Record Production, New Oil Field
Discoveries, and Expanded Acreage
GeoPark Limited (“GeoPark” or the “Company”) (NYSE: GPRK), a
leading independent Latin American oil and gas explorer, operator
and consolidator with operations and growth platforms in Colombia,
Chile, Brazil, Argentina, and Peru, today announced its operational
update for the three-month period ended September 30, 2017
(“3Q2017”).
All figures are expressed in US Dollars and growth comparisons
refer to the same period of the prior year, except when otherwise
specified.
Third Quarter Highlights
Oil and gas production up 28%
- Consolidated oil and gas production up
28% to 28,325 boepd (up 8% compared to 2Q2017)
- Oil production increased by 37% to
23,237 bopd (up 6% compared to 2Q2017)
- Colombian oil production increased by
43% to 22,301 (up 6% compared to 2Q2017)
- Gas production declined by 1% to 30.5
mmcfpd (up 21% compared to 2Q2017)
- Current production exceeds 29,000
boepd, with the year-end exit production goal of 30,000+ boepd on
target and average annual 2017 production close to the high end of
the range, 26,500 – 27,500
Colombia drilling success drives gross production to over
50,000 bopd
In the Llanos 34 block (GeoPark operated, 45% WI):
- Curucucu 1 exploration well discovered
new oil field, and currently producing 1,600 bopd
- Jacana 12 appraisal well successfully
drilled and currently producing 3,100 bopd
- Tigana Norte 2 development well
successfully drilled and currently producing 2,000 bopd
- Jacana 10 appraisal well successfully
drilled and currently producing 900 bopd
- Jacana 13 and 17 appraisal wells
drilled and completed with testing planned in fourth quarter
- New wells drilled are currently
producing more than 7,500 bopd gross
Argentina drilling success and new oil field
discovery
- CN-V block (GeoPark operated, 50% WI):
Rio Grande Oeste 1 exploration well discovered new oil field.
Initiating long-term test
- Puelen block (GeoPark non-operated, 18%
WI): three shallow exploration wells drilled, with two wells to be
completed and tested in fourth quarter
Brazil acreage added to GeoPark’s high potential low cost
Latin American asset platform
- Bid on and awarded a new attractive
block in Brazil Round 14 in the proven mature onshore Potiguar
Basin that fits with other GeoPark properties
- Total commitment (bonus plus work
program) of less than $500,000
2020 Bond refinanced at lower cost, extended maturity and
increased amount
- Strengthened balance sheet with
successful placing of $425 million Bond under Regulation S and Rule
144 A, maturing in September 2024 with a 6.5% coupon
- Funds were used to repay substantially
all existing financial debt, to provide financial flexibility and
for general corporate purposes
- Offering was oversubscribed by more
than 4x with top tier and high-quality investors
Catalysts in 4Q2017
Colombia:
- Continued delineation of the expanding
Tigana/Jacana complex with a focus in northern Tigana and southern
Jacana oil fields and delineate the area between Tigana and Jacana:
two already-drilled wells to be tested, two new appraisal wells to
further test field boundaries, and two new development wells to
increase production
Argentina:
- Production start-up with long-term
testing in Rio Grande Oeste oil field in CN-V block
- Exploration drilling start-up in Sierra
del Nevado block (GeoPark non-operated, 18% WI) in Neuquen
Basin
Brazil:
- Exploration drilling in POT-T-747 block
(GeoPark operated, 70% WI) in the Potiguar Basin
New hedges provide $50-$52/barrel oil price floor in
2018
- Secured minimum Brent price of
$50/barrel and $52/barrel for 11,000 bopd and 8,000 bopd in 1Q2018
and 2Q2018, respectively
- New volumes complement existing hedged
production of 12,000 bopd through December 2017 with a minimum
Brent price of $50-$51/barrel
Breakdown of Quarterly Production by Country
The following table shows production figures for 3Q2017, as
compared to 3Q2016:
3Q2017
3Q2016 Total (boepd) Oil
(bopd)a
Gas
(mcfpd)
Total (boepd)
% Chg. Colombia 22,367 22,301 396
15,678 43% Chile 2,817 891 11,556 3,756 -25% Brazil
3,141 45 18,576 2,636 19%
Total
28,325 23,237 30,528
22,070 28% a) Includes royalties paid
in kind in Colombia for 774 bopd approximately in 3Q2017. No
royalties were paid in kind in either Chile or Brazil.
