Self-Funded Record Production, Reserves,
Asset Value and Financial Results
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 reports its consolidated
financial results for the three-month period ended December 31,
2017 (“Fourth Quarter” or “4Q2017”), and its audited annual results
for 2017.
A conference call to discuss 4Q2017 Financial Results will be
held on March 8, 2018 at 10:00 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.
Definitions and terms used herein, are provided in the Glossary at
the end of this document. This release does not contain all of the
Company’s financial information. As a result, investors should read
this release in conjunction with GeoPark’s consolidated financial
statements and the notes to those statements for the years ended
December 31, 2017 and 2016 available on the Company’s website.
FOURTH QUARTER AND FULL YEAR 2017 HIGHLIGHTS
Record Oil and Gas Production
- Consolidated production up 30% to
30,654 boepd with current production of 33,000 boepd
- Colombia production up 39% to 24,378
boepd
- Annual average production up 23% to
27,586 boepd
Record Oil and Gas Reserves
- Certified consolidated proven (1P)
reserves of 97 million boe
- Certified consolidated proven and
probable (2P) reserves of 159.2 million boe
Record Oil and Gas Asset Valuation – Total and Per
Share
- Certified 1P NPV10 up 38% to $1.5
billion (equivalent to net debt adjusted NPV10 of $18.3 per
share)
- Certified 2P NPV10 up 21% to $2.3
billion (equivalent to net debt adjusted NPV10 of $29.2 per
share)
- Colombia 2P NPV10 up 38% to $1.4
billion (equivalent to net debt adjusted NPV10 of $15.8 per
share)
Record Capital Investment and Cost Efficiencies
- Finding and development costs:
Consolidated 2P of $4.0/boe / Colombia 2P of $2.8/boe
- Full year 2017 operating costs of $7.3
per boe / Colombia $5.6 per boe / Llanos 34 $4.3 per boe
- Full year 2017 operating
netback/capital expenditure ratio of 2.2x
- Capital investment program of $105.6
million in 2017 generated $404 million in 2P NPV10
Record Cash Flow/Adjusted EBITDA Growth
- Adjusted EBITDA more than doubled - up
105% to $55.2 million / full year up 124% to $175.8 million
- Operating netback up 77% to $69.8
million / full year up 87% to $228.3 million
- Full year cash flow from operating
activities up 72% to $142.2 million
- Net loss reduced to $3.4 million / full
year net loss of $17.8 million
Strengthened Balance Sheet and Credit Rating
- Cash in hand of $134.8 million
- Net debt to Adjusted EBITDA ratio
decreased from 3.6x to 1.7x in 4Q2017
- 2024 new bond issued ($425 million at
6.5%), with longer maturities and lower cost, oversubscribed by
four times by high-quality investors
- S&P upgraded GeoPark’s long-term
corporate credit rating to B+ with a stable outlook
New Acreage/Projects Acquired and New Strategic Acquisition
Partnership Announced
- Colombia: Tiple and Zamuro high-impact
exploration acreage acquired adjacent to Llanos 34 block
- Argentina: low-cost, cash
flow-producing acquisition in the prolific Neuquen basin with
production, development, exploration and unconventional
opportunities
- ONGC Videsh + GeoPark strategic Latin
American acquisition partnership
James F. Park, Chief Executive Officer of GeoPark, said: “Our
team has GeoPark firing on all cylinders. Through good science and
engineering, we found and produced more oil and gas. Through
innovation and efficiencies, we reduced our capital and operating
costs. Through organic cash flows, we self-funded our work and
investment program. Through effective capital allocation, every
dollar of new investment created multiples of net present value.
Through engagement with our neighbors and conscientious operations,
we operated safely, cleanly and without interruption. Through
regional knowledge and scouting, we acquired new high-impact
acreage and projects. Through a rewarding and motivating workplace,
we were able to train and attract talented people to continue to
build our capabilities for the future. Through efforts to more
widely share our performance story, we were the number one
performing E&P stock on the NYSE. Our team now has a proven
15-year track record of continuous growth, but we feel we are just
getting warmed up for the big opportunities coming our way.”
