainly due to a 11% decrease
in realized oil prices, offset by increased production. Oil revenues
represent 77% of total net revenues as compared to 81% in 3Q2015.
-
Colombia: In 3Q2016, oil revenues increased by 5% to $33.8 million
mainly due to increased deliveries, partially offset by lower realized
oil prices. Realized oil prices decreased by 10% to $25.9 per barrel,
in line with decreased Brent prices. Oil deliveries increased by 15%
to 14,734 bopd
Colombian earn-out payments (deducted from
Colombian oil revenues) decreased by 14% to $1.3 million in 3Q2016,
compared to $1.5 million in 3Q2015, in line with lower oil prices
-
Chile: In 3Q2016, oil revenues decreased by 28% to $4.4 million due to
lower production and lower prices. Realized oil prices decreased 8% to
$37.8 per barrel in line with decreased Brent prices. Deliveries
decreased by 22% to 1,257 bopd due to lower production resulting from
the natural decline of the fields and no new oil wells drilled since
4Q2014
Gas Revenues: Consolidated gas revenues
increased by 24% to $11.5 million in 3Q2016 compared to $9.3 million in
3Q2015.
-
Chile: In 3Q2016, gas revenues increased by 45% to $4.2 million mainly
due to increased production, resulting from new gas projects,
partially offset by lower prices. Gas deliveries increased by 82% and
amounted to 13,194 mcfpd (2,199 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 20% to $3.5 per
mcf ($20.8 per boe) in 3Q2016
-
Brazil: In 3Q2016, gas revenues increased by 9% to $6.9 million,
mainly due to higher gas prices, partially offset by lower production.
Gas prices, net of taxes, increased by 25% to $5.2 per mcf ($31.5 per
boe) due to the appreciation of the local currency and the annual
gas-price inflation adjustment of approximately 10% in 1Q2016. Gas
deliveries decreased by 13% and amounted to 14,396 mcfpd (2,399 boepd)
due to lower gas consumption. Manati field production capacity
remained unaffected and it is expected to reach an annual average
level of 18,000 mcfpd (3,000 boe) in 2016
Production and Operating Costs2: Consolidated
production and operating costs increased by 8% to $19.6 million in
3Q2016, compared to $18.2 million in 3Q2015, due to increased production
levels (15% increased production compared to 3Q2015) and one-time road
maintenance and well facilities costs.
Operating Costs: Consolidated operating
costs (excluding royalties) increased by 18% to $16.3 million in 3Q2016,
due to increased production levels and, to a lesser extent, to the
impact of the revaluation of local currencies against the US Dollar.
-
Colombia: Operating costs increased by 27% to $9.8 million in 3Q2016,
mainly resulting from increased production levels (20% increased
production compared to 3Q2015) and one-time charges for $2.3 million
(or $1.7 per boe) associated with one-time road maintenance and well
facilities costs in Llanos 34 Block
Compared to 2Q2016,
Colombian operating costs increased by $4.8 million (or $3.1 per boe)
in 3Q2016, mainly due to: (i) the reopening of La Cuerva and other
marginal fields (with higher operating costs than the average in
Colombia) that represented incremental costs of $1.2 million, and (ii)
one-time charges for $2.3 million (or $1.7 per boe), associated with
one-time road maintenance and well facilities costs in Llanos 34 Block.
-
Chile: Operating costs increased by 5% to $5.1 million in 3Q2016 due
to increased production, partially offset by lower operating costs per
boe. Operating costs per boe decreased by 14% to $15.9 per boe
-
Brazil: Operating costs remained stable at $1.5 million in 3Q2016.
Operating costs per boe increased by 16% to $6.6 impacted by lower
production levels affecting fixed cost absorption
Royalties: Consolidated royalties paid in
cash (reported in Production and Operating Costs) decreased to $3.3
million in 3Q2016, compared to $4.4 million in 4Q2015, in line with the
decline in oil prices.
Selling Expenses: Consolidated selling expenses increased to $0.5
million in 3Q2016 compared to $0.4 million in 3Q2015 in line with
increased production and deliveries during the quarter.
Administrative Expenses and Geological & Geophysical Expenses (G&A,
G&G): Consolidated G&A and G&G expenses decreased by 14% to
$10.8 million in 3Q2016 compared to $12.4 million in 3Q2015 mainly due
to continuing financial discipline and cost reduction initiatives.
Adjusted EBITDA: Consolidated Adjusted EBITDA3
increased by 7% to $19.4 million, or $10.2 per boe, in 3Q2016 compared
to $18.2 million, or $10.7 per boe, in 3Q2015, mainly caused by
increased production levels and cash cost reductions, partially offset
by lower realized prices.
