GPRK - Earnings call transcript Q2 2022

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Operator

Good morning and welcome to the GeoPark Limited Conference Call following the results announcement for the Second Quarter ended June 30, 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. of time competitive company's to variety factors and SEC a from risked time include users, developments including risk reports. Risks in the that list differ are cause are the not risks intended represent identify company's but principal Those a business. to complete to forward-looking statements actual the as materially factors to intended described of in certain could in All financial in IFRS U.S. and the figures included accordance herein are with were prepared stated noted. otherwise unless dollars figures to standards. correspond Reserves PRMS

Veronica Andres the Chief Financial you Davila, to today Aka, Shareholder may Mr. Officer; GeoPark now Chief On over Technical Operating Terrado, the Andres I'll turn Steimel, Chief is Augusto Martin Ocampo, begin. Chief call Stacy Zubillaga, Value Officer; Director. Ocampo, Mr. call Executive from Officer; Officer;

Andres Ocampo

call. report Colombia our We're connecting Good our thank on morning, second and from team with the you, quarter to performance joining everyone, and business results. Bogota, for

successful work be the of results can good by ground characterized the opportunities underway, rest of cycle for quarter and paying performance full reducing on the entire This as momentum record year. and increasing and team even to flow, opening like with a transition more or lot drilling a high and thank GeoPark We debt down by shareholder in accelerating cash the quarter returns. cash delivering for success their as another would well and record production discipline emissions

average production, last were second In flow increase our year. line an barrels business to XX,XXX costs our drilled oil production recently able guidance to higher almost on to we generation year and quarter, the XXX,XXX we the full wells maintain a terms and second With day. X increase our average and increased cash day, achieve during track prices We over quarter a significantly. our operations to XX,XXX of upwardly revised in of performance a barrels and production base remain XX% of

X.Xx allowed and our of our million, assets by in $XXX means the $XX after dollar EBITDA increased $X we every grow to per $XX cash adjusted delivered same CapEx, than to to a proof of XXX% more quarter which flow our share. million, are invested million. EBITDA over Bottom spending year million to adjusted profits and line, $XXX in generation team. the that quality jumped This Our last that

We following same have our allocating been the as cash priorities flows always.

and $XXX our million oil We and First, In and reduction price quarter current accelerate our second of accelerate XX invest half the paid the assets a year. to and and our always the $XX in to invested the doubling assets than in our cash to debt, drill in the relative with second, of work our value we're environment, the to more first $XX shareholders. in more million million fund prioritize ended looking year-to-date, our million in cash. down In $XXX of of production; than by investments combination program debt returning our we shareholders assets year, and CapEx to the returned the in half wells.

increased park, and completing grid full national completed just savings the our transition fully main operational producing XXX% renewable finders which welcome governance, and fields our share to the is were will Board, XX% with the Board region efforts our executing accelerated our represent oil to also our who connection that and independent and company. our also emission soon, we contribution majority both fields additional of continue means power. XXXX our targets reliability. proven and X our electricity industry to repay a We're in improved main our oil reduction bonds hydroelectric to sources. This Macelari like program. Carlos of We're our of which to consuming current our cost XX%, significant investing the largely be by to generated step prices, construction a forward just in expect will at dividends has we Brian producing big power is solar is energy that our also and Maxted from in as We also towards and would buyback extensive benefit we Colombia, our On experience

excited oil first the production XX first We area development to Hartela a management during also a the record Cantelamenco is more exploration added multiple in the a moving second great our the there's Colombia assets We exploration land Indicofield. well. Marcela well We're as the rigs addition block. the professionals that and results are is testing today campaign of years well thank producing than our team that with and main and then, place welcome X about catalyst one to to In of already X way. coming. contributions Board adding of we continue is And in Baca XX in in weeks. most the initiate continue in accelerating rig the company. had is and working XXXX the XX we be the well as year, the our is to the the executing third currently currently general more and will to fields the since block, Southeast developing programs X our the for grab. spinning further block, upcoming to of also her In acreage, incredible well a exploration experienced production. as Janus is wells more rig the in gas GenX in block the work CPO-X, are and rigs includes a team We're what on half great in our

any to well activities And answer to Finally, also discussing you operated will be And more in questions on and our drilling forward have. our results block in look We Thank Perico upcoming reporting may are on be we partner the thank we'll Speco the we Ecuador, these drilling in first development quarters. block. now with happy you. the you.

