GPRK - Earnings call transcript Q4 2020

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Operator

Good morning, and welcome to the GeoPark Limited Conference Call following the results announcement from the fourth quarter ended December 31, 2020. [Operator Instructions].

If you do not have a copy of the press release, it is available at the Investor Support section on the company's corporate website at www.geo-park.com. A replay of today's call may be accessed through this webcast in the Investor Support section of the GeoPark corporate website.

Before we continue, please note that certain statements contained in the results press release and on this conference call are forward-looking statements rather than historical facts and are subject to risks and uncertainties that could cause actual results to differ materially from those described. forward-looking Securities company XXXX. Litigation such by protections to Private the Reform respect statements, seeks the afforded With Act of risks time of risk variety public releases. company's include competitive and These and developments SEC factors, reports factors time to including from in the listed a company's Those intended intended list forward-looking the statements, certain are not to principal cause complete that could business. in lists results those to the described represent are to of a actual differ identify factors materially from but figures in financial are accordance were with the in All included prepared U.S. herein IFRS and stated dollars, unless otherwise noted. standards. Reserves figures correspond to PRMS

On James you Martin Director. may over I'll turn Officer; Andrés Executive the Park, Stacy Director from to call Operating Chief And now Mr. Ocampo, today and GeoPark Value Terrado, F. Park, Officer; Shareholder call Chief Mr. Zubillaga, is begin. the of Chief Park. Officer; James Financial Operations; Augusto Steimel,

James Park

Thank you, and welcome, everyone.

team Aires, and fourth value We our upgraded shareholders. with steps are Colombia our executive present XXXX, results, investment full on work continue returning our to Bogotá our to you report an and Buenos program this joining quarter XXXX financial to for in highlight and year and more morning Argentina

continue XXXX prevail must through historically the the storms gratitude to was our personally year, XXXX and and XX-year challenging along men successfully we hard-fought women GeoPark As has the super-human everyone possible it first us for experienced, express and growth by recognize a for efforts that trajectory. and made of

history, company crisis a stronger as in we today. As this have better repeatedly GeoPark has from our emerged done and

$XXX invested almost our We new our amount a company, nearly And impacts. and to $XX EBITDA and reinstated revised $XXX acreage we to and We communities. oil barrels to achieved doubled of in present beat company. and XXX million. neighboring million all straight and buybacks Colombian operated now integrated over in basins. value during pandemic Putumayo million our even XP the in balance asset of the flow. our oil We minimize our million. share million. fully support $XX, increased million our We for social low organization and cash and net with teams our cost We and cash $XXX and reduce it exploration We oil $X.X recovered for We We We gas carbon and Llanos illustrates in portfolio prices to provided have billion. down and our of under aid strengthened gas found move shareholder with XXX per savings barrels year the XXX healthy. and line barrels production interruption over value bottom obligations Our accomplishments. initiatives We more to our $XX important acquired XX,XXX funded to and hand kept resources the our completely business with and field with and Xx reserves sheet and cash a our restructured into day. over of grew footprint each Amerisur, without with We own We work our of We environmental days. expanded dividends. this model. our XXth safe every

scrutiny where the welcome governance; an neighbor the this our our of of integrated element SPEED be safety; investors us of As communities ESG of we performance we environment; employees; prosperity, about we plus, choice. founding value for pushing company always to proudest the including our SPEED. stands from of priorities where a our area employer of for partner and consider choice, was GeoPark's of is operate. increased our This and always, foundation in-house development the one our we underlying program We accomplishments, system choice excel. call and and

rigs of X production our with safely, every increased accelerating underway prospects molecule well run already With fully higher getting cleanly ground acreage on team potential Seismic growth. our at and in identify are is generation, being and hydrocarbon of cash prices our engaged we work. to market. XXXX new and high to So out and the profitably profitable

tangible We CPO-X to invest Llanos executing shareholders. our some be big million return We XX have continued may opportunity program any $XXX pleased $XXX mainly fully-funded, risk-balanced and Llanos And and in have. surrounding XX answer including developing to to balance continuing exciting, million in growth high-impact expanded sheet this the to block to you. while our blocks our drill a our to development program Thank work questions and work strong on look our Colombia, block. would of value to to the focused you basin, drilling wells, the prolific forward now on maintaining XX we

Operator

[Operator Instructions].

