==
al
GEOPARK
Santiago, 29 de noviembre de 2013
Geopark 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 informa sobre los estados
financieros del período de nueve meses, finalizado el 30 de septiembre de 2013.
La información adjunta consiste en comunicado de prensa
de veinticinco 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,
E Pedro Aylwin Chiorrini
pp. GEOPARK LIMITED
Nuestra Señora de los Ángeles 179 – Las Condes, Santiago – Chile
Tel. (+56 2) 2429600 – infoWgeo-park.com – www.geo-park.com
GEOPARK LIMITED
30 SEPTEMBER 2013
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la ll
GEOPARK
Embargoed for release at 7:00 am 29 November 2013
GEOPARK LIMITED
RESULTS FOR THE NINE MONTH ENDED 30 SEPTEMBER 2013
GeoPark Limited (“GeoPark”), the Latin American oil and gas explorer, operator and
consolidator with operations and production in Chile, Colombia, Brazil and Argentina (AlM:
GPK), is pleased to announce its third quarter results for the nine months ended 30
September 2013.
Operational Highlights*
e Oil Production up 57% to 11,163 bopd in 3Q2013 vs 3Q2012
e Total Oil and Gas Production up 21% to 12,992 boepd in 3Q2013 vs 3Q2012
e New Gas discovery: Cerro Sutlej gas field in Fell Block, Chile
e Drilled Tigana 1 exploration well in Llanos 34, Colombia to be tested in 4Q2013
Financial Highlights*
Revenues up 49% to $89.7 million in 3Q2013 vs 3Q2012
Gross Profit up 57% to 41.0 million in 3Q2013 vs 3Q2012
Adjusted EBITDA up 33% to $125.9 million (as of September 30, 2013)
e Cash position of $104.8 million
* Operational and Financial figures do not include results from new Brazilian acquisition, which is expected to close in 4Q2013 or 1Q2014.
Strategic Highlights
e Strategic alliance with Tecpetrol to identify, study and potentially acquire upstream oil
and gas opportunities in Brazil
e Registration process underway with the United States Securities and
Exchange Commission, SEC, to consider alternate public market to obtain
additional capital and increased financial flexibility
GEOPARK LIMITED
30 SEPTEMBER 2013
In accordance with the AIM Rules, the information in this announcement has been reviewed
by Salvador Minniti, a geologist with 32 years of oil and gas experience and Director of
Exploration of GeoPark.
GeoPark can be visited online at www.geo-park.com
For further information please contact:
GeoPark Limited
Pablo Ducci (Chile) +56 2 2242 9600
Oriel Securities – Nominated Adviser and Joint Broker
Michael Shaw (London) +44 (0)20 7710 7600
Tunga Chigovanyika (London)
Macquarie Capital (Europe) Limited – Joint Broker
Steve Baldwin (London) +44 (0)20 3037 2000
GEOPARK LIMITED
30 SEPTEMBER 2013
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GEOPARK
GEOPARK LIMITED
INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
For the nine-months ended 30 September 2012 and 2013
GEOPARK LIMITED
30 SEPTEMBER 2013
CONTENTS
Page
3 Consolidated Statement of Income and Statement of Comprehensive Income
4 Consolidated Statement of Financial Position
5 Consolidated Statement of Changes in Equity
6 Consolidated Statement of Cash Flow
7 Selected explanatory notes
GEOPARK LIMITED
30 SEPTEMBER 2013
CONSOLIDATED STATEMENT OF INCOME
Nine-months Nine-months
period ended period ended
30 September 30 September Year ended
2013 2012″ 31 December
Amounts in US$ “000 Note (Unaudited) (Unaudited) 2012
NET REVENUE 2 250,530 182,139 250,478
Production costs 4 (129,834) (88,656) (129,235)
GROSS PROFIT 120,696 93,483 121,243
Exploration costs 5 (16,012) (21,742) (27,890)
Administrative costs 6 (32,050) (20,910) (28,798)
Selling expenses (12,526) (15,650) (24,631)
Other operating income 4,555 681 823
OPERATING PROFIT 64,663 35,862 40,747
Financial income 7 1,562 364 892
Financial expenses (28,762) (13,962) (17,200)
Bargain purchase gain on acquisition of _
subsidiaries 14 8,401 8,401
PROFIT BEFORE TAX 37,463 30,665 32,840
Income tax (12,260) (6,266) (14,394)
PROFIT FOR THE PERIOD/YEAR 25,203 24,399 18,446
Attributable to:
Owners of the parent 15,767 17,833 11,879
Non-controlling interest 9,436 6,566 6,567
Earnings per share (in US$) for profit attributable
to owners of the Company. Basic 0.36 0.42 0.28
Earnings per share (in US$) for profit attributable
to owners of the Company. Diluted 0.34 0.40 0.27
STATEMENT OF COMPREHENSIVE INCOME
Nine-months Nine-months
period ended 30 period ended30 Year ended
September 2013 September 2012 31 December
Amounts in US$ “000 (Unaudited) ( (Unaudited) 2012
Profit for the period / year 25,203 24,399 18,446
Other comprehensive income
Currency translation differences (573) – –
Total comprehensive Income for the period / year 24,630 24,399 18,446
Attributable to:
Owners of the parent 15,194 17,833 11,879
Non-controlling interest 9,436 6,566 6,567
(1)
allocation (see Note 1).