CONSOLIDATED OPERATING
PERFORMANCE
Key performance
indicators:
Key Indicators
4Q2017 3Q2017 4Q2016
FY2017 FY2016 Oil productiona (bopd)
25,341 23,237 18,798 22,761 16,955 Gas
production (mcfpd) 31,876 30,528 28,770
28,950 32,634 Average net production (boepd) 30,654
28,325 23,593 27,586 22,394 Brent oil
price ($ per bbl) 61.5 52.1 51.1 54.8 45.2 Combined price ($ per
boe) 39.7 33.0 29.3 34.6 25.2 ⁻ Oil ($ per bbl) 43.0 34.6
32.3
36.6 25.6 ⁻ Gas ($ per mcf) 5.2 5.3 4.6 5.3 4.5 Sale of crude oil
($ million) 92.2 68.4 49.3 279.1 145.2 Sale of gas ($ million) 14.1
13.6 11.0 51.0 47.5 Revenue ($ million) 106.3 81.9 60.3 330.1 192.7
Commodity Risk Management Contracts ($ million) -18.4 -8.3 -2.6
-15.4 -2.6 Production & Operating Costsb ($ million) -30.5
-25.7 -20.8 -99.0 -67.2 G&G, G&Ac and Selling Expenses ($
million) -14.8 -12.0 -13.2 -50.9 -48.7 Adjusted EBITDA ($ million)
55.2 44.6 27.0 175.8 78.3 Adjusted EBITDA ($ per boe) 20.6 18.0
13.1 18.4 10.2 Operating Netback ($ per boe) 26.1 23.2 19.2 23.9
15.9 Profit (loss) ($ million) -3.4 -19.1
-26.0 -17.8 -60.6 Capital Expenditures ($ million)
25.3 30.9 15.1 105.6 39.3 Cash
and cash equivalents ($ million) 134.8 135.2 73.6 134.8 73.6
Short-term financial debt ($ million) 7.7 1.9 39.3 7.7 39.3
Long-term financial debt ($ million) 418.5 418.5 319.4 418.5 319.4
Net debt ($ million) 291.4 285.2 285.1
291.4 285.1 a) Includes government royalties paid
in-kind in Colombia for approximately 881, 774 and 718 bopd in
4Q2017, 3Q2017 and 4Q2016 respectively. 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
include $0.7, $0.8, $0.5, $3.1 and $1.8 million for 4Q2017, 3Q2017,
4Q2016, FY2017 and FY2016, respectively, of (non-cash) share-based
payments that are excluded from the adjusted EBITDA calculation.
Production: Significant oil production growth of 39% in
Colombia increased average consolidated oil and gas production to
30,654 boepd in 4Q2017 from 23,593 boepd in 4Q2016. The increase
was mainly attributed to new oil production from the Tigana/Jacana
oil fields in Llanos 34 block in Colombia. On a consolidated basis,
gas production increased by 11% compared to 4Q2016, primarily
attributed to increased industrial demand in Brazil.
For further detail, please refer to 4Q2017 Operational Update
published on January 10, 2018.
Reference and Realized Oil Prices: Brent crude oil price
averaged $61.5 per bbl during 4Q2017, and the consolidated realized
oil sales price averaged $43.0 per bbl in 4Q2017, representing a
24% increase from $34.6 per bbl in 3Q2017 and a 38% increase from
$31.2 per bbl in 4Q2016. Differences between reference and realized
prices are a result of commercial and transportation discounts as
well as the Vasconia price differential in Colombia, which averaged
$4.0 per bbl in 4Q2017 from $2.8 per bbl in 3Q2017 and $5.7 per bbl
in 4Q2016. Commercial and transportation discounts in Colombia were
reduced to $14.9 per bbl in 4Q2017 from $15.2 per bbl in 3Q2017 and
$15.0 per bbl in 4Q2016.
Company efforts are currently underway to continue improving
realized oil prices, including negotiation of existing conditions
with off-takers plus construction of a flowline and related
facilities in Llanos 34 block, expected to continue improving
current commercial and transportation discounts.