line Our Advisors. first from question Stephane comes the of Auctus of Foucaud

Stephane Foucaud

two. actually got I've

barrel. new -- the program to a XXXX based, CapEx So I $XX for activity $XX is think, on program

production, production wondering were out think, on currently the protest a was you And -- including again activity your down remain minute. XXXX you whether Can probably thought anything at level price for the for pay great. how much? If part share or would Any accelerating barrel. -- guidance remaining was year, the I program I if second, $XX dividends, to And increase noticed more debt? the the buyback, be is if We or would of yes, either buyback that of Putumayo at are oil give Putumayo. the north for the where consider I that that share the down

Andrés Ocampo

accelerate And management. first are the value do in balance shareholder to asset we to development Always going following is items. to that, your CapEx respect generation cash for to the our Stephane, think, always a thank new our priority combination exploration and question, levels guidance, where of questions. and existing probably it's for plans portfolio. excess then your today, be reinvest the return of sheet and a remain you first oil To I they at combination your $XX prices $XX. If with our

in production where your to in remain guidance flow they today, at significantly assets the yes, expect prices that going want our that also on X, about a then all And cash that I on exploration be all deleveraging of those second but If accelerate expanding oil we fact trend. would likely combination our our it's our We into continue we to to debt, So assets. gave, taking value levels from us setting. existing to shareholder development of and that. the period of want this free are to will generate continue to consideration allow brief most reinvest and point, on initiatives, also factors production the Putumayo, more have our we do guess, we

production actually As of were as down starting again the our with flow this back ground last resolved. in to is there, night, and been we morning. conversations the team has of And the situation on

X we around So the of X,XXX day would next normal the levels a expect production be X back barrels over to days. to to

our and this a again. is is So is our middle. resolved is -- back we in luckily, and party. this the the the production state flowing against news are event that situation a This situation an basically factored has was we simply normalized, was guidance where guidance were But stuck the protest unfortunately, stock not to included which in in yes, was the And been XXXX. for good

Operator

Our JPMorgan. of of next question comes Rezende from the Ricardo line

Ricardo Rezende

Stacy. Andrés, James,

my a on of side. couple So questions

or about I'm are wondering actually and think your prices First one, by you any they if lock new the just on blocks hedging above try oil year new question or accelerate for those second prices could, we areas where at year. remaining looking some program be auctions. to is the now, if your chance, where in projects potential maybe guidance And for the you could then acquiring

If on you that, would that could great. comment be

Andrés Ocampo

Sure. Ricardo. Thank you,

you for half hedged to of probably this question, accelerate is of are hedging first the second half your time year, the starting And this better time costs. the hedged on XX%. where becomes Today, around yes, XX%, XX% around available around On quarter want the because the XX% hedging the mean, hedging first we year. XXXX, at the when is for I strategy at the

offshore. capture volumes on in in us component both we're being actively active but in more there of second projects. year. we the seeing say, we projects, around the did on multiple, will and of There region. in more and the in more middle levels If And offered we and to But around adding with campaign less in for works in we attractive $XX are XX, then the business, There the year market floors in into ceilings consolidating these are we say, adding initiatives -- definitely with always new key this So significant also, always second being first acreage but this all portfolio. said, we some our try some the today next respect to of well -- for that accelerate we and start levels Colombia half our today, as Llanos we countries very first like that line are are of within $XX. we and it's participating hedges, exploration anticipating divestiture participation that half doing are and spacing, looking -- probably all as different are going Brent, organic the mills. significant and and and are or are the as on Brazil of the -- in mark. in all we half our actively available become other a opportunities sale And we and more the the to projects And also XXXX, Llanos in of you the are probably opportunities, for can mainly the onshore know, --

we're have But the higher opportunity conservative comes, buyers. projects definitely take it. we set bar company, and new to we'll come anything, if for to the patient the if So

Operator

line of question Alejandro comes the next Nau Our from of Securities. Demichelis

Alejandro Demichelis

if questions, may. I Few

gains that part back indicate the you last you're accelerating seeing Could evolving we're to that how please. kind How coming going one, some of retain activity those the is to you're executed during First that year? levels? now of first of Or you cost question.

