==
al
GEOPARK
Santiago, 10 de abril de 2013
Geopark Holdings Limited
Inscrito en el Registro de Valores Extranjeros bajo N* 045
Señor
Fernando Coloma Correa
Superintendente de Valores y Seguros
Av. Libertador Bernardo O’Higgins N* 1449, piso 1
PRESENTE
REF.: Adjunta información relevante que
se publicó el día de hoy en el AlM
del Mercado Bursátil de Londres.
Señor Superintendente:
En virtud de lo establecido en la Norma de Carácter
General N*217 sección ll, por medio de la presente adjunto información considerada
como relevante para la empresa, que ha sido entregada el día de hoy en el
Alternative Investment Market, mercado secundario de la London Stock Exchange,
en donde mediante un comunicado de prensa se informan las ganancias de la
Compañía correspondientes al año 2012.
La información adjunta consiste en un comunicado de
prensa de dieciocho páginas en idioma inglés. Con respecto a la traducción del
comunicado al idioma español, se informa que la misma será publicada en esta
Superintendencia dentro de los próximos días.
Sin otro particular, saluda atentamente a Usted,
1) Pedro Aylwin Chi frni
“pp. GEOPARK HOLDINGS LIMITED
Nuestra Señora de los Ángeles 179 – Las Condes, Santiago – Chile
Tel. (+56 2) 2429600 – infoWgeo-park.com – www.geo-park.com
PA
la all
GEOPARK
2012 Results
GEOPARK HOLDINGS LIMITED
e Revenues increased 124% to US$250 million in 2012.
e Full year production increased 49% averaging 11,276 boepa.
e 2P Reserves increased 15% to 56.9 MMboe.
e Full year Adjusted EBITDA increased 92% to US$121 million.
Net income increased 264% to US$18 million.
e Netback per boe produced increased to US$30.8 per boe in
2012, representing an increase of 34.5% from 2011.
e Acquisition and consolidation of two Colombian Companies –
Winchester Oil and Gas and Hupecol – for a combined
consideration of US$105 million.
e First gas discovery in Tranquilo block (Chile) in 40 years, Palos
Quemados (with a production test of 4.6 mmcf/day).
e Operations commenced in Tierra del Fuego, Chile on the Isla
Norte, Flamenco and Campanario blocks.
+ Over US$195 million invested in capital expenditures in 2012
with 44 new wells. Total investment of US$300 million including
Colombian acquisitions.
Contacts:
+ US$300 million bond issue in February 2013 (144A/RegS):
more than 6 times oversubscribed, initial yield of 7 5/8%. Funds
will be used for new investments and refinancing.
Juan Pablo Spoerer
CFO
Pablo Ducci
Funding € Investor Manager
Santiago, Chile
Tel: +(562) 22429600
Email: irdgeo-park.com
2012 – Earnings Release
INDEX
1. Financial and Operational Highlights 3
2. Summary of Financial Results 5
3. Assets 6
4. Analysis of Consolidated Results 7
5. 4Q2012 Operational Update 8
6. Strategic Developments 11
7. Oiland Gas Reserves 13
8. 2013 Outlook 14
9. Consolidated Financial Statements 15
10. Glossary 18
2012 – Earnings Release
1. Financial and Operational Highlights
(US$ million) 4012 4011 % Chg. 2012 2011 % Chg.
