More Oil and Gas, More Cash Income, More
Acreage, and Higher 2018 Targets
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 March 31, 2018
(“First Quarter” or “1Q2018”).
A conference call to discuss 1Q2018 Financial Results will be
held on Tuesday May 8, 2018 at 10:00 am Eastern Daylight Time.
All figures are expressed in US Dollars and growth comparisons
refer to the same period of the prior year, except when specified.
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, this release should
be read in conjunction with GeoPark’s consolidated financial
statements and the notes to those statements for the period ended
March 31, 2018, available on the Company’s website.
FIRST QUARTER 2018 HIGHLIGHTS
Stronger Oil and Gas Production Growth
- Consolidated oil and gas production up
28% to 32,195 boepd (up 5% compared to 4Q2017)
- Oil production increased by 33% to
27,345 bopd (up 8% compared to 4Q2017)
- Colombian oil production increased by
37% to 26,303 bopd (up 8% compared to 4Q2017)
- Gas production increased by 3% to 29.1
mmcfpd (down 9% compared to 4Q2017)
- Current production of 35,000 boepd,
including new production from Argentina acquisition
- Operating three drilling rigs in the
Llanos 34 block (GeoPark operated, 45% WI), and during May drilling
Tigui 1, testing Chachalaca Sur 1 and drilling Yaguasito (GeoPark
operated, Tiple acreage, 85% WI) exploration wells
Stronger Revenues, Adjusted EBITDA, Cash Flow and Net
Income
- Revenues increased by 86% to $123.9
million
- Adjusted EBITDA increased by 63% to
$63.3 million
- Cash flow from operating activities of
$60.7 million
- Net Income increased more than four
times to $24.9 million
Stronger Capital and Cost Efficiencies
- Operating costs of $7.2 per
boe/Colombia $5.4 per boe /Llanos 34 $4.1 per boe
- Operating netback/capital expenditure
ratio of 3.7x
Stronger Balance Sheet and Credit Rating
- Cash in hand of $120.4 million, and
following payment of Argentina acquisition, interest payments and
work program capital expenditures
- Net debt to Adjusted EBITDA ratio
decreased from 2.6x to 1.5x
- Interest coverage ratio increased to
7.2x from 3.4x
- Second credit upgrade to B+ from Fitch,
following previous upgrade from S&P
Stronger Latin American Asset Platform
- Announced a strategic Latin American
acquisition partnership with ONGC – India’s national oil
company
- Closing of low-cost, cash flow
producing acquisition with development and exploration potential in
the prolific Neuquen basin
Stronger Market Liquidity
- Increased average daily stock trading
volume to approximately $2.8 million in the past three months and
$4.7 million per day in the past month.
Stronger 2018 Work Program
- 2018 work program increased to $140-150
million, targeting increased organic production growth of 20-25%,
in line with the November 2017 guidance under Brent oil prices
above $60/bbl
- Adding in production from the new
acquisition in Argentina, 2018 consolidated production
is expected to further increase to an average 35,500-36,500
boepd, representing approximately 25-30% production growth, and
targeting exit production of 38,000-39,000 boepd
James F. Park, Chief Executive Officer of GeoPark said: “Our
Company is flying into 2018 with continued record growth in the
first quarter backed by climbing oil and gas production,
multiplying cash generation and a big bottom line. We also added
new attractive acreage and a powerful new long-term partner. With
our increased performance and stronger oil price environment,
GeoPark set our performance targets higher for 2018 with an
accelerated work program, which is still funded from our own cash
flow.”