30 September 2012 comparative information has been restated reflecting the finalization of the purchase price
GEOPARK LIMITED
30 SEPTEMBER 2013
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 September At 30 September
2013 2012″ Year ended 31
Amounts in US$ “000 Note (Unaudited) (Unaudited) December 2012
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 9 571,394 429,639 457,837
Prepaid taxes 17,560 3,208 10,707
Other financial assets 3,952 6,813 7,791
Deferred income tax 21,405 19,451 13,591
Prepayments and other receivables 1,968 556 510
TOTAL NON CURRENT ASSETS 616,279 459,667 490,436
CURRENT ASSETS
Inventories 5,825 10,641 3,955
Trade receivables 49,729 21,924 32,271
Prepayments and other receivables 42,355 43,120 49,620
Prepaid taxes 1,778 11,036 3,443
Cash at bank and in hand 104,797 75,539 48,292
TOTAL CURRENT ASSETS 204,484 162,260 137,581
TOTAL ASSETS 820,763 621,927 628,017
EQUITY
Equity attributable to owners of the
Company
Share capital 10 43 43 43
Share premium 120,338 112,302 116,817
Reserves 127,848 129,596 128,421
Retained earnings (losses) 15,593 2,948 (5,860)
Attributable to owners of the Company 263,822 244,889 239,421
Non-controlling interest 88,540 55,463 72,665
TOTAL EQUITY 352,362 300,352 312,086
LIABILITIES
NON CURRENT LIABILITIES
Borrowings 11 290,490 164,891 165,046
Provisions for other long-term liabilities 12 26,619 27,697 25,991
Deferred income tax 23,834 24,218 17,502
Trade and other payables 13 8,344 – –
TOTAL NON CURRENT LIABILITIES 349,287 216,806 208,539
CURRENT LIABILITIES
Borrowings 11 5,735 30,873 27,986
Current income tax 13,196 3,054 7,315
Trade and other payables 13 100,183 70,842 72,091
TOTAL CURRENT LIABILITIES 119,114 104,769 107,392
TOTAL LIABILITIES 468,401 321,575 315,931
TOTAL EQUITY AND LIABILITIES 820,763 621,927 628,017
(“30 September 2012 comparative information has been restated reflecting the finalization of the purchase price
allocation (see Note 1).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
GEOPARK LIMITED
30 SEPTEMBER 2013
Attributable to owners of the Company
Retained Non –
Share Share Other Translation (Losses) “ontrolling
Amount in US$ ‘000 Capital Premium Reserve Reserve Earnings Interest Total
Equity at 1 January 2012 43 112,231 114,270 894 (18,549) 41,763 250,652
Profit for the nine month period – – – – 17,833 6,566 24,399
Total comprehensive income for the period
ended 30 September 2012 7 17,833 6,566 24,399
Proceeds from transaction with Non-controlling – Ñ – –
interest 14,432 7,134 21,566
Shared-based payment – 71 – – 3,664 – 3,735
– 71 14,432 – 3,664 7,134 25,301
Balance at 30 September 2012 ‘ (Unaudited) 43 112,302 128,702 894 2,948 55,463 300,352
Balance at 31 December 2012 43 116,817 127,527 894 (5,860) 72,665 312,086
Profit for the nine month period – – – – 15,767 9,436 25,203
Currency translation differences – – – (573) – – (573)
Total comprehensive income for the period . . .
ended 30 September 2013 (873) 15,767 9,436 24,630
Proceeds from transaction with Non-controlling Ñ _ Ñ Ñ Ñ
interest 6,439 6,439
Shared-based payment – 3,521 – – 5,686 – 9,207
– 3,521 – – 5,686 6,439 15,646
Balance at 30 September 2013 (Unaudited) 43 120,338 127,527 321 15,593 88,540 352,362
(1)
30 September 2012 comparative information has been restated reflecting the finalization of the purchase price allocation (see Note 1).
GEOPARK LIMITED
30 SEPTEMBER 2013
CONSOLIDATED STATEMENT OF CASH FLOW
Nine-months Nine-months
period ended period ended
30 September 30 September Year ended
2013 2012 31 December,
Amounts in US$ *000 (Unaudited) (Unaudited) 2012
Cash flows from operating activities
Profit for the period/year 25,203 24,399 18,446
Adjustments for:
Income tax for the period/year 12,260 6,266 14,394
Depreciation of the period/year 49,546 36,228 53,317
Loss on disposal of property, plant and equipment 568 455 546
Write-off of unsuccessful exploration and evaluation assets 11,955 20,298 25,552
Amortisation of other long-term liabilities (1,359) (1,993) (2,143)
Accrual of borrowing’s interests 17,913 11,471 12,478
Unwinding of long-term liabilities 1,049 630 1,262
Accrual of share-based payment 5,946 3,664 5,396
Deferred income – 5,550 5,550
Income tax paid (4,040) (408) (408)
Exchange difference generated by borrowings (14) 39 35
Bargain purchase gain on acquisition of subsidiaries (Note 14) – (8,401) (8,401)
Changes in operating assets and liabilities (20,699) 8,542 5,778
Cash flows from operating activities – net 98,328 106,740 131,802
Cash flows from investing activities
Purchase of property, plant and equipment (187,237) (147,200) (198,204)
Acquisitions of subsidiaries, net of cash acquired (Note 14) – (105,303) (105,303)
Collections related to financial assets 3,839 – –
Collections related to financial leases 6,734 – –
Cash flows used in investing activities – net (176,664) (252,503) (303,507)
Cash flows from financing activities
Proceeds from borrowings 292,259 38,883 37,200
Proceeds from transaction with Non-controlling interest % 37,577 10,019 12,452
Proceeds from loans from related parties 8,344 – –
Proceeds from issuance of shares 3,521 – –
Principal paid (179,359) (16,297) (12,382)
Interest paid (17,511) (5,552) (10,895)
Cash flows from financing activities – net 144,831 27,053 26,375
Net increase (decrease) in cash and cash equivalents 66,495 (118,710) (145,330)
Cash and cash equivalents at 1 January 38,292 183,622 183,622
Cash and cash equivalents at the end of the period/year 104,787 64,912 38,292
Ending Cash and cash equivalents are specified as
follows:
Cash in banks 104,774 75,515 48,268
Cash in hand 23 24 24
Bank overdrafts (10) (10,627) (10,000)
Cash and cash equivalents 104,787 64,912 38,292
(see Note 1).
