ma
Eos el
GEOPARK
Santiago, 26 de agosto de 2014
Geopark Limited
Inscrito en el Registro de Valores Extranjeros bajo N* 045
Señor
Carlos Pavez Tolosa
Superintendente de Valores y Seguros
Av. Libertador Bernardo O’Higgins N* 1449, piso 1
PRESENTE
REF.: Adjunta información relevante que se
publicó en el U.S. Securities and
Exchange Commission (SEC) el día de
hoy.
Señor Superintendente:
En virtud de lo establecido en la Norma de Carácter General
N*352, por medio de la presente adjunto información considerada como relevante para
la empresa, que ha sido entregada el día de hoy en el U.S. Securities and Exchange
Commission (“SEC”), en donde mediante un comunicado de prensa se informa los
resultados del segundo trimestre terminado el 30 de junio de 2014.
La información adjunta consiste en un comunicado de prensa
de dieciocho páginas escrito en idioma inglés.
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
al
GEOPARK
FOR IMMEDIATE DISTRIBUTION
GEOPARK REPORTS RESULTS FOR THE SECOND QUARTER
ENDED JUNE 30, 2014
Santiago, Chile – August 26, 2014 – GeoPark Limited (GeoPark) (NYSE: GPRK), the Latin American oil and
gas explorer, operator and consolidator with operations and producing properties in Chile, Colombia, Brazil
and Argentina, today reports results for 2Q2014.
All figures are expressed in US dollars and growth comparisons refer to the same period of the prior year,
except when specified.
SECOND QUARTER 2014 HIGHLIGHTS
Operational:
e Oil and gas production up 57% to 20,441 boepd compared to 2Q2013. On a proforma basis, average
production increased by 21%
e Oil production in Colombia increased by 68% to 10,357 bopd
+ 13 new exploration, development and appraisal wells drilled in Chile and Colombia
e Exploration drilling (Tigana Norte 1) on the Llanos 34 Block in Colombia indicated that Tigana, Tigana
Sur and Tigana Norte fields form part of a single larger combined trap and field
+ New Ache gas field discovery on the Fell Block in Chile
+ New Primavera Sur oil field discovery on the Campanario Block in Chile
Financial:
+ Net Revenues up 80% to $131.4 million, driven by increased production and by inventory normalization
(please see note below)
Adjusted EBITDA up 122% to $76.4 million
Adjusted EBITDA per boe improved by 41%
Profit for the period up $27.3 million from $4.8 million
Cash position of $125.3 million at the close of 2Q2014
Strategic / New Business:
e Expansion of GeoPark’s portfolio with a new hydrocarbon block awarded in Colombia, the VIM-3 Block
(GeoPark will operate with a 100% WI), in the Lower Magdalena Basin. Subject to final signature of the
contracts with the Agencia Nacional de Hidrocarburos de Colombia (“ANH”), scheduled for 3Q2014
Note: Proforma figures in this release refer to the incorporation in both periods of the acquired interest in
the Brazilian Manati Field, which closed on March 31, 2014. In 2Q2014, GeoPark’s Colombian revenues
included the inventory normalization from production of the previous quarter, as explained in 1Q2014
Results Release.
James F. Park, GeoPark Chief Executive Officer, said, “GeoPark has completed the first half of 2014 with
significant advances on all fronts. Production is up, cash flow is growing and new reserves are being
discovered. Additionally, we have continued to expand our long term balanced Latin American asset portfolio
by adding a new block in Colombia. Our 50+ well drilling program in 2014 continues to have success –
including extending the size of the Tigana oil field in Colombia and discovering two new oil and gas fields in
southern Chile.”
25.0 Production Growth
N
2
o
E Gas Production
m Oil Production
a
o
10.0
Avg. Daily Production
(thousand boepd)
a
o
0.0
* Includes production from Manati field. Acquisition completed on March 31, 2014
SECOND QUARTER 2014
The table below sets forth GeoPark’s production figures for 2Q2014 compared with 2Q2013.
202014 2Q2013
Total : Total o
(boepd) Oil (bopd) Gas (mcfpd) (boepd) Yo Chg.
Chile 6,435 3,886 15,292 6,803 -5%
Colombia 10,357 10,321 220 6,157 68%
Brazil 3,572 56 21,092 * N/A
Argentina 77 62 93 60 28%
Total 20,441 14,325 36,697 13,020 57%
* The acquisition of the interest in the Brazilian Manati Field was completed on March 31, 2014. As a reference and
only for comparison purposes, the corresponding net production in the Brazilian operations for 2Q2013 amounted
to 3,884 boepd.
The table below sets forth some key indicators of performance for 2Q2014 compared with 2Q2013. Figures
corresponding to 2Q2014 include the acquired interest in the Brazilian Manati Field completed on March 31,
2014. As from that date, GeoPark started consolidating line by line its results of operations for accounting
purposes within its Brazilian operations.
Key Indicators 202014 2Q2013 % Chg.
Oil production (bopd) 14,325 10,798 33%
Gas production (mcfpd) 36,697 13,329 175%
Average net production (boepd) 20,441 13,020 57%
Average realized sales price
2 Oil ($ per bbl) 89.0 71.7 24%
Gas ($ per mcf) 6.7 4.6 44%
Net Revenues ($ million) 131.4 72.9 80%
Production Costs ($ million) -64.3 -42.8 50%
Adjusted EBITDA ($ million) 76.4 34.4 122%
Adjusted EBITDA per boe ($) 42.1 29.9 41%
Operating Netback per boe ($) 47.8 39.6 21%
Profit for the period ($ million) 27.3 4.8 471%
CONSOLIDATED OPERATING PERFORMANCE
Production: Consolidated production increased by 57% in 2Q2014 to 20,441 boepd. This growth is
explained by (i) a 33% increase in consolidated oil production, primarily from higher oil production in the
Colombian operations and (ii) a 175% increase in gas production mainly due to the addition of the Brazilian
operations. On a proforma basis, consolidated average production grew 21% in 2Q2014.