The following table provides a breakdown of reference and net
realized oil prices in Colombia and Chile in 4Q2017:
4Q2017 - Realized Oil
Prices
($ per bbl)
Colombia Chile Brent oil price
61.5 61.5 Vasconia differential (4.0) - Commercial and
transportation discounts (14.9) (8.4) Realized oil
price 42.6 53.1 Weight on Oil Sales Mix 96%
4%
Revenue: Higher oil and gas production and pricing drove
total consolidated revenues up by 76% to $106.3 million in 4Q2017,
compared to $60.3 million in 4Q2016.
Sales of crude oil: Consolidated
oil revenues increased by 87% to $92.2 million in 4Q2017, driven by
a 35% increase in oil sales volumes and a 38% increase in realized
oil prices. Oil revenues represented 87% of total revenues compared
to 82% in 4Q2016.
- Colombia: In 4Q2017, oil revenues
increased by 98% to $87.5 million mainly due to increased sales
volumes and higher realized prices. Oil sales volumes increased by
40% to 23,283 bopd. Realized oil prices also increased by 40% to
$42.6 per bbl, in line with higher Brent prices and a lower
Vasconia discount. Colombia earn-out payments (deducted from
Colombia oil revenues) increased to $3.7 million in 4Q2017,
compared to $2.3 million in 4Q2016, in line with increased
production and higher oil revenues.
- Chile: In 4Q2017, oil revenues
decreased by 11% to $4.4 million due to lower sales volumes
partially offset by higher realized prices. Oil sales volumes
decreased by 31% to 902 bopd and realized oil prices increased by
28% to $53.1 per barrel, in line with higher Brent prices.
Sales of gas: Consolidated gas
revenues increased by 28% to $14.1 million in 4Q2017 compared to
$11.0 million in 4Q2016 due to 15% higher realized gas prices and
11% higher gas sales volumes.
- Chile: In 4Q2017, gas revenues
increased by 6% to $4.4 million mainly due to higher gas prices,
partially offset by lower sales volumes. Gas prices increased by
24% to $4.5 per mcf ($27.1 per boe) in 4Q2017, due to increased
methanol prices. Gas sales volumes decreased by 15% to 10,630 mcfpd
(1,772 boepd).
- Brazil: In 4Q2017, gas revenues
increased by 42% to $9.4 million, due to both higher realized
prices and sales volumes. Gas prices, net of taxes, increased by 8%
to $5.7 per mcf ($34.0 per boe) due to the annual gas price
inflation adjustment of approximately 7%, effective January 2017.
Gas sales volumes increased by 31% to 18,000 mcfpd (3,000 boepd),
primarily due to higher gas consumption by Brazilian industrial
users.
Commodity risk management contracts: Consolidated
commodity risk management contracts registered a realized loss of
$5.8 million in 4Q2017, totaling realized losses of $2.1 million in
full year 2017 ($3.8 million cash gains were recorded and cashed-in
during the first nine months of 2017). Unrealized cash losses
amounted to $12.6 million in 4Q2017 compared to $3.1 million loss
in 4Q2016 resulting from the significant increase in forward Brent
oil price curve. The company uses risk management contracts to
minimize the impact of oil price fluctuations on the Company´s
self-funded work program.
Production and operating costs[1]:
Consolidated operating costs per barrel decreased by 9% to $7.3 per
boe in 4Q2017 from $8.1 per boe in 4Q2016. Following the 30%
increase in oil and gas sales volumes, total operating costs
increased by $3.0 million to $19.6 million. Consolidated royalties
increased by $6.8 million to $10.7 million in 4Q2017, mainly as the
Jacana oil field in the Llanos 34 block accumulated more than five
million barrels of production that triggered Colombia’s “high
price” royalty scheme beginning in 2Q2017, and to a lesser extent
due to increased volumes and higher realized prices.
Below is a breakdown of production and operating costs by
country:
- Colombia: Operating costs per boe
remained flat at $6.1 per boe in both 4Q2017 and 4Q2016, due to:
- Significant increase in volumes sold,
40% compared to a year earlier, that increased overall operating
costs by 40% to $13.1 million in 4Q2017 from $9.3 million in
4Q2016,
- Incremental costs related to the
reopening of mature oil fields temporarily closed in 4Q2016 which
have higher operating costs per barrel compared to Llanos 34
block.
