GeoPark Limited — Form 20-F summary
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone Q4 filing; the supplied filing text does not provide separate fourth-quarter financial results. Financial statements are audited and prepared under IFRS as issued by the IASB, in U.S. dollars.
Business context
GeoPark is an independent Latin American oil and gas exploration and production company. It operated in Colombia, Ecuador, Brazil and Chile during 2023; the sale of its Chilean business closed on January 18, 2024. Colombia generated 92.8% of 2023 revenue. Oil represented approximately 97% of revenue.
Key financial and operating metrics
| Metric | 2023 | 2022 | Change |
|---|---|---|---|
| Revenue | US$756.6 million | US$1,049.6 million | Down 28% |
| Operating profit | US$270.9 million | US$429.1 million | Down 37% |
| Profit for the year | US$111.1 million | US$224.4 million | Down 51% |
| Basic earnings per share | US$1.95 | US$3.78 | Down |
| Adjusted EBITDA (non-IFRS) | US$451.9 million | US$540.8 million | Down 16% |
| Cash from operating activities | US$300.9 million | US$467.5 million | Down 36% |
| Capital expenditures | US$199.0 million | US$168.8 million | Up |
| Average net production | 36.6 mboepd | 38.6 mboepd | Down 5% |
| Net proved reserves at year-end | 66.2 mmboe | 70.4 mmboe | Down 6% |
Revenue fell mainly because realized oil prices and sold volumes declined. Average realized oil price decreased to about US$67 per barrel from US$82.2; total net production declined 5%. Operating margin was approximately 35.8% and net margin approximately 14.7%, calculated from reported IFRS figures. Adjusted EBITDA margin was approximately 59.7%; Adjusted EBITDA is a non-IFRS measure and should not be treated as cash flow or a substitute for IFRS profit.
Production and operating costs decreased 35% to US$232.3 million, chiefly because cash royalties and economic rights were lower; operating costs per boe increased to US$12.5 from US$8.0, including sharply higher energy costs in Colombia. Depreciation rose 25% to US$120.9 million. The effective tax rate was 48%, versus 43% in 2022.
Year-end cash and cash equivalents were US$133.0 million. Current assets were US$269.7 million and current liabilities US$230.5 million, giving working capital of US$39.2 million and a current ratio of approximately 1.17. Outstanding borrowings were US$501.0 million, primarily 5.50% notes due January 2027; reported net debt was US$367.9 million. GeoPark reported compliance with the notes’ covenants. It also had an undrawn US$80 million credit facility and US$179.6 million in uncommitted credit lines.
Cash used in investing activities was US$198.6 million and cash used in financing activities was US$98.7 million. Financing uses included US$31.2 million of share repurchases and US$29.7 million of cash distributions. Four 2023 distributions ranged from US$0.130 to US$0.134 per share.
Material changes and unusual items
- Revenue, operating profit, net profit and operating cash flow all declined materially year over year, while capital expenditures increased.
- Colombia production was affected by the temporary January–September shut-in of Indico 6 and Indico 7 wells pending surface facilities; Colombian exit production reached 34,154 boepd in Q4.
- GeoPark recorded US$29.6 million of unsuccessful exploration write-offs and a US$13.3 million impairment related to the Fell Block and Chile divestiture. Other expenses included Chile divestiture-related costs and a US$7.0 million payment associated with transferring the Los Parlamentos interest in Argentina.
- GeoPark agreed to sell its Chilean subsidiaries for US$4.0 million, subject to adjustments. The transaction closed after year-end; GeoPark retained specified rights to future unconventional activity in the Fell Block and remained responsible for approximately US$5.9 million of Campanario and Isla Norte investment commitments.
- A Putumayo community claim in the UK was settled in August 2023 without admission of liability; the court approved the settlement and discontinued the litigation in October, and the related letter of credit was cancelled.
- The company repurchased approximately 3.1 million shares in 2023. Year-end shares outstanding were 55.3 million.
Outlook, commentary and risks
- Management’s preliminary 2024 base capital program was US$150–200 million, based on a reference oil-price assumption of US$80–90 per barrel, funded from operating cash flow and cash on hand. The downside program was US$100–150 million below US$70 oil; the upside program was US$200–250 million above US$90 oil. These are scenario plans, not guaranteed guidance.
- 2024 hedges covered portions of production using Brent collars, with floor prices generally around US$65.59–70.00 per barrel and ceilings around US$92.04–99.32, depending on the quarter. Hedging limits upside if prices exceed ceilings and can create collateral-related liquidity needs; the filing reported no cash collateral posted as of its date.
- Major business risks include oil-price volatility, reserve replacement and decline, concentration of Colombian revenue among three customers, currency movements, financing and capital requirements, regulatory and concession risks, environmental and climate obligations, community disruption and blockades, security conditions in Colombia, and transportation constraints.
- Colombia’s Llanos 34 Block is a significant concentration: it represented 66.8% of company production and 71.1% of Colombian proved reserves. The filing also reports a 5.3-year reserve-to-production ratio for net proved reserves in Colombia, Ecuador and Brazil.
- There was one fatal contractor vehicle incident in 2023. GeoPark also reported zero recordable hydrocarbon spills of at least one barrel that were not contained.
- Management and the auditor identified a material weakness in IT general controls, specifically timely removal of user access after employee termination. No financial-statement misstatements were identified, and the financial statement audit opinion was unqualified; the auditor issued an adverse opinion on internal control effectiveness. Management expected remediation before the end of 2024, subject to testing.
Most important facts for investors to verify
- How much 2024 production, realized pricing, cash flow and capital spending differ from the stated scenario assumptions, and the realized effect of hedges.
- Whether the Chile divestiture’s final proceeds and working-capital adjustment were received as expected, and how retained rights and outstanding commitments affect cash flows.
- Progress in remediating the ITGC material weakness and whether controls are subsequently tested and found effective.
- Reserve revisions, drilling results and production trends, particularly in Colombia and the Llanos 34 and CPO-5 blocks.
- Customer concentration, payment and renewal terms, and the continuity of oil transport routes and community access.
- Debt covenant capacity, liquidity and restrictions on dividends or additional borrowing; board decisions on future distributions are discretionary.
- Share-count disclosures: the filing reports 55,327,520 shares outstanding at December 31, 2023, and 55,470,850 at March 19, 2024; verify subsequent issuance and repurchases.