GeoPark, 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, has announced its operational update for the three-month period ended June 30, 2020.

Operational and Cost Savings Actions and Results 

• Consolidated oil and gas production of 36,912 boepd in 2Q2020 due to temporary shut-ins, no drilling activity and limited maintenance works during the quarter
• Over $290 million in ongoing cost savings and capital investment reductions across regional platform – including voluntary salary reductions
• Received regulatory approvals to reclassify the flowline connecting the Llanos 34 block to regional infrastructure into a pipeline, contributing to reduced operational risk, further cost savings and reduced carbon footprint

Capital Strength and Risk Management Levers  

• $157.7 million of cash and cash equivalents as of June 30, 2020
• $75 million oil prepayment facility, with $50 million committed and no amounts drawn
• $130.7 million in uncommitted credit lines
• Long-term financial debt maturity profile with no principal payments until September 2024
• S&P and Fitch reaffirmed GeoPark’s long-term corporate credit rating at B+
• Added new hedges for the next 12 months, now reaching 27,500 bopd in 3Q2020, 25,500 bopd in 4Q2020, 9,000 bopd in 1Q2021 and 6,500 bopd in 2Q2021. New hedges include a portion providing protection to Vasconia local marker in Colombia

Opening Up Production and Reengaging Work Program

• Reopened 70-80% of temporary production shut-ins totaling 6,500-7,500 boepd
• Resuming drilling campaign in 2H2020 with 6-8 gross wells in the Llanos 34 block (GeoPark operated, 45% WI) and 1-2 gross wells in the CPO-5 block (GeoPark non-operated, 30% WI)
• Expanding full-year 2020 work program to $65-75 million (from prior $45-50 million) targeting 40,000-42,000 boepd average production and operating netbacks of $220-240 million assuming Brent of $35 per bbl
• Fully funded and flexible work programs, quickly adaptable to any oil price scenario

Improving Overall Business

• Streamlining and improving business across portfolio and top to bottom review in all departments and capabilities
• Initiating formal process to irrevocably retire from the non-producing Morona block in Peru due to extended force majeure which allows for the termination of the license contract

James F. Park, Chief Executive Officer of GeoPark, said: 
“Enormous gratitude to the GeoPark team, which despite the obvious hardships and uncertainties, provided a rapid-fire and effective response to this unique health, operational and economic crisis. And then, as soon as the situation became clearer, and without skipping a beat, our team has got the drill bit turning to the right and the production valves opening to the left – allowing us to start to catch up and get back to business. All the while with our creative juices flowing and bold ideas to take advantage of this upheaval and turn GeoPark into an even better value generator on the other side of this downturn.”