CONSOLIDATED OPERATING PERFORMANCE
The table below sets forth key performance indicators for 1Q2018
compared to 4Q2017 and 1Q2017:
Key Indicators
1Q2018 4Q2017 1Q2017 Oil
productiona (bopd) 27,345 25,341 20,487 Gas
production (mcfpd) 29,101 31,876 28,152 Average net production
(boepd) 32,195 30,654 25,180 Brent oil price ($ per
bbl) 67.3 61.5 54.7 Combined price ($ per boe) 44.7 39.7 32.6 ⁻ Oil
($ per bbl) 48.6 43.0 34.3 ⁻ Gas ($ per mcf) 5.4 5.2 5.2 Sale of
crude oil ($ million) 111.0 92.2 54.5 Sale of gas ($ million) 12.8
14.1 12.2 Revenue ($ million) 123.9 106.3 66.7 Commodity Risk
Management Contracts ($ million) -3.9 -18.4 5.4 Production &
Operating Costsb ($ million) -34.1 -30.5 -17.6 G&G, G&Ac
and Selling Expenses ($ million) -15.2 -14.8 -10.2 Adjusted EBITDA
($ million) 63.3 55.2 38.8 Adjusted EBITDA ($ per boe) 22.9 20.6
19.0 Operating Netback ($ per boe) 28.5 26.1 24.0
Profit (loss) ($ million)
24.9 -3.4 5.8 Capital Expenditures ($ million) 21.4
25.3 23.5 Acquisition of Argentina ($ million) 36.4 15.6
- Cash and cash equivalents ($ million) 120.4 134.8 70.3
Short-term financial debt ($ million) 0.8 7.7 32.2 Long-term
financial debt ($ million) 418.7 418.5 309.5 Net debt ($ million)
299.1 291.4 271.4 a) Includes government
royalties paid in kind in Colombia for approximately 930, 881 and
608 bopd in 1Q2018, 4Q2017 and 1Q2017 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 $0.6 million, $0.7 million and $0.8
million for 1Q2018, 4Q2017 and 1Q2017, respectively, of (non-cash)
share-based payments that are excluded from the Adjusted EBITDA
calculation.
Production: Colombian oil contributed significantly to
overall oil and gas production which grew by 28% to a record of
32,195 boepd in 1Q2018 from 25,180 boepd in 1Q2017. New production
from successful appraisal and development drilling in both Tigana
North, and the southern part of Jacana, contributed most to the
increase. On a consolidated basis, gas production increased by 3%
compared to 1Q2017.
For further detail, please refer to 1Q2018 Operational Update
published on April 11, 2018.
Reference and Realized Oil Prices: Brent crude oil price
averaged $67.3 per bbl during 1Q2018, and the consolidated realized
oil sales price averaged $48.6 per bbl in 1Q2018, representing a
13% increase from $43.0 per bbl in 4Q2017 and a 41% increase from
$34.3 per bbl in 1Q2017. 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
$4.1 per bbl in 1Q2018, $4.0 in 4Q2017 and $5.2 per bbl in 1Q2017.
Commercial and transportation discounts in Colombia averaged $15.0
per bbl in 1Q2018, $14.9 per bbl in 4Q2017 and $15.2 per bbl in
1Q2017.
The Company is continuously working to improve realized oil
prices, including the ongoing negotiation of existing conditions
with off-takers. In Colombia, the construction of a flowline and
related facilities in the Llanos 34 block is already underway and
is expected to continue improving current commercial and
transportation discounts.
The table below provides a breakdown of reference and net
realized oil prices in Colombia and Chile in 1Q2018:
1Q2018 - Realized Oil Prices
($ per bbl) Colombia Chile Brent
oil price 67.3 67.3 Vasconia differential (4.1) (9.8) Commercial
and transportation discounts (15.0) -
Realized oil price
48.2
57.5
Weight on oil sales mix 97% 3%
Revenue: Consolidated revenues increased by 86% to $123.9
million in 1Q2018, compared to $66.7 million in 1Q2017. The
increase was mainly due to the combination of higher realized
prices and higher deliveries.
Sale of crude oil: Consolidated oil
revenues increased by 104% to $111.0 million in 1Q2018, driven
mainly by a 41% increase in realized oil prices and a 43% in oil
deliveries (compared to 1Q2017). Oil revenues represented 90% of
total revenues compared to 82% in 1Q2017.
- Colombia: In 1Q2018, oil revenues
increased by 96% to $106.5 million mainly due to higher realized
prices and increased deliveries. Realized oil prices increased by
41% to $48.2 per bbl, in line with higher Brent prices and to a
lesser extent, to a smaller discount for the Vasconia marker. Oil
deliveries increased by 39% to 25,523 bopd.Colombian earn-out
payments (deducted from Colombian oil revenues) increased to $4.3
million in 1Q2018, compared to $2.4 million in 1Q2017, in line with
higher oil revenues and increased production.
- Chile: In 1Q2018, oil revenues amounted
to $4.2 million, resulting from a $57.5 per bbl realized prices and
oil deliveries of 820 bopd. In 1Q2017, no oil revenues were
recorded due to negotiations with ENAP. As a result, Chilean oil
production was recorded as inventories at March 31, 2017, and
subsequently delivered to ENAP in May 2017.
Sale of gas: Consolidated gas
revenues increased by 5% to $12.8 million in 1Q2018 compared to
$12.2 million in 1Q2017, following a 3% increase in gas prices and
a 2% increase in gas deliveries.
