GPRK - Earnings call transcript Q1 2022

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Operator

Good morning and welcome to the GeoPark Limited Conference Call following the results announcement for the first quarter ended March 31, 2022. [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.geopark.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. With respect to such forward-looking statements, the company seeks protections afforded by the Private Securities Litigation Reform Act of 1995. variety from including the time reports public a risk developments company's include and listed factors to releases. risks of competitive factors and SEC These time in could identify those business. from in the represent the are principal to a differ but described intended statements, intended are results to lists factors Those company's that not cause forward-looking complete actual materially of certain to list noted. included US the figures financial otherwise IFRS dollars herein in are stated in with All were accordance and unless prepared Reserves standards. figures PRMS correspond to

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

James Park

welcome and you everyone. Thank

We We one team executive quarter achievements financial with most of results are for on delivering women GeoPark thanking and the in men hard-working the an Bogota, XXXX. are quarters to value the the the successful XX-year continuing morning you we while value right first immense our and the our joining to report the and partners recognizing and want for our right our the all of succeed begin complete by this Colombia the believe, capture We proposition. business, to history, across in right with and right business. platform, place, building of team, in in right approach right

tremendous and And this to proceeding with with gratitude enthusiasm, I'm a and wonderful GeoPark responding the management is energy, confidence from Our full-time well becoming on that, is optimism. team and transition and shareholder job being and previously very cheerleader. received moving announced ideas is it

while XX-year pleased committed our has to word allowed unique big cycle our to full gave and which us a record idea word and focus opportunities growth. Since beginning, and bunch and world about the to create more industry to through passing opening which GeoPark of been been long-term with weather all a in Before solidly allows position very our future. have any a larger the a steadily, or build on underlies value win we company be Andres delivery, keeping crisis rock-hard which as and our something to track plan more continuous and for questions, performance we us foundation need as just the for well the a price. us This and

back expand improve and protecting flows more culture, and pay downsides, to give debt down revenues cash drill, our strengthening celebrating work G&G growth more gas, to and to successfully and record program our safe, excellence business, using to invest more operational our are to and we our protecting and Using a and our today, powerful more keeping the scale. our adding shareholders. and business across managing big find of oil constructive provides team which produce to own efficiency greater high years self-funded continuous reducing value capital full our all flows, our staying of So desired and and further community achieve disciplined With cash a being E&P snowballing we healthy fairway, and assets XX and for expand this reduce environment and the our potential risks rewarded. and innovative value the being chain neighbor, activity and emissions, nearly have and by acreage as and our costs, being

can some this you you stepping please and this So, up on Perhaps details on Andrés, quarter. job. more add thank for taking

Andrés Ocampo

Thank you Jim.

show We the strong our first year. company have year our a to our with filled and activity results across start quarter

gross, new producing production Ecuador, discovered years fields new quarter the of that's a day two block, fourth last higher year. we're X.X In XX First, wells now day times have when two and we CPO-X almost a we X% acquired block oil In the XX,XXX barrels the producing drilled by ago. X,XXX currently increased gross. we over than barrels over almost

production increased generated record oil results. second and prices The financial the

generation million, $XXX which $XXX means the quarter of EBITDA a the more was period. million the $XXX up also in for XX XX% adjusted million net This than Our more to than same months. income last means in

which CapEx in of every $XX invested invested EBITDA we that for adjusted more Third, we that million than in means of the $X quarter, period. dollar generated

we in basin to and our The acreage $XX CPO-X and also blocks block flow and of cash general own. we acres doubled XXX,XXX play. million other that added CPO-XX covers quarter. our XXXX used is Fourth, reduce as we bonds to million our our per repurchased core also adjacent located We new dividend debt, $X strategically to

as plant, costs Finally, as operational and to cleaner our striving be always to our increasing a multiple emissions, company, as Grid has our we reliability. solar which and on connecting National building our the benefit of advanced we're reducing reducing better well Colombian the

gender-related as MSCI improved ratings A. the And included we covering best-in-class recognized Index, being are ESG policies. and companies efforts Our our practices Gender-Equality with also in were to Bloomberg

to always down on or is performance we based adaptable case, designed As asset the and volatility. oil be our work programs price up

