(GeoPark, 19.Oct.2021) — GeoPark Limited (NYSE: GPRK) announced its operational update for the three-month period ended 30 September 2021 (3Q:21).
Highlights
- Consolidated oil and gas production of 37,859 boepd, up 4% compared to 2Q2021
- Oil production of 32,844 bopd, up 6% compared to 2Q2021 due to increased production in Colombia
- Gas production of 30.1 mmcfpd, down 9% compared to 2Q2021 due to lower production in Chile and Brazil
- On track to reach 2021 full-year guidance of 38,000-40,000 boepd
Drilling Activity in Colombia Accelerates
Currently operating four drilling rigs and three workover rigs in Colombia
In the Llanos 34 block (GeoPark operated, 45% WI):
- Drilled and put on production six new wells
- Successful results in the Tigui field area, potentially expanding its northern and southeast margins and opening new drilling opportunities
In the CPO-5 block (GeoPark non-operated, 30% WI):
- Civil works and other pre-drilling activities ongoing, with drilling expected to initiate in 4Q2021
- The operator ONGC signed contracts for two drilling rigs for two years with one rig currently in the block
- ONGC and GeoPark Technical Workshop held in New Delhi to align and define 2022 work program
In the Platanillo block (GeoPark operated, 100% WI):
- Spudded the Alea Oeste 1 development well, to be followed by an additional well in 4Q2021
In the Llanos 94 block (GeoPark non-operated, 50% WI):
- Drilling the Humea exploration prospect in 4Q2021
Drilling Activity in Ecuador Begins
In the Perico block (GeoPark non-operated, 50% WI):
- Pre-drilling activities underway for the Jandaya exploration prospect to be drilled by year-end 2021 or early 2022
In the Espejo block (GeoPark operated, 50% WI):
- 3D seismic acquisition of 60 sq km expected to start in 4Q2021
2022 Work Program and Capital Allocation Process
- Focused on low-risk rapid cash flow generation and production and development growth from the Llanos 34 and CPO-5 blocks
- Targeting meaningful high potential short-cycle, near-field exploration projects on big proven acreage position adjacent to core Llanos 34 block
- 2022 work program and investment guidelines to be released in November with 3Q2021 results
ESG+ Actions
- GeoPark honored with the Equipares Silver Award by Colombian Ministry of Labor, measuring our commitment to promote equality, inclusion and diversity
- Finalizing details of strategic medium and long-term greenhouse gas reduction policy, to be released in November 2021
- Released GeoPark’s 2020 annual sustainability report (the SPEED report), available on the Company’s website
Cash and Shareholder Returns
- Quarterly Dividend increased to $0.041 per share, or $2.5 million (from $1.25 million), paid on August 31, 2021
- Expedited discretionary share buyback program. Acquired 608,579 shares for $7.2 million since November 6, 2020, while executing self-funded and flexible work programs, and paying down debt
Market Index Inclusion to Continue Expanding GeoPark’s Investor Base
- In September 2021, GeoPark was included in the S&P Global BMI Index and sub-indexes, including the S&P Emerging BMI, the S&P Colombia BMI, the S&P Latin America BMI, and the S&P Global BMI Energy, among others
Portfolio Consolidation and Management
- Argentina: expediting divestment with sale agreement expected to be signed in 4Q2021
- Peru: obtained final approval to transfer 100% of the Morona block to Petroperu following the Supreme Decree issued by the Peruvian Government
- Brazil: Manati gas field divestment process ongoing, expected to close in 1H2022
Breakdown of Quarterly Production by Country
The following table shows production figures for 3Q2021, as compared to 3Q2020:
Oil and Gas Production Update
Consolidated
Oil and gas production in 3Q2021 increased by 4% to 37,859 boepd versus 2Q2021. Compared to 3Q2020, oil and gas production decreased by 3%, resulting from lower production in Chile and Argentina, partially offset by higher production in Colombia and Brazil.
Oil represented 87% and 85% of total reported production in 3Q2021 and 3Q2020, respectively.
Colombia
Average net oil and gas production in Colombia increased by 1% to 31,565 boepd in 3Q2021 compared to 31,297 boepd in 3Q2020.
Oil and gas production in main blocks in Colombia was:
- Llanos 34 block net average production was 25,130 bopd in 3Q2021 (or 55,845 bopd gross)
- CPO-5 block net average production was 3,789 bopd (or 12,630 bopd gross) in 3Q2021
- Platanillo block average production was 2,185 bopd in 3Q2021
Main activities in operated and non-operated blocks:
- Llanos 34 block: Tigui 17, Tigui Este and Tigui 24 wells were drilled to test northern and southeast boundaries of the Tigui oilfield, opening new potential areas for further delineation. These three wells are currently producing approximately 3,500 bopd gross
- CPO-5 block: civil works and other pre-drilling activities underway, with rig in the block expecting to spud in 4Q2021
- Platanillo block: currently spudding the Alea Oeste 1 development well, to be followed by an additional development well in 4Q2021
- Llanos 94 block: pre-drilling activities underway in the Humea exploration prospect, with spudding expected in 4Q2021
- Llanos 87 block (GeoPark operated, 50% WI): environmental, permitting and other activities in progress, targeting to initiate exploration drilling in 2022
Chile
Average net production in Chile decreased by 35% to 2,354 boepd in 3Q2021 compared to 3,610 boepd in 3Q2020, resulting from lower gas production in the Jauke and Jauke Oeste gas fields. The production mix during 3Q2021 was 88% gas and 12% light oil (compared to 90% gas and 10% light oil in 3Q2020).
Brazil
Average net production in Brazil increased 13% to 1,791 boepd in 3Q2021 compared to 1,581 boepd in 3Q2020 in response to higher gas demand in northern Brazil. The production mix was 99% natural gas and 1% oil and condensate in 3Q2021 and 3Q2020.
At the end of September 2021, Petrobras informed that production in the Manati field was preventatively interrupted due to a small gas leak that affected operations from September 28 to October 3. Production in the field was restored and has been flowing normally since then.
Argentina
Average net production in Argentina decreased by 9% to 2,149 boepd in 3Q2021 compared to 2,357 boepd in 3Q2020. The production mix during 3Q2021 was 56% oil and 44% natural gas (compared to 59% oil and 41% natural gas in 3Q2020).
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