GeoPark(GPRK) - 2025 Q1 - Quarterly Report

Interim Condensed Consolidated Financial Statements and Explanatory Notes for the three-month periods ended March 31, 2025 and 2024 Condensed Consolidated Statement of Income For the first quarter of 2025, GeoPark reported a significant decrease in revenue and profit compared to the same period in 2024. Revenue fell by 18% to $137.3 million, and net profit dropped by 57% to $13.1 million. The decline was primarily driven by lower sales, a write-off of unsuccessful exploration efforts, and higher financial expenses related to debt refinancing Q1 2025 vs Q1 2024 Income Statement Highlights (in US$ '000) | Metric | Q1 2025 (Unaudited) | Q1 2024 (Unaudited) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 137,349 | 167,416 | -18.0% | | Production and operating costs | (35,437) | (38,540) | -8.1% | | Write-off of unsuccessful exploration efforts | (5,883) | — | N/A | | Operating Profit | 50,416 | 83,955 | -39.9% | | Financial expenses | (24,836) | (11,137) | +123.0% | | Profit Before Income Tax | 25,516 | 75,065 | -66.0% | | Profit for the Period | 13,069 | 30,192 | -56.7% | | Basic EPS (US$) | 0.25 | 0.55 | -54.5% | | Diluted EPS (US$) | 0.25 | 0.54 | -53.7% | Condensed Consolidated Statement of Comprehensive Income Total comprehensive profit for Q1 2025 was $13.4 million, a 52% decrease from $27.8 million in Q1 2024. The decrease is mainly attributed to the lower net profit for the period. Other comprehensive income turned positive at $0.3 million, compared to a loss of $2.4 million in the prior year, primarily due to gains on cash flow hedges Q1 2025 vs Q1 2024 Comprehensive Income (in US$ '000) | Metric | Q1 2025 (Unaudited) | Q1 2024 (Unaudited) | | :--- | :--- | :--- | | Profit for the period | 13,069 | 30,192 | | Gain (Loss) on cash flow hedges | 802 | (3,943) | | Other comprehensive profit (loss) for the period | 323 | (2,358) | | Total comprehensive profit for the period | 13,392 | 27,834 | Condensed Consolidated Statement of Financial Position As of March 31, 2025, GeoPark's total assets remained stable at approximately $1.2 billion compared to year-end 2024. Key changes include an increase in cash and cash equivalents to $308.0 million and a significant shift in liabilities, with non-current borrowings increasing to $638.4 million and current liabilities decreasing substantially, mainly due to the repayment of a large customer advance Financial Position Highlights (in US$ '000) | Metric | At March 31, 2025 (Unaudited) | At Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | 1,197,956 | 1,200,055 | | Cash and cash equivalents | 307,993 | 276,750 | | Property, plant and equipment | 709,360 | 740,491 | | Total Liabilities | 987,265 | 996,764 | | Borrowings (Non-current) | 638,432 | 492,007 | | Trade and other payables (Current) | 110,948 | 279,949 | | Total Equity | 210,691 | 203,291 | Condensed Consolidated Statement of Changes in Equity Total equity increased from $203.3 million at the start of the year to $210.7 million as of March 31, 2025. The increase was driven by a comprehensive profit of $13.4 million, partially offset by cash distributions (dividends) of $7.5 million and other transactions with owners - Equity at March 31, 2025, stood at $210.7 million, up from $203.3 million at January 1, 2025[21] - The increase in equity was primarily due to the profit for the period of $13.1 million[21] - The company made cash distributions of $7.5 million during the quarter[21] Condensed Consolidated Statement of Cash Flow The company experienced a net cash outflow from operating activities of $78.8 million in Q1 2025, a sharp reversal from an inflow of $87.6 million in Q1 2024, largely due to a significant negative change in working capital, including a $132.8 million repayment of an advance from Vitol. Financing activities provided a net cash inflow of $116.1 million from issuing new debt. Overall, cash and cash equivalents increased by $30.6 million to $308.0 million Q1 2025 vs Q1 2024 Cash Flow Summary (in US$ '000) | Metric | Q1 2025 (Unaudited) | Q1 2024 (Unaudited) | | :--- | :--- | :--- | | Cash flows (used in) from operating activities | (78,763) | 87,621 | | Cash flows used in investing activities | (6,675) | (46,649) | | Cash flows from (used in) financing activities | 116,064 | (23,127) | | Net increase in cash and cash equivalents | 30,626 | 17,845 | | Cash and cash equivalents at end of period | 307,993 | 150,721 | - The negative operating cash flow was heavily impacted by a $161.6 million negative change in working capital, which includes a partial repayment of $132.8 million of an advance payment from Vitol[24][25] - Financing activities were driven by proceeds from new borrowings of $550 million, used to repay $405.3 million of principal on other debt[24] Explanatory Notes to the Interim Condensed Consolidated Financial Statements The explanatory notes provide detailed information on accounting policies, segment performance, financial instruments, and key business activities. Highlights include a breakdown of revenue and costs by geography, details on debt refinancing, recent divestments of non-core assets in Colombia and Brazil, and