ma
Eos el
GEOPARK
Santiago, 12 de agosto de 2015
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 se informa los estados financieros
consolidados de la Compañía correspondientes al periodo de seis meses finalizado
el 30 de junio de 2015.
La información adjunta consiste en un documento de
veinte páginas escrito en idioma inglés.
Sin otro particular, saluda atentamente a Usted,
o >
Pedro Aylwin Chiorrini
pp. GEOPARK LIMITED
Nuestra Señora de los Ángeles 179 – Las Condes, Santiago – Chile
Tel. (+56 2) 22429600 – infoOgeo-park.com – www.geo-park.com
GEOPARK LIMITED
INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
For the six-months period ended 30 June 2014 and 2015
GEOPARK LIMITED
30 JUNE 2015
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 JUNE 2015
CONSOLIDATED STATEMENT OF INCOME
Three-months Three-months Six-months Six-months
period ended 30 period ended 30 period ended 30 period ended 30
June 2015 June 2014 June 2015 June 2014
Amounts in US$ ‘000 Note (Unaudited) (Unaudited) (Unaudited) (Unaudited)
NET REVENUE 2 62,039 131,449 116,470 216,180
Production and operating costs 4 (22,472) (37,327) (46,367) (57,413)
Geological and geophysical expenses 5 (3,631) (2,887) (6,292) (5,606)
Administrative expenses 6 (8,377) (11,263) (18,218) (21,872)
Selling expenses 7 (1,113) (5,999) (3,420) (12,317)
Depreciation (24,380) (27,570) (49,851) (45,678)
Write-off of unsuccesstul efforts – (4,550) – (8,637)
Other (expenses) income (1,604) 361 (8,763) 974
OPERATING PROFIT (LOSS) 462 42,214 (16,441) 65,631
Financial costs 8 (8,095) (6,222) (17,125) (12,520)
Foreign exchange income (loss) 3,728 2,675 (16,018) 1,391
(LOSS) PROFIT BEFORE TAX (3,905) 38,667 (49,584) 54,502
Income tax (expense) benefit (5,525) (11,321) 4,137 (16,832)
(LOSS) PROFIT FOR THE PERIOD (9,430) 27,346 (45,447) 37,670
Attributable to:
Owners of the parent (7,568) 21,756 (40,224) 28,458
Non-controlling interest (1,862) 5,590 (5,223) 9,212
(Losses) Earnings per share (in US$) for (loss)
profit attributable to owners of the Company. (0.13) 0.39 (0.70) 0.52
Basic
(Losses) Earnings per share (in US$) for (loss)
profit attributable to owners of the Company. (0.13) 0.35 (0.70) 0.45
Diluted
STATEMENT OF COMPREHENSIVE INCOME
Three-months Three-months Six-months Six-months
period ended 30 period ended 30 period ended 30 period ended
June 2015 June 2014 June 2015 30 June 2014
Amounts in US$ ‘000 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
(Loss) Profit for the period (9,430) 27,346 (45,447) 37,670
Other comprehensive income
Currency translation differences 489 1,413 (3,886) 2,344
Total comprehensive income for the period (8,941) 28,759 (49,333) 40,014
Attributable to:
Owners of the parent (7,079) 23,169 (44,110) 30,802
Non-controlling interest (1,862) 5,590 (5,223) 9,212
GEOPARK LIMITED
30 JUNE 2015
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June
2015 Year ended 31
Amounts in US$ “000 Note (Unaudited) December 2014
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 9 750,505 790,767
Prepaid taxes 1,691 1,253
Other financial assets 13,418 12,979
Deferred income tax 38,214 33,195
Prepayments and other receivables 274 349
TOTAL NON CURRENT ASSETS 804,102 838,543
CURRENT ASSETS
Inventories 5,355 8,532
Trade receivables 19,422 36,917
Prepayments and other receivables 13,960 13,993
Prepaid taxes 18,547 13,459
Cash at bank and in hand 105,299 127,672
TOTAL CURRENT ASSETS 162,583 200,573
TOTAL ASSETS 966,685 1,039,116
EQUITY
Equity attributable to owners of the
Company
Share capital 10 58 58
Share premium 209,869 210,886
Reserves 120,131 124,017
Retained accumulated earnings 3,177 40,596
Attributable to owners of the Company 333,235 375,557
Non-controlling interest 98,346 103,569
TOTAL EQUITY 431,581 479,126
LIABILITIES
NON CURRENT LIABILITIES
Borrowings 11 348,192 342,440