- Chile: In 1Q2018, gas revenues remained
flat at $4.8 million reflecting higher gas prices, offset by lower
gas deliveries. Gas prices increased by 15% to $5.1 per mcf ($30.6
per boe) in 1Q2018, in line with increased methanol prices. Gas
deliveries decreased by 14% to 10,437 mcfpd (1,740 boepd).
- Brazil: In 1Q2018, gas revenues
increased by 7% to $7.7 million, mainly due to higher gas
deliveries as gas prices were lower. Gas deliveries increased by
11% to 15,100 mcfpd (2,517 boepd), due to a recovery in industrial
demand in the northeast of the country. Gas prices decreased by 4%
to $5.7 per mcf ($33.9 per boe), in line with a 4% devaluation of
the local currency.
Commodity risk management contracts: GeoPark uses hedge
contracts to manage risks and reduce its exposure to oil price
volatility and protect the base case work program.
For the period ending March 31, 2018, GeoPark realized $10.6
million in lower net revenues from certain hedge contracts in place
that had a floor of $50-53/bbl and a ceiling of $55-65/bbl Brent.
In accordance with accounting rules, these reduced revenues are
adjusted by the change in the value of future contracts and
recorded as a $3.9 million loss.
For details regarding current contracts in place, please refer
to Commodity Risk Management Contracts below, or see Note 4 of
GeoPark’s consolidated financial statements for the period ended
March 31, 2018, available on the Company’s website.
Production and Operating Costs1:
Consolidated operating costs per barrel were $7.2 in 1Q2018, lower
than the $7.3 per bbl in 4Q2017, but higher than the $6.2 per bbl
in 1Q2017. The operating costs in 1Q2017 were approximately $1
lower than normal because Chilean oil production was recorded as
inventory while negotiations with ENAP were completed.
Consolidated operating costs increased by $7.2 million to $19.9
million in 1Q2018 compared to 1Q2017, reflecting higher Colombian
sales volumes and the reopening of mature oil fields with higher
operating costs.
The following is a breakdown of operating costs by country:
- Colombia: Operating costs per boe
increased by 12% to $5.4 per boe in 1Q2018 compared to $4.8 per boe
in 1Q2017. The increase was due to the marginal costs of reopening
mature oil fields which have higher operating costs per barrel
compared to the rest of the Llanos 34 block (of approximately $4.1
per boe). The latter, in conjunction with a 39% increase in volumes
sold, raised overall operating costs by $4.5 million to $12.4
million in 1Q2018 compared to $7.9 million in 1Q2017. However,
relative to the 4Q2017, operating costs per boe decreased by
13%.
- Chile: Operating costs increased by
$2.7 million to $5.4 million in 1Q2018 from $2.6 million in 1Q2017.
Increased operating costs in 1Q2018 resulted from increased sales
volumes and a higher share of oil in the sales mix. Compared to
4Q2017, operating costs increased by only 2% or $0.2 million from
$5.2 million in 4Q2017. Operating costs per boe were $23.3.
- Brazil: Operating costs decreased by
26% to $1.6 million in 1Q2018 from $2.2 million in 1Q2017, mainly
due to one-time maintenance costs in Manati that negatively
impacted 1Q2017 figures. Operating costs per boe decreased to $7.0
per boe from $10.5 in 1Q2017.
Consolidated royalties increased by $9.4 million to $14.1
million in 1Q2018, mainly due to a combination of increased
volumes, realized prices and the “high price” royalty in the Jacana
oil field as production passed the 5 million-barrel mark in the
second quarter of 2017.
Selling Expenses: Consolidated selling expenses decreased
to $0.3 million in 1Q2018 compared to $0.4 million in 1Q2017.
Administrative, Geological & Geophysical Expenses:
Consolidated G&A and G&G expenses increased to $14.8
million in 1Q2018, compared to $9.7 million in 1Q2017, due to an
increased scale of operations and the continuous investment in
human capital. Consolidated G&A and G&G costs per boe
increased to $5.6 per boe in 1Q2018 (vs $5.0 per boe in 1Q2017).
Additionally, G&A and G&G costs per boe remained slightly
flat compared to $5.5 per boe in 4Q2017.
Adjusted EBITDA: Consolidated Adjusted EBITDA2 surged by
63% to $63.3 million, or $22.9 per boe, in 1Q2018 compared to $38.8
million, or $19.0 per boe, in 1Q2017, mainly driven by the
combination of increased production levels and higher realized oil
prices.
