Record Operational and Financial Performance Today Expands the Growth
Pathway for Tomorrow
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, Chile and Ecuador reports its consolidated financial
results for the three-month period ended March 31, 2019 (“First Quarter”
or “1Q2019”). A conference call to discuss 1Q2019 financial results will
be held on May 9, 2019 at 11:00 am Eastern 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 and should be read in conjunction with GeoPark’s
consolidated financial statements and the notes to those statements for
the period ended March 31, 2019 and 2018, available on the Company’s
website.
FIRST QUARTER 2019 HIGHLIGHTS
Continuous Operational Success
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Record consolidated oil and gas production up 23% to 39,557 boepd
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Gross operated production in Colombia, Chile and Argentina surpassed
75,000 bopd
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Oil production increased by 26% to 34,358 bopd
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Gas production increased by 7% to 31.2 mmcfpd
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Seven rigs now operational across the GeoPark platform
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Flowline connecting the Colombian Llanos 34 block (GeoPark operated,
45% WI) to regional pipeline completed
Continuous Cost Efficiency and Cash Generation Growth
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Revenue increased by 21% to $150.1 million
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Net Profit of $19.7 million
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Adjusted EBITDA increased by 46% to $92.3 million
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Adjusted EBITDA per boe increased by 20% to $27.4, in spite of 5%
lower Brent oil prices
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Lower transportation costs in Colombia improved Adjusted EBITDA by
$2.0/bbl
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Cash Flow from Operating Activities increased to $81.3 million
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Free Cash Flow1 of $44.0 million
Continuous Financial Track Record and Capital Strengthening
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Record Adjusted EBITDA reaching $359.5 million in the last twelve
months
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Return on Capital Employed of 38%2 in the last twelve months
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Net debt to Adjusted EBITDA ratio of 0.8x
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Adjusted EBITDA to Capital Expenditures ratio of 2.5x
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Cash and Cash Equivalents of $146.6 million
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40-45% of 2Q2019 oil production hedged at floors of $55-65/bbl Brent
Continuous Long-Term Project Inventory Expansion
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New country entry into Ecuador and exploration acreage boost: Acquired
attractive low-cost, low-risk Espejo and Perico blocks3
(GeoPark, 50% WI), in the prolific Oriente basin in Ecuador
Continuous Value Return to Shareholders
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Invested $16.5 million in the share buyback program initiated in
December 2018, buying 1,100,000 shares while executing self-funded
growth work programs
James F. Park, Chief Executive Officer of GeoPark, said:
“Congratulations and thanks again to the GeoPark team. We are proud of
our continuous streak of quarterly operational and financial records -
which is really the reflection of many years of work and consistent
execution of our long-term business plan. For this reason, our recent
successful entry into Ecuador represents a major development for our
Company. One of the biggest most attractive underdeveloped petroleum
systems in Latin America - and a long-term target of GeoPark - is the
Maranon-Oriente-Putumayo basin complex stretching from Peru through
Ecuador and into Colombia with over 10 billion boe of remaining
conventional hydrocarbon resources. With our existing platforms in Peru
and Colombia, our Ecuador entry into this exciting oil province
substantially expands our organic and inorganic growth fairway - laying
the groundwork for a future with the potential for many more records and
successes.”
CONSOLIDATED OPERATING PERFORMANCE
Key performance indicators:
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Key Indicators
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1Q2019
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4Q2018
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1Q2018
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Oil productiona (bopd)
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34,358
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32,859
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27,345
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Gas production (mcfpd)
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31,194
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35,288
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29,101
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Average net production (boepd)
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39,557
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38,741
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32,195
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Brent oil price ($ per bbl)
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63.7
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68.0
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67.3
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Combined price ($ per boe)
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44.6
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44.7
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44.7
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⁻ Oil ($ per bbl)
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48.7
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49.0
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48.6
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⁻ Gas ($ per mcf)
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5.0
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5.0
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5.4
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Sale of crude oil ($ million)
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137.6
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136.6
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111.0
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Sale of gas ($ million)
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12.5
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14.6
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12.8
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Revenue ($ million)
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150.1
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151.2
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123.9
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Commodity risk management contracts ($ million)
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-21.3
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32.0
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-3.9
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Production & operating costsb ($ million)
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-38.9
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-46.7
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-34.1
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G&G, G&Ac and Selling expenses ($ million)
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-19.6
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-19.9
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-15.2
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Adjusted EBITDA ($ million)
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92.3
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85.7
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63.3
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Adjusted EBITDA ($ per boe)
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27.4
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25.3
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22.9
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Operating Netback ($ per boe)
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32.3
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31.0
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28.5
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Profit (loss) ($ million)
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19.7
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42.6
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24.9
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Capital expenditures ($ million)
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37.3
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33.8
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21.4
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Argentina acquisition ($ million)
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-
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52.0
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Cash and cash equivalents ($ million)
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146.6
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127.7
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120.4
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Short-term financial debt ($ million)
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11.4
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18.0
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0.8
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Long-term financial debt ($ million)
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429.2
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429.0
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418.7
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Net debt ($ million)
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294.0
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319.3
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299.1
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a) Includes government royalties paid in kind in Colombia for
approximately 1,295, 1,181 and 930 bopd in 1Q2019, 4Q2018 and 1Q2018
respectively. No royalties were paid in kind in Chile, Brazil or
Argentina.