Provisions for other long-term liabilities 12 45,851 46,910
Deferred income tax 33,441 30,065
Trade and other payables 13 19,556 16,583
TOTAL NON CURRENT LIABILITIES 447,040 435,998
CURRENT LIABILITIES
Borrowings 11 22,187 27,153
Current income tax 421 7,935
Trade and other payables 13 65,456 88,904
TOTAL CURRENT LIABILITIES 88,064 123,992
TOTAL LIABILITIES 535,104 559,990
TOTAL EQUITY AND LIABILITIES 966,685 1,039,116
GEOPARK LIMITED
30 JUNE 2015
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the Company
Retained
earnings Non –
Share Share Other Translation (accumulated “ontrolling
Amount in US$ ‘000 Capital Premium Reserve Reserve losses) Interest Total
Equity at 1 January 2014 44 120,426 127,527 (1,062) 23,906 95,116 365,957
Profit for the first half of the year – – – – 28,458 9,212 37,670
Currency translation differences – – – 2,344 – – 2,344
errar into income for the period . . . 2,344 28,458 9,212 40,014
Proceeds from issuance of shares 14 90,848 – – – – 90,862
Share-based payment – – – – 4,837 – 4,837
14 90,848 – – 4,837 – 95,699
Balance at 30 June 2014 (Unaudited) 58 211,274 127,527 1,282 57,201 104,328 501,670
Balance at 31 December 2014 58 210,886 127,527 (3,510) 40,596 103,569 479,126
Loss for the first half of the year – – – – (40,224) (5,223) (45,447)
Currency translation differences – – – (3,886) – – (3,886)
O OS income tor the period . – – (3,886) (40,224) (5,223) (49,333)
Repurchase of shares – (1,327) – – – – (1,327)
Share-based payment – 310 – – 2,805 – 3,115
– (1,017) – – 2,805 – 1,788
Balance at 30 June 2015 (Unaudited) 58 209,869 127,527 (7,396) 3,177 98,346 431,581
GEOPARK LIMITED
30 JUNE 2015
CONSOLIDATED STATEMENT OF CASH FLOW
Six-months Six-months
period ended period ended
30 June 2015 30 June 2014
Amounts in US$ ‘000 (Unaudited) (Unaudited)
Cash flows from operating activities
(Loss) Profit for the period (45,447) 37,670
Adjustments for:
Income tax (benefit) expense (4,137) 16,832
Depreciation 49,851 45,678
Loss on disposal of property, plant and equipment – 68
Write-off of unsuccessful efforts – 8,637
Amortisation of other long-term liabilities (228) (291)
Accrual of borrowing’s interests 13,037 12,841
Unwinding of long-term liabilities 1,447 706
Accrual of share-based payment 3,116 5,597
Income tax paid (7,625) (1,306)
Foreign exchange loss (income) 16,018 (1,391)
Change in working capital (17,360) (20,060)
Cash flows from operating activities – net 8,672 104,981
Cash flows from investing activities
Purchase of property, plant and equipment (15,974) (118,161)
Acquisitions of companies, net of cash acquired – (114,967)
Collections related to financial leases – 3,391
Cash flows used in investing activities – net (15,974) (229,737)
Cash flows from financing activities
Proceeds from issuance of shares – 90,862
Proceeds from borrowings – 67,155
Proceeds from loans received from related parties 2,400 –
Principal paid (51) (18,550)
Repurchase of shares (1,327) –
Interest paid (12,987) (11,311)
Cash flows (used in) / from financing activities – net (11,965) 128,156
Net (decrease) / increase in cash and cash equivalents (19,267) 3,400
Cash and cash equivalents at 1 January 127,672 121,135
Currency translation differences (3,106) 753
Cash and cash equivalents at the end of the period 105,299 125,288
Ending Cash and cash equivalents are specified as
follows:
Cash in banks 105,285 125,276
Cash in hand 14 21
Bank overdrafts – (9)
Cash and cash equivalents 105,299 125,288
GEOPARK LIMITED
30 JUNE 2015
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 principal activity of the Company and its subsidiaries (“the Group”) are exploration, development and
production for oil and gas reserves in Chile, Colombia, Brazil, Peru and Argentina. The Group has working
interests and/or economic interests in 32 hydrocarbon blocks.