- Colombia: Adjusted EBITDA of $61.9
million in 1Q2018
- Chile: Adjusted EBITDA of $1.7 million
in 1Q2018
- Brazil: Adjusted EBITDA of $5.0 million
in 1Q2018
- Corporate, Argentina and Peru: Adjusted
EBITDA of negative $5.2 million in 1Q2018
The table below shows production, volumes sold and the breakdown
of the most significant components of Adjusted EBITDA for 1Q2018
and 1Q2017, on a per country and per boe basis:
Adjusted EBITDA/boe Colombia
Chile Brazil Total
1Q18 1Q17 1Q18
1Q17 1Q18 1Q17
1Q18 1Q17 Production (boepd) 26,405
19,330 2,873 3,351 2,775 2,499
32,195 25,180 Stock variation /RIKa (783)
(955) (313) (1,314) (217) (204)
(1,411) (2,473) Sales volume (boepd) 25,622 18,375
2,560 2,037 2,558 2,295 30,784 22,707 % Oil 99.6%
100% 32% 0% 2% 2% 86% 81%
($ per boe) Realized oil price 48.2 34.3 57.5 - 74.6 59.5
48.6 34.3 Realized gas priceb 34.6 - 30.6 26.5 33.9 35.4 32.5 31.6
Earn-out (2.0) (1.4) - - -
- (1.6) (1.1)
Combined Price
46.3 32.9 39.2
26.5 34.5 35.8
44.7 32.6 Realized Commodity Risk Management
Contracts (4.6) 0.1 - - -
- (3.8) 0.1 Operating costs (5.4) (4.8) (23.3) (14.3)
(7.0) (10.5) (7.2) (6.2) Royalties in cash (5.6) (2.4) (1.6) (0.8)
(3.1) (3.1) (5.1) (2.3) Selling & other expenses (0.1)
0.1 (0.6) (1.1) - - (0.1)
(0.1)
Operating Netback/boe 30.7
25.8 13.8 10.4
24.4 22.2 28.5
24.0 G&A, G&G
(5.6)
(5.0)
Adjusted EBITDA/boe
22.9 19.0 a) RIK (Royalties in kind).
Includes royalties paid in kind in Colombia for approximately 930
and 608 bopd in 1Q2018 and 1Q2017 respectively. No royalties were
paid in kind in Chile and Brazil. b) Conversion rate of
$mcf/$boe=1/6.
Depreciation: Consolidated depreciation charges increased
by 25% to $19.7 million in 1Q2018, compared to $15.7 million in
1Q2017, due to higher volumes sold. On a per barrel basis, however,
depreciation costs decreased by 8% to $7.1 per boe due to drilling
successes and increased reserves.
Write-off of unsuccessful exploration efforts:
Consolidated write-off of unsuccessful exploration efforts was $1.8
million in 1Q2018. Amounts recorded in 1Q2018 mainly correspond to
unsuccessful exploration efforts in the Potiguar basin in
Brazil.
Other Income (Expenses): Other operating charges amounted
to an $0.8 million gain in 1Q2018, compared to $0.5 million loss in
1Q2017.
CONSOLIDATED NON-OPERATING RESULTS AND PROFIT FOR THE
PERIOD
Financial Expenses: Net financial costs decreased to $8.5
million in 1Q2018, compared to $9.2 million in 1Q2017, due to lower
bank charges and interest costs.
Foreign Exchange: Net foreign exchange charges amounted
to a $1.7 million loss in 1Q2018 compared to a $2.9 million gain in
1Q2017, due to the devaluation of the Brazilian real and its impact
on US dollar denominated net intercompany debt. In addition, the
Colombian peso appreciated by 5% impacting net local currency
liabilities.
Income Tax: Income tax expenses were $15.0 million in
1Q2018 as compared to a $16.0 million in 1Q2017.
Net Income: Net income increased by 4.3x $24.9 million in
1Q2018 compared to $5.8 million in 1Q2017.
BALANCE SHEET
Cash and Cash Equivalents: Cash and cash equivalents
totaled $120.4 million as of March 31, 2018. Year-end 2017 cash and
cash equivalents were $134.8 million. The difference reflects cash
used in investing activities of $57.8 million, cash used in
financing activities of $17.2 million, and cash generated from
operating activities of $60.7 million.