30 September 2012 comparative information has been restated reflecting the finalization of the purchase price allocation
Proceeds from transaction with Non-controlling interest for the period ended 30 September 2013 includes: US$ 6,439,000
from capital contributions received in the period; and US$ 31,138,000 as result of collection of receivables included in
Prepayment and other receivables as of 31 December 2012, relating to equity transactions made in 2012 and 2011.
GEOPARK LIMITED
30 SEPTEMBER 2013
SELECTED EXPLANATORY NOTES
Note 1
General information
GeoPark Limited (the Company) is a company incorporated under the law of Bermuda. The Registered
Office address is Cumberland House, 9th Floor, 1 Victoria Street, Hamilton HM11, Bermuda. The Company
is quoted on the AIM market of London Stock Exchange plc.
The principal activity of the Company and its subsidiaries (“the Group”) are exploration, development and
production for oil and gas reserves in Chile, Colombia and Argentina. The Group has working interests
and/or economic interests in 19 hydrocarbon blocks.
On 30 July 2013 the shareholders approved the change of the Company’s name from GeoPark Holdings
Limited to GeoPark Limited.
This consolidated interim financial report was authorised for issue by the Board of Directors on
29 November, 2013.
Basis of Preparation
The consolidated interim financial report of GeoPark Limited is presented in accordance with lAS 34
“Interim Financial Reporting”. It does not include all of the information required for full annual financial
statements, and should be read in conjunction with the annual financial statements as at and for the years
ended 31 December 2011 and 2012, which have been prepared in accordance with IFRSs.
The consolidated interim financial report has been prepared in accordance with the accounting policies
applied in the most recent annual financial statements. For further information please refer to GeoPark
Limited’s consolidated financial statements for the year ended 31 December 2012.
The comparative information for the period ended 30 September 2012 has been restated from the original
condensed financial statements at that date to include the final estimation of the purchase price allocation
for the business combination related to the acquisition in Colombia shown in Note 14.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected
total annual profit or loss.
The activities of the Company are not subject to significant seasonal changes.
Leases in which substantially all of the risks and rewards of ownership are transferred to the lessee are
classified as finance leases. Under a finance lease, the Company as lessor has to recognize an amount
receivable equal to the aggregate of the minimum lease payments plus any unguaranteed residual value
accruing to the lessor, discounted at the interest rate implicit in the lease (see Note 9).
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 1 (Continued)
New and amended standards adopted by the Group
As from 1 January, 2013, the Company applied IFRS 10, ‘Consolidated financial statements”, IFRS 11,
“Joint arrangements’, IFRS 12, ‘Disclosures of interests in other entities’. Those standards did not materially
affect the Company’s financial condition or results of the operations.
Also, as from 1 January 2013 the Company applied IFRS 13 “Fair value measurement” . This standard has
not have a significant impact on the balances recorded in the financial statements but would require the
company to apply different valuation techniques to certain items (e.g. debt acquired as part of a business
combination) recognised at fair value as and when they arise in the future.
Estimates
The preparation of interim financial information requires the use of certain critical accounting estimates. lt
also requires management to exercise ¡ts judgement in the process of applying the Group’s accounting
policies. Actual results may differ from these estimates
In preparing these condensed consolidated interim financial statements, the significant judgements made
by management in applying the group’s accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial statements for the year ended 31
December 2012.
Financial risk management
The Company’s activities expose it to a variety of financial risks: currency risk, price risk, credit risk-
concentration, funding and liquidity risk, interest risk and capital risk. The interim condensed consolidated
financial statements do not include all financial risk management information and disclosures required in
the annual financial statements, and should be read in conjunction with the Company’s annual financial
statements as at 31 December 2012.
There have been no changes in the risk management since year end or in any risk management policies.
10
Note 1 (Continued)
Subsidiary undertakings
GEOPARK LIMITED
30 SEPTEMBER 2013
The following chart illustrates the Group structure as of 30 September 2013 (*):
29.9% 29.9% 29.3%
] ] I ] Te 100%
SeoParkLatin || csopark Colombia || GeoParkBrazi Seopalatin ¡GeoPark Argentina
Cobperate tn. Coóperatie UA. Coóperatie UA. |: Limited – Bermuda
(Netherlands) (Bermuda) 1 GA)
| ] : ]
GeoPark Brazil GeoParkLatin |! GeoPark Argentina
Exploracio e America Limted |! Limited –
Produgáo de Petróleo Agencia en Chile |; Argentinean.
e Gás Ltda. (Brazi) (Chile) ! Branch (Argentina)
20% [0% se3% | ¡ [100% 20% ]
i
sl ‘GeoPark Chile SA GeoPark S.A. 1 | GeoParkBrazl GeoPark Colombia | 20% | o
LG Internationa |-| (Chile) (Chi) SpA. (Chis) SA (Chie) LG International
:
114% rr 3
! 28% 100% E 100% 100% 100%
GeoParkTaFS.A. | | GeoParkFel SpA. Saori GeoParkLuna SAS | | GeoPark Colombia GeoPark Llanos
(Chile) (Chile) ¡pgslenes (Colombia) SAS (Colombia) SAS (Colombia)
Limitada (Chi)
[100% [100% [100%
‘Geopark Colombia GeoPark
La Luna Co. Ltd.