exploration say, production average. day take If COVID, need question, program. one back Second that you're the XXXX were is probably you things. look on to, guiding XX,XXX, go level? that than barrels may, we side the investment of I the on if now? on producing a for Do quarter before towards to of question, would first third a you XX,XXX more to we What And back

you prospective that you of of the million of With the how the exploration, resources think with exploration much XXX program. barrels, acceleration the accessing you can be indicated current

Andrés Ocampo

you, Thank Alejandro.

we basis, first reduced -- shut lot a in Your is of the respect couple time, play to elements that higher that fact was we also, One cost. our the in year, costs. base. come of our our a with we at a to production some is there cost cost last question of period that for of But

So or last back in Brent year. or lowest with compared $X the per will OpEx on that, to $XX some to production, our slight that And year, about even And BOE. average per means BOE quarter and beyond of Last second an produce. come of basis. per consolidated $XX increase third may less that at were more a a show barrel in obviously, that we $X.X consolidated was the and

higher. So similar we're to -- little estimating or bit are the for the these at XXXX, average less more prices, be it a around

So full $X number at $XX for $XX a XXXX good to Brent. to BOE $X.X is per year

appreciate in is OpEx recover, Latin Another countries, when is oil local around component also XX% and the that of of to our in base these currency. prices rate FX America tends that in

noted now CapEx against think we we're incorporating shape X We X,XXX not compared production. and those the of only half or of as guidance commodity the this more to second one looking to an thing flattish is With the But increase each go roughly the we So is average not barrels gave, before development. with question some at previous curve CapEx half so the at for an in the guidance your rate that that FX other, I average I with looking respect on were mean, a the towards our the is curve, about less prices. curve, and of basis, basis, growth growth shows said, the on CapEx, slight more look with may year. but significant, that

the far So XX,XXX, probably, XX,XXX be end not of by we year, before. -- should were we that from the that XX,XXX the

That growth our that huge is Llanos historically allocating which mention asset would engine our asset of I today, we're been a capital Additionally, lot for there. XX, is of is most now lot a has main company that our new migrating spitting of of a which into very machine, significant cash a -- than phase growth. cash out out rather little spitting with CapEx a

block, focusing last in point, much this XXXX say, flow cash small at probably, fraction. lot announced this this we prospectivity growth the profits showing and on that digits. full we're the a new than So Are question, we generating audit. with fancy a program? rather And it's more how your welcome our we recent of but then would phase targeting I of

the So pool. around million XX about XX of of an resources it's total average something total million barrels, to approximately un-risking

lot that a of in is remaining block. of So A CPO-X is Llanos acreage. the the that in lot

And that and prospects some all process, of more to advancing us licensing we this that is to the acquiring acreage some in the start for drill seismic to and XXXX year, getting be investments doing are on. on XD both ready ready

Alejandro Demichelis

exploration lot flexibility I you us into are kind some have know CPO-X? the you in many But give mean. could are of you going wells wells into could And how going program, I us of the program, How many block? give a other the -- of split

Andrés Ocampo

wells. more this or well in Then those less development exploration have be spud -- targeting we're less exact. -- one will exploration them X It's are planned XX. planning two which we well exploration exploration to should Yes. be this and XX well first of one more in to That for hoping in in all XX, that and that the in year. Llanos wells be X or Llanos or Llanos exploration the well well, in the X be not of May XX. and are June around campaign. wells we're campaign CPO-X, X going less sorry, this more wells; the Llanos is In or is wells we're wells One One exploration going

Operator

[Operator Instructions].

of Guardiola Our the of next BTG. Daniel from question comes line

Daniel Guardiola

and questions. related you are how Andrés wanted you upside a very of that of understand oil realized to the $XX. My considering couple prices. hedging prices through mechanisms, are guys I is to and are future to James, production know active question have first I I different prices, oil at exposed today,

So I benefit to you're going this prices of oil these levels. wanted level, to know, indeed, be at stay if if

mean, So I first I forward you okay? question, go if want So or either the you that's you can my and -- questions can as like. other it ask answer

Andrés Ocampo

want. ask Okay. Daniel, sure. I if rest, can then can take the that one, and you you

that they to oil the hedges upside in we the So at we by upside some are for remain limited the is in have that of exposed place, If prices. especially these levels, particularly, first half.

we for the -- of half per then cap it half our first capture $XX the we or full year, the oil of of So $XX, production, barrel. the hedged. The the rest of full rest release. XX% upside, And average hedged an and oil is the $XX The has or XX% our more included in XX% will detail around our the XX%, less, second is and year, of have products production. roughly only of

production our experience of will half So good upside.