after work new licensing. than to $X.X cash increased new taxes, million expected the a representing of given growth represents yield. up guidance divestiture, success. At Ecuador revised million and not to this the facilities, exploration adjusting debt program, eight Argentina future is discoveries This any our more additional compared Brent wells, $XX to to an guidance higher flow a we of be Consequently, work generate nine service, per revised which well work have plant program $XXX permitting to oil expanded would as by reflect Brazil. X% and another XX% program So of more our as to XX,XXX expanded equivalent to in adjusted CapEx, oil prices, drill XXXX in almost billion new range an including but flow XXXX $XXX self-funded XX,XXX to production production for XX% annual production Manati EBITDA from free cash day the barrels than and from we free $XX

base, investing giving shareholders. to back growing to paying continue use to asset and our We this in value more debt, cash extra down expect

operations teams technical busier ever. Our and than are

eight their full rigs but general working today have four We're asset campaign more executing CPO-X, an other blocks. impact time way. not on and in rigs low-cost our our and America across have exploration spacing only platform Latin in We high also in exciting low-risk

have. we from So, to Thank very pleased you. reporting we exciting on answer may forward results to will progress really and you And these any questions activities. be look

Operator

question of Alejandro, proceed. line Thank may you. from Alejandro Nau Securities. the Instructions] comes First [Operator Demichelis you with

Alejandro Demichelis

much Thank questions. my if questions taking I morning for may please. gentlemen. you Three good Yes, very

say drilling The barrels for first it the when you're at -- the updated awful wells look brings in program. extra production rest please you production Manati of you could one lot the walk that because XX take like are an the through and the guidance in we doesn't us adding Llanos X,XXX guidance, the

conservative So, That's trying to the how first guidance question. is? the see

could you're kind maybe the us expiration What you are where you on can on of some the how When seeing there? tell third so we results please Second you you expect question And CPO-X can far? of is are inflation. question seeing touch cost and Rocca?

royalties very We excluding flat. production cost have seen your

the expect we of should please? for year what the rest So,

Martin Terrado

the the Good two first I'll operating Veronica morning This Martin over and is Appreciate go then cost. Alejandro. Terrado. your cover let questions.

as the of is we X,XXX day. of the on oil So, per production incremental expect seen, equivalent the in guidance Manati, order you've decline. barrels

from guidance X,XXX. is contribution for the the around So, year Manati or remaining the of Brazil and that

and that already are per have day and we X,XXX equivalent performance. of discoveries activity new asset channels better have and coming are asset CPO-X the oil performance barrels production it we better incorporates communicated. that includes Ecuador So, activity new from from that That

Andrés Ocampo

production Andrés that And no that we is which would I the also has Alejandro activities here, would added a activity add lot associated. add exploration of I also has incremental it incremental

X,XXX So, are barrels as guidance is and new the said, guidance Martin better performance from activities. to related the

Martin Terrado

Indigo we X. continue excited like So, performing Andrés and this concerning each. CPO-X production, second be water equivalent both the successful oil on from result second had to X barrels the on where are We of and They're we block. X,XXX really a about question without one

top we plan. of XX, that. of Jacana XX, And very to is those field proud that its of three the puts so the And part about of in of Tigana, So, In fields this have and Indigo well fortunate out Colombia. that XX to reach also we're we according are one Eureka, drilled TD. And as GeoPark. being we're

on in then, block, So one remind be production soon. trend to we locks drilling complete that, getting Eureka. area, very four the we continuation want And going are this have and rig, evaluating, well that well. of investigating about in is that the do We drill of and will the Jacana that to make we we that. wells is the excited then, that the Northwest that of in that you putting about continue so, sure the should and be We

working are with partner. We our

Alejandro Demichelis

if I … may, Martin,

Martin Terrado

Yes.

Alejandro Demichelis

interrupt something have Those there. may, I going already you're you, play If you to into are just production.

Martin Terrado

no. about total No, We're debt. No. to reach

So we're still drilling.

so the well. to they're flowing well a and not Tigana to we'll so the and We that going trend good naturally, Remember results. Case will love be this pump. Jacana expecting is have put

oil first the be of end by likely, most will So the month.