Operator

Demichelis Alejandro Securities. question [Operator comes Our Instructions] first with Nau from

Alejandro Demichelis

I questions, of if couple may, please. A Yes.

follow-up as one your first how has. bit a of you the proposal in that remarks, in for you are process the most see XXXX. forward. for you Andres, as the budget that has the seeing of reform are the tax think tool mentioned I there management is, in from And And you put that the a government Colombia The that powerful

question. So tax in should side, budget the given the then are the the of the target also garments? changes the next that you have That's some of exploration second in proposal of this now we northern seeing expect new question, year rest that kind you on first direction the through part both please. of and the the the of for the block Southeast, the And CPO-X, end how of in field of discovery year, in the the

Andres Ocampo

form Thank the in and early removal the morning. export the commenced But will tax first be at your the on. seeing crude need greatly also bolted are get the address -- and of announced those course, what they detail inclusion industry company. of you, question, days is and the are -- we Good affecting Those to of still of the of portion To been, very at are main our first to overall in main an to reduction. Congress our we and royalties provisions go looking Alejandro. to proposal your have propose process, that

mentioned, as been Of the get business, as impact to report clarity to goes to expect further and able all right I on our time as of to back of we analyzing now. course, to you we've be those

a is as in of percentage terms of our to Colombia for are like calculated about highlight In royalties, produces would company, that's what we volume X%.

address in that affects from to And proposal tax X% the tax income that is this not core so able what Keep forward. bill was be current action the of calculation, to mind, XXXX. peculation which appears the will income deductible

reform past, be happened Colombia in as goes for the that's the same the the that is in XXX% is applied is is one would fashion the payable then XXXX So non-deductibility royalty. which the the X%; of forward in tax, in XXXX has expectation

are affects in it kind. that and the So not ones

So of it's XX% royalty. probably our

in so, company. should you like so or So average our something in far of X% which the what is assume

Alejandro Demichelis

final But sells -- each volumes, then their tax, company on really how be also export on, to but dependent Sure. we of reform, of is every and every letter -- will right? course, it very the

Andres Ocampo

If are by sold those have is a which we of sold exports, of half of composition, of are -- roughly but exported our X% look direct none of portion Then domestically those domestically, at our our clients. sales we then overall are overall sales. our

remaining those the tend exports. as is this as to mentioned be technically, market the tax, domestically other the then sold overall market to also volumes regardless pricing, And pricing domestically. sales, with this you of towards markets overall unclear sold, but take early It and type So it's XX% regulation. I the how the XX% dependent still the on refined still, of parity very are to again, overall gets able the market how In will export consider affected. stages. it's But beginning, are go in at whereby should

that. clarity. more are up with there the enough Yes, way about we And pleased do, change thinking changes next we I'll one as on to allocation get Olof. just to be follow expect sorry, Are on aren't to share second capital you We year. will for take to I'm the

Veronica Davila

and a that allocation mentioned process. goes of our remarks, process in his following capital we approval weeks are all the budget our with culminates the of in as Andres at the So, beginning is of This thorough November.

This affect as projects, that aspects look will those you will forward. these technical, overall our and considered, of the form to projects frame our would be one that but of the what we each -- environmental we every all will the and of I items one social course, economic expect, As and projects. aspects, the be define strategic -- is of aspects within going going would to of of continue course, at to the the like

will And and with carry by in Colombian affected by have reform. will the the projects very and program we'll the up them November. be tax come out expected We make process detail thoroughly and make the we as we But compete.

Martin Terrado

on Alejandro, CPO-X. to this is the Martin respond Terrado. question for I'll acceleration

X grew have show block on we the mainly exploration targets in development the have wells second is Andres in X we preliminary Flamenco Mirador formation. mentioned, multiple X aqua, we the well, exploration and year-to-date vertically that one the from this the pay CanteFlamenco oil Mirador and well. Guadalupe results So wells, The ante exploration that

completion right taking block. step the that of advantage production we We're So the doing increased that Indico well. that moving development of the and prices rate oil that drive so rig move X now, the is to next wells The of field. we're to to

first We kilometers the the from these will Again, extension. Urakawas one, X the to north. come wells, back Jacana

And there's to haven't is the in we yet, is block. north. on we formation and second finalizing the of mentioned that pads Southeast tested mobilization area. we also one We're to Guadalupe the the the that So closer need rig that that building a have get the

formation well we're So going wake that spudding Aptris. be first called targeting to Southeast was in the our the

September, October, potential expect encouraged. really So of have we we block, well. we And overall, look being to when in at the our keep exploration that sparing

we have the looking We that prospects. additional at the seismic teams acquired that are

have drill have jointly, closer some got northeast we prospects IndiComriposa to the block with seismic the to that we acquiring. partner year, our late be agreed year, early of we We in already the next in And that the will area.

a flavor of little CP on where [ph]. a that's bit of we're So

Operator

question, your Thank you for Alejandro.