Revenues 68.3 37.7 81% 250.5 111.6 124%
Oil 63.3 28.0 126% 221.6 73.5 201%
Gas 5.1 9.7 -47% 28.9 38.1 -24%
Chile 32.7 37.4 -13% 149.9 110.1 36%
Colombia 35.6 – 99.5 –
Argentina 0.1 0.3 -71% 11 15 -29%
Adjusted EBITDA 26.6 22.2 20% 121.4 63.4 92%
Chile 17.2 26.1 -34% 93.9 70.4 33%
Colombia 10.2 – 34.5 –
Argentina, Corporate 8 Others -0.8 -3.9 79% -7.0 -7.0 0%
Adjusted EBITDA Margin (%) 38.9% 58.7% 48.5% 56.8%
Net Income -6.0 3.7 -263% 18.4 5.1 264%
Net Income Margin (%) -8.7% 9.7% 7.4% 4.5%
Net Cash Flow from Operations 30.6 18.9 62% 131.8 68.8 92%
Weighted Avg. Shares (million) 42.7 41.9
EPS Diluted ($) 0.269 0.001
Stock Price (£ as of December) 647.5 440.0
Average Daily Traded Volume ($ ‘000) 89.9 196.1
Production (average boepd) 10,627 8,710 11,276 7,593 49%
Chile 6,558 8,637 7,802 7,511 4%
Colombia 4,027 – 3,411 – N/A
Argentina 42 73 63 82 -23%
P1 Reserves (MMboe) 18.7 16.5 13%
P1 + P2 Reserves 56.9 49.5 15%
P1 + P2 + P3 Reserves 114.4 106.9 1%
% Oil / Revenues 92.6% 74.4% 88.5% 65.9% 34%
% Gas / Revenues 7.4% 25.6% 11.5% 34.1% -66%
2P Reserve/Production Ratio (Years) 14.4 17.9 -19%
+ Revenues Up 124%: Total revenues increased to US$250 million in 2012 from US$112 million in 2011, mainly
as a result of an increase in oil production in Chile and the incorporation of new production from Colombia,
partially offset by lower gas revenues. Oil revenues from Chilean operations increased by 68% to US$121
million and Colombian operations incorporated additional oil revenues of US$99 million. Oil revenues
represented 88% of total revenues. Revenues from Columbian operations are accounted from the date of
acquisition and therefore do not represent full 2012 production from the relevant assets.
2012 – Earnings Release
+ Adjusted EBITDA Up 92%: Adjusted EBITDA (adjusted earnings before interest, tax, depreciation,
amortization and certain non-cash items such as write offs and share based payments) increased to US$121
million in 2012 compared to US$63 million in 2011. In addition, cash flow from operating activities in 2012
increased by 91% to US$132 million from US$69 million in 2011.
e Netbacks Up 35%: Netback per boe increased to US$30.8 per boe in 2012 compared to US$22.9 per boe in
2011 reflecting a higher weighting of oil in GeoPark’s production mix, as well as the incorporation of Colombian
operations into the portfolio.
+ Net Income Up Significantly: Net income for 2012 increased to US$18 million, compared to US$5 million
reported in 2011. The growth in net results is mainly associated with an improvement in operating results which
increased to US$41 million in 2012 (including US$8.5 million from our new Colombian operations) compared to
US$26 million in 2011, despite higher write off charges of US$ 25.6 million in 2012 compared to US$ 5.9
million in 2011. In addition, a gain of US$8.4 million was recognized related to the acquisition of the Colombian
subsidiaries.
e Total Equity Up 25%: Total Equity increased to US$312 million as of December 2012 compared to US$251
million as of December 2011. In addition to the net income generated during the year, net equity increased due
to equity contributions made by LGl in Chile.
e Available Cash Resources: GeoPark had US$48 million in cash and cash equivalents at the end of 2012
(US$38 million net of overdrafts), with a liquidity ratio of 1.28x (current assets divided by current liabilities), and
total financial debt of US$193 million. As of 31 March 2013, after the issuance of the US$ 300 million Notes,
total cash amounted to US$179 million.
. Total Production Up 49%: Production average 11,276 boepd during 2012 compared to 7,593 boepd in 2011.
Resulting from an increase in production of 291 boepd in Chile (including an increase of 65% of oil production
partially offset by a decrease in gas production) and the addition of 3,411 bopd in Colombia.
. 57% Drilling Success: GeoPark’s 44 well drilling program during 2012 represented a balance between
exploration, appraisal and development. 36 wells (operated by GeoPark) were drilled achieving a success rate
of 57%.
. 2P Reserves Up 15%: 2P reserves increased 15% compared to 2011, to 56.9 Mmboe.
. US$198 million CAPEX: Geopark invested US$198 during 2012. In addition, US$ 105 million was invested
for the acquisition of the Colombian operations.
2012 – Earnings Release
IEA EEES
Statement of income
(US$ million) 4012 4011 % Chg. 2012 2011 % Chg.