Andrés Ocampo

-- everybody. to well. This sorry for Alejandro just an exploration clear is be But

is, a going discovery today, event the What or We that is or have that in no is whether to have not. information information no confirms Martin indication discovery. saying a today that is be we this

We yet. haven't TD reached

of even not interest yet. log-in the have don't zone we're information. So in We

to clear. to the it just be everybody really, sure clear, and question understand that So has I make

yet, the decide we is well. there's on to if the decide, And put information we we testing, haven't get or on successful to so We We'll zone the logging no Once the will see, it from on it the based a not. zone, reached complete that well. well information. cross

going another to us probably, All take is of that month.

wouldn't us on least another month. clear? particular this So news at that Is I or well expect from

Alejandro Demichelis

That's very clear.

Andrés Ocampo

Okay.

Alejandro Demichelis

very Thank you. That's clear.

Andrés Ocampo

Great. Okay.

Veronica Davila

already you in in impact grid the guidance. the Colombia OpEx to takes over XX% and to expectation Thank OpEx, our Veronica. numbers increase into national and This is XXXX and in per account cost production the In for already be OpEx XXXX question. overall included range. $X.X higher is X% our to connection for Chile $X from inflation namely expect this increased initiatives Ecuador. the between fields, reduction XXXX is for Alejandro in OpEx regards including of we This BOE your to and

Alejandro Demichelis

That’s Thank you, very, clear. Veronica.

Veronica Davila

Thank you.

Operator

question, your for you Thank Alejandro.

the question proceed. comes from line of with Balanz. Oriana, Covault Our Oriana please next

Oriana Covault

wells my your thinking would I great, questions. one-by-one taking go on inflation and be for This that Balanz may side Thanks and just Oriana just If Hi. about the we with call. additional should had in up inflation, following plan? three that with costs reflecting or much completion think coming costs and it your update how drilling of in higher that your is we only budget, is in terms budget related

Andrés Ocampo

The it the is is Oriana, activity activity. original factored it you, of new there included Andrés not Thank -- what activity. for existing here. our to is increase inflation revising is costs. is It It -- our We in inflation. some in already had guidance, new all

it's less more terms increase, across or completion, the our X%, the in activity the this X% are In more casings, more already original new guidance. in. factors less we the making seeing was already Everything wells drilling And X% our materials, to of expensive. is That built and that or X% services.

Oriana Covault

up on a clear. the of different business. very That's Perhaps, following side Perfect.

under Vasconia the has been disclosed the for the quarter. on this release? past elaborate the Just you in in your press could differential local you widened thinking that impression about Colombia market We've more differential. And

the should understand this we And marker just has think going So -- driving difference? what of that been forward? to how

Veronica Davila

Thank is we the you, grade in Colombia. produced Vasconia that mainly Oriana.

so wide, the for have and recently that's factors recovered. barrel of below $X.X seen to that's few There's below Today but as differential during per you at closer a first Brent April $X Vasconia lower been Brent as $X.X, pushing mentioned, Vasconia barrel in We Brent. it's quarter. versus per then $X.X

is heavy deep are increased side well, reserve. one volumes very compete discounts strategic it out to market, as the discount Vasconia there's of in of competition Also, releases with Asia. trading petroleum grades medium that deep a especially as with sour currently barrels into which are strong for grades, On there the barrels from the US coming at Russian faced with its

all, Brent, we guidance. production our to have the a high the within most diesel for supporting $X within In production refined. $X our pricing include; once stabilize be which budget other diesel, Vasconia and crude factors strong consuming such should Vasconia demand strong which barrel our a support assumption side, Vasconia that to and per discount Colombia, as expect is it's is in and and increasing Vasconia On of global that domestically demand to

Oriana Covault

Thanks.

yesterday very million announcement that one of made was one, on about clear. just the regarding the you That XXXX. Okay. And tendering maybe $XX last

walk could already did rationale. the you if during first you the that quarter. perhaps some Just, We through us understood buyback

why getting ahead? So instead Thanks. of through a go favorable trade-ins prices, -- lower why of better perhaps tender the taking choosing given sense local of advantage to prices

Veronica Davila

Thank you, Oriana.

flow price. do As taking to to XXXX to and for the the cash market of you open of notes. have which And April as with million in started completed year-to-date going million we terms in of year, in strategy. on expect high for our $XX the we're exercise we well step we process, call And continue the is addition reduced below mentioned, another the in strategy we bonds. This purchased of executed May. announced our our last $XX will to the yesterday end million delever, is in $XXX in continuing This past, to We last $XX XXXX about coal have this that this deleveraging generation that a part deleveraging that. liability is the XXXX management, million mentioned the call be are year of we which by advantage of