29.9% S.A. (Fanama) a) a a)
MESES ==
(Chile) La Luna Sucursal ES GeoPark Cuerva
Colombia BER Sucursal Colombia
(Colombia) (Colombia) (Colombia)
(*) LG International is not a subsidiary, instead of it is Non-controlling interest.
During 2013, with the purpose of conducting its multilocation activities and for allowing future business structures, the
Company has incorporated certain wholly owned subsidiaries, that are dormant companies at the date of the issuance
of these interim financial statements.
11
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 1 (Continued)
Subsidiary undertakings (Continued)
Details of the subsidiaries and jointly controlled assets of the Company are set out below:
Name and registered office Ownership interest
Subsidiaries GeoPark Argentina Ltd. – Bermuda 100%
GeoPark Argentina Ltd. – Argentine Branch 100% (a)
GeoPark Latin America 100%
GeoPark Latin America – Agencia en Chile 100% (a)
GeoPark S.A. (Chile) 100% (a) (b)
GeoPark Brazil Exploracao y Producao de Petróleo e
Gas Ltda. (Brazil) 100%
GeoPark Chile S.A. (Chile) 80% (a) (c)
GeoPark Fell S.p.A. (Chile) 80% (a) (c)
GeoPark Magallanes Limitada (Chile) 80% (a) (c)
GeoPark TdF S.A. (Chile) 69% (a) (d)
GeoPark Colombia S.A. (Chile) 80% (a) (c)
GeoPark Luna SAS (Colombia) 100% (a) (e) (f)
GeoPark Colombia SAS (Colombia) 100% (a) (e) (f)
GeoPark Llanos SAS (Colombia) 100% (a) (e) (f)
La Luna Oil Co. Ltd. (Panama) 100% (a) (e) (f)
GeoPark Colombia PN S.A. (Panama) 100% (a) (e) (f)
GeoPark Cuerva LLC (United States) 100% (a) (e) (tf)
Sucursal La Luna Oil Co. Ltd. (Colombia) 100% (a) (e) (tf)
Sucursal GeoPark Colombia PN S.A. (Colombia) 100% (a) (e) (tf)
Sucursal GeoPark Cuerva LLC (Colombia) 100% (a) (e) (tf)
GeoPark Brazil S.p.A. (Chile) 100% (a) (b)
Raven Pipeline Company LLC (United States) 23.5% (b)
GeoPark Colombia Cooperatie U.A. (The
Netherlands) 100% (b)
GeoPark Brazil Cooperatie U.A. (The Netherlands) 100% (b)
Jointly controlled assets Tranquilo Block (Chile) 29%
Otway Block (Chile) 100% (9)
Flamenco Block (Chile) 50% (h)
Isla Norte Block (Chile) 60% (h)
Campanario Block (Chile) 50% (h)
(a) Indirectly owned.
(b) Dormant companies.
(c) LG International has 20% interest.
(d) LG International has 20% interest through GeoPark Chile S.A. and a 14% direct interest.
(e) During the first quarter of 2012, the Company entered into a business combination acquiring 100% interest in
each entity (see Note 14).
During 2013, the Company has started a merger process by which a sole company will continue the
operations related to the referred companies. The Company estimates that the process will be completed by
year end.
In April 2013, the Group voluntarily relinquished to the Chilean Government all of our acreage in the Otway
Block, except for 49,421 acres. In May 2013, our partners under the joint operating agreement governing the
Otway Block decided to withdraw from such joint operating agreement and to apply to withdraw from the
Otway Block CEOP, such that, subject to the Chilean Ministry of Energy’s approval, the Group will be the sole
participant, and have a working interest of 100%, in our two remaining areas in the Otway Block.
GeoPark is the operator in all blocks with a share of 60% for Isla Norte Block and 50% for the other 2 blocks
(See Note 16).
12
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 2
Net revenue
Nine-months Nine-months Year ended
period ended 30 period ended 30 31 December
Amounts in US$ ‘000 September 2013 September 2012 2012
Sale of crude oil 235,225 158,309 221,564
Sale of gas 15,305 23,830 28,914
250,530 182,139 250,478
Note 3
Segment Information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the strategic steering
committee. This committee is integrated by the CEO, COO, CFO and managers in charge of the
Geoscience, Drilling, Operations and SPEED departments. This committee reviews the Group’s internal
reporting in order to assess performance and allocate resources. Management has determined the
operating segments based on these reports.
The committee considers the business from a geographic perspective.
The strategic steering committee assesses the performance of the operating segments based on a
measure of Adjusted EBITDA. Adjusted EBITDA is defined as profit for the period before net finance cost,
income tax, depreciation, amortization and certain non-cash items such as impairments and write-offs of
unsuccesstul exploration and evaluation assets, accrual of stock options and stock awards. Other
information provided, except as noted below, to the strategic steering committee is measured in a manner
consistent with that in the financial statements.