This consolidated interim financial report was authorised for issue by the Board of Directors on
11 August 2015.
Basis of Preparation
The consolidated interim financial report of GeoPark Limited is presented in accordance with IAS 34
“Interim Financial Reporting”. lt 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 2013 and 2014, which have been prepared in accordance with IFRS.
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 2014.
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.
The Management of the Company has changed the presentation of the Consolidated Statement of Income
re-ordering the profit and loss line items and showing the depreciation and write off of unsuccessful efforts
lines separately for a better explanation of the elements of performance.
Estimates
The preparation of interim financial information requires the use of certain critical accounting estimates. lt
also requires management to exercise its 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 2014.
Note 1 (Continued)
Financial risk management
GEOPARK LIMITED
30 JUNE 2015
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 2014.
There have been no changes in the risk management since year end or in any risk management policies.
Subsidiary undertakings
The following chart illustrates the Group structure as of 30 June 2015 (*):
(OS
ESO)
7
1
14%
GeoPark Perú
SAC. (Perú)
GeoPark Operadora
del Perú SAC.
(Perú)
100% 100% 99,9% 99.9% 99.9%
1% ] ] ] ]
; GeoPark GeoPark Latin GeoPark Perú GeoPark Brazil
rare Lin 1 Argentina America Coóperatie Coóperatie UA. Coóperatie ULA.
Limited i LAEUS ERNILEZ VA (The Netherlands] (The Netherlands)
CIL ! (The Netherlands)
1
100% i 100% | 80% 99.9%
GeoPark Latin ! GeoPark Argentina GeoPark Colombia GeoPark Brazil
America Limited 1 Limited – Coóperatie UA. Exploracáo e Producáo
Agencia en Chile 1 | Argentinean Branch (The Netherlands) de Petráleo e Gás Lida
! (Brazil)
1
! 100%,
1
! GeoPark Colombia
‘ SAS (Colombia)
1
1
1
í 29.9%
! GeoPark S.A.C.
80% 999% 1 100% (Perú)
1
Lo [20% | GeoPark Chie Sera SA lala
International SA. (Chile) (Chile) ! (Chile)
: 99.9% 99.9%
1
1
1
1
1
86% 100% 99%
GeoPark TdF GeoPark Fell
S.A (Chile) SpA (Chile)
GeoPark
Magallanes
Limitada (Chile)
(*) LG International is not a subsidiary, it is Non-controlling interest.