- Chile: Operating costs decreased by 6%
to $5.2 million in 4Q2017 from $5.6 million in 4Q2016 mainly due to
lower volumes sold (-21%). As a result of the lower volumes,
operating costs per boe increased by 18% to $21.3.
- Brazil: Operating costs decreased by
45% to $1.0 million in 4Q2017 from $1.7 million in 4Q2016, mainly
due to a one-time recovery of maintenance costs in Manati that were
incurred in previous quarters. Operating costs per boe decreased to
$3.4 per boe from $8.0 in 4Q2016.
Selling expenses: Consolidated selling expenses decreased
to $0.3 million in 4Q2017 compared to $0.6 million in 4Q2016.
Administrative, Geological and Geophysical expenses:
Consolidated G&A and G&G expenses increased by 15% to $14.5
million in 4Q2017 compared to $12.6 million in 4Q2016 mainly due to
higher staff costs resulting from an increased scale of operations.
Consolidated G&A and G&G costs per boe decreased by 13% to
$5.5 per boe in 4Q2017 (vs. $6.1 per boe in 4Q2016).
Adjusted EBITDA: Consolidated adjusted EBITDA of $55.2
million was more than two times higher than the $27.0 million in
4Q2016. That is the equivalent of $20.6 per barrel and was driven
by the combination of increased production and higher realized oil
and gas prices.
- Colombia: Adjusted EBITDA of $51.6
million in 4Q2017 (+95% vs. 4Q2016)
- Chile: Adjusted EBITDA of $1.1 million
in 4Q2017 (+75% vs. 4Q2016)
- Brazil: Adjusted EBITDA of $7.2 million
in 4Q2017 (+116% vs. 4Q2016)
- Corporate, Argentina and Peru: Adjusted
EBITDA of negative $4.7 million in 4Q2017
The table below shows production, volumes sold and breakdown of
the most significant components of adjusted EBITDA for 4Q2017 and
4Q2016, on a per country and per barrel basis:
Adjusted EBITDA/boe Colombia
Chile Brazil Total
4Q17 4Q16 4Q17
4Q16 4Q17 4Q16
4Q17c
4Q16 Production (boepd) 24,378 17,535
2,932 3,523 3,328 2,535 30,654
23,593 Stock variation /RIKa (1,004) (878)
(258) (151) (285) (206) (1,593)
(1,235) Sales volume (boepd) 23,374 16,657 2,674 3,372 3,043
2,329 29,091 22,358 % Oil 99.6% 100% 34%
39% 1% 1% 83% 80%
($ per
boe) Realized oil price 42.6 30.4 53.1 41.4 68.0 54.7 43.0 32.3
Realized gas priceb 30.8 - 27.1 21.9 34.0 31.4 31.4 27.3 Earn-out
(1.8) (1.4) - - - -
(1.4) (1.1)
Combined Price 40.8
29.0 35.9 29.4
34.5 31.7 39.7
29.3 Realized Commodity Risk Management Contracts
(2.7) - - - - - (2.2)
- Operating costs (6.1) (6.1) (21.3) (18.0) (3.4) (8.0)
(7.3) (8.1) Royalties in cash (4.4) (1.9) (1.4) (1.2) (3.3) (2.6)
(4.0) (1.9) Selling & other expenses 0.0 0.2
(0.7) (1.0) - - (0.1)
(0.3)
Operating Netback/boe 27.6
21.1 12.4 9.2 27.8
21.0 26.1 19.2 G&A,
G&G
(5.5) (6.1)
Adjusted
EBITDA/boe
20.6
13.1 a)
RIK (Royalties in Kind). Includes
royalties paid in kind in Colombia for approximately 881 and 718
bopd in 4Q2017 and 4Q2016, respectively. No royalties were paid in
kind in Chile and Brazil
b) Conversion rate of mcf/boe=1/6
c)
Total amount includes 16 bopd of oil
production from CN-V block in Argentina
Depreciation: Consolidated depreciation increased by 17%
to $19.8 million in 4Q2017, compared to $16.9 million in 4Q2016,
due to higher volumes sold. On a per barrel basis, however,
depreciation costs were lower given drilling successes and
increased reserves. Depreciation costs per boe decreased by 10% to
$7.4 per boe.
