GeoPark Announces 2023 Work Program and Shareholder Return Framework - GeoPark
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GEOPARK ANNOUNCES 2023 WORK PROGRAM AND SHAREHOLDER RETURN FRAMEWORK

FREE CASH FLOW FUNDS ANOTHER AMBITIOUS INVESTMENT PROGRAM FOCUSED ON LOW-RISK HIGH-POTENTIAL EXPLORATION AND INCREASED SHAREHOLDER RETURNS

 

Bogota, Colombia – GeoPark Limited (“GeoPark” or the “Company”) (NYSE: GPRK), a leading independent Latin American oil and gas explorer, operator, and consolidator, today announced its work program and shareholder return framework for 2023. All figures are expressed in US Dollars.

A conference call to discuss third quarter 2022 financial results and the 2023 work program and shareholder return framework will be held on November 10, 2022, at 10:00 a.m. Eastern Daylight Time.

 

2023 Work Program Summary ($80-90/bbl Brent)

Production: 39,500-41,500 boepd average production (assuming no production from the 2023 exploration drilling program)

Drilling plan: 50-55 gross wells, including 10-15 gross exploration and appraisal wells

Capital expenditures program: $200-220 million, to be allocated as follows:

  • $130-140 million (or ~65%) to low-risk development growth focused on core Llanos 34 (GeoPark operated, 45% WI) and CPO-5 (GeoPark non-operated, 30% WI) blocks
  • $70-80 million (or ~35%) to exploration of high-potential, short-cycle and near-field projects in the Llanos basin, next to core Llanos 34 and CPO-5 blocks
  • Assuming $80-90 per bbl Brent base case, GeoPark expects to generate an Adjusted EBITDA1 of $510- 580 million2 in 2023, over 2 times total capital expenditures, or over 5 times growth development capital

2023 Shareholder Returns

GeoPark’s high-quality asset base and low-breakeven production have allowed the Company to fully fund its work programs since 2015, while maintaining a strong balance sheet and increasing shareholder returns over time.

Since January 2022 to date, the Company reduced gross debt by $170 million and paid $50 million in direct shareholder distributions (through dividends and buybacks). Continued improvement in GeoPark’s operational and financial performance and outlook allows the Company to further strengthen its shareholder returns in 2023.

In 2023, GeoPark will target the return of approximately 40-50% of its free cash flow to shareholders. This distribution will be paid to shareholders through a combination of base dividends and discretionary buybacks and/or variable dividends.

Free cash flow is used here as Adjusted EBITDA less capital expenditures, mandatory interest payments and cash taxes. Cash taxes include GeoPark’s preliminary estimates of the full impact of the new tax reform in Colombia, irrespective of the timing of its cash impact, expected in 2023 or early 2024.

The Company’s future shareholder returns, including but not limited to dividends and buybacks, and the level thereof is uncertain. Any decision to pay dividends or buyback shares will be subject to the discretion of the Board of Directors and may depend on a variety of factors, including, without limitation the Company’s business performance, financial condition, financial requirements, growth plans, expected capital requirements and other conditions existing at such future time.

 

Read the full press release.

 

1 The Company is unable to present a quantitative reconciliation of the 2023 Adjusted EBITDA which is a forward-looking non-GAAP measure, because the Company cannot reliably predict certain of the necessary components, such as write-off of unsuccessful exploration efforts or impairment loss on non-financial assets, etc. Since free cash flow is calculated based on Adjusted EBITDA, for similar reasons, the Company does not provide a quantitative reconciliation of the 2023 free cash flow forecast.

2 Assuming a $3-4 Vasconia/Brent differential.