Note 1 (Continued)
Subsidiary undertakings (Continued)
Details of the subsidiaries and joint operations of the Company are set out below:
Name and registered office
GEOPARK LIMITED
30 JUNE 2015
Ownership interest
Subsidiaries GeoPark Argentina Limited – Bermuda 100%
GeoPark Argentina Limited – Argentinean Branch 100% (a)
GeoPark Latin America Limited 100%
GeoPark Latin America Limited – Agencia en Chile 100% (a)
GeoPark S.A. (Chile) 100% (a) (b)
GeoPark Brazil Exploracáo y Producáo de Petróleo e Gás Ltda. (Brazil) 100% (a) (f)
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) 68.8% (a) (d)
GeoPark Colombia S.A. (Chile) 100% (a)
GeoPark Colombia SAS (Colombia) 100% (a)
GeoPark Brazil S.p.A. (Chile) 100% (a) (b)
GeoPark Latin America Coóperatie U.A. (The Netherlands) 100%
GeoPark Colombia Coóperatie U.A. (The Netherlands) 100% (a) (c)
GeoPark S.A.C. (Perú) 100% (a)
GeoPark Perú S.A.C. (Perú) 100% (a)
GeoPark Operadora del Perú S.A.C. (Perú) 100% (a)
GeoPark Perú Coóperatie U.A. (The Netherlands) 100%
GeoPark Brazil Coóperatie U.A. (The Netherlands) 100%
Joint operations Tranquilo Block (Chile) 50% (e)
Flamenco Block (Chile) 50% (e)
Campanario Block (Chile) 50% (e)
Isla Norte Block (Chile) 60% (e)
Llanos 17 Block (Colombia) 36.84%
Yamu/Carupana Block (Colombia) 79.5%/90% (e)
Llanos 34 Block (Colombia) 45% (e)
Llanos 32 Block (Colombia) 10%
CPO-4 Block (Colombia) 50% (e)
Puelen (Argentina) 18%
Sierra del Nevado (Argentina) 18%
Manati Field (Brazil) 10%
(a)
(b)
(c)
(d)
(e)
(0
Indirectly owned.
Dormant companies.
LG International has 20% interest.
LG International has 20% interest through GeoPark Chile S.A. and a 14% direct interest, totaling 31.2%.
GeoPark is the operator in all blocks.
On 17 December 2014, the ANP approved the transfer of cession of rights of the Block from Rio das Contas to GeoPark Brazil. On 31 January 2015, both
companies, Rio das Contas and GeoPark Brazil were merged into GeoPark Brazil (see Note 34.c to the audited Consolidated Financial Statements as of 31
December 2014).
GEOPARK LIMITED
30 JUNE 2015
Note 2
Net Revenue
Three-months Three-months Six-months Six-months
period ended 30 period ended 30 period ended 30 period ended 30
Amounts in US$ ‘000 June 2015 June 2014 June 2015 June 2014
Sale of crude oil 50,207 112,022 91,000 187,256
Sale ot gas 11,832 19,427 25,470 28,924
62,039 131,449 116,470 216,180
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 Executive Committee.
This committee is integrated by the CEO, COO, CFO and managers in charge of the Geoscience,
Operations, Legal and Governance, Finance and People 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. As from 2015, the committee has
changed the disclosure of certain elements of performance to be more comparable with other companies in
the market and also to better follow up the performance of the business. This change impacts the segment
information because gross profit or loss is no longer shown but no impact is generated in the measure of
segment profit and loss.
The Executive 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, certain non-cash items such as impairments and write-offs of unsuccessful
efforts, accrual of share-based payment and other non recurring events. Operating Netback is equivalent to
Adjusted EBITDA before cash expenses included in Administrative, Geological and Geophysical and Other
operating expenses. Other information provided, except as noted below, to the Executive Committee is
measured in a manner consistent with that in the financial statements.