Net Revenues: Consolidated net revenues increased by 80% to $131.4 million in 2Q2014 compared to
$72.9 million in 2Q2013, mainly impacted by increased oil production and inventory normalization in
Colombia.
Consolidated Oil Revenues: Consolidated oil revenues represented 85% of total net revenues in 2Q2014
compared to 93% in 2Q2013, and increased 65% to $112.0 million in 2Q2014, mostly due to higher
production and inventory normalization in Colombia, partially offset by a decrease in oil revenues in Chile
due to lower production. This was also impacted by higher oil prices in Colombia and Chile, which resulted in
a 28% increase in the consolidated average realized oil price to $89.0 per barrel.
Consolidated Gas Revenues: Consolidated gas revenues represented 15% of total net revenues in 2Q2014
compared to 7% in 2Q2013, and increased by 294% to $19.4 million in 2Q2014 compared to $4.9 million in
202013 mainly due to the addition of the Brazilian operations along with the increased deliveries and
average gas prices in Chile.
Costs: Consolidated production costs increased by 50% to $64.3 million in 2Q2014, due to higher
production and deliveries in Colombia as well as the addition of the Brazilian operations.
Consolidated exploration costs increased to $7.4 million in 2Q2014 from $6.3 million in 2Q2013, primarily as
a result of higher staff and related costs in line with increased exploration efforts, partially offset by lower
write-offs in Chile.
Consolidated administrative costs increased by 6% to $11.8 million in 2Q2014, mostly due to the addition of
the Brazilian operations.
Consolidated selling expenses increased to $6.0 million in 2Q2014 from $1.6 million in 2Q2013, driven by
increased selling expenses from increased production and deliveries in Colombia.
Adjusted EBITDA: Consolidated Adjusted EBITDA increased by 122% to $76.4 million in 2Q2014 compared
to $34.4 million in 202013. The increase was mainly due to increased Adjusted EBITDA in the Colombian
operations from higher production and the mentioned inventory normalization in 2Q2014, and the addition
of the Brazilian operations, which were partially offset by lower Adjusted EBITDA in Chilean operations.
Adjusted EBITDA per boe increased by 41% to $42.1 per boe in 2Q2014 compared to $29.9 per boe in
202013, mainly resulting from higher average prices in addition to operational efficiencies in both Chile and
Colombia.
ANALYSIS BY BUSINESS SEGMENT
Operations in Chile
In Chile, GeoPark is the first and the largest non-state controlled oil and gas producer. Operations began in
2006 in the Fell Block and have evolved from having a non-operated, non-producing interest to a fully-
operated and producing asset with 45.1 mmboe of 2P PRMS reserves certified by DeGolyer and McNaughton
(“DEM”) as of December 31, 2013. Average production in Fell Block amounted to 6,050 boepd during
202014, representing 94% of GeoPark’s Chilean production, with the remaining production coming from
GeoPark’s Tierra del Fuego blocks. Currently, GeoPark has working interests in six hydrocarbon blocks in
Chile with significant prospective resources.
LG International Corp. (“LGI”), the Korean conglomerate, has a 20% equity interest in GeoPark’s Chilean
operations (including the Fell and Tierra del Fuego blocks), and a 14% direct working interest in the Tierra
del Fuego blocks. (Taking into account direct and indirect participations, this equates to a 31.2% interest for
LGI in the Tierra del Fuego blocks).
Key Indicators 2Q2014 202013 % Chg.
Oil production (bopd) 3,886 4,595 -15%
Gas production (mcfpd) 15,292 13,248 15%
Average net production (boepd) 6,435 6,803 -5%
Net Revenues ($ million) 39.2 37.3 5%
Production Costs ($ million) -18.9 -15.6 21%
Adjusted EBITDA ($ million) 22.5 23.1 -2%
Adjusted EBITDA per boe ($) 44.3 39.4 12%
Operating Netback per boe ($) 56.8 47.7 19%
Production: Production in Chile decreased by 5% to 6,435 boepd in 2Q2014 compared to 6,803 boepd in
202013. GeoPark’s oil production in 2Q2014 represented a 15% decrease compared to 2Q2013, mainly due
to the natural decline in base production, partially offset by the installation of electrical submersible pumps
(“ESP”) in five existing Tobifera wells. GeoPark is planning to install this artificial lift system in more than ten
wells on the Fell Block during the full year 2014 to enhance production levels. In addition, gas production in
202014 increased by 15% compared to 2Q2013.
Net Revenues: Net revenues in Chile increased by 5% to $39.2 million for 2Q2014, representing 30% of
consolidated net revenues, compared to $37.3 million or 51% of consolidated net revenues in 2Q2013.
Oil revenues decreased by 1% to $32.2 million in 202014, due to lower production, which was partially
offset by a higher average realized oil price per barrel.
The average realized oil price increased by 27% to $100.4 per barrel in 2Q2014. The increase was primarily
driven by lower quality discounts from chemical treatments to improve oil quality together with an increase
in the average reference price resulting from renegotiated commercial terms with ENAP, the crude buyer.
Oil revenues represented 82% of total net revenues in Chile in 2Q2014 compared to 87% in 2Q2013.
Gas revenues increased by 44% to $7.0 million in 2Q2014, mainly due to an increase of 34% in the average
realized gas price resulting from (i) higher world methanol prices, (ii) an improved agreement with the Fell
Block gas purchaser, Methanex, and (iii) to a lesser extent due to new gas deliveries from recent discoveries
in the Tierra del Fuego blocks, which are sold at higher prices. Gas revenues represented 18% of total net
revenues in Chile in 2Q2014 compared to 13% in 2Q2013.