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b) Production and operating costs include operating costs and
royalties paid in cash.
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c) G&A expenses include non-cash, share-based payments for $0.8
million, $1.3 million and $0.6 million, respectively. These expenses
are excluded from the Adjusted EBITDA calculation.
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Production: Overall oil and gas production grew by 23% to 39,557
boepd in 1Q2019 from 32,195 boepd in 1Q2018, due to increased production
in Colombia and new production from acquisitions in Argentina. Oil
represented 87% of total reported production compared to 85% in 1Q2018.
For further details, please refer to the 1Q2019 Operational Update
published on April 11, 2019.
Reference and Realized Oil Prices: Brent crude oil prices
averaged $63.7 per bbl during 1Q2019, 5% lower than 1Q2018 levels.
However, the consolidated realized oil sales price averaged $48.7 per
bbl in 1Q2019, compared to $48.6 per bbl in 1Q2018. The smaller
difference in realized prices was due to a smaller Vasconia marker
discount and significant improvements in commercial and transportation
discounts in Colombia that began in January 2019.
In Colombia, the Vasconia marker discount averaged $3.5 per bbl in
1Q2019, compared to $4.1 in 1Q2018, and commercial and transportation
discounts in Colombia averaged $12.0 in 1Q2019, compared to $15.0 per
bbl in 1Q2018.
As shown in the realized oil price table below, commercial and
transportation discounts in Colombia improved by $3.0/bbl during 1Q2019,
positively impacting realized oil revenues in Colombia. These lower
discounts on oil revenues in Colombia were partially offset by $1.0/bbl
of higher selling expenses, thus generating a net margin improvement of
$2.0/bbl (please refer to selling expenses section below).
The flowline connecting the Llanos 34 block to the Oleoducto de los
Llanos (ODL) is being carried to completion and oil will start flowing
from the Jacana oil field to the ODL, supporting future production
growth, reducing overall operational risk, and contributing to further
reductions in transportation and operating costs.
The tables below provide a breakdown of reference and net realized oil
prices in Colombia, Chile and Argentina in 1Q2019 and 1Q2018:
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1Q2019 - Realized Oil Prices
($ per bbl)
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Colombia
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Chile
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Argentina
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Brent oil price
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63.7
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63.7
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63.7
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Vasconia differential
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(3.5)
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Commercial and transportation discounts
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(12.0)
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(8.8)
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Other4
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(9.0)
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Realized oil price
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48.2
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54.9
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54.7
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Weight on oil sales mix
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93%
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2%
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5%
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1Q2018 - Realized Oil Prices
($ per bbl)
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Colombia
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Chile
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Brent oil price
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67.3
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67.3
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Vasconia differential
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(4.1)
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-
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Commercial and transportation discounts
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(15.0)
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(9.8)
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Realized oil price
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48.2
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57.5
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Weight on oil sales mix
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97%
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3%
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Revenue: Consolidated revenues increased by 21% to $150.1 million
in 1Q2019, compared to $123.9 million in 1Q2018. Additional deliveries
and lower discounts led to increased revenues.
Sales of crude oil: Consolidated oil
revenues increased by 24% to $137.6 million in 1Q2019, driven by a 24%
increase in deliveries. Oil revenues were 92% of total revenues compared
to 90% in 1Q2018.
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Colombia: In 1Q2019, oil revenues increased by 19% to $126.2 million
following higher oil deliveries and stable realized oil prices. Oil
deliveries increased by 19% to 30,498 bopd. Realized prices remained
flat at $48.2 despite lower Brent oil prices, resulting from a lower
Vasconia differential and improved commercial and transportation
discounts. Colombian earn-out payments increased to $6.1 million in
1Q2019, compared to $4.3 million in 1Q2018, in line with higher oil
revenues and increased production.
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Chile: In 1Q2019, oil revenues decreased by 22% to $3.3 million, due
to lower volumes sold and lower oil prices. Oil deliveries decreased
by 19% to 668 bopd due to the natural decline of the fields whereas
realized oil prices decreased by 5% to $54.9 per bbl, in line with
lower Brent prices.