10
GEOPARK LIMITED
30 JUNE 2015
Note 3 (Continued)
Segment Information (Continued)
Six-months period ended 30 June 2015
Amounts in US$ ‘000 Total Argentina Chile Brazil Peru Colombia Corporate
Net Revenue 116,470 597 25,670 18,301 – 71,902 –
Sale of crude oil 91,000 597 17,967 534 – 71,902 –
Sale of gas 25,470 – 7,703 17,767 – – –
Production and operating costs (46,367) (1,571) (17,095) (3,554) – (24,147) –
Royalties (6,104) (34) (1,157) (1,654) – (3,259) –
Transportation costs (2,626) – (1,393) – – (1,233) –
Share-based payment (152) (94) – – – (58) –
Other costs (37,485) (1,443) (14,545) (1,900) – (19,597) –
Depreciation (49,851) (100) (19,845) (6,955) (65) (22,886) –
Operating (Loss) / Profit (16,441) (3,232) (26,972) 5,746 (2,256) 15,121 (4,848)
Adjusted EBITDA 44,959 (2,044) (1,069) 12,808 (2,219) 39,942 (2,459)
Six-months period ended 30 June 2014
Amounts in US$ ‘000 Total Argentina Chile Brazil Peru Colombia Corporate
Net Revenue 216,180 853 86,368 12,287 – 116,672 –
Sale of crude oil 187,256 851 69,120 613 – 116,672 –
Sale of gas 28,924 2 17,248 11,674 – – –
Production and operating costs (57,413) (92) (20,347) (3,185) – (33,789) –
Royalties (11,997) (103) (3,969) (992) – (6,933) –
Transportation costs (7,075) (87) (3,559) – – (3,429) –
Share-based payment (1,494) (239) (896) – – (359) –
Other costs (36,847) 337 (11,923) (2,193) – (23,068) –
Depreciation (45,678) (124) (18,779) (4,009) – (22,716) (50)
Operating Profit / (Loss) 65,631 (3,181) 27,283 3,015 – 42,380 (3,866)
Adjusted EBITDA 124,780 (1,223) 53,218 7,066 – 67,520 (1,801)
Total Assets Total Argentina Chile Brazil Peru Colombia Corporate
30 June 2015 966,685 3,831 530,858 125,902 3,172 251,386 51,536
31 December 2014 1,039,116 3,839 541,481 151,770 4,813 263,070 74,143
11
GEOPARK LIMITED
30 JUNE 2015
Note 3 (Continued)
Segment Information (Continued)
A reconciliation of total Operating netback to total profit before income tax is provided as follows:
Three-months Three-months Six-months Six-months
period ended 30 period ended 30 period ended 30 period ended 30
June 2015 June 2014 June 2015 June 2014
Operating netback 38,519 90,071 66,662 149,334
Geological and geophysical expenses (3,560) (3,895) (6,089) (5,916)
Administrative expenses (6,841) (9,775) (15,614) (18,638)
Adjusted EBITDA for reportable segments 28,118 76,401 44,959 124,780
Depreciation e (24,380) (27,570) (49,851) (45,678)
Share-based payment (1,915) (2,636) (3,116) (5,597)
Impairment and write-off of unsuccessful efforts – (4,550) – (8,637)
Others ‘? (1,361) 569 (8,433) 763
Operating profit (loss) 462 42,214 (16,441) 65,631
Financial costs (8,095) (6,221) (17,125) (12,520)
Foreign exchange loss (income) 3,728 2,674 (16,018) 1,391
(Loss) profit before tax (3,905) 38,667 (49,584) 54,502
(22 Net of capitalised costs for oil stock included in Inventories. Depreciation includes US$ 1,849,000 (US$ 1,091,000 in 2014)
generated by assets not related to production activities. For the three months period ended 30 June 2015 the amount
included in depreciation is US$ 933,000 (US$ 572,000 in 2014).
(6) In 2015 includes termination costs (see Note 14). Also includes internally capitalised costs.