In late May 2014, Methanex, GeoPark’s principal gas buyer, temporarily idled its plant as a result of an
insufficient supply of natural gas from its other suppliers. Methanex is expected to resume operations in
September 2014. Resulting from the above, June 2014 Chilean gas revenues were negatively impacted. As
a reference, Chilean gas revenues represented 5% of consolidated revenues in 2Q2014.
Costs: Production costs in Chile in 2Q2014 increased by 21% to $18.9 million, resulting in a 40% increase
in production costs per boe to $37.1. This was mostly due to higher depreciation charges per boe, the
impact on fixed costs from lower production, and, to a lesser extent, higher costs resulting from the
operations of electrical submersible pumps and chemical treatments to improve oil quality to strengthen
revenues. Additionally, operating costs increased by 18% to $7.8 million in 2Q2014 from $6.6 million in
2Q2013.
Exploration expenses in Chile amounted to $4.4 million in 202014 compared to $3.7 million in 2Q2013.
Exploration expenses in both 2Q2014 and 2Q2013 included write-offs related to the Otway Block.
GeoPark maintained administrative costs in Chile stable in the amount of $3.6 million in 202014 compared
to $3.5 million in 2Q2013. Selling expenses in Chile decreased from $1.0 million in 2Q2013 to $0.6 million in
202014.
Adjusted EBITDA: Adjusted EBITDA in Chile decreased by 2% to $22.5 million in 2Q2014, compared to
$23.1 million in 202013, mainly driven by the decrease in oil production and deliveries together with higher
operating costs, which were partially offset by increased average prices.
Adjusted EBITDA per boe increased by 12% to $44.3 per boe in 2Q2014 compared to $39.4 per boe in
2Q2013, as a result of higher average realized sales prices, which were partially offset by higher operating
costs per boe.
Operational Performance:
During 2Q2014, the Company advanced its exploration and development work program with the drilling of
four wells in the Fell Block (GeoPark operated with a 100% WI), and the drilling of three wells in the
Flamenco Block (GeoPark operated with a 50% WI).
Further details were provided in the recent Operations Update release of July 17, 2014.
Operations in Colombia
GeoPark entered Colombia, following the acquisitions of three companies in early 2012. Currently, the
Company has working interests in 10 hydrocarbon blocks with 2P PRMS reserves of 16.5 mmboe, certified
by D8M as of December 31, 2013. Average production for 2Q2014 reached 10,357 boepd. LGI has a 20%
equity interest in GeoPark’s Colombian operations.
Key Indicators 2Q2014 2Q2013 % Chg.
Oil production (bopd) 10,321 6,157 68%
Gas production (mcfpd) 220 0 N/A
Average net production (boepd) 10,357 6,157 68%
Net Revenues ($ million) 79.4 35.2 125%
Production Costs ($ million) -38.3 -26.1 46%
Adjusted EBITDA ($ million) 46.8 16.3 188%
Adjusted EBITDA per boe ($) 46.9 29.1 61%
Operating Netback per boe ($) 50.6 33.1 53%
Production: Colombian oil production increased by 68% to 10,357 bopd in 2Q2014, resulting from
successful exploration and development efforts, such as the new discoveries in the Llanos 34 Block (GeoPark
operated with a 45% WI) including the Tigana and Aruco fields, as well as the development and appraisal of
the Max, Tua and Tarotaro fields.
Net Revenues: The Colombian operations represented 60% of the total consolidated net revenues
compared to 48% of the total consolidated net revenues in 2Q2013. The significant 125% increase in
Colombian revenues was due to increased production and deliveries, along with inventory normalization
versus previous quarter, partially offset by an increase in earn-out expenses.
The average realized oil price increased by 29% to $85.6 per barrel in 2Q2014, which was mainly related to
higher deliveries made by pipeline, with higher realization prices, and an increase in the reference price of
approximately 4%. These increases were partially offset by lower realized prices related to the remaining
production that is commercialized at the well-head.
Earn-out expenses increased to $6.1 million in 2Q2014 compared to $1.7 million in 202013 due to higher
production, mainly in the Llanos 34 Block, as provided for in the Winchester purchase agreement.
Costs: Production costs in Colombia grew less than revenues and increased by 46% to $38.3 million in
202014, primarily due to improved fixed cost absorption and cost efficiencies that led to a decrease in the
production cost per barrel of 18% to $38.3 per barrel. Operating costs in 2Q2014 increased by 38% to
$21.6 million compared to $14.4 million in 202013 mainly due to increased production and deliveries.
Operating costs per boe decreased by 23% to $19.4 per boe and were driven by improved fixed cost
absorption and cost efficiencies.
Exploration expenses in Colombia amounted to $2.6 million in 2Q2014 compared to $1.7 million in 2Q2013,
due mainly to higher staff costs from increased exploration efforts. In both 2Q2014 and 2Q2013, two wells
were written-off from non-operated blocks in Colombia.
Administrative costs in Colombia in 2Q2014 slightly increased to $3.0 million compared to $2.8 million in
2Q2013.
Selling expenses in Colombia in 2Q2014 increased to $5.3 million compared to $0.4 million in 2Q2013,
principally driven by the significant increase in production and deliveries, of which a higher proportion was
sold by pipeline at a higher realized price and with higher associated selling expenses.
Adjusted EBITDA: Adjusted EBITDA in Colombia increased by 188% to $46.8 million in 202014 compared
to $16.3 million in 202013, mainly due to higher oil production and deliveries.
Adjusted EBITDA per boe increased by 61% to $46.9 per boe in 2Q2014, mainly due to higher average oil
prices and lower production costs per boe resulting from increased efficiency, which were partially offset by
higher earn-out payments.