Revenues 68.3 37.7 81.2% 250.5 111.6 124.5%
Production Costs (40.6) (17.8) 128.1% (129.2) (54.5) 137.1%
Gross Profit 27.8 19.9 39.3% 121.2 57.1 112.5%
Operating Profit 4.9 11.2 -56.4% 40.7 25.8 58.0%
Financial Income 0.5 (0.2) -364.0% 0.9 0.2 350.0%
Financial Expenses (3.0) (2.7) 9.9% (17.2) (13.7) 25.7%
Gain on Acquisition (0.2) – 8.4 –
Profit Before Income Tax 2.2 8.3 -73.7% 32.8 12.3 167.7%
Income Tax (8.1) (4.6) 76.4% (14.4) (7.2) 99.8%
Profit for the Year (6.0) 3.7 -262.7% 18.4 5.1 264.4%
Attributable to:
Equity holders of the company (6.0) 0.4 -1548.7% 11.9 0.5 2099.8%
Minority Interest 0.0 3.7 -100.0% 6.6 5.0 31.1%
Balance sheet
(US$ million) Dec-12 Dec-11 Dec-12 Dec-11
Non-Current Assets 490 234 Non-Current Liabilities 209 157
PP8E 458 225 Borrowings 165 135
Other Non-Current 33 9 Other Non-Current Liabilities 43 23
Current Assets 138 238 Current Liabilities 107 64
Cash and Cash Equivalents 48 194 Borrowings 28 31
Prepayment and Other
Receivables 50 25 Trade and Other Payable 55 29
Assets Held for Sale – – Other Current Liabilites 25 5
Trades Receivables 32 16 TOTAL LIABILITIES 316 222
Inventories 4 1 Equity Owners Company 239 209
Other Current Assets 3 3 Minority Interest 73 42
TOTAL EQUITY 312 251
TOTAL EQUITY +
TOTAL ASSETS 628 472 LIABILITIES 628 472
2012 – Earnings Release
Financial indicators
Units Dec-12 Dec-11 Covenant Limit
Gross Financial Debt $ million 193.0 165.3
Net Financial Debt $ million 144.7 (28.4)
Net Financial Debt / Equity times 0.46x na
Gross Debt / Adjusted EBITDA times 1.59x 2.61x 2.75x
Coverage Ratio times 7.06x 4.63x 3.50x
Liabilities / Equity times 1.01x 0.88x
Net Financial Debt / Adjusted EBITDA times 1.19x na
Current Liabilities % 34.0% 29.1%
Non-Current Liabilities % 66.0% 70.9%
Cash and Cash Equivalents $ million 48.3 193.7
Equity $ million 312.1 250.7
Gross Area Net 2P Net Concession
Country Block Operator wi” Basin (thousand Reserves Production % oil Expiration
acres) (mmboe)? (boepd)? Date
Chile Fell GeoPark 100% Magallanes 368 45.4 7,802 52% 2032
Chile Tranquilo GeoPark 29% Magallanes 1,232 > > 2013/2043
Chile Otway GeoPark 25% Magallanes 1,474 – 2017/2044
Chile Isla Norte GeoPark 60% Magallanes 130 – – 2019/2044
Chile Campanario GeoPark 50% Magallanes 192 – 2020/2045
Chile Flamenco GeoPark 50% Magallanes 141 – – 2019/2044
Colombia La Cuerva GeoPark 100% Llanos 47 3.8 2,071 100% 2014/2038
Colombia Llanos 34 GeoPark 45% Llanos 82 6.5 413 100% 2015/2039
Colombia Llanos 62 GeoPark 100% Llanos 44 – 2017/2041
Colombia Yamú GeoPark 54.5/75% Llanos 11 0.8 602 100% 2013/2036
Colombia Llanos 17 Ramshorn 36.80% Llanos 109 – 2015/2039
Colombia Llanos 32 P1 Energy 10% Llanos 100 0.3 116 100% 2015/2039
Colombia Jagueyes Columbus 5% Llanos 61 – 2014/2038
Colombia Arrendajo Pacific 10% Llanos 78 – 96 100% 2017/2041
Colombia Abanico Pacific 10% Magdalena 32 112 100% 20221″
Colombia Cerrito Pacific 10% Catatumbo 10 – 1 0% 2028″
2012 – Earnings Release
Gross Area Net 2P Net Concession
Country Block Operator wi” Basin (thousand Reserves Production %oil Expiration
acres) (mmboe)” (boepd)? Date
Argentina Del Mosquito GeoPark 100% Austral 17.30 – 63 76% 2016
C. Doña
Argentina Juana GeoPark 100% Neuquén 28 – – – 2017
Loma
Argentina Cortaderal GeoPark 100% Neuquén 20 – – – 2017
1 Working Interest
2 Million of barrils of Oils Equivalent
3 Barrels of oil equivalent per day
4 Exploration phase has ended. Currently in production phase
5 In November 2012, we relinquished approximately 85.6% of the Del Mosquito Concession to the Santa Cruz Province; resulting in a remaining exploitation area of 17,800 acres.