-
Colombia: Adjusted EBITDA of $17.4 million in 3Q2016
-
Chile: Adjusted EBITDA of $1.0 million in 3Q2016
-
Brazil: Adjusted EBITDA of $4.4 million in 3Q2016
-
Corporate, Argentina and Peru: Adjusted EBITDA of negative $3.4 million
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__________________________
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2
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Production and Operating Costs = Operating Costs plus Royalties
|
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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 3Q2016 and 3Q2015, on a
per country and on a per boe basis:
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Adjusted EBITDA/boe
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|
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Colombia
|
|
|
Chile
|
|
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Brazil
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|
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Total
|
|
|
|
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3Q16
|
|
3Q15
|
|
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3Q16
|
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3Q15
|
|
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3Q16
|
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3Q15
|
|
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3Q16
|
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3Q15
|
|
Production (boepd)
|
|
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15,678
|
|
13,033
|
|
|
3,756
|
|
3,207
|
|
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2,636
|
|
3,004
|
|
|
22,070
|
|
19,244
|
|
Stock variation /RIKa
|
|
|
(944)
|
|
(261)
|
|
|
(301)
|
|
(392)
|
|
|
(199)
|
|
(209)
|
|
|
(1,444)
|
|
(862)
|
|
Sales Volume (boepd)
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|
|
14,734
|
|
12,772
|
|
|
3,455
|
|
2,815
|
|
|
2,437
|
|
2,795
|
|
|
20,626
|
|
18,382
|
|
% Oil
|
|
|
100%
|
|
100%
|
|
|
36%
|
|
57%
|
|
|
2%
|
|
2%
|
|
|
78%
|
|
78%
|
|
($ per boe)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Oil Price
|
|
|
25.9
|
|
28.8
|
|
|
37.8
|
|
41.0
|
|
|
48.3
|
|
50.8
|
|
|
26.9
|
|
30.1
|
|
Realized Gas Priceb
|
|
|
-
|
|
-
|
|
|
20.8
|
|
26.1
|
|
|
31.5
|
|
25.1
|
|
|
27.1
|
|
25.3
|
|
Earn-out
|
|
|
(0.9)
|
|
(1.3)
|
|
|
-
|
|
-
|
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|
-
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-
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(0.6)
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(1.0)
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Combined Price
|
|
|
25.0
|
|
27.5
|
|
|
27.0
|
|
34.6
|
|
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31.7
|
|
25.5
|
|
|
26.3
|
|
28.2
|
|
Operating Costs
|
|
|
(7.1)
|
|
(6.5)
|
|
|
(15.9)
|
|
(18.5)
|
|
|
(6.6)
|
|
(5.6)
|
|
|
(8.5)
|
|
(8.1)
|
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Royalties in cash
|
|
|
(1.7)
|
|
(1.5)
|
|
|
(1.1)
|
|
(1.6)
|
|
|
(3.1)
|
|
(2.3)
|
|
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(1.7)
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|
(2.4)
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|
Selling & Other Expenses
|
|
|
(0.1)
|
|
1.4
|
|
|
(0.7)
|
|
(0.7)
|
|
|
-
|
|
(0.1)
|
|
|
(0.3)
|
|
(0.1)
|
|
Operating Netback
|
|
|
16.3
|
|
19.6
|
|
|
9.4
|
|
13.8
|
|
|
22.1
|
|
17.5
|
|
|
15.8
|
|
17.6
|
|
G&A, G&G
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5.6)
|
|
(6.9)
|
|
Adjusted EBITDA/boe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2
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10.7
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|
a)
|
|
|
RIK (Royalties in Kind). Includes royalties paid in kind in Colombia
for approximately 690 bopd in 3Q2016 and 726 bopd in 3Q2015. 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 $13.3 million in 3Q2016, compared to
$3.7 million in 3Q2015. Amounts recorded in 3Q2016 correspond to
non-cash charges from seismic and exploratory costs associated to the
relinquishment of blocks with no production and no reserves in Colombia
and Brazil plus unsuccessful exploratory efforts in Chile (incurred in
prior years).
Depreciation: Consolidated depreciation charges decreased by 15%
to $20.8 million in 3Q2016, compared to $24.5 million in 3Q2015, 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 impairment
charges recognized in 4Q2015.
Other expenses: Other operating non-recurrent charges amounted to
a $1.0 million gain in 3Q2016, compared to a $3.9 million loss in 3Q2015.