Nine-months period ended 30 September 2013
Amounts in US$ ‘000 Total Argentina Chile Brazil Colombia Corporate
NET REVENUE 250,530 1,118 119,359 – 130,053 –
GROSS PROFIT 120,696 936 69,546 – 50,214 –
OPERATING PROFIT / (LOSS) 64,663 (2,643) 47,971 (2,323) 29,390 (7,732)
Adjusted EBITDA 125,894 (1,361) 73,570 (2,278) 60,852 (4,889)
13
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 3 (Continued)
Segment Information (Continued)
Nine-months period ended 30 September 2012
Amounts in US$ ‘000 Total Argentina Chile Brazil Colombia Corporate
NET REVENUE 182,139 972 117,244 – 63,923 –
GROSS PROFIT 93,483 302 68,314 – 24,867 –
OPERATING PROFIT / (LOSS) 35,862 (5,628) 41,767 – 5,230 (5,507)
Adjusted EBITDA 94,793 (808) 76,721 – 24,265 (5,385)
Total Assets Total Argentina Chile Brazil Colombia Corporate
30 September 2013 820,763 4,934 449,695 29,964 270,703 65,467
31 December 2012 628,017 6,108 405,674 – 213,202 3,033
30 September 2012 621,927 8,619 411,354 – 200,567 1,387
A reconciliation of total Adjusted EBITDA to total profit before income tax is provided as follows:
Nine-months period
Nine-months period
ended 30 September ended 30 September
2013 2012
Adjusted EBITDA for reportable segments 125,894 94,793
Depreciation (49,546) (36,228)
Accrual of stock awards (5,946) (3,664)
Write-off of unsuccessful exploration and evaluation (11,955) (20,298)
assets
Others 6,216 1,259
Operating profit 64,663 35,862
Financial results (27,200) (13,598)
Bargain purchase gain on acquisition of subsidiaries – 8,401
Profit before tax 37,463 30,665
(a)
14
Includes internally capitalised costs, fees earned from co-venturers and other costs recovery.
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 4
Production costs
Nine-months Nine-months Year ended
period ended periodended 31 December
30 September 30 September 2012
Amounts in US$ ‘000 2013 2012
Depreciation 48,423 35,529 52,307
Royalties 13,010 9,900 11,424
Staff costs 12,195 6,102 14,171
Transportation costs 8,494 5,112 7,211
Well and facilities maintenance 13,423 5,749 9,385
Consumables 11,636 7,639 9,884
Equipment rental 5,562 5,504 5,936
Other costs 17,091 13,121 18,917
129,834 88,656 129,235
Note 5
Exploration costs
Nine-months Nine-months year ended 31
Amounts in US$ ‘000 period ended 30 period ended30 December
September 2013 September 2012 2012
Staff costs 5,681 2,449 4,418
Allocation to capitalised project (1,608) (1,669) (1,849)
Write-off of unsuccessful exploration and
evaluation assets 11,955 20,298 25,552
Amortisation of other long-term liabilities
related to unsuccessful efforts (600) (1,500) (1,500)
Recovery of abandonments costs (759) – –
Other services 1,343 2,164 1,269
16,012 21,742 27,890
15
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 6
Administrative costs
Nine-months Nine-months Year ended 31
period ended 30 period ended 30 December
Amounts in US$ ‘000 September 2013 September 2012 2012
Staff costs 15,251 9,072 9,575
Consultant fees 4,396 4,119 5,122
New projects 1,741 710 2,927
Office expenses 1,880 1,196 3,293
Director fees and allowance 1,263 1,356 1,516
Travel expenses 1,640 973 1,563
Depreciation 1,123 699 1,010
Other administrative expenses 4,756 2,785 3,792
32,050 20,910 28,798
Note 7
Financial income
Nine-months Nine-months Year ended 31
period ended 30 period ended 30 December
Amounts in US$ ‘000 September 2013 September 2012 2012
Exchange difference 722 17 348
Interest received 840 347 544
1,562 364 892
Note 8
Financial expenses
Nine-months Nine-months Year ended 31
period ended 30 period ended 30 December
Amounts in US$ ‘000 September 2013 September 2012 2012
Bank charges and other financial costs 2,774 815 1,764
Bond GeoPark Fell SpA cancellation costs 8,603 – –
(Note 11)
Exchange difference 870 2,994 2,429
Unwinding of long-term liabilities 1,049 630 1,262
Interest and amortisation of debt issue costs 16,774 10,520 13,114
Less: amounts capitalised on qualifying assets (1,308) (997) (1,369)
28,762 13,962 17,200
16
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 9
Property, plant and equipment
Buildings Exploration
Furniture, Production and and
Oil 8 gas equipment facilities and improve- Construction evaluation
Amounts in US$’000 properties and vehicles machinery ments in progress assets TOTAL
Cost at 1 January 2012 171,956 2,175 47,102 2,437 32,896 42,140 298,706
Additions 12,034 627 19,397 – 52,769 62,781 147,608
Disposals (438) – (17) – – – (455)
Write-off and impairment (‘ – – – – – (20,298) (20,298)
Transfers 73,024 – 7,623 595 (37,266) (43,976) –
Acquisitions of subsidiaries 63,942 482 10,865 – 9,359 29,729 114,377
Cost at 30 September 2012 320,518 3,284 84,970 3,032 57,758 70,376 539,938
Cost at 1 January 2013 344,371 3,576 86,949 3,198 54,025 93,106 585,225
Additions 3,313 1,456 273 – 75,167 111,287 191,496
Disposals % (546) (22) (15,870) – – – (16,438)
Write-off and impairment (” – – – – – (11,955) (11,955)