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Argentina: In 1Q2019, oil revenues were $7.9 million, with deliveries
of 1,616 bopd and a realized oil price of $54.7 per bbl. This was
produced from the Aguada Baguales, El Porvenir and Puesto Touquet
blocks (GeoPark operated, 100% WI).
Sales of gas: Consolidated gas revenues
decreased by 2% to $12.5 million in 1Q2019 compared to $12.8 million in
1Q2018. Revenues dropped due to an 8% decrease in gas prices, however
this was offset by the 6% increase in gas deliveries.
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Chile: In 1Q2019, gas revenues increased by 14% to $5.5 million
reflecting higher gas deliveries, partially offset by lower gas
prices. The Jauke gas field discovery during 2018 increased gas
deliveries by 21% to 12,590 mcfpd (2,098 boepd). Gas prices were 5%
lower, or $4.8 per mcf ($28.9 per boe) in 1Q2019.
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Brazil: In 1Q2019, gas revenues decreased by 32% to $5.3 million, due
to lower deliveries and prices. Planned maintenance works in the
Manati field (GeoPark non-operated, 10% WI) reduced gas deliveries by
30% to 10,577 mcfpd (1,763 boepd). Gas prices decreased by 2% to $5.5
per mcf ($33.2 per boe), due to the impact of the local currency
devaluation, which was partially offset by the annual price inflation
adjustment of approximately 6%, effective January 2019.
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Argentina: In 1Q2019, gas revenues were $1.4 million, resulting from
deliveries of 3,807 mcfpd (635 boepd), and realized gas prices of $4.0
per mcf ($24.1 per boe) from the blocks acquired in Argentina.
Commodity Risk Management Contracts: Consolidated commodity risk
management contracts refers to two different components, a realized and
an unrealized portion.
The realized portion of the commodity risk management contracts
registered a cash gain of $1.8 million in 1Q2019 compared to a $10.6
million loss in 1Q2018. Realized gains in 1Q2019 resulted from hedges in
place covering 15,000 bopd with floors of $60-65 per bbl which were
higher than prevailing oil prices during a portion of the quarter.
The unrealized portion of the commodity risk management contracts
amounted to $23.1 million loss in 1Q2019 compared to a $6.7 million gain
in 1Q2018. Unrealized losses during 1Q2019 resulted from an increase in
the forward Brent oil price curve compared to December 2018.
The Company uses risk management contracts to minimize the impact of oil
price fluctuations on its work program.
Production and Operating Costs5: Consolidated
operating costs per boe were $7.8 in 1Q2019, lower than the $8.3 per boe
in 4Q2018, but higher than the $7.2 per boe in 1Q2018 due to the
addition of the new blocks in Argentina which have higher costs per boe.
Consolidated operating costs increased by $5.4 million to $25.3 million
in 1Q2019 compared to $19.9 million in 1Q2018. The majority of the
increase, $4.3 million, was explained by the acquisition in Argentina.
The breakdown of operating costs is as follows:
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Colombia: Operating costs per boe increased slightly to $5.5 in 1Q2019
compared to $5.4 in 1Q2018. Total operating costs increased by 21% to
$15.0 million, in line with higher volumes delivered, which increased
by 20%.
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Chile: Operating costs per boe decreased by 22% to $18.1 in 1Q2019
compared to $23.3 in 1Q2018, due to lower well intervention
activities. Total operating costs decreased by 16% to $4.5 million in
1Q2019 from $5.4 million in 1Q2018, despite an increase of 8% in oil
and gas deliveries.
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Brazil: Operating costs per boe increased by 36% to $9.6 in 1Q2019
compared to $7.0 in 1Q2018, due to the impact of fixed costs over
lower production and deliveries which decreased by 30%. Total
operating costs decreased by 38% to $1.0 million in 1Q2019 from $1.6
million in 1Q2018.
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Argentina: Operating costs per boe decreased by 29% to $24.3 in 1Q2019
compared to $34.4 in 4Q2018. Total operating costs decreased to $4.8
million in 1Q2019 from $7.2 million in 4Q2018. The 1Q2019 costs
decreased compared to the previous quarter due to lower well
intervention activities.
Consolidated royalties fell by $0.8 million to $13.3 million in 1Q2019
compared to $14.1 million in 1Q2018, reaching 9% of net revenue in
1Q2019, compared to 11% in 1Q2018. This decrease was due to a lower
“high price” royalty component in Colombia, which is a variable rate
royalty depending on prevailing oil prices. The “high price” royalty has
a countercyclical effect when oil prices are lower. This effect was
partially offset by higher oil and gas deliveries.
