Earnings call transcript Q4 2022

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Operator

Good morning, and welcome to the GeoPark Limited Conference Call following the Results Announcement for the Fourth Quarter ended December 31, 2022. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

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

and note and statements are cause on rather historical please results in forward-looking actual continue, risks than release to materially press this facts described. results we to that that from contained certain the statements, and differ Before uncertainties subject those could are conference call

and risks the Litigation Reform developments Act With respect the Factors statements, including Securities forward-looking Risk variety company seeks factors, XXXX. releases. time Private in These include from to such protections a of afforded reports to by company's the listed of and competitive time public SEC

to Those results a the of certain business. to lists principal complete in identify from company's actual materially intended cause described those could but represent are differ statements, to the list factors intended forward-looking that not are

in PRMS included financial and figures stated in figures All noted. dollars were standards. correspond are herein Reserves with IFRS otherwise unless US to the accordance prepared

today GeoPark Terrado, Executive the Chief On Martin Shareholder Ocampo, and Officer; Davila, Operating Officer; Chief Value Chief Veronica Officer; Officer; Stacy from Zubillaga, Technical Financial Steimel, call Augusto Chief Director. is Andres

And you begin. now, Mr. over call may Mr. Ocampo. I'll the Andres turn Ocampo, to

Andres Ocampo

morning for Good you our joining thank call. and

our our year with Houston, connecting are and report XXXX on from We to fourth financial Texas, results. team full quarter

in XX During Colombia a in within the production its XXXX, XX total XX with million, fields Indico Jacana largest ranked GeoPark for XX% targeted completed X% oil-producing in and and CPO-X. to grow Tigana, most growth its wells CapEx production $XXX drilled Llanos Work top growth today. Program now assets, mainly of in nearly profitable

line line a global to share. profit as adjusted of $XXX per with well over record equivalent inflationary over $X and maintain work million, over pressures, and costs our as investment bottom $X.XX closed million program, team's $XXX this EBITDA to revenues net billion, year, GeoPark ability despite in With

cost the proof same within Every X than high capital asset base, times dollar discipline. EBITDA and another assets our in our year, adjusted quality combined our of invested the of methodology with generated more allocation

cash flow Full allowed not from to million our debt, ended $XXX We net year of which our debt comfort with year and was times, million, and also net notes. $XXX until principal a in pay but well leverage X.X debt of of CapEx XXXX XXXX. down operations million canceling $XXX zone million, us ratio with no the $XXX our maturities funded cash only program, below

allowed $X $XX initiatives. base in GeoPark us Such value expect share doing free per expanding and over return we a XXXX. XXXX, to our more also through million, In representing a share cash buyback than accelerated more to more continue shareholders flow shareholder and bigger generation continue paid dividend

in mission and continue as was reduce ideas neutralize to invest GeoPark's an and hydrocarbons XXXX to also to important cleanest cost-efficient we and provide possible carbon most our emissions and year impact. the develop environmental

connected a earlier XX another to on high on over year, footprint Llanos and year. risk, are block national park, approximately planning XX% to $XXX Last appraisal $XXX to the with grid to the to a carbon million embarked our exploration the drill potential way ambitious are we work and which solar low million XX we underway, energy by to wells, year XXXX With improvements reducing more this XX% power wells. of XX XX program to XX invest installed

forward drilling again rigs exciting With of to quarters. results operating expect free to XX% we XX return upcoming the of $XXX we adjusted billion EBITDA program over multiple multiple activities cash more reporting we Brent, shareholders. the to and At than to XX% taking currently flow multiyear expect this which of million $XX basins, and to place $X.X generate in in look

you questions Thank happy to be may now And we any answer would you. have.

Operator

Alejandro from Demichelis you. is Thank comes [Operator open. Securities. of first Alejandro, your now line Nau Our Instructions] question

Alejandro Demichelis

Yes. Good questions, I guys. morning, A if may. few

could please in quarter. have an been these wells your back of annual not bringing early shut that that is, in were that two may happen risk you of one time that, confidence next level mentioning, frame indicate you First that kind

Then the a you to the the is CPO-X? the second discoveries, with this And is -- question some change -- these ANH in see this that test repeating production. in that have NHS new is were that way approaching we of if can

the see now? third progressing the then can on update how is, question maybe us And exploration you you program

Andres Ocampo

Good Alejandro. your for you Thank morning. question. here. Hi, Andreas

to unfortunately. is of on this production? on confidence these back our will put respect level with the First, control, beyond be think I whether two wells

guidance So it give hard to a is on that.

