PDP Reserves up 55% to 44 mmboe
1P Reserves up 17% to 114 mmboe Valued at
$1.8 Billion
2P Reserves up 15% to 184 mmboe Valued at
$2.7 Billion
3P Reserves Up 44% to 347 mmboe Valued at
$5.1 Billion
2P Reserve Replacement of 285%
2P Value Per Share (Net Debt-Adjusted) up
37% to $40.1 Per Share
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,
Peru, Argentina, Brazil and Chile, today announced its independent
oil and gas reserves assessment, certified by DeGolyer and
MacNaughton Corp. (D&M), under PRMS methodology, as of December
31, 2018.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20190205005362/en/
(Photo: Business Wire)
All figures are expressed in US Dollars. Definitions of terms
are provided in the Glossary on page [12].
Year-End 2018 D&M Certified Oil and Gas Reserves and
Highlights:
After consolidated capital expenditures of
$2.9 per share in 2018:
- Net debt-adjusted 2P NPV10 increase of
$10.9 per share (3.8 times higher) to $40.1 per share, from $29.2
per share in 2017
- Significant increase in Colombia’s net
debt adjusted 2P NPV10 by 64% to $25.9 per share, from $15.8 per
share in 2017, with capital expenditures of $1.6 per share
- Accretive acquisition of LGI’s equity
interest in GeoPark’s Colombian and Chilean subsidiaries for $2 per
share, with a 2018 estimated 2P NPV10 of $4 per share
- PDP Reserves:
- Net proven developed producing (“PDP”)
reserves increased 55% (by 15.7 mmboe) to 44.2 mmboe
- PDP reserve life index (“RLI”) of 3.3
years
- PDP reserve replacement ratio ("RRR")
of 218%
- 1P Reserves:
- Net proven (“1P”) reserves increased
17% (by 16.9 mmboe) to 113.9 mmboe
- 1P RLI of 8.6 years
- 1P RRR of 229%
- 1P NPV10 increased by $268 million (up
17%) to $1.8 billion
- 2P Reserves:
- Net proven and probable (“2P”) reserves
increased 15% (by 24.5 mmboe) to 183.7 mmboe
- 2P RLI of 13.9 years
- 2P RRR of 285%
- 2P NPV10 increased by $454 million (up
20%) to $2.7 billion
- Colombia 2P and 3P Reserves:
- Net 2P reserves in Colombia increased
26% (by 23.0 mmboe) to 111.2 mmboe
- 2P RLI of 10.7 years
- 2P RRR of 321%
- 2P NPV10 in Colombia increased by $491
million (up 35%) to $1.9 billion
- Net 3P reserves in Colombia increased
43% (by 43.9 mmboe) to 145.6 mmboe
- Peru 3P Reserves:
- Gross 3P reserves in Peru increased
139% (by 115.3 mmbbl) to 198.3 mmbbl demonstrating the significant
potential of the Situche Cntral field in the Morona block - with
net 3P reserves of 131.2 mmbbl
- 3P NPV10 in Peru increased by $1.1
billion (up 145%) to $1.9 billion
- F&D Cost:
- Finding and Development Cost (F&D
Cost) for 2018 was $3.6 per boe on a 2P basis
- F&D Cost for Colombia of $2.9 per
boe on a 2P basis
- Including the acquisition in Argentina,
consolidated Finding, Development and Acquisition Cost (FD&A
Cost) for 2018 was $3.6 per boe on a 2P basis
James F. Park, Chief Executive Officer of GeoPark, said: “Again,
our team did its job. Find, prove-up, develop and produce oil and
gas - safely, cleanly and economically. The reserve certification
is an important independent scorecard of an upstream company’s
performance - and all elements of our report show major
improvements across the board through 2018. Impressive growing oil
and gas reserve volumes - strong reserve replacement metrics -
large asset value increases - cheap Finding and Development Cost -
and big bottom-line ‘per share’ value growth. Our Colombian Llanos
34 prize keeps getting more massive with even more opportunity for
expansion. Furthermore, every category of reserve was certified
with significant increases - demonstrating GeoPark’s short, medium
and long-term depth, stability and potential. The report also
highlights GeoPark’s unique oil and gas and regional asset platform
- which is made real by our relentless 16-year performance growth
track record - showing our team has, can and will continue to
deliver results, meet challenges, and adapt and grow to capture our
abundant opportunity set. Congratulations and many thanks to the
women and men of GeoPark - the most dynamic oil and gas team in
Latin America today.”