Selling Expenses: Consolidated selling expenses increased by $3.1
million to $3.5 million in 1Q2019 (of which $3.0 million, or $1.1/bbl
correspond to Colombia), compared to $0.4 million in 1Q2018.
The increase of $1.0 per barrel in Colombia is explained by accounting
differences for the different kinds of sales. Transportation costs
associated to sales at the wellhead are accounted for as a deduction
from revenues whereas transportation costs associated to sales at other
delivery points are accounted for as selling expenses.
As shown in the reference and realized oil price section of this
document, commercial and transportation discounts in Colombia improved
by $3.0/bbl during 1Q2019, positively impacting realized oil prices.
This was partially offset by $1.0/bbl of higher selling expenses, thus
generating a net margin improvement of $2.0/bbl.
Administrative Expenses: Consolidated G&A costs per boe decreased
by 21% to $3.4 in 1Q2019 compared to $4.3 in 1Q2018. Total consolidated
G&A decreased by 7% to $11.7 million in 1Q2019 compared to $12.6 million
in 1Q2018.
Geological & Geophysical Expenses: Consolidated G&G costs per
boe increased to $1.6 in 1Q2019 versus $1.3 in 1Q2018. Total
consolidated G&G expenses increased to $4.3 million in 1Q2019 compared
to $2.2 million in 1Q2018 due to higher staff costs associated with an
increased scale of operations and continuous investment in improving
capacities.
Adjusted EBITDA: Consolidated Adjusted EBITDA6 surged
by 46% to $92.3 million, or $27.4 per boe, in 1Q2019 compared to $63.3
million, or $22.9 per boe, in 1Q2018.
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Colombia: Adjusted EBITDA of $89.0 million in 1Q2019
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Chile: Adjusted EBITDA of $2.9 million in 1Q2019
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Brazil: Adjusted EBITDA of $2.8 million in 1Q2019
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Argentina: Adjusted EBITDA of $2.6 million in 1Q2019
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Corporate and Peru: Adjusted EBITDA of negative $5.1 million in 1Q2019
The table below shows production, volumes sold and the breakdown of the
most significant components of Adjusted EBITDA for 1Q2019 and 1Q2018, on
a per country and per boe basis:
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Adjusted EBITDA/boe
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Colombia
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Chile
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Brazil
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Argentinac
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Total
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1Q19
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1Q18
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1Q19
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1Q18
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1Q19
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1Q18
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1Q19
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1Q19
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1Q18
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Production (boepd)
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32,131
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26,405
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2,961
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2,873
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1,960
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2,775
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2,505
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39,557
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32,195
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Stock variation /RIKa
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(1,501)
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(783)
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(195)
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(313)
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(165)
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(217)
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(254)
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(2,118)
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(1,411)
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Sales volume (boepd)
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30,630
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25,622
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2,766
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2,560
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1,793
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2,558
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2,251
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37,439
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30,784
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% Oil
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99.6%
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99.6%
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24%
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32%
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2%
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2%
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72%
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88%
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86%
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($ per boe)
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Realized oil price
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48.2
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48.2
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54.9
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57.5
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70.4
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74.6
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54.7
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48.7
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48.6
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Realized gas priceb
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36.7
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34.6
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28.9
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30.6
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33.2
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33.9
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24.1
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30.1
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32.5
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Earn-out
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(2.2)
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(2.0)
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-
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-
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-
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-
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-
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(1.8)
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(1.6)
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Combined Price
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45.9
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46.3
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35.2
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39.2
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33.8
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34.5
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46.1
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44.6
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44.7
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Realized commodity risk management contracts
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0.7
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(4.6)
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-
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-
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-
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-
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-
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0.5
|
|
(3.8)
|
Operating costs
|
|
(5.5)
|
|
(5.4)
|
|
(18.1)
|
|
(23.3)
|
|
(9.6)
|
|
(7.0)
|
|
(24.3)
|
|
|
|
(7.8)
|
|
(7.2)
|
Royalties in cash
|
|
(4.0)
|
|
(5.6)
|
|
(1.3)
|
|
(1.6)
|
|
(2.5)
|
|
(3.1)
|
|
(6.9)
|
|
|
|
(3.9)
|
|
(5.1)
|
Selling & other expenses
|
|
(1.1)
|
|
(0.1)
|
|
(0.4)
|
|
(0.6)
|
|
-
|
|
-
|
|
(2.1)
|
|
|
|
(1.0)
|
|
(0.1)
|
Operating Netback/boe
|
|
35.9
|
|
30.7
|
|
15.3
|
|
13.8
|
|
21.7
|
|
24.4
|
|
12.8
|
|
|
|
32.3
|
|
28.5
|
G&A, G&G, & other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5.0)
|
|
(5.6)
|
Adjusted EBITDA/boe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27.4
|
|
22.9
|
|
|
|
|
a) RIK (Royalties in kind). Includes royalties paid in kind in
Colombia for approximately 1,295 and 930 bopd in 1Q2019 and 1Q2018
respectively. No royalties were paid in kind in Chile, Brazil or
Argentina.