[indiscernible]. Our next from question comes

Unidentified Analyst

like your Just permitting do would out a to in start slow down that Things XXXX. with situation carry to want on back what look is Colombia. question in go to respect program there to year... next you need around What today to

Martin Terrado

Martin is this again. Phil,

in get license, where drilling have and we of the of by that on we the on those, to XXX things be XXX. XXX Janus got soon Channels licensing So next but we some we'll the the and which and some blocks and could is already XXX. exploration, But that complete, that drilling and we're to those licensed. the we of all that's that is we of couple XX, channels call and some will approvals that licensed, target we And basically, months months see. of finally, channels basically have be it, got and bucket, you fully there the fully wells, things some are And turned we were wells west, that are channels. development licensed documentation. time move Putuo later And of the if almost mainly that's some XX, so close and we is on we different our where in CPO-X the buckets. XXX the include The channel are appraisal to then can in bucket again, channels -- XX that's in that's And almost cases, in maybe all delays, The complete want and Chanos kind have next fully those to XX. next is where of the start first

the core licensed line fully in fully very the XXX% we're areas are next shape. good in technically, central licensed, So ones areas, really and core very, and are the almost

Operator

We your from now Stephane Foucaud have text from Advisors. Auctus for questions. you question Thank a

Stephane Foucaud

How much encountered net pay was [indiscernible]?

Andres Ocampo

Stephan, that show XX preliminary Mirador pay for Canteen. results have log-in in foot we around the of formation

Veronica Davila

you. Thank President the of that you official any have Stephane's would Since new the business. seen announcements question. appointment the second Colombia, impact important of

Andres Ocampo

impact measure main reform definitely production was net XX,XXX by was Stephane -- current Vero that our and barrels business. of announced was think last that right that from the I answered now, the GeoPark taken Yes, That is XX,XXX between is, our will in question equivalent the and tax view, oil per And yesterday. that one day. our biggest

Operator

next with Balanz. Oriana comes from Our question Covault

Oriana Covault

I we previous by If rise quarter had would the during with great. be to observed one. could first three. one regards we And the with go cost, a one lifting the that compared one

of curious factors you increase erosion. be mitigating that on how that should from dynamics activities? are what margin inflationary alternatives increased prevent GeoPark to attributed much Just or And seeing

Martin Terrado

is this again. Yes. Martin Oren,

included Overall, XX%. budget. So increase we to in basically about XX% overall, about materials see lift, That seeing pumps from highest our our we're the increases X% artificial was seeing and on where between XX%. so XX% services, we're to

pooling So by increase budget. quarter. oil some quarter the Chile, details, going gone up might our had you next That report in at the to When we're the the increases, production. where went for have you example, activities within look be in seen is OpEx because to for we

pooling where on the In is bring We of the block we again, there day. a working X wells objective our those the anymore. per Ecuador, that was really close close have with campaign barrels OpEx and X,XXX down to have initiative, now a successful brand-new not main OpEx. not to and equivalent oil with production partner We're

a and we things We identified, have give I'll of that couple examples. have you

we're the that we As better our able are contracting prices. seeing for get we and block, were contracts to better adjust

opportunities For on a lot around. example, pipelines. track such production liquids the so of build channels, connecting And out to existing transporting looking in in as was platforms. of This OpEx. on and infrastructure on And also are Intracampos our there's we're into we of

Oriana Covault

uses. Perfect. think you to where deal dividends in that one perhaps That's very terms we a the And clear. Perhaps increase of expect my should How dividend second more changes or broader given head dividend more defined or should maybe like to the policy? this? announced, we excess cash recent possible see