-- The is and facilities thing working is And field, the underway. operator getting in reality on that on currently is the construction only the definitive Indico facilities time. are that those the needed that we is of with

happen. So always can shouldn't we expect any there but be delays delays,

So on getting the with be on really that is operator we're the jointly comment facilities the There that. any working on time. shouldn't and

expect happen. we delays, -- but any there's could don't they always So

the I to in ANH completed been can that no want on On change change should facilities ANH This our approach. make point is been question, understanding, I construction the of before definitive approach. just as in of very on don't that second this a haven't completed actually and time. have a construed delay think really your There's in be clear.

be the to a construction really – these maybe for been been ANH It's change. before completed completed stream. haven't it before. completed there's two on requested simply come to no should have them is because these and -- allowing before But So wells has

really the at all. program, Zubi, the mean, any our So in to in -- view, rest there's exploration don't want their approach complement? you point, we a And on because to your related to expect change not in the any of if that program related I changes

Augusto Zubillaga

morning. Yes. Hello, Alejandro. Good

between XX, we wells well We To So to this is are this are that Llanos XX wells give our – we in do drill maybe appraisal plan more Guaco details those good drill that, of in drill wells finishing with in planning Llanos six two have and important. results. year. drilling to in structure one exploration four wells one CPO-X Sur

Ecuador. which total exploration is we we which fourth Tororoi are under evaluation. is the soon. well, well In one is wells two Llanos reaching And also And XX, we that Picabuey, and testing are Zorzal. And well, are drilling depth

is other we In which and a the the are formation in we well, reach CPO-X, weeks, will [indiscernible] two well target. in

in two wells in and XXX, Llanos of the For continuation more and Llanos eight the we those CPO-X XX Llanos reservoir, wells one is more in and maybe have in trading to drill wells going one geological we two that XXX, plant two in on [indiscernible] of Ecuador. are one

optimistic I'm sure give next the will our update. plan we market the news operational to are So about we in

Operator

And line our from Auctus next Advisors. open. question Stephane, comes your now from Stephane Foucaud is

Stephane Foucaud

line be guys. hope a seems Thanks bit questions. that so are me hearing two I my for up, The breaking Hi, have taking okay. you to question. I

bit seems around that I see increased The see Vasconia as discount, those how or QX. this a in discount. It wondering the to was today? increasing it how or you dropping – you have being is first one And XXXX with Vasconia is

wells second, QX. And that were of there a you were in drilling lot

results you. we particular update wells. Perico, in I Any Zorzal, are those waiting Thank QX, mine as on specific some Tororoi. there in think Picabuey,

Veronica Davila

the To morning, your on and here. your Good been Stephane it's It's you thank widening. differential, Veronica so Vasconia point for question.

about below XXXX. during As of levels $X Brent about year-to-date you X.X% versus well mentioned, today, Brent it's averaging $X.XX below

there's the of the fourth differential few that contributed So, widening to have the a since factors quarter.

increased some -- from and crude. in increase of exports, Vasconia in Venezuela, production the Russia still for have all barrels out We with some discounted competing Canadian market

Latin Chinese with and XXXX we including this reopening differential. for particularly, look crudes pressure should American China some Vasconia. of out the that demand forward for into expect And the If remove demand improve, coming to higher of we

the improve the course to levels of Vasconia expect year. current we So over from

Stephane Foucaud

you. Thank

Andres Ocampo

I to your exploration the Stefan, go here, Andres will about point was.

zero-week we're of here Zubi, in think Houston. different I because with places at us in are some

he a up response little, in completing testing now. the line his his those So, either of made are point was or we that right or the exploration of was Most wells wells, before. drilling but breaking

[indiscernible] The [ph]. we will in and Llanos operationalized finished XX, have finish expect in wells, under a in information or lot and drilling drilling April. Gwala then XX, are we in evaluation, be So drilling completed it early it's not. we [ph], Solca Llanos and more results currently one our Tororoi whether Pickaway, was we two update we

over know then expect well. And of that. course the CPO-X, to in are on a reach in the drill weeks. exploration to of prospects operator then the will with as next we Perico the And We working [ph] couple within couple target drilling next weeks. is of we expects CPO-X We're couple more depth which well,

we April. operational more yes, that a So right details hopefully, going now, lot really the expect, is and on in is update to give some -- in there

Stephane Foucaud

you. Thank

Operator

Our comes next from Canaccord. from Rossi Roman question

ahead. go Please Roman. open, now is line Your

Roman Rossi

the on Congratulations you. Thank results.

below question So for the was XXXX, your CapEx So, first this regarding guidance. right? is way

to CapEx rolled wanted main the this understand And if into reasons that. of XXXX? we So, expect behind some just could

Veronica Davila

you, Thank Good Roman. morning.