Note 4
Production and operating costs
Three- Three-
months months Six-months Six-months
period ended period ended period ended period ended
Amounts in US$ ‘000 30 June 2015 30 June 2014 30 June 2015 30 June 2014
Well and facilities maintenance 6,184 5,777 11,142 10,243
Staff costs 4,705 2,792 10,310 5,372
Royalties 3,866 7,061 6,104 11,997
Consumables 1,810 4,803 4,301 9,220
Transportation costs 1,144 3,491 2,626 7,075
Equipment rental 677 2,194 1,717 4,074
Field camp 565 1,533 1,535 2,856
Gas plant costs 381 804 885 1,639
Non operated blocks costs 99 1,587 969 2,834
Share-based payment 151 976 152 1,494
Other costs 2,017 4,128 4,210 6,134
Crude oil stock variation 873 2,181 2,416 (5,525)
22,472 37,327 46,367 57,413
12
GEOPARK LIMITED
30 JUNE 2015
Note 5
Geological and geophysical expense
Three- Three-
months months Six-months Six-months
Amounts in US$ ‘000 . . – o
period ended period ended period ended period ended 30
30 June 2015 30 June 2014 30 June 2015 June 2014
Statf costs 2,715 2,651 4,734 4,851
Share-based payment 228 172 360 870
Other services 738 634 1,355 1,065
Allocation to capitalised project (50) (570) (157) (1,180)
3,631 2,887 6,292 5,606
Note 6
Administrative expense
Three-months Three-months Six-months Six-months
period ended 30 period ended period ended period ended
Amounts in US$ ‘000 June 2015 30 June 2014 30June 2015 30 June 2014
Staff costs 4,623 3,765 9,982 7,577
Share-based payment 1,536 1,488 2,604 3,233
Consultant fees 829 1,528 1,742 2,791
Office expenses 538 1,037 1,439 1,806
New projects 59 880 206 1,311
Travel expenses 367 463 529 967
Director fees and allowance 260 326 533 612
Other administrative expenses 165 1,776 1,183 3,575
8,377 11,263 18,218 21,872
13
GEOPARK LIMITED
30 JUNE 2015
Note 7
Selling expenses
Three-months Three-months Six-months Six-months
period ended 30 period ended 30 period ended 30 period ended
Amounts in US$ ‘000 June 2015 June 2014 June 2015 30 June 2014
Transportation 898 5,888 3,109 11,901
Selling taxes and other 215 111 311 416
1,113 5,999 3,420 12,317
Note 8
Financial costs
Three-months Three-months Six-months Six-months
period ended
30 period ended
30 period ended30 period ended 30
Amounts in US$ ‘000 June 2015 June 2014 June 2015 June 2014
Financial expenses
Bank charges and other financial costs 656 708 1,663 1,015
Unwinding of long-term liabilities 733 651 1,447 706
Interest and amortisation of debt issue costs 7,370 7,544 15,119 14,380
Less: amounts capitalised on qualifying assets (56) (835) (159) (1,217)
Financial income
Interest received (608) (1,846) (945) (2,364)
8,095 6,222 17,125 12,520
14
GEOPARK LIMITED
30 JUNE 2015
Note 9
Property, plant and equipment
Buildings Exploration
Furniture, Production and and
Oil 8 gas equipment facilities and improve- Construction evaluation
Amounts in US$’000 properties and vehicles machinery ments in progress assets TOTAL
Cost at 1 January 2014 493,260 5,731 98,837 7,018 40,429 147,759 793,034
Additions 1,592 1,460 – – 53,365 71,517 127,934
Acquisition of subsidiaries 115,345 270 – – – – 115,615
Currency translation differences 3,168 – – – – – 3,168
Disposals – (319) – – – – (319)
Write-off / Impairment loss – – – – – (8,637) (8,637)
Transfers 91,219 – 7,568 95 (48,798) (50,084) –
Cost At 30 June 2014 704,584 7,142 106,405 7,113 44,996 160,555 1,030,795
Cost at 1 January 2015 749,947 12,057 111,646 9,527 59,425 140,444 1,083,046
Additions (709) 476 – 28 15,376 5,632 20,803
Currency translation differences (12,580) (29) – 198 (1,170) (484) (14,065)
Transfers 17,701 374 7,320 571 (20,358) (5,608) –
Cost At 30 June 2015 754,359 12,878 118,966 10,324 53,273 139,984 1,089,784
Depreciation and write-down
at 1 January 2014 (157,390) (2,800) (35,677) (1,721) – – (197,588)
Depreciation (41,356) (702) (5,623) (389) – – (48,070)
Disposals – 251 – – – – 251
Depreciation and write-down
At 30 June 2014 (198,746) (3,251) (41,300) (2,110) – – (245,407)
Depreciation and write-down
at 1 January 2015 (240,439) (4,449) (45,147) (2,244) – – (292,279)
Depreciation (40,115) (1,398) (6,606) (451) – – (48,570)
Currency translation differences 1,805 (111) – (124) – – 1,570
Depreciation and write-down
at 30 June 2015 (278,749) (5,958) (51,753) (2,819) – – (339,279)
Carrying amount at 30 June
2014 505,838 3,891 65,105 5,003 44,996 160,555 785,388
Carrying amount at 30 June
2015 475,610 6,920 67,213 7,505 53,273 139,984 750,505
Mm Corresponds to write-off of Exploration and evaluation assets in Chile for US$ 6,865,000 and US$ 1,772,000 in Colombia.