EE RO ETS
Revenues in 2012 amounted to US$250 million, a 124% increase compared to 2011, driven mainly by the
Colombian acquisition and the change in mix towards oil in the Chilean operations. In Chile, total oil production
increased 65% to an average of 4,024 bopd. The acquisition of two companies in Colombia increased production by
3,408 bopd. Revenues from the Colombian business amounted to US$99. Revenues for the Colombian
subsidiaries were accounted for since the acquisition date (February and March 2012, respectively).
Gross profit for the year was US$121.2 million leading to a year-on-year increase of 113% and a gross margin of
48.4%. The gross margin slightly decreased from 51% in 2011 due to consolidation of the Colombian acquisitions,
higher royalties in Colombia and accelerated depreciation of the Del Mosquito Block assets.
Exploration costs increased explained mainly by two factors: the relinquishment of part of the Del Mosquito block
and the write-offs related to unsuccessful exploration wells, (five in Chile and three in Colombia) compared to 3
unsuccessful wells in 2011.
Administrative expenses increased 58.5% explained by the incorporation of the Colombian operations for an
amount of $8.1 million and higher costs associated to new business developments.
Selling expenses amounted to US$24.6 million, reflecting an increase due to higher transportation costs in our
Colombian operations.
2012 – Earnings Release
Adjusted EBITDA in 2012 showed a record amount for the Company of US$121 million, representing a 92%
increase compared to 2011. Adjusted EBITDA for 2012 accounts for the EBITDA generated from the Colombian
business since the acquisition dates. Adjusted EBITDA, calculated on a proforma basis considering the Adjusted
EBITDA for the Colombian business as if the Colombian operations would have been acquired as of January 1*
2012 would have been US$ 132 million. Chile accounted for US$93.9 million representing a 33% increase.
Colombia accounted for US$34.5 million and the remaining amount relates to results from the Argentine operations
and corporate expenses.
Depreciation and amortization increased mainly due to the incorporation of the Colombian operations. In Chile, in
the Fell block depreciation charge represents approximately US$ 9 per boe produced. In Colombia, the depreciation
charge ranges from US$ 13 to US$ 16 per boe in the different operated fields.
Financial expenses increased mainly due to higher interest charges as a result of the US$37.5 million financing
facility executed with ltau BBA and US$ 2.5 million loss arising from exchange rate differences.
Gain on acquisition of subsidiaries: in accordance with the acquisition method of accounting, the acquisition
cost of the two Colombian companies was allocated to the underlying assets acquired and liabilities assumed based
primarily upon their estimated fair values at the date of acquisition. An income approach (being the net present
value of expected future cash flows) was adopted to determine the fair values of the mineral interest Under this
methodology a gain of US$8.4 million was recognized.
Net income increased 264% reaching US$18.4 million. Total net income attributable to owners of the Company
reached US$11.9 million which translates in an diluted EPS of USc0.2693 versus USc0.0012 in 2011.
Consolidated net margin increased to 7.4% versus the 4.5% obtained in 2011.
OPONEMOS
Key achievements during 402012 include:
Oil and Gas Production Increase
Oil and gas production increased by 22% to 10,627 barrels of oil equivalent per day (“boepd”) in 402012 from 8,710
boepd in 4Q2011. Crude oil production increased by 110% to 7,939 barrels of oil per day (“bopd”) in 402012 from
3,783 bopd in 4Q2011.. 1Q2013 average production was approximately 13,500 boepd.