Operational Performance:
During 2Q2014, in the Llanos 34 Block (GeoPark operated with a 45% WI), the Tigana Norte 1, Tigana 2 and
Tigana 3 wells were successfully tested and put in production, and the Tigana Sur Oestel well was drilled
and will be tested in 3Q2014. In addition, in the Llanos 32 Block (Non-operated with a 10% WI), the
operator successfully tested and put into production the Kananaskis 1 and Carmentea 1 wells.
Further details were provided in the recent Operations Update release of July 17, 2014.
Operations in Brazil
In Brazil, GeoPark agreed in 2013 to acquire a non-operating 10% WI in the Manati Field (Brazil’s largest
producing gas field), and completed the transaction on March 31, 2014. The Company began consolidating
results starting in 2Q2014. In addition, during 2013 the Company was also awarded nine exploration blocks
in the 11′ and 12! Brazilian bidding rounds (one of which, the PN-T-597 ¡s still subject to ANP approval).
Additionally, according to D8M’s certified report, 2P PRMS reserves corresponding to the Company’s working
interest in the Brazilian Manati Field (composed of 98% gas) amounted to 8.6 mmboe, as of December 31,
2013. Average gas production from Manati Field in 2Q2014 reached 3,572 boepd.
Key Indicators 202014 2Q2013* % Chg.
Oil production (bopd) 56 – N/A
Gas production (mcfpd) 21,092 – N/A
Average net production (boepd) 3,572 – N/A
Net Revenues ($ million) 12.3 – N/A
Production Costs ($ million) 7.2 – N/A
Adjusted EBITDA ($ million) 7.1 -1.3 N/A
Adjusted EBITDA per boe ($) 23.8 – N/A
Operating Netback per boe ($) 30.7 – N/A
* 202013 shows only Adjusted EBITDA corresponding to expenses from the start-up of GeoPark’s Brazilian
operations, including personnel, legal and administrative costs. The Company completed the acquisition of its
interest in the Brazilian Manati Field on March 31, 2014. As from that date, GeoPark started consolidating line
by line its results of operations for accounting purposes within its Brazilian operations.
Production: Production for the Brazilian operations reached 3,572 boepd in 2Q2014, composed of
approximately 98% gas and 2% condensate.
Net Revenues: The Brazilian operations represented 10% of the total consolidated net revenues in 2Q2014,
and amounted to $12.3 million. Natural gas production is sold through a long term, extendable agreement
with Petrobras, whereby the price of gas is fixed in Brazilian Reais and is adjusted annually in accordance
with the Brazilian inflation index. The average gas price, net of taxes, amounted to $6.9 per mcf ($41.4 per
boe) in 2Q2014.
Costs: Production costs in Brazil were $6.2 million in 2Q2014, reflecting production costs per boe of $24.2.
In addition, operating costs per boe amounted to $10.7.
Adjusted EBITDA: Adjusted EBITDA in Brazil reached $7.1 million in 2Q2014, representing 9% of
consolidated Adjusted EBITDA. Adjusted EBITDA per boe was $23.8 in 2Q2014.
Operational Performance:
During 2Q2014, Petrobras, the operator of the Brazilian Manati Field, started the construction of a
compression plant that is expected to commence operations in 2H2015. The total estimated capital
expenditures for the plant of $60-65 million ($6-6.5 million at GeoPark’s WI) is expected to maximize the
recovery of the gas reserves of the Manati Field, and partially offset the natural production decline.
Also in 2Q2014, GeoPark filed requests to the Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais
Renováveis (“IBAMA”), the Brazilian environmental agency, to shoot 3D Seismic in the blocks awarded in
Round 11 in the Reconcavo and Potiguar basins (GeoPark operated with a 100% WI). Seismic registration is
expected to start in the 3Q2014.
Operations in Argentina
Operations in Argentina represented approximately 1% of consolidated net revenues and Adjusted EBITDA
in 2Q2014 and 2Q2013.
CONSOLIDATED NON-OPERATING RESULTS AND PROFIT FOR THE PERIOD
Net Financial Expenses: Net financial expenses decreased to $3.5 million in 202014 from $8.0 million in
202013, due to higher financial income resulting from higher cash and cash equivalents position (including
net proceeds resulting from the NYSE IPO), together with gains from exchange rate differences resulting
from the impact of the appreciation of the Brazilian currency in 2Q2014 over dollar-denominated debt taken
at the local level. These effects were partially offset by higher financial expenses due to higher average
indebtedness as a result of the 2020 Bond amounting to $300 million issued in February 2013, plus the
gross credit facility of $70 million obtained on March 31, 2014 to acquire the interest in the Brazilian Manati
Field.
Income Tax: Income tax amounted to $11.3 million in 202014 compared to $2.7 million in 2Q2013, in line
with the increase in profits before income taxes in 2Q2014.
Profit: Profit for the period increased 471% and amounted to $27.3 million in 2Q2014 compared to $4.8
million in 2Q2013, mainly due to higher operating income and to a lesser extent by lower net financial
expenses, partially compensated by higher income taxes.
BALANCE SHEET
Cash and cash equivalents as of June 30, 2014, totaled $125.3 million, while at year-end 2013 cash and
cash equivalents amounted to $121.1 million. The increase is primarily due to cash generation from
operations during the six month period ended June 30, 2014 of $105.0 million, along with $128.2 million of
funds generated from financing activities, which are mainly explained by (i) the credit facility taken in Brazil
and (ii) $90.9 million net proceeds resulting from the NYSE IPO, minus (iii) $29.8 million related to debt and
interest payments. During the period, net cash used for investment activities totaled $229.8 million and
included the Company’s capital expenditures program as well as the acquisition of an interest in the Brazilian
Manati Field.
Total assets as of June 30, 2014, amounted to $1,079.5 million. Additionally, total investments for the six
month period, ended June 30, 2014 included (i) $85.9 million invested in Chile, where the Company drilled
seventeen wells and acquired 350 sqkm of 3D seismic surveys, and (ii) $36.3 million invested in Colombia
that mainly included the drilling of twelve wells along with construction of facilities for drilled wells. In
addition, investing activities in 2Q2014 included $115.6 million related to the acquisition of an interest in the
Brazilian Manati Field (net of cash acquired) completed on March 31, 2014.