So well as XX we $XX localized some in of as blocks terms million in over On of That with may CapEx. mentioned, up caused ended delays $XXX that, we surrounding total million in you had XXXX CapEx. fourth of and both exploratory terms about blockades the in the quarter, you recall, channels. some Llanos our of

$XXX other program. XXXX including We to carryover projects But million within is the and work canceled. also the the a smaller XXXX that drilling and savings program had were and to complete million expect we some from some that guidance $XXX

Roman Rossi

you. facilities? Thank CapEx question includes the second costs any surface And your is the to since Awesome. that, CPO-X related

Veronica Davila

facilities, for Indico within Indeed, our you, permanent the the so Thank guidance. facilities included Roman. are

expect that that shouldn't changes included. you Those or for – from are So deviations project.

Roman Rossi

Perfect. Thank much. very you

Operator

from now Oriana, comes Balanz. question Oriana Covaul from is your next our And line open.

Oriana Covaul

Thanks I you the My table regarding afternoon. surcharge. your noticed first for taking statements. in Good some financial was put questions. that, Hi. out question my income

XXXX already is any just do to first And put guidance – payments was be out should carry you or have may was my you budget? the published I the XXXX estimates more working? you you detailed tax are colors going changes with that if So your on by it this provided That that with question. ANH, how if expecting be full in numbers this wondering any –

Veronica Davila

Good Thank Oriana. morning. you,

mentioned we've reform to surcharge as last before, relate the of the Brent prices. linked a to tax that included XX that So triggers is right, years

we above so XX%. $XX Brent and goes XX%, our the to then that our advisers, triggers calculations as published Young. have calculations searches numbers by and – below as interpretation by provided These will based no XX% XX% that above X% & audited a it's and the external the be Ernst audited XX%, are external well to close So there's we have above that on

can give highlight, though, would some the is for and average. – XX-year be the of all a The the figures be calculation What variation, but the will interpretation I rolling later. same The will determined industry. norm final the is

the as fiscal brackets So you from these will year prior slight the before off, to year-to-year, into it year the see the rolls tenure rolls in changes and calculation.

Oriana Covaul

Got increase it. second – and that And blockade what's related first an Thanks. activity Colombia fourth across one, That's and complexity in very last by my quarter the quarter. seen clear. we've the during during is with just

the wondering, most production? on how you thinking you XXXX responding observing comment potential is are how complex government the What can situation? the the So in just conceptually? importantly, increase just And on to apparent impact

Andres Ocampo

Andres to field concern prevent with we make escalator. alert and and on take as and that here. our can Oriana, increase always that We we we've relationship the continuously done always the in information the the events flowing, any keep you, issues violent blockade to Thank and early in continuously, work with to measures activities potential see anticipate with country. the any monitor we sure more Yes, communities crews potential the

the risk, country most the part over that North events quarters have part couple further have of the of last or country, Also, in passed been a in in little from south the of areas the of the where away or a not continue risk, exempted we this We to But this not is we significant obviously, expect and we it are quickly. expect over to XXXX. this are. from accepted very go do

Unfortunately, in happening country. conflictivity today the is additional is something that the

our that of continue our control. company less it But or as this most is to and do, the it as the what improving year, under can to is within much respect the -- do our rest a can more And to relationship concern, we of we again, really -- that's and neighbors. with throughout work our expect with unfortunately. the we continue limit to we So and

Oriana Covaul

again Thanks questions congratulations and Got it. on a year strong taking for my

Andres Ocampo

you, Thank Oriana.

Operator

Bradesco. from a We Gustavo written next have question Sadka from

XXXX Asking what unsuccessful exploration endeavors $XX quarter led write-off million the fourth to in

Veronica Davila

well drilling in one write-offs results that in Hi, Gustavo. Putumayo, channels to of in recognized, XX the well one fourth write-down Ecuador. needed financials. one million your successful well channels Colombia, in one you did question. record be in XX Thank are for We those $XX mainly Those in of wells a also our of are quarter and from the and [ph] a

So composition that's the that figure. of

Operator

questions, will Andres further remarks. no are closing the hand there I for CEO, And to call any back Ocampo,

Andres Ocampo

everybody, Thank support you that of We're questions your any for continued you, and answer GeoPark. always interest may to available have.

time please more So and good Thank day. any for have call us you, a information.

Operator

This Thank concludes everyone, call. for today's joining. you,

disconnect. now may You

GeoPark Limited (GPRK) 9 Mar 232022 Q4 Earnings call transcript