Transfers 97,140 117 16,889 4,019 (69,807) (48,358) –
Cost at 30 September 2013 444,278 5,127 88,241 7,217 59,385 144,080 748,328
Depreciation and write-down
at 1 January 2012 (53,604) (1,123) (18,628) (716) – – (74,071)
Depreciation (29,631) (495) (5,866) (236) – – (36,228)
Depreciation and write-down
at 30 September 2012 (83,235) (1,618) (24,494) (952) – – (110,299)
Depreciation and write-down
at 1 January 2013 (98,156) (1,836) (26,336) (1,060) – – (127,388)
Depreciation (42,016) (660) (6,404) (466) – – (49,546)
Depreciation and write-down
at 30 September 2013 (140,172) (2,496) (32,740) (1,526) – – (176,934)
Carrying amount at 30
September 2012 237,283 1,666 60,476 2,080 57,758 70,376 429,639
Carrying amount at 30
September 2013 304,106 2,631 55,501 5,691 59,385 144,080 571,394
(1 Corresponds to write-off of Exploration and evaluation assets in Colombia US$ 3,244,000 (US$ 4,727,000 in
2012), Chile US$ 8,711,000 (US$ 13,627,000 in 2012) and Argentina nil (US$ 1,944,000 in 2012).
(2
During 2013, the Company entered into a finance lease for which it has transferred a substantial portion of the
risk and rewards of some assets which had a book value of US$ 14.1 million. As of 30 September 2013
prepayments and other receivables include receivables under finance leases for amount of US$ 7.8 million,
which US$ 6.3 million are maturity no later than one year and US$ 1.5 million between one and five years.
Total unearned interest income amounts to US$ 1.5 million .
17
Note 10
Share capital
GEOPARK LIMITED
30 SEPTEMBER 2013
Nine-months Nine-months
period ended 30 period ended 30 Year ended 31
Issued share capital September 2013 September 2012 December 2012
Common stock (US$ “000) 43 43 43
The share capital is distributed as follows:
Common shares, of nominal US$ 0.001 43,495,585 42,474,274 43,495,585
Total common shares in issue 43,495,585 42,474,274 43,495,585
Authorised share capital
US$ per share 0.001 0.001 0.001
Number of common shares (US$ 0.001 each)
5,171,949,000
5,171,949,000 5,171,949,000
Amount in US$ 5,171,949 5,171,949 5,171,949
Note 11
Borrowings
The outstanding amounts are as follows:
At At Year ended
30 September 30 September 31 December
Amounts in US$ ‘000 2013 2012 2012
Bond GeoPark Latin America Agencia 294,037 Ñ Ñ
en Chile (a)
Bond GeoPark Fell SpA (b) – 131,720 129,452
Methanex Corporation (c) – 8,036 8,036
Banco de Crédito e Inversiones (d) 2,178 7,881 7,859
Overdrafts (e) 10 10,627 10,000
Banco Itaú (f) – 37,500 37,685
296,225 195,764 193,032
Classified as follows:
Current 5,735 30,873 27,986
Non-Current 290,490 164,891 165,046
18
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 11 (Continued)
Borrowings (Continued)
(a) 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
Limited and GeoPark Latin America Chilean Branch and are 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 were partially used to repay debt of approximately US$ 170 million, including
the existing Reg S Notes due 2015 and the Itaú loan. The remaining proceeds will be used to finance the
Company’s expansion plans in the region. The transaction extends GeoPark’s debt maturity significantly,
allowing the Company to allocate more resources to its investment and inorganic growth programs in the
coming years.
(b) Private placement of US$ 133,000,000 of Reg S Notes on 2 December 2010. The Notes carried a
coupon of 7.75% per annum and mature on 15 December 2015. These Notes were fully repaid in
March 2013.
(c) The financing obtained in 2007, for development and investing activities on the Fell Block, was
structured as a gas pre-sale agreement with a six year pay-back period and an interest rate of LIBOR flat.
The loan has been fully repaid during 2013.
In addition on 30 October 2009 another financing agreement was signed with Methanex Corporation under
which Methanex have funded GeoPark’s portions of cash calls for the Otway Joint Venture for
US$ 3,100,000. This financing did not bear interest. The loan was fully repaid during 2012.
(d) Facility to establish the operational base in the Fell Block. This facility was acquired through a mortgage
loan granted by the Banco de Crédito e Inversiones (BCl), a Chilean private bank. The loan was granted in
Chilean pesos and is repayable over a period of 8 years. The interest rate applicable to this loan is 6.6%.
The outstanding amount at 30 September 2013 is US$ 247,000.
During the last quarter of 2011, GeoPark TdF obtained short-term financing from BCI. This financing is
structured as letter of credit with a pledge of the seismic equipment acquired to start the operations in the
new blocks. The maturity is February 2014 and the applicable interest rate ranging from 4.45% to 5.45%.
The outstanding amount at 30 September 2013 is US$ 1,931,000.
(e) At 30 September 2013, the Group has credit lines availables with several banks tor approximately
US$ 77,000,000.