|
|
|
|
|
b) Conversion rate of $mcf/$boe=1/6.
|
|
|
|
|
c) The acquisition of the Aguada Baguales, Puesto Touquet and El
Porvenir blocks in Argentina was closed on March 27, 2018, thus not
representing material revenue, operating costs, royalties or selling
expenses during 1Q2018.
|
|
|
|
|
|
Depreciation: Consolidated depreciation charges increased by 29%
to $25.5 million in 1Q2019, compared to $19.7 million in 1Q2018, due to
increased volumes delivered.
Write-off of Unsuccessful Exploration Efforts: The consolidated
write-off of unsuccessful exploration efforts was $0.3 million in 1Q2019
compared to $1.8 million in 1Q2018.
Other Income (Expenses): Other operating income were $1.3 million
in 1Q2019, compared to $0.8 million in 1Q2018.
CONSOLIDATED NON-OPERATING RESULTS AND PROFIT FOR THE PERIOD
Financial Expenses: Net financial expenses increased slightly to
$8.8 million in 1Q2019, compared to $8.5 million in 1Q2018.
Foreign Exchange: Net foreign exchange charges added a $1.0
million gain in 1Q2019 compared to a $1.7 million loss in 1Q2018.
Income Tax: Income tax expenses were $18.5 million in 1Q2019
compared to $15.0 million in 1Q2018, in line with higher taxable income
in 1Q2019.
Profit: Profit of $19.7 million in 1Q2019 was $5.2 million lower
than the $24.9 million recorded in 1Q2018, mainly due to the effect of
unrealized losses related to commodity risk management contracts,
partially offset by higher gross profit.
BALANCE SHEET
Cash and Cash Equivalents: Cash and cash equivalents totaled
$146.6 million as of March 31, 2019 compared to $127.7 million as of
December 31, 2018. Cash generated from operating activities equaled
$81.3 million partially offset by cash used in investing activities of
$37.3 million and in financing activities of $25.3 million.
Cash generated from operating activities of $81.3 million in 1Q2019
included income tax payments of $11.9 million. During 2Q2019 the Company
expects to pay $75-85 million in cash taxes, consisting of $45-50
million related to tax gains of fiscal year 2018 and $30-35 million of
tax prepayments, which will be deducted against tax gains of fiscal year
2019 (to be paid in 2020).
Cash used in financing activities of $25.3 million included interest
payments of $13.8 million on the $425 million Notes (“2024 Notes”) and
$10.2 million from the buyback program in place since December 2018,
which provides for the repurchase of up to 10% of shares outstanding.
Financial Debt: Total financial debt net of issuance cost was
$440.6 million, including the 2024 Notes and other bank loans totaling
$20.3 million. Short-term financial debt was $11.4 million as of March
31, 2019.
For further details, please refer to Note 12 of GeoPark’s consolidated
financial statements as of March 31, 2019, available on the Company’s
website.
FINANCIAL RATIOSa
|
|
|
|
($ million)
|
|
|
|
|
|
|
At period- end
|
|
Financial Debt
|
|
Cash and Cash Equivalents
|
|
Net Debt
|
|
Net Debt/LTM Adj. EBITDAb
|
|
LTM Interest Coveragec
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q2018
|
|
419.5
|
|
120.4
|
|
299.1
|
|
1.5x
|
|
7.2x
|
|
|
|
|
2Q2018
|
|
426.6
|
|
105.2
|
|
321.3
|
|
1.3x
|
|
8.5x
|
|
|
|
|
3Q2018
|
|
434.9
|
|
152.7
|
|
282.2
|
|
0.9x
|
|
10.5x
|
|
|
|
|
4Q2018
|
|
447.0
|
|
127.7
|
|
319.3
|
|
1.0x
|
|
11.4x
|
|
|
|
|
1Q2019
|
|
440.6
|
|
146.6
|
|
294.0
|
|
0.8x
|
|
12.2x
|
|
|
|
|
a)
|
Based on trailing last twelve-month financial results.