Write-off of unsuccessful exploration efforts:
Consolidated write-off of unsuccessful exploration efforts was $1.1
million in 4Q2017, compared to $17.7 million in 4Q2016. Amounts
recorded in 4Q2017 mainly correspond to unsuccessful exploration
efforts in non-operated Sierra del Nevado and Puelen blocks in
Argentina.
Impairment of Non-Financial Assets: Consolidated non-cash
impairment of non-financial assets was zero in 4Q2017 compared to a
$5.7 million gain in 4Q2016 ($5.7 million non-cash recovery in
Colombia).
Other expenses: Other operating expenses were $2.7
million in 4Q2017, compared to $0.9 million in 4Q2016.
CONSOLIDATED NON-OPERATING RESULTS AND PROFIT FOR THE
PERIOD
Net financial expenses: Net financial costs decreased by
7% to $8.2 million in 4Q2017, compared to $8.9 million in 4Q2016,
mainly resulting from lower bank charges and other financial
results.
Foreign exchange: Net foreign exchange charges were a
$3.6 million loss in 4Q2017 and $1.4 million loss in 4Q2016, mainly
due to the devaluation of the Brazilian Real over the US
Dollar-denominated net debt incurred at the local subsidiary level,
where the Real is the functional currency.
Income tax: Income taxes amounted to a $10.7 million in
4Q2017, as compared to a $9.7 million in 4Q2016, in line with
higher taxable profits in 4Q2017.
Net income: Net losses amounted to $3.4 million in 4Q2017
compared to $26.0 million in 4Q2016. The net loss in 4Q2017
resulted from unrealized hedge charges.
BALANCE SHEET
Cash and cash equivalents: Cash and cash equivalents
totaled $134.8 million as of December 31, 2017 compared to $73.6
million a year earlier. The difference reflects cash generated from
operating activities of $142.2 million and cash from financing
activities of $24.0 million, partially offset by cash used in
investing activities of $105.6 million.
Cash generated from operating activities of $142.2 million is
net of a $15.6 million advance payment paid in December 2017 to
Pluspetrol, as a security deposit related to the recently announced
acquisition of Aguada Baguales, El Porvenir and Puesto Touquet
blocks in Neuquen basin in Argentina, which is expected to close in
March 2018.
Cash from financing activities of $24.0 million includes net
proceeds from the issuance of 2024 Notes of $418.3 million, offset
by: (i) principal paid of $355.0 million related to the payment of
2020 Notes and the prepayment of the Itau loan, (ii) cancellation
costs of $12.3, and (iii) interest payments of $27.7 million.
Cash used in investing activities of $105.6 million (76%
allocated to Colombia) includes capital expenditures related to
development, appraisal and exploration activities carried out in
2017 that allowed GeoPark to increase its reserves with low finding
and development costs of $3.6/boe for 1P and $4.0/boe for 2P
reserves (or $2.4/boe and $2.8/boe for 1P and 2P, respectively in
Colombia).
Financial debt: Total financial debt (net of issuance
costs) amounted to $426.2 million, including the $425 million 2024
Notes issued in September 2017. Short-term debt amounted to $7.7
million as of December 31, 2017.
FINANCIAL RATIOSa
($ million)
At period-end
Financial Debt
Cash and Cash Equivalents Net Debt
Net Debt/ LTM Adj. EBITDA LTM Interest
Coverage
4Q2016 358.7 73.6 285.1 3.6x
2.7x 1Q2017 341.7 70.3 271.4 2.6x 3.4x 2Q2017 346.3 77.0 269.3 2.2x
4.1x 3Q2017 420.4 135.2 285.2 1.9x 5.3x 4Q2017 426.2 134.8 291.4
1.7x 6.3x a)
Based on trailing 12-month financial
results.