Net Present Value per Share by Country
The table below presents GeoPark’s net present value after tax
and non-controlling interest, discounted at a 10% rate per share,
by country, of 2P reserves as of December 31, 2018 and 2017.
2018 Net Present Value per
Share Colombia Peru
Chile Argentina Brazil
Total 2P Reserves (mmboe) 111.2 30.3
24.7 14.2 3.2 183.7 2P NPV10 2018 ($
mm) 1,884 410 306 93 52
2,745 Shares Outstanding (mm) 60.5 60.5
60.5 60.5 60.5 60.5 ($/share) 31.2 6.8
5.1 1.5 0.9 45.4
The table below illustrates the details of the net debt adjusted
2P NPV10 per share which increased by 37% to $40.1 from $29.2 in
2017.
Net Debt
Adjusted 2P NPV10 per Share
Total2018
Total2017
%Change
2P NPV10 ($ mm) 2,745 2,291
Non-controlling Interesta ($ mm) - -228
Subtotal ($ mm) 2,745 2,063 Shares Outstanding (mm)
60.5 60.6 Subtotal ($/share) 45.4 34.0 34% Net
Debtb/Share ($/share) -5.3 -4.8
Net Debt Adjusted 2P NPV10 /Share ($/share)
40.1 29.2 37% a)
Non-controlling interest refers to LGI participation in
Chilean and Colombian subsidiaries. In November 2018, GeoPark
acquired all outstanding LGI participation for $111 million plus
three contingent payments of $5 million each that could be payable
over the next three years, subject to certain production thresholds
being exceeded. b) Net debt adjusted 2P NPV10 per share is shown on
a consolidated basis. As of December 31, 2018, net debt is
calculated considering unaudited financial debt of $446.7 million,
less unaudited $127.7 million of cash and cash equivalents.
Consolidated Reserve Life Index and Replacement Ratio
Reserves Category
December 2018 December 2017 Consolidated
(years) RLI PDP 3.3 2.8 RLI 1P 8.6 9.5 RLI 2P
13.9 15.6 RLI 3P 26.2 23.7 RRR PDP 218% 189% RRR 1P
229% 284% RRR 2P 285% 261% RRR 3P 899% 166%
2018 Year-End Reserves Summary
GeoPark engaged D&M to carry out an independent appraisal of
reserves as of December 31, 2018, covering 100% of the current
assets in Colombia, Chile, Brazil, Peru and Argentina. Following
oil and gas production of 13.2 mmboe in 2018, D&M certified 2P
net reserves of 183.7 mmboe (85% oil and 15% gas) as of December
31, 2018. By country, the reserves were: 61% in Colombia, 17% in
Peru, 13% in Chile, 7% in Argentina and 2% in Brazil.
Reserves Summary by Country and Category
Country
ReservesCategory
December 2018(mmboe)
% Oil
December 2017(mmboe)
% Change Colombiaa PDP 34.7 99%
21.6 61% 1P 79.5 100% 66.1 20% 2P 111.2 100% 88.2 26%
3P 145.6 100% 101.7 43%
Peru PDP - 100% - N/A 1P 18.5 100% 18.7 -1% 2P 30.3 100% 31.5 -4%
3P 131.2 100% 62.2 111%
Chile PDP 2.8 25% 2.6 9% 1P 7.2 48% 7.9 -9% 2P 24.7 39% 34.0 -27%
3P 37.9 40% 66.6 -43%
Argentina PDP 3.5 62% 0.0 N/A 1P 5.7 63% 0.0 N/A 2P 14.2 44% 1.1
1191% 3P 28.9 47% 6.4
352% Brazil PDP 3.1 2% 4.3 -28% 1P 3.1 2% 4.3 -28% 2P 3.2 2% 4.4
-27% 3P 3.4 2% 4.6 -26%
Total (D&M Certified)
PDP 44.2 85%
28.5 55% 1P 113.9 92%
97.0 17% 2P 183.7 85%
159.2 15% 3P 347.0
88% 241.6 44% a)
GeoPark signed an agreement to divest the
La Cuerva and Yamu blocks. The table above includes 1.1 mmboe, 2.3
mmboe, 5.3 mmboe and 7.9 mmboe of PDP, 1P, 2P and 3P reserves as of
December 31, 2018, respectively in the La Cuerva and Yamu
blocks.
