Activity Step-Up Across Asset Base with New
Record Production, New Oilfield Discovery, New Acquisition and New
Partnership
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 operational
update for the three-month period ended June 30, 2018
(“2Q2018”).
All figures are expressed in US Dollars and growth comparisons
refer to the same period of the prior year, except when otherwise
specified.
Second Quarter 2018 Highlights
37% Growth in Oil and Gas Production
- Consolidated oil and gas production up
37% to 35,870 boepd (up 11% compared to 1Q2018)
- Oil production increased by 38% to
30,249 bopd (up 11% compared to 1Q2018)
- Colombian production increased by 33%
to 27,940 boepd (up 6% compared to 1Q2018)
- Gas production increased by 34% to 33.7
mmcfpd (up 16% compared to 1Q2018)
Colombia Operations
- Successful drilling and testing of
Tigui 1 exploration well in the Llanos 34 block (GeoPark operated,
45% WI) currently producing 1,100 bopd and representing a new oil
field discovery, the second of 2018
- Successful drilling and testing of
Tigana Norte 9 appraisal well, located outside the certified 3P
reserve area and expanding the size of the Tigana oil field
- Successful drilling and testing of
Tigana Sur Oeste 4, Tigana Sur Oeste 5, Tigana Sur Oeste 8, Tigana
Norte 8 and Jacana 21 development wells
- Flowline construction underway to
connect the Llanos 34 block to regional pipeline
infrastructure
Peru Operations
- Environmental Impact Assessment (EIA)
to initiate operations in the Situche Central oil field (tested oil
with 200 mmbo upside potential) in the Morona block (GeoPark
operated, 75% WI) completed and submitted to Peruvian
authorities
Argentina Operations
- Operational takeover of newly acquired
Aguada Baguales, El Porvenir and Puesto Touquet blocks (GeoPark
operated, 100% WI) in the Neuquen basin with production of
2,400-2,500 boepd
- Spudding Rio Grande Este 1 exploration
well in the CN-V block (GeoPark operated, 50% WI), to test
conventional potential in the Grupo Neuquen and Grupo Mendoza
formations, expected to reach total depth in 3Q2018
- Acquired new low-cost large exploration
acreage, the Los Parlamentos block (GeoPark non-operated, 50% WI),
in the Neuquen basin, in partnership with YPF
Brazil Operations
- Gas production up 9% from the Manati
gas field
- New exploration well in the Reconcavo
basin in 4Q2018
Chile Operations
- Spudding Jauke 1 exploration well in
the Fell block (GeoPark operated, 100% WI) to test the Springhill
and Tobifera formations and expected to reach total depth in
3Q2018
Upcoming 3Q2018 Catalysts
- Testing four drilled wells and drilling
ten new wells, including seven development wells, two exploration
wells and one appraisal well (Colombia, Argentina and Chile)
Breakdown of Quarterly Production by Country
The following table shows production figures for 2Q2018, as
compared to 2Q2017:
2Q2018 2Q2017
Total(boepd)
Oil(bopd)a
Gas(mcfpd)
Total(boepd)
% Chg. Colombia 27,940 27,825
690 21,015 33% Brazil 2,904 40 17,184 2,658 9% Chile 2,559 786
10,638 2,450 4% Argentina 2,467
1,598 5,214 - -
Total
35,870 30,249
33,726 26,123
37%
a) Includes royalties paid in kind in Colombia for approximately
898 bopd in 2Q2018. No royalties were paid in kind in Brazil, Chile
or Argentina.
Quarterly Production Evolution
(boepd) 2Q2017
3Q2017 4Q2017
1Q2018 2Q2018 Colombia
21,015 22,367 24,378
26,405 27,940 Brazil 2,658 3,141 3,328 2,775
2,904 Chile 2,450 2,817 2,932 2,873 2,559 Argentina
- - 16 142
2,467
Total 26,123
28,325 30,654
32,195 35,870 Oil 21,930 23,237 25,341
27,345 30,249 Gas 4,193 5,088 5,313 4,850 5,621
Oil and Gas Production Update
Consolidated:
Overall oil and gas production grew by 37% to 35,870 boepd in
2Q2018 from 26,123 boepd in 2Q2017, due to increased Colombian
production, new production from the recent Argentina acquisition
and increased production in Brazil and Chile.
Oil represented 85% of total reported production compared to 84%
in 2Q2017.
Colombia:
Average net production in Colombia grew 33% to 27,940 boepd in
2Q2018 compared to 21,015 boepd in 2Q2017, primarily attributed to
successful appraisal and development drilling in the Tigana and
Jacana oil fields in the Llanos 34 block, which represented 95% of
Colombian production in 2Q2018.
Llanos 34 block 2Q2018 drilling results:
Exploration and appraisal drilling:
- Tigui 1 exploration well, located
south-east of the main delineating fault line of the Jacana oil
field, was drilled to a total depth of 11,696 feet. A production
test conducted in early July 2018 with an electric submersible pump
in the Guadalupe formation resulted in a production rate of 1,100
bopd of 17.0 degrees API, with approximately 1% water cut.