Issuance of 2024 Notes: During September 2017, the
Company successfully placed $425 million notes (“2024 Notes”). The
2024 Notes carry a coupon of 6.50% per annum. Funds were used to
repay financial debt, to provide financial flexibility and for
general corporate purposes.
The indenture governing the 2024 Notes includes incurrence test
covenants that require the net debt to adjusted EBITDA ratio be
lower than 3.5 times and the adjusted EBITDA to interest ratio
higher than 2 times until September 2019. Failure to comply with
the incurrence test covenants would not trigger an event of
default. As of the date of this release the Company is in
compliance with all provisions and covenants.
COMMODITY RISK OIL MANAGEMENT CONTRACTS
The Company has the following commodity risk management
contracts (reference ICE Brent), in place as of the date of this
release:
Period
Type Volume (bopd) Contract
terms ($ per bbl) Purchased Put
Sold Put Sold Call
1Q2018
Zero cost collar 9,000 50.0-52.0 - 54.9-60.0 Zero
cost 3-way 2,000
52.0
42.0
59.5-59.6 Zero cost 3-way 2,000
53.0
43.0
64.6 Total: 13,000
2Q2018
Zero cost collar 5,000
52.0
- 58.3-60.0 Zero cost 3-way 3,000
52.0
42.0
59.5-59.6 Zero cost 3-way 2,000
53.0
43.0
64.6 Total: 10,000
3Q2018
Zero cost 3-way 5,000
53.0
43.0
69.0
Total: 5,000
For further details, please refer to Note 8 of GeoPark’s
consolidated financial statements for the year ended December 31,
2017, available on the Company’s website.
SELECTED INFORMATION BY BUSINESS SEGMENT
(UNAUDITED)
Colombia 4Q2017 4Q2016 Sale of
crude oil ($ million) 87.5 44.2 Sale of gas ($ million) 0.2 0.2
Revenue ($ million) 87.7 44.4 Production and Operating Costsa ($
million) -22.6 -12.5 Adjusted EBITDA ($ million) 51.6 26.5 Capital
Expendituresb ($ million) 19.4 11.5
Chile 4Q2017 4Q2016 Sale
of crude oil ($ million) 4.4 5.0 Sale of gas ($ million) 4.4 4.2
Revenue ($ million) 8.8 9.1 Production and Operating Costsa ($
million) -5.6 -6.0 Adjusted EBITDA ($ million) 1.1 0.6 Capital
Expendituresb ($ million) 1.4 1.0
Brazil 4Q2017 4Q2016 Sale
of crude oil ($ million) 0.3 0.2 Sale of gas ($ million) 9.4 6.6
Revenue ($ million) 9.7 6.8 Production and Operating Costsa ($
million) -1.9 -2.3 Adjusted EBITDA ($ million) 7.2 3.3 Capital
Expendituresb ($ million) 0.5 2.0 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 and to a lesser extent in Peru.