Analysis by Business Segment
Colombia
After record production of 10.8 mmbbl in 2018 (an increase of
30% over 2017), GeoPark’s 2P D&M certified reserves increased
by 26% to 111.2 mmbbl compared to 2017. Net additions of 33.4 mmbbl
of 2P reserves resulted from strong reservoir performance and
continued successful exploration, development and appraisal
drilling in the Llanos 34 block (GeoPark operated, 45% WI).
For each barrel of oil extracted in Colombia, GeoPark added 2.3
barrels of 1P reserves, the equivalent of a 1P RRR of 229%.
Similarly, for each barrel of oil extracted, GeoPark added 3.2
barrels of 2P reserves, resulting in a 2P RRR of 321%.
The 1P RLI was 7.6 years, while the 2P RLI was 10.7 years.
As of December 31, 2018, the Llanos 34 block included
approximately 80-90 future development drilling locations (2P,
gross, including the Mirador and Guadalupe formations). The Llanos
34 block represented 95% of GeoPark Colombia 2P D&M certified
reserves as of December 31, 2018.
In November 2018, GeoPark signed an agreement with Perenco Oil
and Gas to divest the La Cuerva and Yamu blocks for $18 million
plus a contingent payment of $2 million based on future oil prices.
GeoPark will continue operating the La Cuerva and Yamu blocks until
the closing of this transaction, expected in the first months of
2019. Reserves corresponding to the La Cuerva and Yamu blocks
include 2.3 mmboe of 1P (1.1 mmboe PD and 1.2 mmboe PUD), 5.3 mmboe
of 2P and 7.9 mmboe of 3P reserves as of December 31, 2018.
Peru
GeoPark completed the preparation of the Environmental Impact
Assessment (EIA) to initiate operations in the Situche Central oil
field in the Morona block (GeoPark operated, 75% WI). The EIA was
submitted to the Servicio Nacional de Certificacion Ambiental
(SENACE) on July 2, 2018. The Company is currently waiting for
additional comments from SENACE, which is the final step of the EIA
approval process.
During 2018, D&M updated its review of the Situche Central
field, including a reinterpretation of the 3D seismic, structural
geology, trapping and oil migration model. Following this
evaluation, D&M has certified 3P gross reserves of 198.3 mmbbl
in the Situche Central field (131.2 mmbbl net to GeoPark), which
represents a 111% increase with respect to the 2017 reserve
certification, and provides more information with respect to the
field size and significant upside potential.
The Situche Central oil field in the Morona block represented
100% of GeoPark’s Peruvian D&M certified reserves.
Chile
GeoPark’s 2P D&M certified reserves in Chile decreased by
27% to 24.7 mmboe compared to 2017. Oil and gas production,
adjusted development plans and other technical revisions caused the
declines, which were partially offset by drilling successes.
The 1P RLI was 7.2 years (no change from 2017). The 2P RLI
decreased to 24.7 years, compared to 30.7 years in 2017.
The Fell block represented 99% of GeoPark Chile 2P D&M
certified reserves and consisted of 40% oil and 60% gas, similar to
2017.
Argentina
After production of 0.7 mmboe in 2018, GeoPark’s 2P D&M
certified reserves in Argentina increased significantly to 14.2
mmboe compared to 1.1 mmboe in 2017. The net increase in 2018
includes the acquisition of 100% WI and operatorship of the Aguada
Baguales, El Porvenir and Puesto Touquet blocks.
The 1P RLI and 2P RLI increased to 6.1 years and 15.2 years,
respectively.
The Aguada Baguales, El Porvenir and Puesto Touquet blocks
represented 91% of GeoPark Argentina 2P D&M certified reserves
and consisted of 42% oil and 58% gas.
Brazil
GeoPark’s 2P D&M certified reserves in Brazil decreased by
27% to 3.2 mmboe compared to 2017, resulting from production of 1.1
mmboe during 2018.
The 2P RLI decreased to 2.9 years compared to 4.0 years in
2017.