CONSOLIDATED NON-OPERATING RESULTS AND PROFIT FOR THE PERIOD
Financial Costs: Net financial costs decreased by 4% to $8.6
million in 3Q2016, mainly consisting of lower interest costs and bank
charges.
Foreign Exchange: Net foreign exchange charges amounted to a $1.8
million loss in 3Q2016 compared to a $28.4 million loss in 3Q2015,
mainly related to the impact of the devaluation of the Brazilian Real
(1% in 3Q2016 vs. 27% in 3Q2015) over the US Dollar-denominated net debt
incurred at the local subsidiary level, where the functional currency is
the Brazilian Real.
Income Tax: Income tax gains amounted to $3.5 million in 3Q2016
as compared to $15.0 million in 3Q2015, in line with lower losses before
taxes in 3Q2016 as compared to 3Q2015.
Net Income: Loss for the period amounted to $21.0 million in
3Q2016 compared to $37.7 million in 3Q2015.
BALANCE SHEET
Cash and Cash Equivalents: Cash and cash equivalents totaled
$63.6 million as of September 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 $24.2 million, (ii)
cash used in financing activities of $49.4 million (made up of principal
payments of $21.4 million primarily related to the Itau Loan plus
interest payments of $25.5 million), and (iii) cash generated from
operating activities that amounted to $54.9 million.
The table below shows a reconciliation of cash and cash equivalents as
of June 30, 2016 and September 30, 2016.
|
|
|
|
|
|
|
($ million)
|
|
|
|
|
|
Cash + Cash Equivalents - June 30, 2016
|
|
|
|
79.2
|
|
Cash from Operating activities
|
|
|
|
26.5
|
|
Cash used in Investing activitiesa
|
|
|
|
(10.1)
|
|
Cash used in Financing activitiesb
|
|
|
|
(31.2)
|
|
Currency translation effect
|
|
|
|
(0.8)
|
|
Cash + Cash Equivalents – September 30, 2016
|
|
|
|
63.6
|
|
a)
|
|
|
Including Capex in Colombia amounting to $8.2 million during 3Q2016.
|
|
b)
|
|
|
Mainly related to principal payments ($11.3 million), interest
payments ($12.8 million) and dividends to non-controlling interest
($6.4 million).
|
Prepayment Facility and Credit Lines Available: As of September
30, 2016, the Company has in place an offtake and prepayment agreement
with Trafigura of up to $100 million (with $20 million drawn) and
approximately $36 million in uncommitted credit lines.
Financial Debt: Total financial debt (net of debt issuance costs)
amounted to $352.9 million, including principally the $300 million 2020
Bond and the Itau Loan (originally incurred for the acquisition of an
interest in the Brazilian Manati Field) amounting to $48.9 million.
FINANCIAL RATIOSa
|
($ million)
|
|
At period-end
|
|
|
Financial
Debt
|
|
|
Cash
Position
|
|
|
Gross Debt /
LTM Adj.
EBITDA
|
|
|
Net Debtb/
LTM Adj.
EBITDA
|
|
|
Interest
Coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
369.9
|
|
|
79.2
|
|
|
6.1x
|
|
|
4.8x
|
|
|
2.0x
|
|
3Q2016
|
|
|
352.9c
|
|
|
63.6
|
|
|
5.7x
|
|
|
4.7x
|
|
|
2.0x
|
|
a)
|
|
|
Based on trailing 12 month financial results.
|
|
b)
|
|
|
Included for informational purposes only. Not included in the 2020
Bond Indenture.
|
|
c)
|
|
|
Decreased total financial debt in 3Q2016 vs. 2Q2016 corresponds to
principal and interest payments, partially offset by interest costs
accrued during the period.
