\nGeoPark Limited (\u201cGeoPark\u201d or the \u201cCompany\u201d) (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.\n<\/p>\n
\nA 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.\n<\/p>\n
2023 Work Program Summary ($80-90\/bbl Brent)<\/b><\/p>\n
Production:<\/b> 39,500-41,500 boepd average production (assuming no production from the 2023 exploration drilling program)\n<\/p>\n
Drilling plan:<\/b> 50-55 gross wells, including 10-15 gross exploration and appraisal wells\n<\/p>\n
Capital expenditures program:<\/b> $200-220 million, to be allocated as follows:\n<\/p>\n 2023 Shareholder Returns<\/b><\/p>\n \nGeoPark\u2019s 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.\n<\/p>\n \nSince 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\u2019s operational and financial performance and outlook allows the Company to further strengthen its shareholder returns in 2023.\n<\/p>\n \nIn 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.\n<\/p>\n \nFree cash flow is used here as Adjusted EBITDA less capital expenditures, mandatory interest payments and cash taxes. Cash taxes include GeoPark\u2019s 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.\n<\/p>\n \nThe 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.\n<\/p>\n Free Cash Flow & Shareholder Return Sensitivities to Different Brent Oil Prices<\/b><\/p>\n \nThe table below provides illustrative cash flows and shareholder return sensitivities to different Brent oil prices using the 2023 base work program targeting production of 39,500-41,500 boepd and capital expenditures of $200-220 million:\n<\/p>\n \n\u00a0\n<\/p>\n (in $ million)<\/b>1\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n $70-80 per bbl<\/b><\/p>\n<\/td>\n \n(Base Case) \n\u00a0\n<\/p>\n $90-100 per bbl<\/b><\/p>\n<\/td>\n<\/tr>\n \nAdjusted EBITDA\n<\/p>\n<\/td>\n \n$430-510\n<\/p>\n<\/td>\n \n$510-580\n<\/p>\n<\/td>\n \n$580-650\n<\/p>\n<\/td>\n<\/tr>\n \nCapital Expenditures\n<\/p>\n<\/td>\n \n$200-220\n<\/p>\n<\/td>\n \n$200-220\n<\/p>\n<\/td>\n \n$200-220\n<\/p>\n<\/td>\n<\/tr>\n \nMandatory Debt Service Payments3<\/sup><\/p>\n<\/td>\n \n$27-30\n<\/p>\n<\/td>\n \n$27-30\n<\/p>\n<\/td>\n \n$27-30\n<\/p>\n<\/td>\n<\/tr>\n \nCash taxes (*)\n<\/p>\n<\/td>\n \n$120-150\n<\/p>\n<\/td>\n \n$150-210\n<\/p>\n<\/td>\n \n$210-240\n<\/p>\n<\/td>\n<\/tr>\n \nFree Cash Flow\n<\/p>\n<\/td>\n \n$80-120\n<\/p>\n<\/td>\n \n$120-140\n<\/p>\n<\/td>\n \n$140-170\n<\/p>\n<\/td>\n<\/tr>\n \nFree Cash Flow Yield4<\/sup> (in %)\n<\/p>\n<\/td>\n \n10-16%\n<\/p>\n<\/td>\n \n14-18%\n<\/p>\n<\/td>\n \n18-22%\n<\/p>\n<\/td>\n<\/tr>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n Shareholder Returns<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \nDividends & Buybacks\n<\/p>\n<\/td>\n \n$40-60\n<\/p>\n<\/td>\n \n$60-70\n<\/p>\n<\/td>\n \n$70-85\n<\/p>\n<\/td>\n<\/tr>\n \nCapital Return Yield3<\/sup> (in %)\n<\/p>\n<\/td>\n \n5-8%\n<\/p>\n<\/td>\n \n8-9%\n<\/p>\n<\/td>\n \n9-11%\n<\/p>\n<\/td>\n<\/tr>\n \n(*) Cash taxes include GeoPark\u2019s 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.Please refer to the section below on the tax reform in Colombia.\n<\/p>\n<\/td>\n<\/tr>\n Tax Reform in Colombia<\/b><\/span><\/p>\n \nIn November 2022, the Colombian Congress approved a tax reform that contemplates an increase in the government take for the oil and gas industry. The main impacts for the oil and gas industry include provisions that prevent the deduction of royalties paid to the government from the income tax calculation and the establishment of a surcharge linked to Brent oil price. The new tax provisions will go into effect in 2023 and do not affect current tax bases or tax rate for fiscal year 2022. Please refer to Note 18 of GeoPark\u2019s consolidated financial statements for the period ended September 30, 2022 for further details.