19
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 11 (Continued)
Borrowings (Continued)
(f) GeoPark Limited executed a loan agreement with Banco ltaú BBA S.A., Nassau Branch for
US$ 37,500,000. GeoPark used the proceeds to finance the acquisition and development of the La Cuerva
and Llanos 62 blocks. This loan was fully repaid in February 2013.
Note 12
Provision for other long-term liabilities
The outstanding amounts are as follows:
At At Year ended
30 September 30 September 31 December
Amounts in US$ ‘000 2013 2012 2012
Assets retirement obligation and other
environmental liabilities 19,590 14,663 16,213
Deferred income 6,010 7,518 7,369
Cash awards (Note 17) 260 – –
Other 759 5,516 2,409
26,619 27,697 25,991
Note 13
Trade and other payables
The outstanding amounts are as follows:
At At Year ended
30 September 30 September 31 December
Amounts in US$ ‘000 2013 2012 2012
Trade payables 78,736 53,291 54,890
Payables to related parties (” 8,516 – –
Staff costs to be paid 6,038 4,716 5,867
Royalties to be paid 4,892 4,553 3,909
Taxes and other debts to be paid 6,812 7,846 5,418
To be paid to co-venturers 3,533 436 2,007
108,527 70,842 72,091
Classified as follows:
Current 100,183 70,842 72,091
Non-Current 8,344 – –
(In December 2012, LGI entered into GeoPark’s operations in Colombia through the acquisition of a 20% of
interest in GeoPark Colombia S.A. As part of the transaction, LGl committed to fund the operations in
Colombia through loans (See Note 35 to the audited Consolidated Financial Statements as of 31 December
2012). The maturity of these loans is December 2015 and the applicable interest rate is 8% per annum.
20
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 14
Acquisitions in Colombia
In February 2012, GeoPark acquired two privately-held exploration and production companies operating in
Colombia, Winchester Oil and Gas S.A. and La Luna Oil Company Limited S.A. (“Winchester Luna”).
In March 2012, a second acquisition occurred with the purchase of Hupecol Cuerva LLC (“Hupecol”), a
privately-held company with two exploration and production blocks in Colombia.
The following table summarises the combined consideration paid for Winchester Luna and Hupecol, the fair
value of assets acquired and liabilities assumed for these transactions:
Amounts in US$ ‘000 Hupecol Winchester Luna Total
A working capital 79,630 32,243 111,873
Total consideration 79,630 32,243 111,873
Cash and cash equivalents 976 5,594 6,570
(chu mineral interes) 73,781 37,182 110,973
Trade receivables 4,402 4,098 8,500
Prepayments and other receivables 5,640 2,983 8,623
Deferred income tax assets 10,344 5,262 15,606
Inventories 10,596 1,612 12,208
Trade payables and other debt (20,487) (11,981) (32,468)
Borrowings – (1,368) (1,368)
Provision for other long-term liabilities (5,632) (2,738) (8,370)
Total identifiable net assets 79,630 40,644 120,274
Bargain purchase gain on . 8,401 8,401
acquisition of subsidiaries
In 2012, the results of the operations corresponding to Winchester Luna and Hupecol were consolidated
since the acquisition date, February and April, respectively.
See Note 35 to the audited Consolidated Financial Statements as of 31 December 2012.
21
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 15
Entry in Brazil
Proposed acquisition in Brazil
GeoPark entered into Brazil with the proposed acquisition of a ten percent working interest in the offshore
Manati gas field (“Manati Field”), the largest natural gas producing field in Brazil. On May 14, 2013,
GeoPark executed a stock purchase agreement (“SPA”) with Panoro Energy do Brazil Ltda., the subsidiary
of Panoro Energy ASA, (“Panoro”), a Norwegian listed company with assets in Brazil and Africa, to acquire
all of the issued and outstanding shares of its wholly-owned Brazilian subsidiary, Rio das Contas Produtora
de Petróleo Ltda (“Rio das Contas”), the direct owner of 10% of the BCAM-40 block (the “Block”), which
includes the shallow-depth offshore Manati Field in the Camamu-Almada basin.
The Manati Field is a strategically important, profitable upstream asset in Brazil and currently provides
approximately 50% of the gas supplied to the northeastern region of Brazil and more than 75% of the gas
supplied to Salvador, the largest city and capital of the northeastern state of Bahia. The field is largely
developed with existing producing wells and an extensive pipeline, treatment and delivery infrastructure
and is not expected to require significant future capital expenditures to meet current production estimates.
Additional reserve development may be possible.
The Manati Field is operated by Petrobras (35% working interest), the Brazilian national company, largest
oil and gas operator in Brazil and internationally-respected offshore operator. Other partners in the block
include Queiroz Galvao Exploracao e Producao (45% working interest) and Brasoil Manati Exploracao
Petrolifera S.A. (10% working interest).
GeoPark has agreed to pay a cash consideration of US$140 million at closing, which will be adjusted for
working capital with an effective date of April 30, 2013. The agreement also provides for possible future
contingent payments by GeoPark over the next five years, depending on the economic performance and
cash generation of the Block. The closing of the acquisition is subject to certain conditions, including
approval by the Brazilian National Petroleum, Natural Gas and Biofuels Agency (“ANP”) and the Brazilian
antitrust authorities.
The Manati Field acquisition provides GeoPark with:
– – Asolid foundational platform in Brazil to support future growth and expansion in Brazil – one of the
world’s most attractive hydrocarbon regions.