|
|
|
|
|
|
|
Covenants in 2024 Notes: The 2024 Notes include incurrence test
covenants that require the net debt to Adjusted EBITDA ratio to be lower
than 3.5 times and the Adjusted EBITDA to interest ratio higher than two
times until September 2019. The Company is compliant with all 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
|
2Q2019
|
|
Zero cost 3-way
Zero cost
Zero cost 3-way
|
|
6,000
5,000
4,000
|
|
65.0
65.0
55.0
|
|
55.0
-
45.0
|
|
90.0-90.5
92.3-92.5
79.0
|
3Q2019
|
|
Zero cost 3-way
Zero cost
|
|
8,000
5,000
|
|
55.0
65.0
|
|
45.0
-
|
|
79.0-81.5
92.3-92.5
|
4Q2019
|
|
Zero cost 3 way
|
|
8,000
|
|
55.0
|
|
45.0
|
|
79.0-81.5
|
1Q2020
|
|
Zero cost 3 way
|
|
8,000
|
|
55.0
|
|
45.0
|
|
79.0-81.5
|
|
|
|
|
|
|
|
|
|
|
|
For further details, please refer to Note 4 of GeoPark’s consolidated
financial statements for the period ended March 31, 2019, available on
the Company’s website.
SELECTED INFORMATION BY BUSINESS SEGMENT
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colombia
|
|
1Q2019
|
|
1Q2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of crude oil ($ million)
|
|
126.2
|
|
106.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of gas ($ million)
|
|
0.4
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue ($ million)
|
|
126.6
|
|
106.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and operating costsa ($ million)
|
|
-26.3
|
|
-25.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA ($ million)
|
|
89.0
|
|
61.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expendituresb ($ million)
|
|
21.3
|
|
17.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chile
|
|
1Q2019
|
|
1Q2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of crude oil ($ million)
|
|
3.3
|
|
4.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of gas ($ million)
|
|
5.5
|
|
4.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue ($ million)
|
|
8.8
|
|
9.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and operating costsa ($ million)
|
|
-4.9
|
|
-5.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA ($ million)
|
|
2.9
|
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expendituresb ($ million)
|
|
3.8
|
|
0.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil
|
|
1Q2019
|
|
1Q2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of crude oil ($ million)
|
|
0.2
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of gas ($ million)
|
|
5.3
|
|
7.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue ($ million)
|
|
5.5
|
|
8.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and operating costsa ($ million)
|
|
-1.5
|
|
-2.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA ($ million)
|
|
2.8
|
|
5.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expendituresb ($ million)
|
|
1.2
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Argentinac
|
|
1Q2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of crude oil ($ million)
|
|
7.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of gas ($ million)
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue ($ million)
|
|
9.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and operating costsa ($ million)
|
|
-6.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA ($ million)
|
|
2.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expendituresb ($ million)
|
|
3.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a)
|
|
Production and operating costs = Operating costs + Royalties.
|
|
|
|
|
|
|
|
|
|
|
|
|
b)
|
|
The difference with the reported figure in Key performance
indicators table corresponds mainly to capital expenditures in Peru.
|
|
|
|
|
|
|
|
|
|
|
|
|
c)
|
|
The acquisition of the Aguada Baguales, Puesto Touquet and El
Porvenir blocks in Argentina was closed in March 27, 2018, thus not
representing material information during 1Q2018 other than capital
expenditures related to the acquisition.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions of $)
|
|
1Q2019
|
|
1Q2018
|
|
|
|
|
REVENUE
|
|
|
|
|
|
|
|
|
Sale of crude oil
|
|
137.6
|
|
111.0
|
|
|
|
|
Sale of gas
|
|
12.5
|
|
12.8
|
|
|
|
|
TOTAL REVENUE
|
|
150.1
|
|
123.9
|
|
|
|
|
Commodity risk management contracts
|
|
-21.3
|
|
-3.9
|
|
|
|
|
Production and operating costs
|
|
-38.9
|
|
-34.1
|
|
|
|
|
Geological and geophysical expenses (G&G)
|
|