Additional production history and drilling will be needed to
delineate the potential of this new oil field discovery.
- Tigui Sur 1 exploration well, located
south of Tigui 1, was drilled to a total depth of 13,277 feet. The
well is expected to be tested during 3Q2018.
- Chachalaca Sur 1 exploration well,
located on a fault trend to the west of the Tigana and Jacana oil
fields, was drilled in 1Q2018 and tested in the Mirador formation
during 2Q2018. The well is currently producing 170 bopd from the
Mirador formation. Chachalaca Sur also showed potential in the
Guadalupe formation, where short-term tests were carried out during
1Q2018 with production rates of 350 bopd.
- Tigana Norte 9 appraisal well was
drilled in 1Q2018 to a total depth of 11,581 feet and tested during
2Q2018. A production test conducted with an electric submersible
pump in the Guadalupe formation resulted in a production rate of
1,150 bopd. The Tigana Norte 9 well was drilled outside the 3P
outline defined in the 2017 D&M reserve certification.
Development drilling:
- Five new wells were tested and put on
production, including the Tigana Sur Oeste 4, Tigana Sur Oeste 5,
Tigana Sur Oeste 8, Tigana Norte 8 and Jacana 21 development wells,
which tested approximately 5,100 bopd gross.
- Two additional wells were drilled,
Tigana Sur Oeste 6 and Jacana 22 development wells, expected to be
tested during 3Q2018.
Facilities update:
- During 2Q2018 the Company continued
with engineering and construction of the flowline to connect the
Llanos 34 block to the ODL pipeline, which is expected to be
operational by early 2019. Net capital expenditures for GeoPark for
this project – which will support future production growth and
reduce transportation and operating costs – are $15-20
million.
Tiple acreage (GeoPark operated) farm-in drilling results in
2Q2018:
- Yaguasito 1 exploration well, was
drilled to a total depth of 9,196 feet. According to petrophysical
logging interpretation, the well encountered non-commercial oil
accumulations and, following these results, a decision was made to
plug and abandon the well.
For a summary of upcoming drilling and testing activities,
please refer to the 3Q2018 drilling schedule below.
Peru:
GeoPark completed the EIA to initiate operations in the Situche
Central oil field in the Morona block.
The EIA was submitted for approval to the Servicio Nacional de
Certificacion Ambiental (SENACE) on July 2, 2018 after more than a
year of collecting data, and in which local communities were also
involved.
The Morona block covers an area of 1.9 million acres on the
western side of the Marañon basin, one of the most prolific
hydrocarbon basins in Peru, where more than 1 billion barrels of
oil have been produced from the surrounding blocks. The Morona
block contains the Situche Central oil field, which has been
delineated by two wells that tested combined production rates of
7,500 bopd of light oil with upside potential of 200 mmbo. D&M
has certified gross proven and probable (2P) reserves of 42.1
million barrels of oil (mmbo) and 3P reserves of 83.0 mmbo for the
Situche Central oil field. The Morona block also includes a large
exploration potential with high impact prospects and plays –
including unrisked exploration resources ranging from 300 to 500
mmbo, as audited by Gaffney, Cline & Associates.
Argentina:
Average net production in Argentina totaled 2,467 boepd in
2Q2018 (65% oil, 35% gas), corresponding to the recent acquisition
of the Aguada Baguales, El Porvenir and Puesto Touquet blocks
(GeoPark operated, 100% WI) in the Neuquen basin.
GeoPark closed the acquisition and initiated operational
takeover at the end of 1Q2018 of the Aguada Baguales, El Porvenir
and Puesto Touquet blocks, which have multiple attractive
development and exploration projects, with the potential to
significantly increase production and reserves from cash flow
generated from existing production.
The Company will carry out the following activities in the
above- mentioned blocks during 3Q2018:
- Initiate a low-cost well intervention
campaign aimed at enhancing base production levels.
- Test a new tight gas play in the El
Porvenir block, through a low-cost well intervention (approximately
$0.3-0.4 million) of an existing well (drilled by the previous
owner of the block) to evaluate reservoir conditions, potential
well productivity and field size delineation.
Exploration drilling in the CN-V block:
- Rio Grande Este exploration well,
located adjacent to the Rio Grande Oeste light oil field discovered
by GeoPark in 2017, is currently being drilled, targeting
conventional potential in the Grupo Neuquen and Grupo Mendoza
formations.
New exploration acreage in the Neuquen basin and YPF
partnership:
- The Los Parlamentos block was awarded
to YPF in the Mendoza bidding round on May 31, 2018.
- The block covers an area of 366,000
acres with seismic coverage and is located near other producing
fields.
- GeoPark will receive a 50%
non-operating WI in exchange for a net financial commitment of $6
million over the next three years.
- Customary regulatory approvals are
still pending as of the date of this release.
For further details related to the Los Parlamentos block, please
refer to the release published on June 11, 2018.
Brazil:
Average net production in the Manati gas field (GeoPark
non-operated, 10% WI) improved by 9% to 2,904 boepd in 2Q2018,
compared to 2,658 boepd in 2Q2017. The increase in 2Q2018 resulted
from increased industrial consumption and decreased hydroelectric
power availability.