an that than cap is other half. half, the On first higher the average

one to It's the per -- $XX, the the of closer for $XX for second around ceiling check year second. is half is barrel. me Let

than limited So first second I the half. in would say, we in are more we're half the

second the full exposed. year, value. then for half, we get the we're For almost fully And next

Daniel Guardiola

Okay.

understood So just I totally your to make answer. sure

the So cap for have the first a year, at $XX. of you half

Andrés Ocampo

No.

the at $XX And first of and $XX. XX% the half applies -- second only For Brent, quarter is the our quarter the we cap a production. of year, to have first is that

flow. year, is of XX% and of applies the for XX% then So the production. second ceiling cap no $XX for the And has no the that half

XX% has cap. the production So of no

exposed. fully it's So

Daniel Guardiola

And you sorry. second my Okay. yes, -- question, Great. Understood. if Great.

Andrés Ocampo

okay. that's no, No,

Sorry, go ahead.

Daniel Guardiola

year. my XX production. -- for I ask production is expected CapEx more considering increase on program -- working that And you Llanos share second to this XXXX onwards, CPO-X, you to wanted question to in from main related the No. I your maybe with was your us could going details and and or you the fields,

Andrés Ocampo

I breakdown Platanillo has are an XXX% in or half in in a more interest. working drilled think to we we what to used field because to the we similar it's have, that and second is because more -- or on two be the wells particularly, has have more adding -- probably little bit less less weight impact

but had between and XX year. to Brazil are -- The targeting growth, last a X% flat. Llanos So small or now we to was we're X% also were Argentina maybe -- to a double before target little to before, to Platanillo, targeting small Chile is decline, relatively of rest maybe growth, higher is Colombia the bit flat. X%. a and less, more we flat. what is is flat targeting similar compared a CPO-X that. than production

is that difference less where is going breakdown the or more on come. the So to

Daniel Guardiola

a XX,XXX if per pandemic were regarding reach mistaken. current day, targeting XX and reach I'm oil production. remember Does the those again environment sense plateau if production barrels to may I make levels, Andrés, of the in to follow-up you before I Llanos once it started, that squeeze price? considering not to our of close

Andrés Ocampo

area. in had that then The with remember spent to now, drilling declines. that, -- or coming with Until that back more you X oil thing we drilling we production months is the obviously, and, activity And in limited the the time, to that rigs have as block, the some after no activity had X area before. activity normal we things are for the we in

X basis So like production we no the following to a X,XXX a reach We unlikely something barrels X,XXX declined growth was day. it's with probably will -- that months plateau that fact that probably the drilling. on --

focus than is I important what would on will million is I really I XX,XXX on to $XX now, I million, what going generate operating plateau show rates to shining be focus is said fancy, with the think $XX cash growth much that really of that's the going And than $XX much grow, $XXX is netback. profits. how more This more before, how showing CapEx don't generating. just focusing think of main Brent year And So million a our it is better would now. right

Daniel Guardiola

Andrés. Okay,

priorities healthy, brief excess I very to be cash ask your for one. to your expected I -- expected you, look, XXXX? comparing are use last XXXX. a Just generation XXXX, that When against considering mean, or And you flow very to generation to it's I wanted going flow it cash what cash in of be mean, especially

Andrés Ocampo

the in our can always a we then And is main reinvest assets. that second deleveraging is think of I returns. summarize shareholder to combination priority as the one value and

So that the biggest are X to those to are the that that going cash we XXXX. going be taking are probably generate in elements be -- taking

Operator

And further showing this over or at time, any to no floor the like remarks. closing I'm Ocampo I'd additional Andrés turn for questions. to

Andrés Ocampo

Thank GeoPark interest your you, company. for and your everybody, of support in continued our

please As in us to the begin encourage visit each again, to our borders world's country. you at we open operations

video available comments. as or team Our in listen accelerated is the direct shareholder questions to than our clock around answer interactions this your to calls, and has ever their and value team management any year conference is with webinars,

thank and please you, So stay healthy strong. and

Operator

you, today's Thank This conclude call. gentlemen. ladies does and conference

disconnect. may You now

GeoPark Limited (GPRK) 11 Mar 212020 Q4 Earnings call transcript