(2) Corresponds to the effect of restimation of assets retirement obligations in Colombia.
15
GEOPARK LIMITED
30 JUNE 2015
Note 10
Share capital
Six-months
period ended 30 Year ended 31
Issued share capital June 2015 December 2014
Common stock (US$ “000) 58 58
The share capital is distributed as follows:
Common shares, of nominal US$ 0.001 57,549,888 57,790,533
Total common shares in issue 57,549,888 57,790,533
Authorised share capital
US$ per share 0.001 0.001
Number of common shares (US$ 0.001 each) 5,171,949,000 5,171,949,000
Amount in US$ 5,171,949 5,171,949
GeoPark’s share capital only consists of common shares. The authorized share capital consists of
5,171,949,000 common shares of par value US$ 0.001 per share. As of 30 June 2015 there are
57,549,888 common shares outstanding. All of the Company issued and outstanding common shares are
fully paid and nonassessable. The Company also has an employee incentive program, pursuant to which it
has granted share awards to ¡ts senior management and certain key employees (see Notes 25 and 29 to
the audited Consolidated Financial Statements as of 31 December 2014).
Note 11
Borrowings
The outstanding amounts are as follows:
Year ended
At 31 December
Amounts in US$ ‘000 30 June 2015 2014
Notes GeoPark Latin America 299,773 300,963
Agencia en Chile (a)
Banco Itaú (b) 70,570 68,540
Banco de Crédito e Inversiones (c) 36 90
370,379 369,593
Classified as follows:
Current 22,187 27,153
Non-Current 348,192 342,440
16
GEOPARK LIMITED
30 JUNE 2015
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 carry a coupon of 7.50% per annum (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 Cooperatie U.A. 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 debt
issuance cost for this transaction amounted to US$ 7,637,000. The indenture governing our Notes due
2020 includes incurrence test covenants that provides among other things, that, the Debt to EBITDA ratio
should not exceed 2.5 times for the Company to conduct certain corporate actions such as incurring new
debt and making certain restricted payments, such as paying dividends and others, (other than in each
Case, certain small specific exceptions). As of the date of these interim condensed consolidated financial
statements, the Company’s Debt to EBITDA ratio was 2.6 times, above the incurrence test primarily due to
the lower oil prices that impacted the Company’s EBITDA generation. As a result, the Company will not be
able to incur additional debt or make restricted payments (other than in each case for certain small specific
exceptions). As of the date of these interim condensed consolidated financial statements, the Company is
in compliance of all the indenture’s provisions.
(b) During March 2014, GeoPark executed a loan agreement with Itaú BBA International for
US$ 70,450,000 to finance the acquisition of a 10% working interest in the Manatí field in Brazil. The
interest rate applicable to this loan is LIBOR plus 3.9% per annum. The interest will be paid semi-annually;
principal will be cancelled semi-annually with a year grace period. The debt issuance cost for this
transaction amounted to US$ 3,295,000. This loan includes covenants restricting dividend payments and
new indebtedness. As of the date of these interim condensed consolidated financial statements, the
Company has complied with these covenants.
In March 2015, the Company reached an agreement to: (i) extend the principal payments that were due in
2015 (amounting to approximately US$ 15,000,000), which will be divided pro-rata during the remaining
principal installments, starting in March 2016 and (ii) to increase the variable interest rate to six-month
LIBOR + 4.0%.
(c) 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 (BCI), 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%.