CONSOLIDATED STATEMENT OF INCOME
(QUARTERLY INFORMATION UNAUDITED) (In millions
of $)
4Q2017 4Q2016 FY2017
FY2016
REVENUE
Sale of crude oil 92.2 49.3 279.1 145.2 Sale of gas 14.1 11.0 51.0
47.5
TOTAL REVENUE 106.3 60.3 330.1
192.7 Commodity risk management contracts -18.4 -2.6 -15.4
-2.6 Production and operating costs -30.5 -20.8 -99.0 -67.2
Geological and geophysical expenses (G&G) -3.9 -2.7 -7.7 -10.3
Administrative expenses (G&A) -10.6 -10.0 -42.1 -34.2 Selling
expenses -0.3 -0.6 -1.1 -4.2 Depreciation -19.8 -16.9 -74.9 -75.8
Write-off of unsuccessful exploration efforts -1.1 -17.7 -5.8 -31.4
Impairment for non-financial assets - 5.7 - 5.7 Other operating
-2.7 -0.9 -5.1 -1.3
OPERATING PROFIT (LOSS) 19.1
-6.1 79.0 -28.6 Financial costs, net
-8.2 -8.9 -51.5 -34.1 Foreign exchange gain (loss) -3.6 -1.4 -2.2
13.9
PROFIT (LOSS) BEFORE INCOME TAX
7.3
-16.3 25.3 -48.8 Income tax -10.7 -9.7
-43.1 -11.8
PROFIT (LOSS) FOR THE PERIOD -3.4
-26.0 -17.8 -60.6 Non-controlling interest 1.1
-5.6 6.4 -11.6
ATTRIBUTABLE TO OWNERS OF GEOPARK -4.5
-20.4 -24.2 -49.1
SUMMARIZED CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
(In millions of $)
Dec '17 Dec
'16 (Audited) (Audited) Non-Current
Assets Property, plant and equipment 517.4 473.6 Other
non-current assets 53.8 45.7
Total Non-Current Assets
571.2 519.3 Current Assets Inventories
5.7 3.5 Trade receivables 19.5 18.4 Other current assets 54.9 25.7
Cash at bank and in hand 134.8 73.6
Total Current Assets
215.0 121.2 Total Assets 786.2
640.5 Equity Equity attributable to owners of
GeoPark 84.9 105.8 Non-controlling interest 41.9 35.8
Total
Equity 126.8 141.6 Non-Current
Liabilities Borrowings 418.5 319.4 Other non-current
liabilities 74.5 80.0
Total Non-Current Liabilities
493.0 399.4 Current Liabilities
Borrowings 7.7 39.3 Other current liabilities 158.6 60.2
Total
Current Liabilities 166.3 99.5
Total Liabilities
659.3 498.9 Total Liabilities and Equity
786.2 640.5
SUMMARIZED CONSOLIDATED STATEMENT OF
CASH FLOWS
(In millions of $)
Dec '17 Dec
'16 Cash flows from operating activities 142.2 82.9 Cash
flows used in investing activities -105.6 -39.3 Cash flows from
(used) in financing activities 24.0 -51.1
RECONCILIATION OF ADJUSTED EBITDA TO
PROFIT (LOSS) BEFORE INCOME TAX
2017 (In millions of $)
Colombia Chile Brazil
Other Total Adjusted EBITDA 168.3 4.1
20.2 -16.8
175.8 Depreciation -40.0 -23.7 -10.8 -0.4 -74.9
Unrealized Commodity Risk Management
Contracts
-13.3 - - - -13.3 Impairment - - - - - Write-offs unsuccessful
exploration efforts -1.6
-0.5
-3.0 -0.7 -5.8 Share Based Payments/Other
2.9
0.4
-2.0
-4.1
-2.8
OPERATING PROFIT (LOSS) 116.3
-19.7
4.4 -22.0
79.0 Financial costs, net
-51.5 Foreign Exchange charges, net
-2.2
PROFIT (LOSS) BEFORE
INCOME TAX 25.3 2016 (In millions of $)
Colombia Chile Brazil
Other Total Adjusted EBITDA 66.9 5.1
17.5 -11.2
78.3 Depreciation -31.1 -31.3 -13.0 -0.3 -75.8
Unrealized Commodity Risk Management
Contracts
-3.1 - - - -3.1 Impairment 5.7 - - - 5.7 Write-offs unsuccessful
exploration efforts -7.4
-19.4
-4.6 - -31.4 Share Based Payments/Other 0.5 0.6
-0.5 -3.0 -2.4
OPERATING PROFIT (LOSS)
31.5 -45.0 -0.6 -14.5
-28.6 Financial costs, net -34.1 Foreign Exchange charges,
net
13.9
PROFIT (LOSS) BEFORE
INCOME TAX -48.8
OTHER NEWS / RECENT EVENTS
2017 YEAR-END RESERVES SUMMARY
GeoPark engaged DeGolyer & MacNaughton (“D&M”) to carry
out an independent appraisal of reserves as of December 31, 2017,
covering 100% of the current assets in Colombia, Chile, Brazil,
Peru and Argentina.