The Manati field (GeoPark non-operated, 10% WI) represented 100%
of GeoPark’s Brazilian D&M certified reserves and is 98%
gas.
D&M Net Certified Reserves Change by Country
The following table shows the net change in 2P net reserves by
country from December 31, 2017 to December 31, 2018:
(mmboe) Colombia
Peru Chile Argentina
Brazil Total 2P Net Reserves as of Dec.
31, 2017 88.2 31.5 34.0 1.1 4.4
159.2 2018 Production -10.4 0.0 -1.0 -0.7 -1.1 -13.2 Net
Change 33.4 -1.2 -8.3 - -0.1 23.9 Acquisitions - - - 13.8 - 13.8 2P
Net Reserves as of Dec. 31, 2018 111.2 30.3
24.7 14.2 3.2 183.7
Net Present Value Summary
The table below details D&M certified NPV10 by country and
by category of reserves as of December 31, 2018 as compared to
2017:
Country
ReservesCategory
NPV10 2018 NPV10 2017
($ mm) ($ mm) % Change
Colombia 1P 1,366 1,123 2P 1,884 1,393 3P
2,394 1,588 Peru 1P 264 230 2P 410 395
3P 1,896 773 Chile 1P 94 120 2P
306 417 3P 495 707
Argentina 1P 44 1 2P 93 7 3P 262 90
Brazil 1P 49 76 2P 52 78 3P 56
82
Total 1P 1,817
1,549 17% (D&M Certified)
2P 2,745
2,291 20% 3P 5,103
3,240 58%
Oil Price Forecast
The price assumptions used to estimate feasibility of PRMS
reserves and NPV10 in 2018 and 2017 D&M reports are detailed in
the table below:
Brent Oil Price
($/bbl)
2019 2020 2021
2022 2023
2024-2026
2018 Reserves Report 63.9
68.2 71.0 73.4 75.4 77.4-81.6 2017 Reserves Report 62.0 65.0 68.1
71.6 74.3 78.1-84.6
After 2026, Brent oil prices in the 2018 D&M report grow 2%
per year.
Total D&M Certified Future Net Revenue (Actual and
Discounted)
The table below presents D&M’s best estimate of GeoPark's
future net revenue (both actual and discounted at a 10% rate) and
the unit value per boe, by country, and by category of certified
reserves as of December 31, 2018:
($ mm)
Oil
andGasRevenues
Royalties
OperatingCosts
FutureDevelopmentCapital
andAbandonmentCosts
IncomeTax
FutureNetRevenueafter tax
Future NetRevenueafter
taxdiscountedat 10%
Unit Valueafter
taxdiscountedat 10%($/boe)
Colombia1
1P 4,320 611 543 208 872 2,086 1,366 $17 2P 6,120 877 715 288 1,259
2,981 1,884 $17 3P 8,142 1,280 904 349
1,675 4,935 2,394 $16
Peru 1P
1,428 81 365 294 212 476 264 $14 2P 2,467 141 624 415 392 895 410
$14 3P 11,384 1,248 1,591 1,345
2,157 5,043 1,896 $15
Chile 1P 341 15
154 39 4 129 94 $13 2P 1,107 46 369 159 66 467 306 $12 3P
1,733 73 500 222 127 811
495 $13
Argentina 1P 298 56 123 54 7 58 43 $8 2P 662
125 184 176 36 141 93 $7 3P 1,432 269 292
262 147 462 262 $9
Brazil
1P 113 9 39 4 5 56 49 $16 2P 118 9 39 4 5 61 52 $16 3P 125
10 39 4 6 66 56
$16
Total 1P 6,500 772 1,224 599 1,100 2,805 1,817
$16
2P 10,474 1,198 1,931 1,042 1,758 4,545 2,745 $15
3P 22,817 2,880 3,326 2,182
4,112 10,317 5,103 $15 1 Oil and gas
revenues in Colombia are shown net of earn-out expenses, per IFRS
rules, of $180 mm (1P), $250 mm (2P) and $325 mm (3P). D&M
reported these expenses as operating costs.