– Participation in an economically-attractive and strategic asset representing the largest non-
associated gas producing field in Brazil, with a gross production of over 200 million cubic feet per
day of gas and a secure attractively-priced long term off take contract that covers 75% of proven
reserves (100% of proven developed reserves).
22
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 15 (Continued)
Entry in Brazil (Continued)
– – Alow-risk and fully- developed producing gas field with no significant drilling or capital expenditure
investments expected.
– – Avaluable partnership with Petrobras, the largest operator in Brazil.
– An established geoscience and administrative team to manage the assets – and seek new growth
opportunities.
New operations in Brazil
On 14 May 2013, the Company has been awarded seven new licenses in the Brazilian Round 11 of which
two are in the Reconcavo Basin in the State of Bahia and five are in the Potiguar Basin in the State of Rio
Grande do Norte.
The licensing round was organized by the ANP and all proceedings and bids have been made public. On
17 September 2013, the winning bids were approved by the ANP.
For its winning bids on the seven blocks, GeoPark has committed to invest a minimum of US$15.3 million
(including bonus and work program commitment) during the first 3 years of the exploratory period. The new
blocks cover an area of approximately 54,850 acres.
Note 16
Drilling operations start-up in Tierra del Fuego
In April 2013, the Company has started the exploration drilling in Tierra del Fuego in Chile in its partnership
with Empresa Nacional de Petroleo de Chile (“ENAP”) with the spudding of the Chercán 1 well on the
Flamenco Block. Chercán 1 is the first of 21 exploratory wells on the Flamenco, Campanario and Isla Norte
Blocks in Tierra del Fuego as part of an estimated US$ 100 million investment commitment during the First
Exploration Period. As of the date of this interim consolidated financial report 3 wells have been drilled and
more than 1,200 sq km of 3D seismic have been carried out over the three blocks; out of a total 3D seismic
program of approximately 1,500 sq km.
23
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 17
Share-based payment
During the third quarter of 2013, as part of its Long-term Incentive Plan, the Company approved two new
share-based compensation programmes: ¡.) a stock awards plan oriented to Managers (non Top
Management) and key employees which qualifies as an equity-settled plan and ii.) a phantom awards plan,
oriented to all non-management employees which qualifies as a cash-settled plan.
Main characteristics of both plans are:
– – Exercise price: US$ 0.001
– – Grant date: July 2013
– Grant price: £ 5.8
– Vesting date: 31 December 2015
– – Conditions to be able to exercise:
e Continue to be an employee
+ Obtain the Company minimum Production, Adjusted EBITDA and Reserves target for the
year of vesting
+ The stock market price at the date of vesting should be higher than the share price at the
price of grant
– – Estimated amount of shares for both plans: 1,000,000
In addition, the Company also approved a plan named Value creation plan (“VCP”) oriented to Top
Management. The VCP establishes awards payables in a variable number of shares with some limitation,
subject to certain market conditions, among others, reach certain stock market price for the Company
share at vesting date. VCP has been classified as an equity-settled plan.
For the measure and recognition of the three new plans the Company has applied IFRS 2.
Note 18
Strategic alliance with Tecpetrol in Brazil
On 30 September 2013, the Company and Tecpetrol S.A. (“Tecpetrol”) announced the formation of a new
strategic alliance to jointly identify, study and potentially acquire upstream oil and gas opportunities
in Brazil, with a specific focus on the Parnaiba, Sao Francisco, Reconcavo, Potiguar and Sergipe-Alagoas
basins.
Tecpetrol is the oil and gas subsidiary of the Techint Group (a multinational oilfield and steel conglomerate)
with an extensive track-record as an oil and gas explorer and operator with its portfolio of assets currently
in Argentina, Peru, Colombia, Ecuador, Mexico, Bolivia, Venezuela and the United States, and with a
current net production of over 85,000 barrels of oil equivalent per day.
At 30 September 2013, there is no accounting impact of the creation of the alliance.
24
GEOPARK LIMITED
30 SEPTEMBER 2013
Note 19
Initial Public Offering in Progress with the United States Securities and Exchange Commission
(SEC)
On 10 September 2013, the Company announced a listing on the New York Stock Exchange (NYSE) in
order to create a public market for its common shares in the United States and to facilitate future access to
international equity markets, as well as to obtain additional capital and financial flexibility.
A registration statement relating to the common shares has been filed with the SEC but has not yet
become effective. The common shares may not be sold, nor may offers to buy be accepted, in the United
States prior to the time the registration statement becomes effective.
As of the date of these financial statements, the Company is evaluating the optimum timing for its proposed
listing and common shares offering on the NYSE, which is expected to be in the first half of 2014.
Note 20
Subsequent events
On 29 October 2013, the Company put into place an irrevocable, non-discretionary share purchase
program for the purchase up to 400,000 of our common shares, or the Purchase Program, for the account
of our Employee Benefit Trust, or EBT.
The Purchase Program will last from 29 October 2013 through 31 December 2013, and will be managed by
Banco BTG Pactual S.A. – Cayman Branch and Oriel Securities Limited. The common shares purchased
under the program will be used to satisfy future awards under the incentive schemes. Under the program,
the Company may procure the purchase in any one day of not more than 25% of the average daily volume
over the preceding 20 business days.
The Company has made the following purchases pursuant to the program: i) on 5 November 2013, 10,000
common shares at a purchase price of £ 5.45; and ii) on 14 November 2013, 10,000 common shares at a
purchase price of £ 5.40.
25
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