2012 – Earnings Release
Drilling Success in Chile and Colombia
Key wells drilled and put into production on the Fell Block in Chile during 2012 fourth quarter included:
> Yagan 2 (currently producing approximately 610 bopd)
> Konawentru 4 (currently producing approximately 900 bopd)
> Yagan 4 (currently producing approximately 600 bopd)
Key wells drilled and put into production on the Llanos 34 Block in Colombia included:
> Tua3 (currently producing approximately 1,100 bopa)
> Tua2 (currently producing approximately 1,700 bopa)
Fourth Quarter 2012 Drilling and Work Program
GeoPark’s 2012 work program included the drilling of 44 new wells (gross) with a capital expenditure of $195
million. The drilling program in 402012 was mainly focused on reserve appraisal and development in Chile and
Colombia. Results are set out below:
Geological Depth Principal
Country Block wi Well Type of Well Formation (Meters) Hydrocarbon Current Status
Wells Drilled in 402012
Chile Fell 100% Yagán 2 Appraisal Tobífera 3,126 Oil On Production
Chile Fell 100% Konawentru 4 Appraisal Tobífera 3,102 Oil On Production
Chile Fell 100% Yagán Norte 4 Development Tobífera 3,105 Oil On Production
Chile Fell 100% Manekenk 2 Development Tobífera On Drilling
Chile Fell 100% Konawentru 3 Development Tobífera Waiting for Completion
Chile Tranquilo 29% Marcou Sur 1 Exploration Loreto Inferior 1,496 Gas Waiting for Completion
Chile Tranquilo 29% Palos Quemados 1 Exploration Loreto Superior 1,600 Gas Waiting for Completion
Chile Tranquilo 29% EaMaAntonieta1 Exploration El Salto Inferior 1,191 Gas Waiting for Completion
Colombia Llanos 32 10% Maniceño 1 Disposal > Injecting in C1
Colombia Llanos 34 45% Tua3 Development Mirador/Guadalupe 3,276 Oil On Production
Colombia Arrendajo 10% Azor3 Development C5 2,033 Oil On Production
Completions/Workovers Performed in 402012
Chile Otway 25% Tatiana 1 Completion Agua Fresca 2,202 Gas Plug 8 Abandon
Chile Fell 100% Nika Oeste 4 Completion Springhill / Tobifera 3,204 Gas Waiting for Fracture
Chile Fell 100% Kosten 1 Workover Springhill Gas On Production
Chile Fell 100% Ovejero 2 Deepening Tobifera 3,184 Oil Waiting for Fracture
Chile Fell 100% Guanaco 10 Workover Springhill Oil Converted to Injector
Chile Fell 100% Maku 1 Workover Springhill Gas On Production
Chile Fell 100% Guanaco 16 Workover Springhill Oil On Production
Chile Fell 100% Alakaluf 3 Workover Springhill oil Injector
Colombia Llanos 34 45% Tua 2 Completion Guadalupe 3,374 Oil On Production
Colombia Arrendajo 10% Azor 2 Completion C5 1,947 Oil On Production
Drilling Highlights:
> Appraisal well Yagan 2 on the Fell Block in Chile (GeoPark operated with a 100% working interest (“W!I”)) was
put into production from the Tobifera formation in November 2012 and is currently producing approximately
610 bopd.
2012 – Earnings Release
V
V
V
V
Appraisal well Konawentru 4 on the Fell Block in Chile (GeoPark operated with a 100% WI) was put into
production from the Tobifera formation in November 2012 and is currently producing approximately 900 bopd.
Appraisal well Yagan Norte 4 on the Fell Block in Chile (GeoPark operated with 100% WI) was put into
production from the Tobifera formation in December 2012 and is currently producing approximately 600 bopd.
Appraisal well Manekenk 2 on the Fell Block in Chile (GeoPark operated with a 100% WI) was drilled and is
waiting on completion and testing in the Tobifera and Springhill formations.
Development well Konawentru 3 on the Fell Block in Chile (GeoPark operated with a 100% WI) was drilled and
is waiting on completion and testing in the Tobifera formation.
Exploration well Tatiana 1 on the Otway Block in Chile (GeoPark operated with a 25% WI) was drilled and
completed in December 2012. The well encountered gas in the targeted objective but with a tight reservoir (low
permeability) and no commercial production. The well was plugged and abandoned.
Appraisal well Tua 3 on the Llanos 34 Block in Colombia (GeoPark operated with a 45% WI) was put into
production from the Mirador formation in December 2012 and is currently producing approximately 1,100 bopd
gross.
Appraisal well Tua 2 on the Llanos 34 Block in Colombia (GeoPark operated with a 45% WI) was put into
production from the Guadalupe formation in December 2012 and is currently producing approximately 1,700
bopd gross.
Appraisal well Azor 2 on the Arrendajo Block in Colombia (Non-operated with a 10% WI) was put into
production from the C5 formation in October 2012 and is currently producing approximately 580 bopd gross.
Appraisal well Azor 3 on the Arrendajo Block in Colombia (Non-operated with a 10% WI) was put into
production from the C5 formation in December 2012 and is currently producing approximately 490 bopd gross.