Quarterly Production Evolution
(boepd) 3Q2016 4Q2016
1Q2017 2Q2017 3Q2017 Colombia
15,678 17,535 19,330 21,015
22,367 Chile 3,756 3,523 3,351 2,450 2,817 Brazil 2,636
2,535 2,499 2,658 3,141
Total
22,070 23,593 25,180
26,123 28,325 Oil 16,942 18,798 20,487
21,930 23,237 Gas 5,128 4,795 4,693 4,193 5,088
Oil and Gas Production Update
Consolidated:
Continued significant oil production growth of 43% in Colombia
increased average consolidated oil and gas production to 28,325
boepd in 3Q2017 from 22,070 boepd in 3Q2016. The increase was
mainly attributed to new production from the Tigana/Jacana oil
fields with four new wells put into production plus the Curucucu
oil field discovery. Production from Jacana 12 and Tigana Norte 2
wells were only initiated in the second half of September. On a
consolidated basis, gas production in Chile and Brazil increased by
22% compared to the previous quarter.
Oil represented 82% of the total reported production in 3Q2017
(vs. 77% in 3Q2016 and 84% in 2Q2017) resulting from the successful
drilling campaign in the Llanos 34 block and a recuperated level of
gas production in Chile and Brazil.
Colombia:
Average net production in Colombia grew 43% to 22,367 boepd in
3Q2017 compared to 15,678 boepd in 3Q2016, primarily attributed to
exploration, appraisal and development drilling success in the
Tigana/Jacana oil field complex in the Llanos 34 block, which
represented 95% of GeoPark’s Colombian production in 3Q2017.
The 3Q2017 drilling campaign in the Llanos 34 block continued to
provide positive results, as follows:
- Curucucu 1 exploration well was
successfully drilled exploring a new fault trend to the east of
Tigana/Jacana fault trend, adjacent to the Jacamar oil field. The
well is currently producing 1,600 bopd.
- Jacana 12 appraisal well was drilled to
a total depth of 11,508 feet. A production test conducted with an
electric submersible pump in the Guadalupe formation resulted in a
production rate of approximately 3,100 bopd of 15.8 degrees API,
with less than 0.1% water cut, through a choke of 64/64 inches and
wellhead pressure of 45 pounds per square inch. Additional
production history is required to determine stabilized flow rates
of the well. The Jacana 12 well was drilled to a bottom-hole
location that is approximately 1,300 meters south of the Jacana 11
appraisal well.
- Tigana Norte 2 was drilled to a total
depth of 11,154 feet. A production test conducted with an electric
submersible pump in the Guadalupe formation resulted in a
production rate of 1,980 bopd of 14.7 degrees API, with less than
1.0% water cut, through a choke of 70/64 inches and wellhead
pressure of 80 pounds per square inch. Additional production
history is required to determine the stabilized flow rates of the
well.
- Jacana 10 appraisal well was
successfully drilled and completed to test the northern limits of
the Jacana oil field. The well is currently producing 900
bopd.
- Jacana 13 and 17 appraisal wells were
drilled and cased, and preliminary logging information indicated
the presence of hydrocarbons in the Guadalupe formation in both
wells. The wells are to be tested in the fourth quarter.
For a summary of upcoming drilling activities, please refer to
the section 4Q2017 Drilling Schedule below.
Chile:
Average net oil and gas production in Chile decreased by 25% to
2,817 boepd in 3Q2017 compared to 3,756 boepd in 3Q2016 due to the
natural decline in the fields. The resulting production mix during
3Q2017 was 68% gas and 32% oil (vs. 66% gas and 34% oil in 3Q2016).
The Fell block represented 98% of GeoPark’s Chilean production.
Uaken 1 exploration well was drilled to a total depth of 3,600
feet, targeting a gas prospect in El Salto formation in the Fell
block (GeoPark operated, 100% WI). Preliminary logging information
indicates gas in the upper and lower zones of the formation.
GeoPark is currently seeking customary regulatory approvals to
carry out testing activities, which are expected in the fourth
quarter.