Following oil and gas production of 10.2 mmboe in 2017, D&M
certified 2P reserves of 159.2 mmboe at 2017 year-end, following a
261% Reserve Replacement, with an NPV valuation of $2.3
billion.
- PDP Reserves: Net proven developed
producing (PDP) reserves increased by 47% to 28.5 mmboe, with a PDP
reserve replacement index (RRI) of 189%. PDP NPV10 increased by 74%
to $491 million.
- 1P Reserves: Net 1P reserves increased
by 24% to 97.0 mmboe, with 1P reserve life index (RLI) of 9.5 years
and a 1P RRI of 284%. 1P NPV10 increased by 39% ($430 million) to
$1.5 billion.
- 2P Reserves: Net 2P reserves increased
by 11% to 159.2 mmboe, with a 2P RLI of 15.6 years and a 2P RRI of
261%. 2P NPV10 increased by 21% ($404 million) to $2.3
billion.
- Finding and Development (F&D) costs
for 2017 were $3.6 per boe for 1P reserves and $4.0 per boe for 2P
reserves.
- Colombia: Net PDP reserves increased
89% to 21.6 mmboe, Net 1P reserves increased 64% to 66.1 mmboe and
net 2P reserves increased 31% to 88.2 mmboe. F&D Costs were
$2.4 per boe for 1P reserves and $2.8 per boe for 2P reserves.
For further detail, please refer to 2017 Reserves Release
published on February 5, 2018.
CONFERENCE CALL INFORMATION
GeoPark will host its Fourth Quarter 2017 Financial Results
conference call and webcast on Thursday, March 8, 2018, at 10:00
a.m. Eastern Standard Time.
Chief Executive Officer, James F. Park and Chief Financial
Officer, Andres Ocampo will discuss GeoPark's financial results for
4Q2017, 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: 6197567
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 costs, income tax, depreciation,
amortization, certain non-cash items such as impairments and
write-offs of unsuccessful exploration efforts, accrual of
share-based payments, unrealized results on commodity risk
management contracts and other non-recurring events
Adjusted
EBITDA per boe Adjusted EBITDA divided by total boe sales
volumes
bbl Barrel
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
F&D costs Finding and development costs,
calculated as capital expenditures in 2016 divided by the
applicable net reserves additions before changes in Future
Development Capital
“High price” royalty An additional
royalty incurred in Colombia when each oil field exceeds 5 mmbbl of
cumulative production and is determined by a combination of API
gravity and WTI oil prices
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
NPV10 Present value of estimated future oil and gas
revenues, net of estimated direct expenses, discounted at an annual
rate of 10%
Operating netback per boe Revenue, less
production and operating costs (net of depreciation charges and
accrual of stock options and stock awards) and selling expenses,
divided by total boe sales volumes. Operating netback is equivalent
to adjusted EBITDA net of cash expenses included in Administrative,
Geological and Geophysical and Other operating costs
PRMS
Petroleum Resources Management System
SPE Society of
Petroleum Engineers
SQ KM Square kilometers
WI
Working interest
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.
This press release contains certain oil and gas metrics,
including information per share, operating netback, reserve life
index, and others, which do not have standardized meanings or
standard methods of calculation and therefore such measures may not
be comparable to similar measures used by other companies. Such
metrics have been included herein to provide readers with
additional measures to evaluate the Company's performance; however,
such measures are not reliable indicators of the future performance
of the Company and future performance may not compare to the
performance in previous periods.
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 2018 production growth and
performance, operating netback per boe 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. Annual production per day is obtained by dividing total
production for 365 days.
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 costs, 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,
unrealized results on commodity risk management contracts 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.
[1] Production and Operating Costs = Operating Costs plus
Royalties
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180307006454/en/
GeoPark LimitedINVESTORS:Santiago, ChileStacy
Steimel – Shareholder Value
Directorssteimel@geo-park.comorMEDIA:New York, USAJared Levy
– Sard Verbinnen & CoT: +1 (212)
687-8080jlevy@sardverb.comorKelsey Markovich – Sard Verbinnen &
CoT: +1 (212) 687-8080kmarkovich@sardverb.com
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