Oil and Gas Production
GeoPark’s daily average oil and gas production increased to 10,627 boepd in 4Q2012 from an average of 8,710
boepd in 402011. This increase resulted from a growth in Chilean oil production (from 3,723 bopd to 3,879 bopd)
and new production from Colombian assets acquired (4,018 bopd). Oil production accounted for 75% of the total oil
and gas production compared to 43% in 4Q2011.
10
2012 – Earnings Release
Fourth Quarter 2012 Fourth Quarter 2011
Total (boepd) Oil (Bopd) Gas (mctpd) Total (boepd)___%Chg.
Chile 6,558 3,879 16,080 8,637 -24%
Colombia 4,027 4,018 50 – N/A
Argentina 42 42 – 73 -42%
TOTAL 10,627 7,939 16,130 8,710 22%
Full Year 2012 Full Year 2011
Total (boepd) Oil (Bopd) Gas (mctpd) Total (boepd)__ %Chg.
Chile 7,802 4,024 22,665 7,511 4%
Colombia 3,411 3,408 50 – N/A
Argentina 63 48 85 82 -23%
TOTAL 11,276 7,480 22,800 7,593 49%
In accordance with the AIM Rules, the information in this announcement has been reviewed by Salvador Minniti, a
geologist with 32 years of oil and gas experience and Director of Exploration of GeoPark.
¡IEC ES
LGl partnership
On 12 March 2010, LGl and the Company agreed to form a strategic partnership to jointly acquire and develop
upstream oil and gas projects in Latin America.
During 2011, GeoPark and LGl entered into the following agreements through which LGl acquires an equity interest
in the Chilean Business of the Group:
. On 20 May 2011, the Company (through its wholly owned subsidiaries GeoPark Chile Chilean Branch and
GeoPark Chile S.A.) and LGl signed a subscription agreement in which LGl subscribed 10 million of
ordinary shares representing 10% equity interest in GeoPark Chile S.A, the Company owner of the Chilean
assets, for a total consideration of $70 million.
. On 4 October 2011, an addendum to the agreement dated 20 May 2011 was signed whereby 12.5 million of
ordinary shares in GeoPark Chile S.A. were subscribed by LGl, for a consideration of $78 million,
representing an additional 10%.
The transactions mentioned above have been considered to be a deemed disposal and in accordance with IAS 27 it
has been accounted for as a transaction with Non-controlling interest. Consequently, the gain as a result of
US$ 111.2 million has been recognized through equity rather than in the income statement for the year. Under the
terms of this agreement LGl also committed to provide additional equity funding of US$ 18 million to GeoPark Chile
S.A. over the next three years, being LGl’s share of GeoPark Chile S.A.’s commitments under the minimum work
program of the three Tierra del Fuego licenses.
In December 2012, LGl joined GeoPark’s operations in Colombia through the acquisition of a 20% interest in
GeoPark Colombia S.A., a company that holds GeoPark’s Colombian assets and which includes interests in 10
11
2012 – Earnings Release
hydrocarbon blocks. A capital contribution in GeoPark Colombia S.A. for an amount of $14.9 million was made in
2013. In addition, as part of the transaction, $5 million was transferred directly to the Colombian subsidiary as a
loan. In addition, in March 2013 GeoPark and LGl announced their agreement to extend their strategic alliance to
build a portfolio of upstream oil and gas assets throughout Latin America through 2015.
Agreement with Methanex
In March 2012, the Company and Methanex signed a third addendum and amendment to the Gas Supply
Agreement to incentivise the development of gas reserves. Through this new agreement, the Company completed
the drilling of five new gas wells during 2012. Methanex contributed to the cost of drilling the wells in order to
improve the project economics. As of 31 December, the Company has fulfilled all the commitments under this
agreement.
The Agreement also included monthly commitments of delivering certain volume of gas; in case of failure, the
Company could meet the obligation from future deliveries without penalties during a period of three months.
Otherwise, the Company has to recognise the corresponding liability. As of 31 December 2012, the accrued penalty
amounts to $1.7 million.
Gas Market
Methanex Corporation, which purchases all of GeoPark’s Chilean gas production, announced it expects to idle its
Chile operation in March 2013 and restart it later in the present year due to anticipated insufficient natural gas
supply. Gas supply for the plant is expected to decrease during the winter months of 2013 given the seasonal gas
demand increase from the city of Punta Arenas, which is 100% supplied by the Chilean State Oil Company ENAP,
and whose gas production is supplemental to GeoPark’s gas supply to the Methanex plant.