Brazil:
Average net production in the Manati gas field (GeoPark
non-operated, 10% WI) improved by 19% to 3,141 boepd in 3Q2017
compared to 2,636 boepd in 3Q2016. Industrial demand for gas in
Brazil recovered in the third quarter resulting in increased
production compared to the second quarter.
GeoPark was awarded a new attractive exploration block in Brazil
bid Round 14. The POT-T-785 block covers an area of 7,875 acres in
the Potiguar Basin, surrounded by producing fields operated by
Petrobras, where GeoPark’s technical team has identified three
leads. GeoPark committed to an investment of approximately
$500,000, including bonus and work program commitments, during the
first exploration period ending December 2020. Potiguar is a mature
proven basin that has undergone significant oil and gas activities
for the past 50 years with more than 70 oil and gas fields
currently in production.
Argentina:
During 3Q2017 GeoPark announced the discovery of the Rio Grande
Oeste oil field in CN-V block in the Neuquen Basin. Rio Grande
Oeste 1 exploration well showed potential net pay of 400 feet and
successfully tested 300 bopd gross. GeoPark constructed an early
production facility to begin production in a long-term test during
the fourth quarter.
Also in 3Q2017, three exploration wells were drilled in Puelen
block, with two of these expected to be completed and tested by the
operator, Pluspetrol, in the fourth quarter. New exploration
drilling in Sierra del Nevado block (GeoPark non-operated, 18% WI)
is also expected in the fourth quarter.
The Puelen and Sierra del Nevado blocks are in the Neuquen
Basin. The Puelen block is located north of the producing El
Corcobo oil field, operated by Pluspetrol and the Sierra del Nevado
block is located east of the Llancanelo oil field, operated by
YPF.
4Q2017 Drilling Schedule
The following is a summary of expected activities scheduled for
4Q2017 with estimated total net capital expenditures of $20-30
million (drilling and completion costs of $10-15 million plus
facilities and other costs of $10-15 million).
Prospect/Wella Country
Block WI Type 1
Tigana Sur Oeste 3 Colombia Llanos 34 45%
Development 2 Tigana Sur Oeste 7 Colombia Llanos 34 45%
Appraisal 3 Jacana 13
b Colombia Llanos 34 45%
Appraisal
4 Jacana 17
b Colombia Llanos 34 45%
Appraisal
5 Tigana Norte 3 Colombia Llanos 34 45% Development 6 Tigana Norte
4 Colombia Llanos 34 45% Appraisal 7 Sierra del Nevado 1 Argentina
Sierra del Nevado 18% (Non-op) Exploration 8 Sierra del Nevado 2
Argentina Sierra del Nevado 18% (Non-op) Exploration 9 Sierra del
Nevado 3 Argentina Sierra del Nevado 18% (Non-op) Exploration 10
Sierra del Nevado 4 Argentina Sierra del Nevado 18% (Non-op)
Exploration 11 JET Brazil POT-T-747
70%c
Exploration a) Information included in the table
above is subject to change and may also be subject to partner or
regulatory approval b) Drilled in 3Q2017 with testing planned in
fourth quarter c) A 30% working interest of proposed partners is
subject to ANP approval
OTHER NEWS / RECENT EVENTS
Reporting dates for 3Q2017 results release, conference call
and work program and investment guidelines for 2018
GeoPark will report its 3Q2017 financial results on Wednesday,
November 15, 2017, after the market closes.
In conjunction with the 3Q2017 results press release, GeoPark’s
management will host a conference call on Thursday, November 16,
2017 at 10:00 am (Eastern Standard Time) to discuss 3Q2017
financial results and the work program and investment guidelines
for 2018.
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: 99494005
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 2017 production growth,
expected schedule, economic recovery, payback timing, IRR, drilling
activities, demand for oil and gas 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, except when specified.
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: http://www.businesswire.com/news/home/20171012005638/en/
GeoPark LimitedINVESTORS:Santiago, ChileStacy Steimel,
+562 2242 9600Shareholder Value
Directorssteimel@geo-park.comorMEDIA:New York, USASard
Verbinnen & CoJared Levy,
+1-212-687-8080jlevy@sardverb.comorKelsey Markovich,
+1-212-687-8080kmarkovich@sardverb.com
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