Andrés Ocampo

why And size could the we is as $XXX is repurchase The basically. hard rationale to it's as find, Andrés also is The million, about rationale the here find. Oriana. of calling less we're it much it's -- so small, we bond

take now purchased we've bigger coal chunk. we And just year-to-date, to could the decided So a find everything below price. we

Oriana Covault

on and again quarter. Thanks congratulations biggest great. sounds That

Andrés Ocampo

you. Thank

Operator

Thank your Oriana. question, you for

go Our next Please of from with Auctus the question. Stephane question Foucaud Advisors. comes ahead line your with

Stephane Foucaud

question. Thanks for Hi, Three my me. well taking for guys. as questions

see for where free assuming million First or of My do second new of sort the announced redemption. $XX you expect flow the one, how buyback is could light would second question thing, guidance production generate, How the deleveraging remains the increase to there quite reported instance bond there That's has similar Do is, exit production further -- a resources back in price Parex, few work the on so you block once could noticed think HX? see that you and could see Assuming further see in -- December. we cash I XXXX CPO-X redemption some is year? And and you. a that? an the give that bond for the block part for you first Parex guidance? big that you exit lastly, interest potentially from the words Thank the sort that of this upcoming on program? I recently you question. my oil acquired on something the you of

Andrés Ocampo

good morning. as about this we're deleveraging, question calling now. here. Stephane, With to million $XX said Andres your respect, Hi, you

coal continue call the the in date and approaching the more months where it's when it -- in We to are date couple again. next wait and economical drops calling down of it, the September price

$XXX our we cash as we the of if and in are they guidance likely if yes, days our should in second you remain after evolves in of flow That we XXX% most our to year, is most September that said likely So, will sometime half expect $XX as oil the range, us expectation. these call prices XXXX second the the the within as half.

Martin Terrado

per Stephane, this Terrado. to was XX,XXX And of day. And barrels of quarter, all we first X,XXX exit our exploration that exit oil not publish Colombia equivalent around Martin any that. see Colombia include XXXX our kind barrels is -- Colombia in success. production of our for production does as the above Related We

Augusto Zubillaga

question is context. Zubi. put In in CPO me let about this just the Stefane, X, Hi you regard

in GenXX. the XXXX blocks the So awarded surrounding practically blocks we successful round in in our all in the XXXX, six

been activities. the have we the in drilling environmental and far, in permits So working

XX two of one in this will part So also Max exploration And drilling Llanos wells called the in we XX. the we year, start channels in exploration drill which is channelXX just northwest x-X. well will

back is CPO-X adjacent coming So to to block. channels XX CPO-X.

is two seismic. with has It the acres XXX,XXX XD XX% bigger is XX. interest covered Llanos area XX%. working which Our of times

So place formation. [indiscernible] the we identified strategic far in

well the one due commitment the phases. have, work that So to is first drill exploration the block around in in to we that exploration

Difficulty] CPO-X in billion. the addition So [Technical to X.X billion is to X.X

James Park

Hello. Are -- you hear us? can still you

Stephane Foucaud

I can Yes, hear you

James Park

Yes. Yes.

line is that connected. the Sorry, main

Stefano. We backup on line. the main Sorry We're got on we're joining So disconnected the line.

you can Zubi, So continue.

Augusto Zubillaga

you know So, missed it I don't when CPO-X.

Andrés Ocampo

the You were talking about expansion...

Martin Terrado

that's. So

the Just to we billion CPO-X, Genovesi. addition exploration all the in resources, to summarize to X.X the in X.X in in our all that have billion barrels blocks

Stephane Foucaud

Thank Okay. you.