Cash used in investing activities of $57.8 million includes
capital expenditures related to development, appraisal and
exploration activities of $21.4 million, allocated predominantly to
Colombia, and $36.4 million related to payment of outstanding
amounts for the acquisition of Aguada Baguales, El Porvenir and
Puesto Touquet blocks in the Neuquen basin in Argentina.
Cash used in financing activities of $17.2 million was composed
of $13.8 million in interest payments and $3.4 million for the
dividend distribution to the non-controlling interest, LGI.
The agreement with LG International Corp (LGI) in Colombia
allows GeoPark to earn back up to 12% equity participation at the
Colombian subsidiary level in accordance with the performance of
the project. GeoPark expects to pay an additional $4-5 million
dividend to LGI, which would allow the Company to earn back an
initial 4%, after which the LGI non-controlling interest in
Colombia would be reduced from the initial 20% to 16%.
Financial Debt: Total financial debt (net of issuance
costs) was $419.5 million, including the $425 million 2024 notes
(“2024 Notes”) issued in September 2017. Short-term debt was $0.8
million.
FINANCIAL RATIOSa
($ million)
At period-end Financial
Debt Cash and Cash Equivalents Net
Debt Net Debt/LTM Adj. EBITDAb
LTM Interest
Coveragec
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 1Q2018 419.5
120.4 299.1 1.5x 7.2x a) Based
on trailing last twelve months financial results. b) LTM adj.
EBITDA was $200.3 million as of March 31, 2018. c) LTM interest
expense was $27.6 million as of March 31, 2018
Covenants on 2024 Notes: The indenture governing the 2024
Notes includes incurrence test covenants that require the net debt
to adjusted EBITDA ratio be lower than 3.5 times and the adjusted
EBITDA to interest ratio higher than two times until September
2019. Failure to comply with the incurrence test covenants would
not trigger an event of default. As of the date of this release the
Company is in compliance with all provisions and covenants.
COMMODITY RISK OIL MANAGEMENT CONTRACTS
The Company has the following commodity risk management
contracts (reference ICE Brent) in place as of the date of this
release:
Period
Type Volume (bopd) Contract
terms ($ per bbl) Purchased Put
Sold Put Sold Call
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
2Q2018
Zero cost 3-way
2,000
53.0
43.0
64.6
Zero cost 3-way
4,000
55.0
45.0
77.2-77.5
Total: 14,000
3Q2018
Zero cost 3-way
5,000
53.0
43.0
69.0
Zero cost 3-way 4,000
55.0
45.0
77.2-77.5
Total: 9,000
4Q2018 Zero cost 3-way 4,000
55.0
45.0
77.2-77.5
Total: 4,000
For further details, please refer to Note 4 of GeoPark’s
consolidated financial statements for the period ended March 31,
2018, available on the Company’s website.
SELECTED INFORMATION BY BUSINESS SEGMENT (UNAUDITED)
Colombia
1Q2018 1Q2017 Sale of crude oil ($ million)
106.5 54.3 Sale of gas ($ million) 0.3 0.2 Revenue ($
million) 106.8 54.4 Production and Operating Costsa ($ million)
-25.4 -11.9 Adjusted EBITDA ($ million) 61.9 38.1 Capital
Expendituresb ($ million) 17.9 19.2
Chile 1Q2018 1Q2017 Sale
of crude oil ($ million) 4.2 0.0 Sale of gas ($ million) 4.8 4.8
Revenue ($ million) 9.0 4.8 Production and Operating Costsa ($
million) -5.8 -2.8 Adjusted EBITDA ($ million) 1.7 0.3 Capital
Expendituresb ($ million) 0.0 1.5
Brazil 1Q2018 1Q2017 Sale
of crude oil ($ million) 0.3 0.2 Sale of gas ($ million) 7.7 7.2
Revenue ($ million) 8.0 7.4 Production and Operating Costsa ($
million) -2.3 -2.8 Adjusted EBITDA ($ million) 5.0 3.8 Capital
Expendituresb ($ million) 1.3 2.1 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 Peru.