Andres Ocampo

Thank you, Oriana. morning. Good

by on this and To -- may flows recall, we dividends, doubled of cash will quarter, alluded set and We we point our assets the to continue our Des out XX% dividend dividend have last well-established you to to specific that our base scenarios, an also our in paying is continues $X.X additional oil We this per quarter. scalable is see price low even but it a grow. on as accounts now and dividend, sustainable, company That the be yield. as to X% million allocate shareholder and then this, priorities, to first within and returns. and our your something combination fund that about lever foremost, of as increased

dividend return few So strategy continue be payments return last have looking keep improving within over our shareholder the we to and we had our that will at our shareholder quarters. full

Oriana Covault

one final one just me. And from it. Got

on the in potential in some slowdown in perhaps Colombia. the to regulatory allocation flexibility of environment possibility Just up capital picking a the of due

be Ecuador new maybe avenues your might or you exploring. considering at to in looking given other presence Just curious jurisdictions like start what

Andres Ocampo

Thank you, Ariana.

of the about conditions forms fluid, the we country, downs Martin in especially remainder American to of to place, -- ups Basin -- year to up As be in final described, we're how the every very take with But our to right, and with the Latin different are us is the and how no or in in for they activities either call our following change. assets, right, licensed be but and this, licensed of fully Colombia, year. able irrespective the keep measures to used

have it aspect portfolio. at is key We look we strategy, a as be. our will It continue had always and of business approach a unresonal our to

So as times, we diversification, intended. less many we regional look at I we've think probably said became than

continue So have one outside Colombia. expanding of that we is the challenges also to that footprint

we diversification that X become like more our assets can and that relevant. in in obviously, have fields accelerate obviously But fills in Chile. now We portfolio Ecuador

Oriana Covault

the Perfect. Thanks for [ph]. questions

Operator

Roman comes Rose Genuity. question next from Canaccord with Our

Roman Rose

if sequentially, the may. ask will I I

of The first Oriana's one one following questions. is

So -- could right? you set these I so expect impacted. the the the buyback Clark maximum changes from we understand invent want to to what of XXXX some regarding the And being the given notes, is restricted inventory.

Andres Ocampo

the Thank you, repurchase and to XX% have we shares. to on We well. program of time, had, to as the spoke Complementing up an question for a Roman. about that some moving asked dividends Ian outstanding

that executing those $XX $X million been million alone. in July on this out paid and have year We roughly of buyback. We

So able mentioned, shareholder working, current return we expect this strategy our at to course, and, be keep conditions as I pace of overall always. as do we market on sustain to

and accelerated should acceleration. our continue we've the expect you us to So trend

Roman Rose

one Perfect. And Martin. long this for

a electricity there. As to of much XX, generation in wanted significant we OpEx in reduction expenses to you if you are generation? And finishing expect in related the is transition entice operating a ask how I should

Martin Terrado

our no electricity. OpEx a problem. from of in About generation of Ramon, XX% Yes. comes channels

for something is good. big us is and this it's that So

the on XX%, going but XX% We about of price to it's it reduction forward, what expect connection depending we due fluctuate expect. could to of And the OpEx around tell. electricity

Roman Rose

that prices. oil I on cost how will understand with forward. last something factor should has wanted going depend high of to the I Perfect. But to the price think royalties. this part really one I of royalty we know wanted And understand,

Martin Terrado

ask did about -- Sorry, export the tax payment? the Roman, you

Roman Rose

Yes. Sorry.

We -- have originated go ahead, please.

Martin Terrado

Thank Sure. Roman. you,

So and government on you from is a I E&P any terms don't royalty XX%, on way you're in the other of those as royalties, different different block, executed are cash fully are extractor been will have components right? and And always of And contract That's Each to -- tax it changes we block ongoing. factors are they're Colombia. back linking take, right? the X-factor. to and in contracts. those think mentioned. those the that reform, contracts the has right There expect such

Roman Rose

Okay. Thank you Congratulations quarter. much. very the on

Operator

for questions. [Operator you your no questions There awaiting Thank time. currently There Instructions] questions registered. are no at are this

I'll over to So, remarks. further back any pass conference Ocampo Mr. the for

Andres Ocampo

Thank everybody, and operations GeoPark. to And any to you, your that encourage information visit of call for or you, and may Thank have. we support always you interest have may questions for us time need. good day. and you available we're more us a any you answer our Please,

Operator

Thank you your participation. for

disconnect may your lines. You now

GeoPark Limited (GPRK) 11 Aug 222022 Q2 Earnings call transcript