Operator

question, your Stephane. you Thank for

comes question webcast. next Our from our

for Pactual. thoughts in generated Can excess expected to remind from And be the could compensation? you With exploratory from to Any what Daniel you respect And expectations you you XXXX? Guardiola the full capital comes the strategy to prices cash stable, allocate shareholders' our if to share how more expected us in in with remain to much growth? respect us can What are asks question year oil for your planning terms campaign? production on provide your be modify it BTG campaign? of to with planning to he what to you are hedging be us And allocate XXXX this priorities are color Our inorganic incremental would XXXX? XXXX? of would loss related

Stacy Steimel

in and of good allocating I'll Thank priorities question flow. terms our you cash go on in the Daniel, first morning.

continue the priorities same. remain to our So

base return. a and in his we going shareholder Jim followed combination call already to of touched the prioritize reduction our on bit opening mentioned As we're by remarks funding little upon asset which debt a and

deploy today, our expansion exploration. wells. are we of to program, we should be our our the we that successful of work have terms ready to within been assets exploratory assets, already And discussing capital In additional XX with

call upon for launched touched $XX XXXX million. but already for we the we On the the it, reduction, debt have

already deleveraging second And million half year-to-date. terms doubled year. And in terms continue have We we in initiative pay of to shareholder the return. of terms the expect place, have which continue million of shareholder We of in in quarter we discretion out would $X have – Andrés dividend we as is $XX expect of returns we the mentioned part dividends. to to our in also buyback and our of per share already purchased

Martin Terrado

Daniel, wells to to drilled additional we Terrado. in is our exploration on the already it's program, Martin of wells about and discovered work two this Ecuador. were XX mentioned, Related that like top XX

of working barrels PXX. resources chances XXX XX we go in but XXX or we're XXX around to level, new is that that interest between XX%. the our million million high So to with from have, targeting range we're resources million and that un-risked targeting that That's XX% of million success

Now, how us? for Again like Difficulty] the does that [Technical look in year

Operator

that have speaker Excuse to me them. seems lost me we all. allow line. one Please moment It our reconnect

James Park

Are were with And we the having back apologize Mr. Guardiola I that. technical line. some for We're we answering problems question. online?

So Martin, can you continue.

Martin Terrado

Yeah.

Sorry about that everybody.

growth So up and and was working of our XX% With resources million about barrels. of magnitude XXX XX%. about I is million between the order chances like after it that million interest being to of barrels million to are XX the saying, around we're XXX success to the XXX ends

different Colombia, are we going quarters, most going the are In quarter of in four drilled and drilled As we're most per exploration of be in through to Colombia. those anywhere channels. and to go to be wells six going be drilling between those

channel and operated wells the will first block drilled We channel exploratory block. the six five are Colombia going our Perico the XX. Espejo well GeoPark One and well one outside have to or follow-up a and of about channels be the and same be be drilled and other in well XX wells amount by channel Ecuador. two that in XX in Platanillo to What's two around will to CPO-X Espejo success could wells that is one be exploration in to our in in in

So clarification. or apologies but the us there's know again, let if Daniel for cut, further questions

James Park

there point in hedging on question And was a also.

Stacy Steimel

hedging So to if -- the we're moving on question.

tool the our in We protect a We hedging cyclicality volatile. hedging ourselves from to strategy. risk continue our executing is management believe business sound is very which on

we know had unrealized which remainder our costs, current numbers have hedge first for the prices hedge further? year, something costs the you $XX we at expectation remain an hedge I the hedge already our conditions of Those question in or of the mentioned, recorded of quarter, remainder of those market should if the the year. additional don't guidance. terms $XX costs been have and align in costs covers provisioned Daniel, for if million million in with have the included and that of you In the

Operator

you to question you a related to If risk elections have in from do your follow-up foresee upcoming asked Daniel, he presidential the operations Colombia? any

Andrés Ocampo

before and like are round we be The end then, in trust the Colombian to it there's rule and you, for we of political a and of the calls, as country stability. the seems But sounds primary in a solid of elections -- call have Thank really. law again, to going said proven round the Colombian's are highest most This to economic has It respect confident long-term the month. likely has expected prior mid-June. contracts in second very And Daniel. and going the region. that institutions we be tight one it's

So, the that country. required historical provide future to of for with in again, the And I the to that its will country continue the are we're the balances expect respect institutions optimistic we stability. mean balances -- the

Operator

questions this There at waiting no more time. Perfect. are

I management remarks. to for our So team will the now back closing pass call

James Park

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

to is We comments. answer Our listen the as your value questions to forward around team Thank available shareholder hearing any clock soon. seeing from to you or you. management team look and is our

Operator

Park XXXX Geo you Results Conference participation. Call. First Quarter Thank your the for concludes That

your disconnect lines. now may You

GeoPark Limited (GPRK) 12 May 222022 Q1 Earnings call transcript