BOGOTA, Colombia--(BUSINESS WIRE)--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, today announced its operational update for the three-month period ended March 31, 2019 (“1Q2019”).
All figures are expressed in US Dollars and growth comparisons refer to the same period of the prior year, except when otherwise specified.
The following table shows production figures for 1Q2019, as compared to 1Q2018:
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 Chile, and new production from the Argentina acquisition, partially offset by lower production in Brazil.
Oil represented 87% of total reported production compared to 85% in 1Q2018.
Average net production in Colombia grew 22% to 32,131 boepd in 1Q2019 compared to 26,405 boepd in 1Q2018, reflecting continued successful exploration, appraisal and development drilling in the Llanos 34 block, which represented 96% of Colombian production in 1Q2019.
The Llanos 34 block 1Q2019 operational results were:
During 1Q2019, as part of the approval process, GeoPark received input and feedback on its Environmental Impact Assessment (EIA) to initiate development activities in the Situche Central oil field in the Morona block (GeoPark operated, 75% WI). Comments received include observations by all stakeholders in the area of influence of the Morona project, including local communities, governmental agencies and non-governmental organizations. The Company is currently working to provide in-depth answers to local authorities during April 2019. Following the final review by SENACE, EIA final approval is expected during 2Q2019. The EIA approval process represents the final step before initiating development activities in the Situche Central oil field.
Equipment to be used in early production facilities has been delivered and engineering works are proceeding on the dock at Morona base camp. Seasonal weather conditions and the final timing of EIA approval could impact logistics and commissioning of early production facilities. Consequently, a significant portion of the Peru 2019 capital expenditures may be deferred to 2020. First oil is expected by year-end 2020.
The Morona block contains the Situche Central light oil field, which has been delineated by two wells that tested combined production rates of 7,500 bopd. As of December 2018, D&M certified gross 3P reserves of 198.3 mmbo for the Situche Central oil field, with an associated NPV10 of over $2 billion.
Average net production in Argentina totaled 2,505 boepd in 1Q2019 (67% oil, 33% gas) corresponding to the acquisition of the Aguada Baguales, El Porvenir and Puesto Touquet blocks in the Neuquen basin. Both oil and gas production levels increased by approximately 5% compared to 4Q2018, due to an ongoing secondary recovery optimization project and a successful test of a new tight gas play, in the Challaco Bajo field, in the El Porvenir block (GeoPark operated, 100% WI):
Testing and drilling activities in the El Porvenir block:
Planned maintenance activities in the Manati field (GeoPark non-operated, 10% WI) temporarily reduced net production by 29% to 1,960 boepd in 1Q2019, compared to 2,775 boepd in 1Q2018. The maintenance activities were finished in early April and the Manati field is currently producing 2,600 boepd.
Exploration drilling in the REC-T-128 block (GeoPark operated, 70% WI):
Average net oil and gas production in Chile increased by 3% to 2,961 boepd in 1Q2019 compared to 2,873 boepd in 1Q2018 and increased by 5% compared to 4Q2018 due to increased production from the Jauke gas field. The production mix during 1Q2019 was 77% gas and 23% light oil (compared to 69% gas and 31% light oil in 1Q2018). The Fell block (GeoPark operated, 100% WI) represented 100% of Chilean production in 1Q2019.
On March 12, 2019, GeoPark was awarded the Espejo and Perico blocks in the Intracampos bid round in Quito, Ecuador.
The Espejo and Perico blocks are attractive, low-risk exploration blocks located in Sucumbíos Province in the north-eastern part of Ecuador in the Oriente basin. Both blocks are covered with 3D seismic and are adjacent to multiple producing fields and existing infrastructure. More than five multilayer and ready-to-drill light oil prospects and leads have been identified on these blocks. Geoscience evaluation is ongoing and field operations are expected to start in late 2019 or early 2020.
The winning bid consisted of a minimum investment program including 55 sq km of 3D seismic in the Espejo block and drilling four exploration wells in each block, with a total estimated investment commitment of $60 million ($30 million net to GeoPark) over the next four years. Frontera Energy has a 50% working interest in the consortium.
Final award of the blocks is contingent upon regulatory approvals and the execution of the contracts, expected in the 2Q2019.
The following is a summary of expected drilling and testing activities scheduled for 2Q2019:
Reporting dates for 1Q2019 results release and conference call
GeoPark will report its 1Q2019 financial results on May 8, 2019, after the market close. In conjunction with the 1Q2019 results press release, GeoPark management will host a conference call on May 9, 2019 at 11:00 am (Eastern Time) to discuss 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:
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.
Finding and development costs, calculated as capital expenditures divided by the applicable net reserves additions before changes in Future Development Capital
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 production growth, expected schedule, economic recovery, payback timing, IRR, drilling activities, demand for oil and gas, capital expenditures plan, regulatory approvals, reserves and exploration resources. 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. 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.
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.
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.