At the end of 2Q2014, GeoPark’s total financial debt amounted to $368.6 million, mainly including the 2020
Bond issued in February 2013 and the 5-year credit facility in Brazil for the acquisition of an interest in the
Brazilian Manati Field.
Shareholders’ Equity reached $501.7 million and included minority interests of $104.3 million related to LG
International’s participation in the Chilean and Colombian operations. (LG International and GeoPark have a
strategic alliance to build a portfolio of upstream assets across Latin America). Shareholders’ Equity as of
June 30, 2014 increased by $135.7 million as compared to December 31, 2013, mainly due to net proceeds
of $90.9 million resulting from the NYSE IPO in addition to profits from the six-month period.
FINANCIAL RATIOS (*)
Amounts in $ million
Gross debt /
Year / Period Financial debt Cash position Adjusted ras
EBITDA
2Q2013 301.8 149.4 2.2X 4.4x
3Q2013 296.2 104.8 2.2X 5.9x
2013 317.1 121.1 1.9x 4.3x
102014(**) 364.7 131.9 2.2X 4.9x
2Q2014 368.6 125.3 1.8x 6.0x
(*) Based on trailing 12 months financial results
(**) Does not consider Adjusted EBITDA generated by the acquired interest in the Brazilian Manati Field
GeoPark’s consolidated incurrence financial covenants agreed under the 2020 Bond indenture provide for:
e Leverage Ratio, defined as Gross debt to Adjusted EBITDA, lower than 2.75x for the year 2014 and
lower than 2.5x from 2015 onwards; and
e Interest Coverage Ratio, defined as Adjusted EBITDA divided by Interest Expenses, above 3.5x.
OTHER NEWS/RECENT EVENTS
First Oil Discovery in Isla Norte Block, Chile
Pantano Oeste 1 well marks the first oil discovery on the newly-acquired Isla Norte Block in Tierra del Fuego,
Chile. GeoPark operates and has a 60% WI in the Isla Norte Block, in partnership with Empresa Nacional de
Petroleo de Chile (“ENAP”), the Chilean state-owned company.
Exploration well Pantano Oeste 1 was drilled in the 2Q 2014 to a total depth of 7,268 and tested in August
2014 in the Tobifera formation at approximately 7,085 feet, resulting in a production rate of approximately
635 gross bopd of 45% API, with approximately 75% water cut. Further production history will be required to
determine stabilized flow rates and the extent of the reservoir. Surface facilities and flow lines will be
required for this new discovery.
2014 Colombia Bidding Round
In July 2014, GeoPark was awarded the VIM-3 Block in the Lower Magdalena Basin, covering an area of
approximately 225,000 acres. GeoPark’s winning bid consisted of an estimated investment commitment of
$22.2 million during the initial three year exploratory period, and a Royalty X Factor of 3%. GeoPark will
operate and have a 100% working interest in the block. The winning bid is subject to final signature of the
contracts with the ANH, which is currently scheduled for 3Q2014.
Swap Colombia
On July 29, 2014, GeoPark’s Colombian subsidiary agreed to exchange its 10% non-operating economic
interest in the Arrendajo Block for additional interests held by the seller in the Yamu Block (GeoPark
operated) that includes a 15% economic interest in all of the Yamu fields except for the Carupana field,
where the seller had a 25% economic interest. According to the terms of the exchange, GeoPark will also
receive $3.2 million in cash from the exchange, prior to working capital adjustments. Following this
transaction, GeoPark will continue to be the operator and have a 79.5% interest in the Carupana Field and a
90% interest in the Yamú and Potrillo Fields, all fields located in the Yamú Block.
2014 Bidding Round in Mendoza, Argentina
On August 20, 2014, the consortium of GeoPark and Pluspetrol was awarded two exploration licenses in the
Sierra del Nevado and Puelen Blocks, as part of the 2014 Mendoza Bidding Round in Argentina, carried out
by Empresa Mendocina de Energía S.A. (“EMESA”). The blocks cover an area of approximately 1.7 million
acres and are located in the Neuquen Basin, Argentina’s largest producing hydrocarbon basin.
The consortium consists of Pluspetrol (Operator with a 72% working interest (“WI”)), EMESA (Non-operated
with a 10% WI) and GeoPark (Non-operated with an 18% WI). In accordance with the terms of the bidding,
all of the expenditures related to EMESA’s WI will be carried by Pluspetrol and GeoPark proportionately to
their respective WIs, and will be recovered through EMESASs participation in future potential production.
GeoPark has committed to a minimum aggregate investment of $6.2 million for its WI, which includes the
work program commitment on both blocks during the first three years of the exploratory period. In addition
to forming a partnership with Pluspetrol, one of the largest Latin American independent companies, these
licenses will rebalance GeoPark’s Argentina portfolio following the decision to relinquish the non-productive
Cerro Doña Juana and Loma Cortaderal Blocks, announced in April 2014.
Work Program and Outlook for 2014
Based on the results for the first six months of the year 2014, GeoPark is on track to meet its 2014 targets,
which consist of:
+ Average annual production growth of 15-20% compared to annual production average in 2013
(including full year production from the Manati Field in both years).
e Capital Expenditures of $220-250 million, which considers 50-60 new wells, seismic surveys and new
facilities. Approximately 40% of capital expenditures will be dedicated to exploration activities and
60% will be dedicated to development activities.
Lock Up Period Expiration for Certain Shareholders
August 6, 2014 marked the expiration of the lock up period for the sale or purchase of shares applicable to
certain existing shareholders in relation to the share issuance on February 7, 2014.