However, the plant is still on production, given that according to public information, Methanex is receiving gas from
Argentina under non disclosed conditions. Despite, Methanex idles its Chile operations, they has agreed to continue
to purchase gas from GeoPark in 2013 in accordance with the minimum committed gas volumes per the Gas Sales
Agreement.
Portfolio Restructuring
In Argentina, GeoPark, in November 2012, relinquished approximately 85.6% of the Del Mosquito Concession to
the Santa Cruz Province; resulting in a remaining exploitation area of 17,300 acres.
In Chile in January 2013, GeoPark formally advised the Ministry of Energy of a decision by the Tranquilo Block JV
partners to not proceed with the Second Exploratory Period of the Tranquilo Block CEOP. GeoPark and its partners
will relinquish the Tranquilo Block, except for an area of 92,417 acres consisting of protected exploitation zones for
the Cabo Negro, Marcou Sur, Maria Antonieta and Palos Quemados prospects.
12
2012 – Earnings Release
Notes Issuance
During February 2013, the Company successfully placed US$ 300 million notes which were offered under Rule
144A and Regulation S exemptions of the United States Securities laws.
The Notes, issued by the Company’s wholly-owned subsidiary GeoPark Latin America Limited Agencia en Chile
(“the Issuer”), were priced at 99.332% and will carry a coupon of 7.50% per annum to yield 7.625% per annum.
Final maturity of the notes will be 11 February 2020.
The Notes are guaranteed by GeoPark and secured with a pledge of all of the equity interests of the Issuer in
GeoPark Chile S.A. and GeoPark Colombia S.A. and a pledge of certain intercompany loans. Notes were rated
single B by both Standard 8 Poor’s and Fitch Ratings.
The net proceeds of the notes will be used to finance the Company’s expansion plans in the region and also to
repay existing debt of approximately US$170 million, including the existing Reg S Notes due 2015. The transaction
extends GeoPark’s debt maturity significantly, allowing the Company to allocate more resources to its investment
programs and inorganic growth in the coming years.
7. Oil and Gas Reserves
DeGolyer and McNaughton (“D8M”) concluded its independent reserve certification of GeoPark’s properties
in Chile and Colombia dated 31 December 2012 with a 2P reserve estimate of 56.9 million barrels of oil
equivalent, comprising 49% oil and 51% gas. These figures consider a write off of the Argentinian reserves
due to lack of activity and proximity of the end of concession.
Country Reserve Type (MEL) eh) (MMBOE)
Chile P1 5.5 39.4 12.0
(Certified) P2 10.9 135.0 33.4
P3 10.8 253.5 53.1
P1+P2 16.3 174.4 45.4
P1 + P2 + P3 27.2 427.9 98.5
Colombia P1 6.7 – 6.7
(Certified) P2 4.8 – 4.8
P3 4.5 – 4.5
P1+P2 11.4 – 11.4
P1 + P2 + P3 15.9 – 15.9
Total P1 12.1 39.4 18.7
P2 15.7 135.0 38.2
P3 15.3 253.5 57.5
P1+P2 27.8 174.4 56.9
P1 + P2 + P3 43.1 427.9 114.4
13
2012 – Earnings Release
8. 2013 Outlook
GeoPark has begun 2013 with strong fundamentals in place:
Continuous track record of execution and growth performance,
Improved capabilities and organization,
Healthy financial position resulting from significant cash reserves and supporting operating cash flows, and
Increased portfolio of new project opportunities.
During 2013, the Company expects to realize important operational and financial performance gains following an
aggressive investment plan, which will include:
Risk-balanced production, development and exploration work programs on 16 blocks in 2 countries (Chile
and Colombia),
Capital expenditures of US$200-230 million,
Drilling of 35-45 new wells – with approximately 40% representing exploration for new reserves,
EBITDA projection in the range of $160 MM – $170 MM,
Average annual production increase of 20% to 25% over 2012 average production.
14
2012 – Earnings Release
Oo a SEAS
CONSOLIDATED STATEMENT OF INCOME
Amounts in US$ “000 2012 2011
NET REVENUE 250,478 111,580
Production costs (129,235) (54,513)
GROSS PROFIT 121,243 57,067
Exploration costs (27,890) (10,066)
Administrative costs (28,798) (18,169)
Selling expenses (24,631) (2,546)
Other operating income (expenses) 823 (502)
OPERATING PROFIT 40,747 25,784
Financial income 892 162
Financial expenses (17,200) (13,678)
Bargain purchase gain on acquisition of 8,401 –
subsidiaries ?