\n<\/p>\n \nGeoPark\u2019s 2023 work program, cash flows and shareholder returns are based on estimates, as of the date of this press release, regarding the impact that this tax reform could have on GeoPark\u2019s business, and are therefore subject to change based on many factors, including government decrees affecting the details and effective applicability of the tax reform.\n<\/p>\n Production breakdown<\/b><\/p>\n \nThe 2023 production guidance of 39,500-41,500 boepd (assuming no production from the 2023 exploration drilling program) includes 35,000-36,500 boepd in Colombia, 1,700-2,000 boepd in Chile, 1,300-1,500 boepd in Ecuador and 1,300-1,500 boepd in Brazil. The production mix is expected to be ~93% oil and ~7% natural gas.\n<\/p>\n Capital Expenditures and Activity Breakdown<\/b><\/p>\n \nThe activity breakdown in Colombia includes:\n<\/p>\n \n– Llanos 34 block: <\/b>35-40 gross development, appraisal and injector wells plus infrastructure and facilities to continue optimizing operations\n<\/p>\n \n– CPO-5 block: <\/b>the operator, ONGC, plans to drill 4-6 gross wells (1-2 development and 3-4 exploration wells), acquire 3D seismic and other infrastructure and facilities\n<\/p>\n \n– Llanos 87 block (GeoPark operated, 50% WI):<\/b> 1-2 gross exploration wells\n<\/p>\n \n– Llanos 123 block (GeoPark operated, 50% WI):<\/b> 1-2 gross exploration wells\n<\/p>\n \n– Llanos 124 block (GeoPark operated, 50% WI):<\/b> 2-3 gross exploration wells\n<\/p>\n \n– Platanillo block (GeoPark operated, 100% WI):<\/b> 1-2 gross development wells\n<\/p>\n \n– Seismic acquisition and reprocessing and other preoperational activities in the Llanos and Putumayo basins\n<\/p>\n \nCertain activities included in the 2023 work program are subject to obtaining required environmental, social or other regulatory approvals. In the blocks where GeoPark is not the operator, activities are subject to timely execution by the operator.\n<\/p>\n Work Program Flexible at Different Oil Price Scenarios<\/b><\/p>\n \nGeoPark\u2019s 2023 work program can be rapidly adapted to different oil price scenarios, illustrating the high quality of the Company\u2019s assets and strong financial performance even in volatile oil price environments.\n<\/p>\n \nGeoPark has oil hedges in place providing price risk protection over the next 12 months. Please refer to Note 4 of GeoPark\u2019s consolidated financial statements for the period ended September 30, 2022 for further details on volumes, type of contracts and average prices.\n<\/p>\n \nGeoPark monitors market conditions on a continuous basis and may enter into additional commodity risk management contracts to secure minimum oil prices for its 2023 production and beyond.\n<\/p>\n CONFERENCE CALL INFORMATION<\/b><\/p>\n Reporting Date, Conference Call & Webcast for 3Q2022 financial results, and 2023 Work Program and Shareholder Return Framework<\/b><\/p>\n \nIn conjunction with the 3Q2022 results press release, GeoPark management will host a conference call on November 10, 2022, at 10:00 am (Eastern Daylight Time) to discuss the 3Q2022 financial results, and the Work Program and Shareholder Return Framework for 2023.\n<\/p>\n \nTo listen to the call, participants can access the webcast located in the Invest with Us section of the Company\u2019s website at www.geo-park.com<\/a>, or by clicking below:\n<\/p>\n\n
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