-4.3
|
|
-2.2
|
|
|
|
|
Administrative expenses (G&A)
|
|
-11.7
|
|
-12.6
|
|
|
|
|
Selling expenses
|
|
-3.5
|
|
-0.4
|
|
|
|
|
Depreciation
|
|
-25.5
|
|
-19.7
|
|
|
|
|
Write-off of unsuccessful exploration efforts
|
|
-0.3
|
|
-1.8
|
|
|
|
|
Impairment for non-financial assets
|
|
-
|
|
-
|
|
|
|
|
Other operating
|
|
1.3
|
|
0.8
|
|
|
|
|
OPERATING PROFIT
|
|
46.0
|
|
50.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial costs, net
|
|
-8.8
|
|
-8.5
|
|
|
|
|
Foreign exchange gain (loss)
|
|
1.0
|
|
-1.7
|
|
|
|
|
PROFIT BEFORE INCOME TAX
|
|
38.1
|
|
39.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
|
|
-18.5
|
|
-15.0
|
|
|
|
|
PROFIT FOR THE PERIOD
|
|
19.7
|
|
24.9
|
|
|
|
|
Non-controlling minority interest
|
|
-
|
|
6.4
|
|
|
|
|
ATTRIBUTABLE TO OWNERS OF GEOPARK
|
|
19.7
|
|
18.4
|
|
|
|
|
|
|
|
|
|
SUMMARIZED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(QUARTERLY
INFORMATION UNAUDITED)
|
|
|
|
|
|
(In millions of $)
|
|
Mar '19
|
|
Dec '18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Current Assets
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
574.1
|
|
557.2
|
|
|
|
|
|
|
Other non-current assets
|
|
59.4
|
|
45.8
|
|
|
|
|
|
|
Total Non-Current Assets
|
|
633.5
|
|
603.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
10.1
|
|
9.3
|
|
|
|
|
|
|
Trade receivables
|
|
36.8
|
|
16.2
|
|
|
|
|
|
|
Other current assets
|
|
63.4
|
|
106.5
|
|
|
|
|
|
|
Cash at bank and in hand
|
|
146.6
|
|
127.7
|
|
|
|
|
|
|
Total Current Assets
|
|
256.9
|
|
259.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
890.4
|
|
862.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to owners of GeoPark
|
|
153.7
|
|
143.1
|
|
|
|
|
|
|
Total Equity
|
|
153.7
|
|
143.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
429.2
|
|
429.0
|
|
|
|
|
|
|
Other non-current liabilities
|
|
78.4
|
|
72.2
|
|
|
|
|
|
|
Total Non-Current Liabilities
|
|
507.6
|
|
501.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
11.4
|
|
18.0
|
|
|
|
|
|
|
Other current liabilities
|
|
217.7
|
|
200.4
|
|
|
|
|
|
|
Total Current Liabilities
|
|
229.1
|
|
218.4
|
|
|
|
|
|
|
Total Liabilities
|
|
736.7
|
|
719.6
|
|
|
|
|
|
|
Total Liabilities and Equity
|
|
890.4
|
|
862.7
|
|
|
|
|
|
|
|
|
|
|
|
SUMMARIZED CONSOLIDATED STATEMENT OF CASH FLOW
(UNAUDITED)
(In millions of $)
|
|
1Q2019
|
|
1Q2018
|
|
|
|
|
|
Cash flow from operating activities
|
|
81.3
|
|
76.3
|
Cash flow used in investing activities
|
|
-37.3
|
|
-73.4
|
Cash flow used in financing activities
|
|
-25.3
|
|
-17.2
|
|
|
|
|
|
RECONCILIATION OF ADJUSTED EBITDA TO PROFIT BEFORE INCOME TAX
(UNAUDITED)
1Q2019 (In millions of $)
|
|
Colombia
|
|
Chile
|
|
Brazil
|
|
Argentina
|
|
Other(a)
|
|
Total
|
Adjusted EBITDA
|
|
89.0
|
|
2.9
|
|
2.8
|
|
2.6
|
|
-5.1
|
|
92.3
|
Depreciation
|
|
-11.4
|
|
-8.3
|
|
-1.7
|
|
-3.8
|
|
-0.2
|
|
-25.5
|
Unrealized commodity risk management contracts
|
|
-23.1
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-23.1
|
Write-off of unsuccessful exploration efforts & impairment
|
|
-0.2
|
|
-
|
|
-
|
|
-0.1
|
|
-
|
|
-0.3
|
Share based payment
|
|
-0.3
|
|
-0.1
|
|
-0.03
|
|
-0.3
|
|
-0.5
|
|
-1.3
|
Others
|
|
0.7
|
|
0.2
|
|
1.5
|
|
0.8
|
|
0.6
|
|
3.8
|
OPERATING PROFIT (LOSS)
|
|
54.7
|
|
-5.3
|
|
2.5
|
|
-0.7
|
|
-5.1
|
|
46.0
|
Financial costs, net
|
|
|
|
|
|
|
|
|
|
|
|
-8.8
|
Foreign exchange charges, net
|
|
|
|
|
|
|
|
|
|
|
|
1.0
|
PROFIT BEFORE INCOME TAX
|
|
|
|
|
|
|
|
|
|
|
|
38.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q2018 (In millions of $)
|
|
Colombia
|
|
Chile
|
|
Brazil
|
|
Argentina
|
|
Other(a)
|
|
Total
|
Adjusted EBITDA
|
|
61.9
|
|
1.7
|
|
5.0
|
|
-1.2
|
|
-4.0
|
|
63.3
|
Depreciation
|
|
-11.0
|
|
-5.8
|
|
-2.8
|
|
-0.1
|
|
-0.1
|
|
-19.7
|
Unrealized commodity risk management contracts
|
|
6.7
|
|
-
|
|
-
|
|
-
|
|
-
|
|
6.7
|
Write-off of unsuccessful exploration efforts & impairment
|
|
-
|
|
-
|
|
-1.8
|
|
-
|
|
-
|
|
-1.8
|
Share based payment and other
|
|
1.0
|
|
-
|
|
-0.1
|
|
1.0
|
|
-0.4
|
|
1.5
|
OPERATING PROFIT (LOSS)
|
|
58.6
|
|
-4.1
|
|
0.3
|
|
-0.3
|
|
-4.4
|
|
50.0
|
Financial costs, net
|
|
|
|
|
|
|
|
|
|
|
|
-8.5
|
Foreign exchange charges, net
|
|
|
|
|
|
|
|
|
|
|
|
-1.7
|
PROFIT BEFORE INCOME TAX
|
|
|
|
|
|
|
|
|
|
|
|
39.8
|
|
|
|
(a)
|
|
Includes Peru and Corporate.
