GeoPark(GPRK) - 2024 Q4 - Annual Report

Oil Price Dependency - For the year ended December 31, 2024, 99% of the company's revenues were derived from oil, indicating a strong reliance on oil prices for financial performance[117]. - A substantial or extended decline in oil and natural gas prices could adversely affect the company's business, financial condition, and results of operations[119]. - The company expects a slightly more balanced supply-demand dynamic in 2025, with potential supply growth from non-OPEC producers possibly leading to a softer price environment compared to 2024[118]. - The market for oil and natural gas has historically been volatile, with Brent spot prices ranging from $19.3 to$128.0 per barrel over the last five years[115]. - Brent crude prices averaged $79.8 per barrel in 2024, with fluctuations driven by geopolitical factors and OPEC+ production cuts of approximately 2.2 million barrels per day[116]. Production and Reserves - As of December 31, 2024, the reserves-to-production ratio for net proved reserves in Colombia, Ecuador, and Brazil was 5.0 years[128]. - If drilling and development activities ceased on January 1, 2025, the proved developed producing reserves base would decline by 14$191.3 million and $199.0 million during the years ended December 31, 2024 and 2023, respectively[143]. - 88$654.7 million as of March 31, 2025, with 84% corresponding to Notes due 2030[232]. Operational Challenges - The company operates in regions with significant political and economic risks, which could impact operations and financial performance[111]. - The company has faced disruptions in 2024 due to strikes by local communities, which could significantly hinder market access and impact financial results[163]. - The company is subject to various operational risks, including delays in project development and compliance with governmental regulations, which could adversely affect financial condition[154]. - The company competes with major oil and gas firms that have greater financial and technical resources, impacting its ability to acquire properties and attract capital[156]. - The company is not the sole owner or operator of all licensed areas, limiting control over exploration and production efforts[189]. Regulatory and Compliance Issues - The company is subject to extensive regulations in Colombia, Ecuador, Brazil, and Argentina, which could impact operational costs and compliance requirements[275]. - Legislative initiatives regarding hydraulic fracturing in Colombia could increase future costs and impede operational plans[229]. - Compliance with anti-corruption regulations is critical, as breaches could result in substantial fines and reputational damage, impacting business operations[286]. - The Colombian government enacted a tax reform in 2022 that materially impacted oil-producing companies, and new tax measures were issued in February 2025, potentially increasing financial liabilities[267]. - The Colombian government has announced it will not grant any new oil and gas exploration licenses, which may limit future expansion opportunities in the country[289]. Environmental and Social Factors - The company expects to reduce operational Scope 1 and 2 GHG emissions intensity by 35-40% by year-end 2025 and by 40-60% by year-end 2030 against a 2020 baseline[224]. - The company is subject to numerous environmental, social, health, and safety laws, which may result in material liabilities and costs[214]. - The company has mechanisms in place to ensure compliance with environmental regulations, including a dedicated environmental team and external audits[218]. - Climate-related risks, including extreme weather events and regulatory changes, could increase operational costs and affect the company's ability to operate effectively[248]. - The company is engaged in prior consultation processes with indigenous communities, which may lead to delays in project timelines and additional compliance costs[252]. Shareholder Returns and Financial Flexibility - The company distributed a total of US$298.7 million to shareholders from 2018 to 2024, including US$200.1 million through share repurchases and US$98.6 million in cash dividends[297]. - The ability of the company to pay dividends is subject to Bermuda legal constraints, which require that the company must not be unable to pay its liabilities as they become due[298]. - The company's principal source of revenue and cash flow is distributions from its subsidiaries, which may be limited by law and contract[301]. - The market price of the company's common shares may be volatile and influenced by various factors, including operating performance and fluctuations in oil or gas prices[295]. - The company may issue additional common shares or convertible securities in the future to finance potential acquisitions[303]. Economic and Market Conditions - The Economic Commission for Latin America and the Caribbean forecasts a regional growth of 2.4% in 2025, indicating ongoing low growth and economic challenges in the region[263]. - Oil and gas operations are subject to political and economic uncertainties, including changes in energy policies and potential civil unrest in the countries of operation[264]. - Argentina has experienced high inflation and significant currency devaluation, leading to multiple exchange rates, which could create financial inefficiencies and increase costs[292]. - Restrictions on foreign exchange and transfer of funds abroad in Argentina could adversely affect the company's liquidity and financial flexibility[291]. - New U.S. trade tariffs may adversely affect the company's cost structure and supply chain, contributing to increased uncertainty in global trade dynamics[261].