|
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 September 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
|
|
|
3Q2016
|
|
|
3Q2015
|
|
Net Oil Revenues ($ million)
|
|
|
33.8
|
|
|
32.3
|
|
Production and Operating Costsa ($ million)
|
|
|
-12.0
|
|
|
-11.0
|
|
Adjusted EBITDA ($ million)
|
|
|
17.4
|
|
|
17.6
|
|
Capital Expendituresb ($ million)
|
|
|
8.2
|
|
|
17.9
|
|
|
|
|
|
|
|
|
|
Chile
|
|
|
3Q2016
|
|
|
3Q2015
|
|
Net Oil Revenues ($ million)
|
|
|
4.4
|
|
|
6.1
|
|
Net Gas Revenues ($ million)
|
|
|
4.2
|
|
|
2.9
|
|
Net Revenues ($ million)
|
|
|
8.6
|
|
|
8.9
|
|
Production and Operating Costsa ($ million)
|
|
|
-5.4
|
|
|
-5.2
|
|
Adjusted EBITDA ($ million)
|
|
|
1.0
|
|
|
0.0
|
|
Capital Expendituresb ($ million)
|
|
|
0.0
|
|
|
6.1
|
|
|
|
|
|
|
|
|
|
Brazil
|
|
|
3Q2016
|
|
|
3Q2015
|
|
Net Oil Revenues ($ million)
|
|
|
0.2
|
|
|
0.2
|
|
Net Gas Revenues ($ million)
|
|
|
6.9
|
|
|
6.4
|
|
Net Revenues ($ million)
|
|
|
7.1
|
|
|
6.6
|
|
Production and Operating Costsa ($ million)
|
|
|
-2.2
|
|
|
-2.0
|
|
Adjusted EBITDA ($ million)
|
|
|
4.4
|
|
|
3.6
|
|
Capital Expendituresb ($ million)
|
|
|
0.6
|
|
|
2.3
|
|
a)
|
|
|
Production and Operating = Operating Costs + Royalties
|
|
b)
|
|
|
The difference with the reported figure in Key Indicators table
corresponds mainly to capital expenditures in Argentina
|
CONSOLIDATED STATEMENT OF INCOME
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions of $)
|
|
|
|
3Q2016
|
|
|
|
3Q2015
|
|
NET REVENUES
|
|
|
|
|
|
|
|
|
|
Sale of crude oil
|
|
|
|
38.4
|
|
|
|
38.6
|
|
Sale of gas
|
|
|
|
11.5
|
|
|
|
9.3
|
|
TOTAL NET REVENUES
|
|
|
|
49.9
|
|
|
|
47.8
|
|
Production and operating costs
|
|
|
|
-19.6
|
|
|
|
-18.2
|
|
Geological and Geophysical expenses (G&G)
|
|
|
|
-2.3
|
|
|
|
-3.3
|
|
Administrative expenses (G&A)
|
|
|
|
-8.5
|
|
|
|
-9.1
|
|
Selling expenses
|
|
|
|
-0.5
|
|
|
|
-0.4
|
|
Depreciation
|
|
|
|
-20.8
|
|
|
|
-24.5
|
|
Write-off of unsuccessful efforts
|
|
|
|
-13.3
|
|
|
|
-3.7
|
|
Other operating
|
|
|
|
1.0
|
|
|
|
-3.9
|
|
OPERATING PROFIT (LOSS)
|
|
|
|
-14.1
|
|
|
|
-15.2
|
|
|
|
|
|
|
|
|
|
|
|
Financial costs, net
|
|
|
|
-8.6
|
|
|
|
-9.0
|
|
Foreign Exchange Gain (Loss)
|
|
|
|
-1.8
|
|
|
|
-28.4
|
|
PROFIT (LOSS) BEFORE INCOME TAX
|
|
|
|
-24.5
|
|
|
|
-52.6
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
|
|
|
|
3.5
|
|
|
|
15.0
|
|
PROFIT (LOSS) FOR THE PERIOD
|
|
|
|
-21.0
|
|
|
|
-37.7
|
|
Non-controlling interest
|
|
|
|
-2.9
|
|
|
|
-1.5
|
|
ATTRIBUTABLE TO OWNERS OF GEOPARK
|
|
|
|
-18.1
|
|
|
|
-36.2
|
RECONCILIATION OF ADJUSTED EBITDA TO PROFIT (LOSS) BEFORE INCOME TAX
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3Q2016
|
|
|
|
Colombia
|
|
|
Chile
|
|
|
Brazil
|
|
|
Other
|
|
|
Total
|
|
Adjusted EBITDA
|
|
|
|
17.4
|
|
|
1.0
|
|
|
4.4
|
|
|
-3.4
|
|
|
19.4
|
|
Depreciation
|
|
|
|
-10.2
|
|
|
-7.6
|
|
|
-2.9
|
|
|
-0.0
|
|
|
-20.8
|
|
Write-offs unsuccessful efforts
|
|
|
|
-7.4
|
|
|
-1.3
|
|
|
-4.6
|
|
|
0.0
|
|
|
-13.3
|
|
Share Based Payments
|
|
|
|
-0.2
|
|
|
-0.1
|
|
|
0.0
|
|
|
-0.8
|
|
|
-1.1
|
|
Others
|
|
|
|
0.5
|
|
|
0.5
|
|
|
1.1
|
|
|
-0.5
|
|
|
1.7
|
|
OPERATING PROFIT (LOSS)
|
|
|
|
0.0
|
|
|
-7.5
|
|
|
-2.0
|
|
|
-4.7
|
|
|
-14.1
|
|
Financial costs, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-8.6
|
|
Foreign Exchange charges, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-1.8
