GeoParks reported its consolidated financial results corresponding to the quarter of 2023, ended on September 30, which highlights the association with Phoenix Global Resources to exploit four deposits in Dead Cow.
The acquisition of shareholding in the unconventional hydrocarbon blocks was a milestone for the company, which had withdrawn from Argentina in 2022 by divesting itself of mature fields. On July 1, the transaction with Phoenix became effective with Mata Mora Norte and Mata Mora Sur where it has 45% as a non-operating partner; adding North Confluence and South Confluence, in both cases with 50%.
“Our expansion in Vaca Muerta also took an important step with a recent field trip in which, together with our partner Phoenix Global Resources, we hosted a group of fixed income and equity investors. This visit provided an invaluable opportunity to showcase first-hand our growth strategy and highlight the scalable and efficient growth potential of our unconventional assets in Vaca Muerta,” he explained Andrés OcampoCEO of GeoPark.
“In the third quarter, we continued to build on our strengths, generating strong cash flow and efficiently advancing our strategic initiatives with a disciplined investment of $45.9 million in capital expenditures. This investment was focused on key development activities , advanced and exploration in our main assets in Colombia and Ecuador,” explained the manager.
During the third quarter of this year, The development of the wells in the Mata Mora Norte block reached an average gross production of 12,621 barrels of oil equivalent per day. Additionally, Phoenix, as operator, started three exploratory wells in Confluencia Norte.
In terms of ratings, the Argentine subsidiary GeoPark obtained key approvals in the capital markets, including bank credit lines, a AA+(arg) credit rating of the local subsidiary of Fitch Ratings and the authorization of the National Securities Commission (CNV) to issue up to US$500 million in debt securities over the next five years.
In the financial summary for the period, GeoPark reported a solid financial performance with an Adjusted EBITDA of USD 99.8 million, a margin of 63% and a net profit of USD 25.1 million, amid a context of lower prices and operational challenges. Net profit was 1.2% higher than the third quarter of last year, demonstrating resilient profitability in a context of lower oil prices.
Adjusted EBITDA for the nine-month period ended September 30, 2024 was higher than the same period in 2023, highlighting the strength and consistency of our financial results to date.
GeoPark invested US$45.9 million in capital expenditures in the third quarter of this year, focusing on five axes in its global strategy:
- Facility improvements and advancement of development and advanced activities in the Llanos 34 block (operated by GeoPark, with a 45% interest) in Colombia, including an ongoing waterflooding campaign and facility expansion
- Drilling of two exploratory wells in the CPO-5 block (not operated by GeoPark, with a 30% interest) in Colombia
- Delineation and exploration underway at the Toritos and Bisbita deposits in the Llanos 123 block (operated by GeoPark, with a 50% interest) in Colombia
- Exploration and workover activities in the Espejo (operated by GeoPark, with a 50% interest) and Perico (not operated by GeoPark, with a 50% interest) blocks in Ecuador
- Infrastructure development, with the construction of drilling platforms in the PUT-8 block (operated by GeoPark, with a 50% interest) in Colombia.
The company’s report states: “Reaffirming continued commitment to disciplined financial management, GeoPark concluded 3Q2024 with a growing cash balance reaching $123.4 million at the end of September, while net leverage remained low. at 0.8x. “GeoPark’s debt profile remains resilient, with no principal maturities scheduled until January 2027.”
“Every dollar invested in capital expenditures generated $2.2 in Adjusted EBITDA, and return on average capital employed (ROACE) reached 34%. These financial achievements and discipline allowed GeoPark to once again reward its shareholders with a quarterly dividend of US$7.5 million (US$0.147 per share), which represents an annualized dividend of US$30 million and an approximate yield of 7%,” the statement further states.
“Looking ahead, GeoPark plans to publish its 2025 Work Plan and Investment Guidelines before the end of the year. This plan will provide strategic direction and capital allocation priorities for GeoPark, to drive sustained growth and maximize the creation of value in its asset portfolio,” he highlights.
