Business Context and Reporting Period
Company: GeoPark Limited (NYSE: GPRK)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Date: December 1, 2025
Subject: Announcement of the 2026 Work Program and Medium-Term Guidelines (2027-2028).
Overview: GeoPark, an independent energy company operating in Latin America, outlined a two-fold strategy: protecting core production in Colombia and accelerating growth in Argentina's Vaca Muerta basin. The filing details a strategic reset following a 2025 Investor Day, highlighting a 22% increase in Original Oil in Place (OOIP) in the Llanos 34 block and a 38% year-over-year increase in certified 2P reserves.
Key Financial Metrics and Guidance
The following metrics represent management's guidance for the periods 2025E through 2028, based on Brent crude price scenarios of $65-70/bbl (2026), $60-70/bbl (2027), and $70/bbl (2028).
| Metric | 2025E | 2026 | 2027 | 2028 |
|---|---|---|---|---|
| Production (boepd) | 26,000 - 28,000 | 27,000 - 30,000 | 32,000 - 34,000 | 44,000 - 46,000 |
| Capital Expenditures ($mm) | 90 - 120 | 190 - 220 | 280 - 310 | 350 - 380 |
| Adjusted EBITDA ($mm) | 260 - 290 | 220 - 300 | 310 - 340 | 490 - 520 |
| Net Debt to EBITDA (x) | 1.5 - 2.1 | 1.9 - 2.1 | 1.8 - 2.0 | 1.2 - 1.4 |
| Lifting Cost ($/bbl) | 12 - 14 | 13 - 15 | 13 - 15 | 11 - 13 |
Liquidity and Cash Flow:
- 2026 Cash Position: Expected year-end cash of $130-$140 million.
- Funding: Program primarily funded by internal cash generation and available debt facilities.
- Dividends: Revised program approved for $6 million total over four quarters ($1.5 million/quarter or $0.03/share), covering 3Q2025 through 2Q2026.
- Hedging: As of November 26, 2025, approximately 56% of 2026 estimated production is hedged.
Material Changes vs. Prior Period
- Reserve Growth: Certified 2P reserves increased by 38% year-over-year, raising the reserve life index to 12.7 years.
- OOIP Increase: Independent audit validated a 22% increase (206 million barrels) in 2P Original Oil in Place for the Llanos 34 block.
- Production Inflection: Colombia production reached a positive inflection point in 4Q2025, one year earlier than previously projected.
- Argentina Ramp-Up: Production growth in Vaca Muerta, originally expected in 2027, is now anticipated to begin in 2026 with an exit rate of 5,000–6,000 bopd.
- CAPEX Increase: Capital expenditures are projected to rise significantly from $90-120 million in 2025E to $190-220 million in 2026 to support the growth strategy.
Outlook, Risks, and Management Commentary
Management Commentary: CEO Felipe Bayon emphasized a disciplined, returns-focused plan to balance near-term cash generation with investments required to transform the business scale. The strategy aims to double Adjusted EBITDA by 2028 and achieve a Return on Average Capital Employed (ROACE) of 25-30%.
Operational Outlook:
- 2026 Drilling: Plan to drill 27-36 gross wells (86% development, 14% exploration).
- Cost Efficiency: Lifting costs targeted below $15/bbl in 2026, trending to ~$12/bbl by 2028. G&A expenses expected to remain around $4/bbl in 2026.
- Debt Reduction: Leverage projected to decline below 1.5x by 2028 as cash flow increases.
Risks and Contingencies:
- Forward-Looking Statements: Actual results may differ materially due to commodity price volatility, operational risks, and regulatory changes.
- Joint Venture Alignment: Final activity levels remain subject to discussions with joint venture partners.
- Non-GAAP Measures: The Company does not provide a quantitative reconciliation for target Adjusted EBITDA or Net Debt to EBITDA due to the inability to reliably predict certain non-cash items (e.g., impairments, write-offs).
Key Facts for Investor Verification
- Reserve Certification: Verify the independent technical audit by DeGolyer and MacNaughton confirming the 22% OOIP increase in Llanos 34.
- Argentina Execution: Monitor the actual drilling and production ramp-up in Vaca Muerta to confirm the accelerated 2026 timeline.
- CAPEX Discipline: Track actual capital expenditures against the $190-220 million 2026 guidance to ensure alignment with cash flow generation.
- Hedging Strategy: Confirm the maintenance of 50-70% hedging coverage for 2026 production to protect against price volatility.
- Dividend Sustainability: Assess the impact of the $6 million dividend program on free cash flow given the increased investment phase.