10
Annual General Meeting
GeoPark’s 2014 Annual General Meeting will be held on September 11, 2014. Information regarding the
notice and other related information including the Company’s Annual Report on Form 20-F for 2013 can be
found in the Investor Support section of the Company’s website at www.geo-park.com.
CONFERENCE CALL INFORMATION
GeoPark will host its Second Quarter 2014 results conference call on August 26, 2014, at 10:00 a.m. Eastern
Standard Time.
Chief Executive Officer, James F. Park, Chief Operating Officer, Augusto Zubillaga, and Chief Financial
Officer, Andrés Ocampo, will discuss GeoPark’s financial and operating results for 2Q2014, with a question
and answer session immediately following.
Interested parties may access the conference call by dialling from outside the United States, +1 201-689-
8035 and from within the United States, 1 877-407-8035 (Passcode: GeoPark).
11
FIRST HALF 2014
The table below sets forth GeoPark’s production figures for the six month period ended June 30, 2014
(“1H2014”) compared with 1H2013.
1H2014(*) 1H2013
Total : Total o
(boepd) Oil (bopd) Gas (mcfpd) (boepd) o Chg.
Chile 6,918 4,179 16,434 7,615 -9%
Colombia 9,814 9,780 208 5,551 77%
Brazil 1,796 28 10,604 * N/A
Argentina 74 60 89 56 32%
Total 18,602 14,047 27,335 13,224 41%
*
The table below sets forth some key indicators of performance for 1H2014, as compared with 1H2013.
The acquisition of the interest in the Brazilian Manati Field was completed on March 31, 2014. As a reference and
only for comparison purposes, the corresponding net production in the Brazilian operations for 142014 amounted
to 3,619 boepd and for 1H2013 net production amounted to 3,913 boepd.
Figures corresponding to 1H2014 include information relating to the acquired interest in the Brazilian Manati
Field completed on March 31, 2014. As from that date, GeoPark started consolidating line by line its results
of operations for accounting purposes within its Brazilian operations.
Key Indicators
Oil production (bopd)
Gas production (mcfpd)
Average net production (boepd)
Average realized sales price
Oil ($ per bbl)
Gas ($ per mcf)
Net Revenues ($ million)
Production Costs ($ million)
Adjusted EBITDA ($ million)
Adjusted EBITDA per boe ($)
Operating Netback per boe ($)
Profit forthe period ($ million)
1H2014
14,047
27,335
18,602
87.8
6.8
216.2
-102.0
124.8
42.3
50.2
37.7
1H2013
10,640
15,502
13,224
78.4
4.5
160.8
-81.1
84.0
35.1
44.5
14.2
% Chg.
32%
76%
41%
12%
52%
34%
26%
49%
20%
13%
165%
CONSOLIDATED OPERATING PERFORMANCE
Production: Consolidated production increased by 41% to 18,602 boepd in 1H2014 and is mainly explained
by increased production in the Colombian operations together with the addition of the Brazilian operations
(since 2Q2014), which were partially offset by lower production in the Chilean operations. On a proforma
basis, consolidated average production reached 20,425 boepd in 1H2014 and grew 19% compared to 17,135
boepd in 1H2013.
Net Revenues: Consolidated net revenues increased by 34% to $216.2 million in 142014 compared to
$160.8 million, primarily driven by increased oil production.
12
Consolidated Oil Revenues: Consolidated oil revenues represented 87% of total revenues in 1H2014
compared to 93% in 1H2013, and increased by 25% to $187.3 million in 142014, mainly resulting from
increased production, in addition to an increase in the average realized price of oil per barrel.
The average realized oil sales price increased 12% to $87.8 per barrel in 142014.
Consolidated Gas Revenues: Consolidated gas revenues represented 13% of total revenues in 1H2014
compared to 7% in 1H2013, and increased by 163% to $28.9 million in 142014 mainly related to the
addition of the Brazilian operations in the amount of $12.3 million and to a lesser extent by higher average
gas prices in the Chilean operations. The average realized gas sales price increased 52% to $6.8 per mcf in
1H2014.
Costs: Consolidated production costs increased by 26% to $102.0 million in 142014, mainly driven by the
increase in production during the period, and the addition of the Brazilian operations. Additionally,
production costs per boe grew driven by improved fixed cost absorption from increased production.
Exploration costs increased by 5% to $14.2 million in 142014 resulting from higher staff and related costs
due to increased exploration efforts, partially offset by lower write-offs. Three wells and other seismic
studies were charged to expense in 1H2014, compared to five wells expensed in 1H2013.
Administrative costs increased by 11% to $23.0 million in 142014. This increase was primarily due to (¡)
higher corporate expenses and new business efforts and (ii) the addition of the Brazilian operations.
Selling expenses increased by 61% to $12.3 million in 142014, primarily due higher production in Colombia.
Adjusted EBITDA: Adjusted EBITDA increased by 49% to $124.8 million in 142014, primarily impacted by
higher Adjusted EBITDA in Colombian operations.
Adjusted EBITDA per boe increased by 20% to $42.3 per boe in 1H2014 compared to $35.1 per boe in
1H2013, impacted by higher average sales prices and the impact of lower operating costs per boe due to
improved fixed cost absorption and cost efficiencies.
CONSOLIDATED NON-OPERATING RESULTS AND PROFIT FOR THE PERIOD
Net Financial Expenses: Financial expenses decreased from $20.6 million in 142013 to $11.1 million in
1H2014, due to (i) one-time expenses incurred as part of the prepayment of the 2015 Reg S Bond in
February 2013, and (ii) higher interest income related to increased cash and cash equivalents, partially
offset by higher interest expenses due to higher average indebtedness.
Income Tax: Income tax increased by 137% to $16.8 million in 1H2014, in line with increased profits
before income taxes.
