GeoPark Limited, 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 June 30, 2020.

All figures are expressed in US Dollars and growth comparisons refer to the same period of the prior year, except when specified. 

SECOND QUARTER 2020 HIGHLIGHTS

Production and Drilling Response and Actions

• At the beginning of the quarter, all drilling and workover operations were suspended – including the shutdown of 8 rigs
• In consideration of health and safety, cost, reservoir and mechanical factors, approximately 6,500-7,500 boepd were temporarily shut in during lowest price period
• As prices strengthened, most of these fields and wells were reopened recovering approximately 5,000-5,500 boepd (70-80% of shut-in production) with current production of approximately 40,000 boepd and a quarterly average of 36,912 boepd (6% decrease from 2Q2019)
• Now drilling has been resumed with a revised program of 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). Workover and well maintenance operations also have been resumed

Cost and Investment Response and Actions

• Capital expenditures were halted with a reduction of 80% to $5.8 million
• Production and operating costs were reduced by 55% to $20.7 million
• Operating costs per boe were reduced by 26% to $6.0 per boe (24% lower vs 1Q2020)
• G&A/G&G costs were reduced by 19% to $14.3 million
• Combination of cost and investment reductions totaled over $290 million across regional platform
• With strengthening prices, full year 2020 budget has been revised upward to $65-75 million (from prior $45-50 million) targeting 40,000-42,000 boepd average production and operating netbacks of $230-260 million at Brent of $35-40 per bbl
• Hedging program successfully protected base oil price and provided a $14.3 million realized gain in 1H2020 – with new hedges added for the next 12 months 

James F. Park, Chief Executive Officer of GeoPark, said: 
“Huge respect and appreciation for the GeoPark team for successfully managing through one of the ugliest and most severe and complex collapses in the history of our volatile industry – all the while dealing with a global pandemic, extensive lockdowns, market swings and unpredictable government actions. It is difficult to capture the dynamics and incredible efforts undertaken operationally and financially during this period by showing the customary quarterly metrics and comparisons since so much happened at the same time. We first responded to an extreme and uncertain period that needed to be handled rapidly and decisively – and then to a strengthening which provided an opportunity to start conservatively rebalancing and recovering. We also believe this storm is not over yet and are prepared for however long its full duration might be. Our Company was born in a crisis in 2002 and showed, once again, we can keep focused and navigate through these upheavals. And, as much as these times hurt, GeoPark has always adapted to come out better and stronger on the other side – as we are on the move to do so again. We also are pleased to welcome Sylvia Escovar and Somit Varma to our Board – two respected and proven executives who will help drive GeoPark to our exciting energy future.”

Production

Overall oil and gas production decreased by 6% to 36,912 boepd in 2Q2020 from 39,201 boepd in 2Q2019 due to temporary production shut-ins to preserve shareholder value and to minimize contractor and employee activity in the fields. There were no new wells drilled and limited maintenance activities during the quarter, partially offset by the addition of 4,651 bopd from the recent Amerisur Resources acquisition in Colombia. Oil represented 88% of total reported production in 2Q2020 compared to 87% in 2Q2019.

KeyFacts Energy: GeoPark Colombia country profile