|
|
PROFIT (LOSS) BEFORE INCOME TAX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-24.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3Q2015
|
|
|
|
Colombia
|
|
|
Chile
|
|
|
Brazil
|
|
|
Other
|
|
|
Total
|
|
Adjusted EBITDA
|
|
|
|
17.6
|
|
|
0.0
|
|
|
3.6
|
|
|
-2.9
|
|
|
18.2
|
|
Depreciation
|
|
|
|
-13.3
|
|
|
-8.0
|
|
|
-3.1
|
|
|
-0.0
|
|
|
-24.5
|
|
Write-offs unsuccessful efforts
|
|
|
|
-3.7
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
-3.7
|
|
Share Based Payments
|
|
|
|
0.0
|
|
|
-0.2
|
|
|
0.0
|
|
|
-1.2
|
|
|
-1.4
|
|
Others
|
|
|
|
0.5
|
|
|
-3.2
|
|
|
0.0
|
|
|
-1.1
|
|
|
-3.8
|
|
OPERATING PROFIT (LOSS)
|
|
|
|
1.1
|
|
|
-11.5
|
|
|
0.4
|
|
|
-5.2
|
|
|
-15.2
|
|
Financial costs, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-9.0
|
|
Foreign Exchange charges, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-28.4
|
|
PROFIT (LOSS) BEFORE INCOME TAX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-52.6
|
CONSOLIDATED SUMMARIZED STATEMENT OF FINANCIAL POSITION
|
|
|
|
|
Sept '16
|
|
|
|
Dec '15
|
|
|
|
|
|
|
|
|
|
|
|
Non Current Assets
|
|
|
|
|
|
|
|
|
|
Property, Plant and Equipment
|
|
|
|
487.5
|
|
|
|
522.6
|
|
Other Non Current Assets
|
|
|
|
48.0
|
|
|
|
49.4
|
|
Total Non Current Assets
|
|
|
|
535.5
|
|
|
|
572.0
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
3.6
|
|
|
|
4.3
|
|
Trade Receivables
|
|
|
|
11.9
|
|
|
|
13.5
|
|
Other Current Assets
|
|
|
|
29.7
|
|
|
|
31.3
|
|
Cash at bank and in hand
|
|
|
|
63.6
|
|
|
|
82.7
|
|
Total Current Assets
|
|
|
|
108.8
|
|
|
|
131.8
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
|
644.3
|
|
|
|
703.8
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Equity attributable to owners of GeoPark
|
|
|
|
124.3
|
|
|
|
146.7
|
|
Non-controlling interest
|
|
|
|
41.3
|
|
|
|
53.5
|
|
Total Equity
|
|
|
|
165.6
|
|
|
|
200.2
|
|
|
|
|
|
|
|
|
|
|
|
Non Current Liabilities
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
|
320.4
|
|
|
|
343.2
|
|
Other Non Current Liabilities
|
|
|
|
84.5
|
|
|
|
79.0
|
|
Total Non Current Liabilities
|
|
|
|
404.9
|
|
|
|
422.2
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
|
32.5
|
|
|
|
35.4
|
|
Other Current Liabilities
|
|
|
|
41.3
|
|
|
|
46.0
|
|
Total Current Liabilities
|
|
|
|
73.8
|
|
|
|
81.4
|
|
Total Liabilities
|
|
|
|
478.7
|
|
|
|
503.6
|
|
Total Liabilities and Equity
|
|
|
|
644.3
|
|
|
|
703.8
|
CONFERENCE CALL INFORMATION
GeoPark will host its Third Quarter 2016 Financial Results and Work
Program and Investment Guidelines 2017 conference call and webcast on
Tuesday, November 15, 2016, at 10:00 a.m. Eastern Standard 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 3Q2016 and work program and investment
guidelines for 2017, with a question and answer session immediately
following.
Interested parties may participate in the conference call by dialing the
numbers provided below:
United States Participants: 866-547-1509
International
Participants: +1 920-663-6208
Passcode: 93708120
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 Investor
Support section of the Company’s website at www.geo-park.com
after the conclusion of the live call.
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,
and 2017 work program and investment guidelines. 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.
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