Profit: Profit in 142014 increased by 165% to $37.7 million, as a result of higher operating results and to a
lesser extent by lower net financial expenses. Earnings per share increased by 160% to $0.52 per share in
1H2014, mainly driven by increased profits in the period.
GeoPark can be visited online at www.geo-park.com
For further information please contact:
Pablo Ducci – Director Capital Markets pducciOMgeo-park.com
Sofia Chellew – Investor Relations schellewOgeo-park.com
Santiago, Chile
T: +562 2242 9600
13
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
In millions of $, except for %
202014 202013 % 1H2014 1H2013 %
NET REVENUES
Sale of crude oil 112.0 67.9 65% 187.3 149.8 25%
Sale of gas 19.4 4.9 294% 28.9 11.0 163%
TOTAL NET REVENUES 131.4 72.9 80% 216.2 160.8 34%
Production costs -64.3 -42.8 50% -102.0 -81.1 26%
GROSS PROFIT 67.1 30.0 123% 114.2 79.7 43%
Exploration costs -7.4 -6.3 18% -14.2 -13.6 5%
Administrative costs -11.8 -11.1 6% -23.0 -20.7 11%
Selling expenses -6.0 -1.6 277% -12.3 2.7 61%
Other operating income 0.4 4.4 -92% 1.0 4.2 -77%
OPERATING PROFIT 42.2 15.4 174% 65.6 41.9 57%
Financial results, net -3.5 -8.0 -55% -11.1 -20.6 -46%
PROFIT BEFORE INCOME TAX 38.7 7.4 419% 54.5 21.3 156%
Income tax -11.3 -2.7 326% -16.8 -7.1 137%
PROFIT FOR THE PERIOD 27.3 4.8 471% 37.7 14.2 165%
Non controlling interest 5.6 2.7 111% 9.2 5.6 64%
ATTRIBUTABLE TO OWNERS OF GEOPARK 21.8 2.1 919% 28.5 8.6 230%
RECONCILIATION OF ADJUSTED EBITDA TO PROFIT BEFORE INCOME TAX
AND ADJUSTED EBITDA PER BOE
In millions of $, except for Y%
202014 202013 % 1H2014 1H2013 %
Adjusted EBITDA 76.4 34.4 122% 124.8 84.0 49%
Depreciation -27.6 -16.8 64% -45.7 -32.6 40%
Accrual of Stock Awards -2.6 -1.7 57% -5.6 -3.5 61%
Impairment and write-off -4.6 -5.9 -23% -8.6 -11.8 -27%
Others 0.6 5.4 -90% 0.8 5.8 -87%
OPERATING PROFIT 42.2 15.4 174% 65.6 41.9 57%
Financial results, net -3.5 -8.0 -55% -11.1 -20.6 -46%
PROFIT BEFORE INCOME TAX 38.7 74 419% 54.5 21.3 156%
Adjusted EBITDA 76.4 34.4 122% 124.8 84.0 49%
Total deliveries (in millions of boe) 1.81 1.15 58% 2.95 2.36 25%
Adjusted EBITDA per boe 42.1 29.9 41% 42.3 35.1 21%
RECONCILIATION OF GROSS PROFIT TO OPERATING NETBACK AND OPERATING NETBACK PER
In millions of $, except for %
BOE
202014
Gross Profit 67.1
Plus: Depreciation and stock awards 25.5
Less: Selling Expenses -6.0
Operating Netback 86.7
Total deliveries (in millions of boe) 1.81
Operating Netback per boe 47.8
202013
30.0
17.1
-1.6
45.5
1.15
39.6
%
123%
50%
277%
90%
58%
21%
1H2014
114.2
46.1
-12.3
147.9
2.95
50.2
1H2013
79.7
32.9
-2.7
104.9
2.36
44.5
%
43%
40%
61%
41%
25%
13%
14
CONSOLIDATED SUMMARIZED BALANCE SHEET
In millions of $, except for % at
30 June’14 31 Dec’13 %
Non Current Assets
Property, Plant and Equipment 785.4 595.4 32%
Other Non Current Assets 39.6 36.3 9%
Total Non Current Assets 825.0 631.8 31%
Current Assets
Inventories 16.4 8.1 102%
Trade Receivables 61.3 42.6 44%
Other Current Assets 51.4 42.7 20%
Cash at bank and in hand 125.3 121.1 3%
Total Current Assets 254.4 214.6 19%
Total Assets 1,079.5 846.4 28%
Equity
Equity attributable to owners of GeoPark 397.3 270.8 47%
Non-controlling interest 104.3 95.1 10%
Total Equity 501.7 366.0 37%
Non Current Liabilities 349.9 290.5 20%
Other Non Current Liabilities 94.9 64.5 47%
Total Non Current Liabilities 444.9 355.0 25%
Current Liabilities
Borrowings 18.723 26.63 -30%
Other Current Liabilities 114.2 98.864 16%
Total Current Liabilities 132.9 125.5 6%
Total Liabilities and Equity 1,079.5 846.4 28%
SELECTED HISTORICAL OPERATIONAL AND FINANCIAL DATA
Year ended December 31,
2013 2012 2011 2010 2009
Oil Reserves (2P PRMS) – mmboe 33.9 27.8 16.9 16.2 10.9
Gas Reserves (2P PRMS) – mmboe 27.7 29.1 32.6 33.4 31.3
Combined Reserves (2P PRMS) – mmboe 61.6 56.9 49.5 49.6 42.2
Oil Production (thousand boepd) 11.1 7.5 2.5 1.9 1.2
Gas Production (thousand boepd) 2.4 3.8 5.1 5.0 5.1
Production (thousand boepd) 13.5 11.3 7.6 6.9 6.3
Oil Revenues ($ million) 315 222 74 48 22
Gas Revenues ($ million) 23 29 38 31 23
Total Revenues ($ million) 338 250 112 80 45
Adjusted EBITDA ($ million) 167 121 63 41 18
15
GLOSSARY
Adjusted EBITDA
Adjusted EBITDA per boe
Operating Netback per boe
ANP
ANH
boe
boepd
bopd
EOP
EPS
IPO
mbbl
mmboe
mcfpd
mmcfpd
Mm?*/day
PRMS
SPE
wI
NPVi0
Sqkm
Profit for the period before net finance cost, income tax,
depreciation, amortization, certain non-cash items such as
impairments and write offs of unsuccessful efforts, accrual of stock
options and stock awards and bargain purchase gain on acquisitions
of subsidiaries
Adjusted EBITDA divided by total boe deliveries for the applicable
period
Net revenues, less production costs (net of depreciation charges and
accrual of stock options and stock awards) and selling expenses,
divided by total equivalent sales volume. Operating Netback is
equivalent to Adjusted EBITDA net of cash expenses included in
Administrative, Exploratory and Other operating costs.