The Company is currently carrying out preliminary activities
related to a new exploration well in the REC-T-128 block (GeoPark
operated, 70% WI) in the Reconcavo basin, where it plans to spud
the well during October 2018.
Chile:
Average net oil and gas production in Chile increased by 4% to
2,559 boepd in 2Q2018 compared to 2,450 boepd in 2Q2017. Gas
production figures in 2Q2017 were partially affected by a temporary
interruption in gas purchases from the buyer. The production mix
during 2Q2018 was 69% gas and 31% oil (vs. 62% gas and 38% oil in
2Q2017). The Fell block (GeoPark operated, 100% WI) represented 99%
of Chilean production.
Exploration drilling in the Fell block:
- Jauke 1 exploration gas well is
currently being drilled, targeting the Springhill and Tobifera
formations.
3Q2018 Drilling Schedule
The following is a summary of expected drilling activities
scheduled for 3Q2018:
Prospect/Wella Country
Block WI
Type 1 Tigana 5
Colombia Llanos 34
45% Development 2 Tigana Sur
Oeste 6
b Colombia Llanos 34 45% Development 3 Tigana Norte
10 Colombia Llanos 34 45% Development 4 Tigana Norte 11 Colombia
Llanos 34 45% Development 5 Tigana Norte 14 Colombia Llanos 34 45%
Development 6 Chiricoca 2 Colombia Llanos 34 45% Appraisal 7 Jacana
22
b Colombia Llanos 34 45% Development 8 Jacana 14 Colombia
Llanos 34 45% Development 9 Jacana 24 Colombia Llanos 34 45%
Development 10 Jacana 25 Colombia Llanos 34 45% Development 11 Buco
1 Colombia Llanos 34 45% Exploration 12 Tigui Sur 1
b
Colombia Llanos 34 45% Exploration 13 Rio Grande Este 1
b
Argentina CN-V 50% Exploration 14 Jauke 1 Chile Fell 100%
Exploration a) Information included in the table
above is subject to change and may also be subject to partner or
regulatory approval b)
Drilling initiated in 2Q2018 with testing
expected in 3Q2018
OTHER NEWS / RECENT EVENTS
Reporting dates for 2Q2018 results release and conference
call
GeoPark will report its 2Q2018 financial results on August 8,
2018, after the market close. In conjunction with the 2Q2018
results press release, GeoPark’s management will host a conference
call on August 9, 2018 at 10:00 am (Eastern Daylight Time) to
discuss 2Q2018 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:
3166854
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.
NOTICE
Additional information about GeoPark can be found in the
“Investor Support” section on the website at www.geo-park.com.
Rounding amounts and percentages: Certain amounts and
percentages included in this press release have been rounded for
ease of presentation. Percentage figures included in this press
release have not in all cases been calculated on the basis of such
rounded figures, but on the basis of such amounts prior to
rounding. For this reason, certain percentage amounts in this press
release may vary from those obtained by performing the same
calculations using the figures in the financial statements. In
addition, certain other amounts that appear in this press release
may not sum due to rounding.
CAUTIONARY STATEMENTS RELEVANT TO
FORWARD-LOOKING INFORMATION
This press release contains statements that constitute
forward-looking statements. Many of the forward- looking statements
contained in this press release can be identified by the use of
forward-looking words such as ‘‘anticipate,’’ ‘‘believe,’’
‘‘could,’’ ‘‘expect,’’ ‘‘should,’’ ‘‘plan,’’ ‘‘intend,’’ ‘‘will,’’
‘‘estimate’’ and ‘‘potential,’’ among others.
Forward-looking statements that appear in a number of places in
this press release include, but are not limited to, statements
regarding the intent, belief or current expectations, regarding
various matters, including expected 2018 production growth,
expected schedule, economic recovery, payback timing, IRR, drilling
activities, demand for oil and gas, capital expenditures plan,
regulatory approvals, reserves and exploration resources.
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.
Oil and gas production figures included in this release are stated
before the effect of royalties paid in kind, consumption and
losses, except when specified.
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.
Readers are cautioned that the exploration resources disclosed
in this press release are not necessarily indicative of long term
performance or of ultimate recovery. Unrisked prospective resources
are not risked for change of development or chance of discovery. If
a discovery is made, there is no certainty that it will be
developed or, if it is developed, there is no certainty as to the
timing of such development. There is no certainty that any portion
of the Prospective Resources will be discovered. If discovered,
there is no certainty that it will be commercially viable to
produce any portion of the resources. Prospective Resource volumes
are presented as unrisked.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180711005219/en/
INVESTORS:GeoPark LimitedStacy Steimel – Shareholder
Value DirectorSantiago, Chile+562 2242
9600ssteimel@geo-park.comorGeoPark LimitedMiguel Bello – Market
Access DirectorSantiago, Chile+562 2242
9600mbello@geo-park.comorMEDIASard Verbinnen & CoJared
LevyNew York, USA+1 (212) 687-8080jlevy@sardverb.comorSard
Verbinnen & CoKelsey MarkovichNew York, USA+1 (212)
687-8080kmarkovich@sardverb.com
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