PROFIT BEFORE INCOME TAX 32,840 12,268
Income tax (14,394) (7,206)
PROFIT FOR THE YEAR 18,446 5,062
Attributable to:
Owners of the Company 11,879 54
Non-controlling interest 6,567 5,008
Earnings per share (in US$) for
profit attributable to owners of the Company. 0.2784 0.0013
Esmnings per share (in US$) for
E guuibutable to owners of the Company. 0.2693 0.0013
15
2012 – Earnings Release
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Amounts in US$ “000 2012 2011
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 457,837 224,635
Prepaid taxes 10,707 2,957
Other financial assets 7,791 5,226
Deferred income tax asset 13,591 450
Prepayments and other receivables 510 707
TOTAL NON CURRENT ASSETS 490,436 233,975
CURRENT ASSETS
Other financial assets – 3,000
Inventories 3,955 584
Trade receivables 32,271 15,929
Prepayments and other receivables 49,620 24,984
Prepaid taxes 3,443 147
Cash at bank and in hand 48,292 193,650
TOTAL CURRENT ASSETS 137,581 238,294
TOTAL ASSETS 628,017 472,269
TOTAL EQUITY
Equity attributable to owners of
the Company
Share capital 43 43
Share premium 116,817 112,231
Reserves 128,421 115,164
Accumulated losses (5,860) (18,549)
Attributable to owners of the
Company 239,421 208,889
Non-controlling interest 72,665 41,763
TOTAL EQUITY 312,086 250,652
LIABILITIES
NON CURRENT LIABILITIES
Borrowings 165,046 134,643
Provisions and other long-term
liabilities 25,991 9,412
Deferred income tax liability 17,502 13,109
TOTAL NON CURRENT
LIABILITIES 208,539 157,164
CURRENT LIABILITIES
Borrowings 27,986 30,613
Current income tax liabilities 7,315 187
Trade and other payable 54,890 28,535
Provisions for other liabilities 17,201 5,118
TOTAL CURRENT LIABILITIES 107,392 64,453
TOTAL LIABILITIES 315,931 221,617
TOTAL EQUITY AND LIABILITIES 628,017 472,269
16
2012 – Earnings Release
CONSOLIDATED STATEMENT OF CASH FLOW
Amounts in US$ *000 2012 2011
Cash flows from operating activities
Income for the year 18,446 5,062
Adjustments for:
Income tax for the year 14,394 7,206
Depreciation of the year 53,317 26,408
Loss on disposal of property, plant and equipment 546 2,010
Write-off of unsuccessful efforts 25,552 5,919
Impairment loss – 1,344
Accrual of borrowing’s interests 12,478 11,130
Amortisation of other long-term liabilities (2,143) (1,038)
Unwinding of long-term liabilities 1,262 350
Accrual of share-based payment 5,396 5,298
Exchange difference generated by borrowings 35 (15)
Gain on acquisition of subsidiaries (8,401) –
Deferred income 5,550 5,000
Income tax paid (408) –
Changes in working capital 5,778 89
Cash flows from operating activities – net 131,802 68,763
Cash flows from investing activities
Purchase of property, plant and equipment (198,204) (98,651)
Acquisitions of companies, net of cash acquired (105,303) –
Purchase of financial assets – (2,625)
Cash flows used in investing activities – net (303,507) (101,276)
Cash flows from financing activities
Proceeds from borrowings 37,200 9,668
Proceeds from transaction with non-controlling interest 12,452 142,000
Principal paid (12,382) (9,150)
Interest paid (10,895) (10,779)
Cash flows from financing activities – net 26,375 131,739
Net (decrease) increase in cash and cash equivalents (145,330) 99,226
Cash and cash equivalents at 1 January 183,622 84,396
Cash and cash equivalents at the end of the year 38,292 183,622
Ending Cash and cash equivalents are specified as
follows:
Cash in bank 48,268 193,642
Cash in hand 24 8
Bank overdrafts (10,000) (10,028)
Cash and cash equivalents 38,292 183,622
17
2012 – Earnings Release
MC TS
Glossary
boe barrels of oil equivalent
boepd barrels of oil equivalent per day
bopd barrels of oil per day
CEOP Contrato Especial de Operacion Petrolera (Special Petroleum Operations Contract)
mmboe million barrels of oil equivalent
mcfpd thousands of cubic feet per day
mm3/day thousands of cubic metres per day
EPS earnings per share
18
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