Agéncia Nacional do Petróleo, Brazil’s National Agency of Petroleum
Agencia Nacional de Hidrocarburos de Colombia
Barrels of oil equivalent
Barrels of oil equivalent per day
Barrels of oil per day
Contrato Especial de Operacion Petrolera (Special Petroleum
Operations Contract)
Earnings per share
Initial Public Offering
Thousand barrels of oil
Million barrels of oil equivalent
Thousand cubic feet per day
Million cubic feet per day
Thousand cubic meters per day
Petroleum Resources Management System
Society of Petroleum Engineers
Working interest
Present value of estimated future oil and gas revenues, net of
estimated direct expenses, discounted at an annual rate of 10%
Square kilometers
16
NOTICE
Additional information about GeoPark can be found in the “Investor Support” section on the website at
www.geo-park.com
Rounding amounts and percentages: Certain amounts and percentages included in this press release have
been rounded for ease of presentation. Percentage figures included in this press release have not in all cases
been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding.
For this reason, certain percentage amounts in this press release may vary from those obtained by
performing the same calculations using the figures in the financial statements. In addition, certain other
amounts that appear in this press release may not sum due to rounding.
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION
This press release contains statements that constitute forward-looking statements. Many of the forward
looking statements contained in this press release can be identified by the use of forward-looking words
such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “will,” “estimate” and
“potential,” among others.
Forward-looking statements that appear in a number of places in this press release include, but are not
limited to, statements regarding the intent, belief or current expectations, regarding various matters,
including expected 2014 production growth and capital expenditures plan. Forward-looking statements are
based on management’s beliefs and assumptions, and on information currently available to the
management. Such statements are subject to risks and uncertainties, and actual results may differ
materially from those expressed or implied in the forward-looking statements due to various factors.
Forward-looking statements speak only as of the date they are made, and the Company does not undertake
any obligation to update them in light of new information or future developments or to release publicly any
revisions to these statements in order to reflect later events or circumstances, or to reflect the occurrence of
unanticipated events. For a discussion of the risks facing the Company which could affect whether these
forward-looking statements are realized, see filings with the U.S. Securities and Exchange Commission.
Information about oil and gas reserves: The SEC permits oil and gas companies, in their filings with
the SEC, to disclose only proved, probable and possible reserves that meet the SEC’s definitions for such
terms. GeoPark uses certain terms in this press release, such as “PRMS Reserves” that the SEC’s guidelines
do not permit GeoPark from including in filings with the SEC. As a result, the information in the Company’s
SEC filings with respect to reserves will differ significantly from the information in this press release.
NPV10 for PRMS 1P, 2P and 3P reserves is not a substitute for the standardized measure of discounted
future net cash flows for SEC proved reserves.
Adjusted EBITDA: The Company defines Adjusted EBITDA 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
unsuccessful exploration and evaluation assets, accrual of stock options and stock awards and bargain
purchase gain on acquisition of subsidiaries. Adjusted EBITDA is not a measure of profit or cash flows as
determined by IFRS. The Company believes Adjusted EBITDA is useful because it allows us to more
effectively evaluate our operating performance and compare the results of our operations from period to
period without regard to our financing methods or capital structure. The Company excludes the items listed
above from profit for the period in arriving at Adjusted EBITDA because these amounts can vary
substantially from company to company within our industry depending upon accounting methods and book
values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA
should not be considered as an alternative to, or more meaningful than, profit for the period or cash flows
from operating activities as determined in accordance with IFRS or as an indicator of our operating
performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in
understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax
structure and significant and/or recurring write-offs, as well as the historic costs of depreciable assets, none
of which are components of Adjusted EBITDA. The Company’s computation of Adjusted EBITDA may not be
comparable to other similarly titled measures of other companies. For a reconciliation of Adjusted EBITDA to
17
the IFRS financial measure of profit for the year or corresponding period, see the accompanying financial
tables.
Operating netback per boe should not be considered as an alternative to, or more meaningful than, profit for
the period or cash flows from operating activities as determined in accordance with IFRS or as an indicator
of our operating performance or liquidity. Certain items excluded from Operating netback per boe are
significant components in understanding and assessing a company’s financial performance, such as a
company’s cost of capital and tax structure and significant and/or recurring write-offs, as well as the historic
costs of depreciable assets, none of which are components of Operating Netback per boe. The Company’s
computation of Operating Netback per boe may not be comparable to other similarly titled measures of
other companies. For a reconciliation of Operating Netback per boe to the IFRS financial measure of profit
for the year or corresponding period, see the accompanying financial tables.
18
Link al archivo en CMFChile: https://www.cmfchile.cl/sitio/aplic/serdoc/ver_sgd.php?s567=00b645897e23ede0bb4dc54fc991ea7fVFdwQmVFNUVRVFJOUkVFMVRYcG5lRTVCUFQwPQ==&secuencia=-1&t=1682366909