CONSOLIDATED
STATEMENT OF INCOME (UNAUDITED) (In
millions of $)
1Q2018 1Q2017
REVENUE
Sale of crude oil 111.0 54.5 Sale of gas 12.8 12.2
TOTAL
REVENUE 123.9 66.7 Commodity risk management
contracts -3.9 5.4 Production and operating costs -34.1 -17.6
Geological and geophysical expenses (G&G) -2.2 -1.2
Administrative expenses (G&A) -12.6 -8.5 Selling expenses -0.4
-0.4 Depreciation -19.7 -15.7 Write-off of unsuccessful efforts
-1.8 - Other operating 0.8 -0.5
OPERATING PROFIT 50.0
28.1 Financial costs, net -8.5 -9.2 Foreign exchange
(loss) gain -1.7 2.9
PROFIT BEFORE INCOME TAX 39.8
21.8 Income tax -15.0 -16.0
PROFIT FOR THE
PERIOD 24.9 5.8 Non-controlling interest 6.4 2.2
ATTRIBUTABLE TO OWNERS OF GEOPARK 18.4 3.6
SUMMARIZED CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
(In millions of $)
Mar '18 Dec '17
(Unaudited) (Audited) Non-Current Assets
Property, plant and equipment 570.4 517.4 Other non-current assets
57.3 53.8
Total Non-Current Assets 627.8 571.2
Current Assets Inventories 9.7 5.7 Trade receivables
14.5 19.5 Other current assets 47.6 54.9 Cash at bank and in hand
120.4 134.8
Total Current Assets 192.2 215.0
Total Assets 820.0 786.2
Equity Equity attributable to owners of GeoPark 104.0 84.9
Non-controlling interest 45.0 41.9
Total Equity 149.0
126.8 Non-Current Liabilities Borrowings 418.7
418.5 Other non-current liabilities 78.8 74.5
Total Non-Current
Liabilities 497.5 493.0 Current
Liabilities Borrowings 0.8 7.7 Other current liabilities 172.7
158.6
Total Current Liabilities 173.5 166.3
Total Liabilities
671.0 659.3 Total Liabilities and
Equity 820.0 786.2 SUMMARIZED
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(In millions of $)
1Q2018 1Q2017 Cash flows
from operating activities 60.7 45.2 Cash flows used in investing
activities -57.8 -23.5 Cash flows used in financing activities
-17.2 -23.8
RECONCILIATION OF ADJUSTED EBITDA TO PROFIT
(LOSS) BEFORE INCOME TAX (UNAUDITED)
1Q2018 (In millions of $) Colombia
Chile Brazil
Other(a) Total Adjusted EBITDA
61.9 1.7 5.0 -5.2
63.3 Depreciation -11.0 -5.8 -2.8 -0.1
-19.7 Unrealized Commodity Risk Management Contracts 6.7 - - - 6.7
Write-off of unsuccessful exploration efforts - - -1.8 -
-1.8
Share based payments and other 1.0 - -0.1 0.6
1.5
OPERATING PROFIT (LOSS) 58.6 -4.1
0.3 -4.7
50.0 Financial costs, net -8.5
Foreign exchange charges, net
-1.7
PROFIT BEFORE INCOME TAX
39.8 1Q2017 (In millions of $) Colombia
Chile Brazil
Other(a) Total Adjusted EBITDA
38.1 0.3 3.8 -3.3
38.8 Depreciation -8.6 -4.7 -2.3 -0.1
-15.7 Unrealized Commodity Risk Management Contracts 5.2 - - - 5.2
Write-off of unsuccessful exploration efforts - - - - - Share based
payments and other 1.2 -0.1 -0.5 -0.8
-0.2
OPERATING PROFIT (LOSS) 35.9 -4.5 1.0
-4.2
28.1 Financial costs, net -9.2 Foreign
exchange charges, net
2.9
PROFIT BEFORE INCOME TAX 21.8
(a) Includes Argentina, Peru and
Corporate.
CONFERENCE CALL INFORMATION
GeoPark will host its First Quarter 2018 Financial Results
conference call and webcast on Tuesday, May 8, 2018, at 10:00 a.m.
Eastern Daylight Time.
Chief Executive Officer, James F. Park, Chief Financial Officer,
Andres Ocampo, Chief Operating Officer, Augusto Zubillaga and
Shareholder Value Director, Stacy Steimel will discuss GeoPark's
financial results for 1Q2018, 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: 9397328
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 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 deliveries
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 deliveries.
Operating netback is equivalent to Adjusted EBITDA net of cash
expenses included in Administrative, Geological and Geophysical and
Other operating costs
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 divided by the applicable net reserves
additions before changes in Future Development Capital
LTM
Last Twelve Months
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.
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 2
See “Reconciliation of Adjusted EBITDA to Profit (Loss) Before
Income Tax and Adjusted EBITDA per boe” included in this press
release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180507006110/en/
GeoPark LimitedINVESTORS:Santiago, ChileStacy
Steimel – Shareholder Value DirectorT: +56 (2)
2242-9600ssteimel@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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