|
|
|
|
|
|
|
FREE CASH FLOW RECONCILIATION
(UNAUDITED)
|
|
|
(In millions of $)
|
|
1Q2019
|
|
|
|
|
|
|
|
|
|
Cash flow from operating activities
|
|
81.3
|
|
|
|
Cash flow used in investing activities
|
|
-37.3
|
|
|
|
Free Cash Flow
|
|
44.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RETURN ON CAPITAL EMPLOYED CALCULATION
(UNAUDITED)
|
|
|
(In millions of $)
|
|
1Q2019
|
|
|
|
|
|
|
|
|
|
Last-twelve months Operating Profit
|
|
252
|
|
|
|
Total Assets less Current Liabilities - March 31, 2019
|
|
661
|
|
|
|
Return on Capital Employed
|
|
38%
|
|
|
|
|
|
|
CONFERENCE CALL INFORMATION
GeoPark management will host a conference call on May 9, 2019 at 11:00
am (Eastern Time) to discuss these 1Q2019 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: 866-547-1509
International
Participants: +1 920-663-6208
Passcode: 7551936
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, the effect of
IFRS 16, 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), selling
expenses, and realized results on commodity risk management
contracts, 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
|
|
|
|
D&M
|
|
DeGolyer and MacNaughton
|
|
|
|
Free Cash Flow
|
|
Operating cash flow less cash flow used in investment activities
|
|
|
|
F&D costs
|
|
Finding and Development costs, calculated as capital expenditures
divided by the applicable net reserve additions before changes in
Future Development Capital
|
|
|
|
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
|
|
|
|
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 2019 production growth and operating and financial
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 flow 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.
Non-GAAP Measures: The Company believes Adjusted EBITDA, free
cash flow and operating netback per boe, which are each non-GAAP
measures, are 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’s computation of Adjusted EBITDA, free cash flow,
return on capital employed and operating netback per boe may not be
comparable to other similarly titled measures of other companies.
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 flow as determined by IFRS. 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
flow 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. For a
reconciliation of Adjusted EBITDA to the IFRS financial measure of
profit for the year or corresponding period, see the accompanying
financial tables.
Free cash flow: Free cash flow is a non-GAAP measure and does not
have a standardized meaning under GAAP. Free cash flow is defined as
cash provided by operating activities less cash used in investing
activities excluding Argentina acquisition and cash advances from
disposal of long-term assets.
Operating Netback per boe: Operating netback per boe should not
be considered as an alternative to, or more meaningful than, profit for
the period or cash flow 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.
Net Debt: Net debt is defined as current and non-current
Borrowings less Cash and Cash equivalents.
____________________________
|
1 Free cash flow is defined as cash flow from operating
activities less cash used in investing activities. Free cash flow is
a non-GAAP measure. See reconciliation below.
|
2 Return on capital is defined as operating profit
divided by total assets minus current liabilities.
|
3 Subject to regulatory approval and final signature of
the contracts.
|
4 Oil prices in Argentina have been linked to
international oil prices since December 2018, subject to certain
discounts. Current conditions could be temporary and oil prices in
Argentina may be adjusted up or down, depending on prevailing
market circumstances and other factors.
|
5 Production and operating costs = Operating costs +
Royalties
|
6 See “Reconciliation of Adjusted EBITDA to Profit
(Loss) Before Income Tax and Adjusted EBITDA per boe” included in
this press release.
|
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