Finding and Development Cost by Reserves Category
The table below sets forth the calculation of F&D and
FD&A Cost as of December 31, 2018:
December 31, 2018
1P 2P
Colombia1P
Colombia2P
Capital Expenditure/Acquisitions (unaudited) ($ mm) 124.7
124.7 97.0 97.0 Reserve Additions (mmboe) 24.5
34.5 23.8 33.4
Argentina Acquisition F&D Cost ($
mm)
48.8 48.8 - - Argentina Reserves
(mmboe) 5.2 13.8 - -
F&D Cost ($/boe)
5.1 3.6 4.1 2.9
FD&A Cost ($/boe)
5.8 3.6
OTHER NEWS / RECENT EVENTS
Reporting Date for 4Q2018 Results Release, Conference Call
and Webcast
GeoPark will report its 4Q2018 and Annual 2018 financial results
on Wednesday, March 6, 2019 after the market close.
In conjunction with 4Q2018 results press release, GeoPark’s
management will host a conference call on March 7, 2019 at 9:00 am
(Eastern Standard Time) to discuss these 4Q2018 financial results.
To listen to the call, participants can access the webcast located
in the Investor Support section of the Company’s website at
www.geo-park.com.
Interested parties may participate in the conference call by
dialing the numbers provided below:United States
Participants: 866-547-1509International
Participants: +1 920-663-6208Passcode: 4069004
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.
GLOSSARY
1P
Proven Reserves
2P
Proven plus Probable Reserves
3P
Proven plus Probable plus Possible Reserves
boe
Barrels of oil equivalent (6,000 cf gas
per bbl of oil equivalent)
boepd
Barrels of oil equivalent per day
bopd
Barrels of oil per day
Certified Reserves
Refers to net reserves independently evaluated by the petroleum
consulting firm, DeGolyer and MacNaughton Corp. (“D&M”)
F&D Cost
Finding and Development Cost, calculated
as the unaudited cash flow from investing activities divided by the
applicable net reserves additions before changes in Future
Development Capital
FD&A Cost
Finding, Development and Acquisition Cost,
calculated as the unaudited cash flow from investing activities
plus acquisition costs divided by the applicable net reserves
additions before changes in Future Development Capital
mboed
Thousands of Barrels of oil equivalent per day
mmboed
Millions of Barrels of oil equivalent per day
mmbbl
Millions of Barrels of oil
mcfpd
Thousands of standard cubic feet per day
mmcfpd
Millions of standard cubic feet per day
NPV10
Net Present Value after tax discounted at 10% rate
PDNP
Proven Developed Non-Producing Reserves
PDP
Proven Developed Producing Reserves
PUD
Proven Undeveloped Reserves
RLI
Reserve Life Index
RRR
Reserve Replacement Ratio
sqkm
Square kilometers
WI
Working Interest
NOTICE
Additional information about GeoPark can be found in the
“Investor Support” section of the website at www.geo-park.com.
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.
Gas quantities estimated herein are reserves to be produced from
the reservoirs, available to be delivered to the gas pipeline after
field separation prior to compression. Gas reserves estimated
herein includes fuel gas.
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.
Oil and gas production figures included in this release are
stated before the effect of royalties paid in kind, consumption and
losses.
All evaluations of future net revenue contained in the D&M
Reports are after the deduction of cash royalties, development
costs, operating expenses, production and profit taxes, fees, earn
out payments, well abandonment costs, and country income taxes from
the future gross revenue. It should not be assumed that the
estimates of future net revenues presented in the tables represent
the fair market value of the reserves. The actual production,
revenues, taxes and development, and operating expenditures with
respect to the reserves associated with the Company's properties
may vary, from the information presented herein, and such
variations could be material. In addition, there is no assurance
that the forecast price and cost assumptions contained in the
D&M Report will be attained, and variances could be
material.
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 2019 work program, NPV10 and NPV10/share
estimations, estimated future revenues and oil price forecast.
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 the Company’s filings with the U.S. Securities
and Exchange Commission.
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190205005362/en/
INVESTORS:Stacy Steimel – Shareholder Value
DirectorSantiago, ChileT: +562 2242 9600ssteimel@geo-park.com
Miguel Bello – Market Access DirectorSantiago, ChileT: +262 2242
9600mbello@geo-park.com
MEDIA:Jared Levy – Sard Verbinnen & CoNew York, USAT:
+1 (212) 687-8080jlevy@sardverb.com
Kelsey Markovich – Sard Verbinnen & CoNew York, USAT: +1
(212) 687-8080kmarkovich@sardverb.com
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