As of the date of this interim condensed consolidated report, the Group has been granted with credit lines
for over US$ 57,000,000.
17
GEOPARK LIMITED
30 JUNE 2015
Note 12
Provision for other long-term liabilities
The outstanding amounts are as follows:
Year ended
At 31 December
Amounts in US$ ‘000 30 June 2015 2014
Assets retirement obligation and other
environmental liabilities 32,621 33,286
Deferred income 5,506 5,736
Other 7,724 7,888
45,851 46,910
Note 13
Trade and other payables
The outstanding amounts are as follows:
Year ended
At 31 December
Amounts in US$ ‘000 30 June 2015 2014
Trade payables 33,058 64,457
Payables to related parties (” 20,315 16,591
Taxes and other debts to be paid 13,046 10,031
Staff costs to be paid 6,128 7,226
V.A.T. 5,261 3,449
To be paid to co-venturers 6,059 1,335
Royalties to be paid 1,145 2,398
85,012 105,487
Classified as follows:
Current 65,456 88,904
Non-Current 19,556 16,583
Mm Corresponds to related parties loans granted by LGl. The maturity of these loans is July 2020 and the
applicable interest rate is 8% per annum.
18
GEOPARK LIMITED
30 JUNE 2015
Note 14
Oil industry situation and the impact on GeoPark’s operations
As a consequence of oil price crisis which started in the second half of 2014 (WTI and Brent, the main
international oil price markers, fell more than 40% between September 2014 and February 2015), the
Company has undertaken a decisive cost cutting program to ensure its ability to both maximize the work
program and preserve its liquidity. The main decisions within the mentioned program for 2015 include:
– Reduction of its capital investment taking advantage of the discretionary work programme.
– – Deferment of capital projects by regulatory authority and partner agreement.
– Renegotiation and reduction of oil and gas service contracts, including drilling and civil work
contractors, as well as transportation trucking and pipeline costs.
– – Operating cost improved efficiencies and temporary suspension of certain marginal producing oil
and gas fields.Further cost reductions are expected to result from a general depreciation of Latin
American currencies (Colombian peso, Brazilian real, Chilean peso, Argentine peso and Peruvian
sol), in connection with operating and structure costs established in local currencies and also
related to a voluntary salary reduction by GeoPark’s senior management team and Board of
Directors.
During February 2015, the Company reduced its workforce significantly. This reduction streamlined certain
internal functions and departments for creating a more efficient workforce in the current economic
environment. As a result, the Company expects cost savings associated with the reduction of full-time and
temporary employees, excluding one-time termination costs.
In addition, actions taken by the Company to maximize ongoing work projects and to reduce expenses,
including renegotiations and reduction of oil and gas service contracts and other initiatives included in the
cost cutting program adopted may expose the Company to claims and contingencies from interested
parties that may have a negative impact on its business, financial condition, results of operations and cash
flows. As of the date of this interim condensed consolidated report, according to internal estimates, the
Company has recognized approximately US$ 3,300,000 for future contingent payments in connection with
claims of third parties. The mentioned costs are allocated under the other (expenses) income line, included
in the Consolidated Statement of Income.
19
GEOPARK LIMITED
30 JUNE 2015
Note 15
Subsequent events
Potential acquisition of an interest in the CN-V Block in the Neuquen basin in Argentina
On 22 July 2015, the Company signed a farm-in agreement with Wintershall for the CN-V Block in
Argentina. Subject to regulatory approval, GeoPark will operate during the exploratory phase and receive a
50% working interest (WI) in the CN-V Block in exchange for its commitment to drill two exploratory wells,
for a total financial commitment of up to US$ 10.0 million which includes a recognition of US$ 5.0 million of
sunk costs .The first well is targeted for the second half of 2016 and costs in excess of GeoPark’s financial
commitment will be shared in a pro-rata basis. The CN-V Block covers an area of approximately 234,000
acres (947 sq km) with 3D seismic coverage of approximately 180 sq km, adjacent to Loma Alta Sur Field.
20
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