significant subsequent events such as oil price volatility and the appointment of a new CEO Note 1: General Information, Basis of Preparation, and Financial Risk GeoPark Limited is a Bermuda-incorporated company focused on oil and gas exploration and production in Latin America. The financial statements are prepared under IAS 34. The company actively manages financial risks, including price and currency risk, and maintains a strong liquidity position with $308 million in cash and access to significant credit facilities - The Group's principal activity is the exploration, development, and production of oil and gas reserves in Latin America[27] - As of March 31, 2025, the Group maintained a cash position of $308.0 million and had access to committed and uncommitted credit lines totaling over $481 million, plus approval for a $500 million debt program in Argentina[36] Note 2: Segment Information In Q1 2025, Colombia was the primary contributor to the company's performance, generating $129.9 million in revenue and $88.4 million in Adjusted EBITDA. Overall Adjusted EBITDA decreased to $87.9 million from $111.5 million in Q1 2024, mainly due to lower revenue. Total assets were predominantly located in Colombia ($915.9 million) and Argentina ($216.1 million) Adjusted EBITDA by Segment (Q1 2025 vs Q1 2024, in US$ '000) | Segment | Q1 2025 Adj. EBITDA | Q1 2024 Adj. EBITDA | | :--- | :--- | :--- | | Colombia | 88,389 | 113,405 | | Ecuador | 3,393 | (279) | | Brazil | (1,487) | 796 | | Argentina | (1,241) | (696) (part of Other) | | Total | 87,944 | 111,543 | - A reconciliation shows that after accounting for depreciation, write-offs, and other items, the Adjusted EBITDA of $87.9 million reconciles to a Profit Before Income Tax of $25.5 million for Q1 2025[45] Note 4: Commodity Risk Management Contracts GeoPark uses derivative financial instruments, specifically zero-premium collars, to manage oil price risk. For Q1 2025, the company had 19,500 bbl/d hedged with a floor price of $69.79/bbl and a ceiling of $82.48/bbl. Hedging volumes are scheduled to decrease quarterly through the remainder of 2025 Production Hedging Schedule (as of March 31, 2025) | Period | Volume (bbl/d) | Average Price (US$/bbl) | | :--- | :--- | :--- | | Q1 2025 | 19,500 | 69.79 Put / 82.48 Call | | Q2 2025 | 19,000 | 69.26 Put / 79.02 Call | | Q3 2025 | 17,500 | 68.69 Put / 78.59 Call | | Q4 2025 | 16,000 | 68.25 Put / 77.50 Call | | Q1 2026 | 1,000 | 68.00 Put / 77.40 Call | Note 9: Financial Results Financial expenses more than doubled to $24.8 million in Q1 2025 from $11.1 million in Q1 2024. The increase was primarily driven by a one-off, non-cash charge of $6.2 million for borrowing cancellation costs related to the early repurchase of the 2027 Notes, and higher interest expenses - A significant component of the increased financial expense was a $6.24 million one-off non-cash charge for 'Borrowings cancellation costs' due to the accelerated amortization of deferred issuance costs from the partial repurchase of the Notes due 2027[56][57] - Interest and amortization of debt issue costs increased to $11.8 million from $7.7 million year-over-year[56] Note 10: Income Tax The effective tax rate for Q1 2025 was 49%, down from 60% in Q1 2024. The rate remains higher than Colombia's statutory rate of 40% (35% base + 5% estimated surcharge) primarily due to non-deductible expenses, including a one-off charge related to debt refinancing - The effective tax rate was 49% for Q1 2025, compared to 60% for Q1 2024[59] - The statutory income tax rate in Colombia for 2025 is estimated to be 40%, including a 5% surcharge based on Brent oil prices[60] - The higher effective tax rate was mainly driven by non-deductible tax losses and the non-cash charge from the early extinguishment of debt[61] Note 11: Property, Plant and Equipment The carrying amount of Property, Plant and Equipment (PP&E) decreased to $709.4 million from $740.5 million at year-end 2024. During the quarter, the company recorded a $5.9 million write-off for an unsuccessful exploration well in the PUT-8 Block in Colombia and divested $78.2 million in assets (at cost) - The company wrote off $5.9 million corresponding to one unsuccessful exploration well drilled in the PUT-8 Block in Colombia[62][63] - Assets with a cost of $78.2 million were divested during the quarter[62] Note 14: Borrowings In January 2025, GeoPark completed a major debt refinancing. The company issued $550 million of new senior notes due 2030 with an 8.75% coupon. The proceeds were used to repurchase $405.3 million of its existing notes due 2027 and to repay a $152 million prepayment facility with Vitol - On January 31, 2025, the company issued $550 million in senior notes due 2030 at an 8.75% coupon[68] - Net proceeds were used to repurchase $405.3 million of its Notes due 2027 through a tender offer[70] - The remainder of the proceeds was used to repay up to $152 million of an offtake and prepayment agreement with Vitol and for general corporate purposes[70] Note 16: Trade and Other Payables Trade and other payables decreased significantly to $110.9 million from $279.9 million at year-end 2024. The primary reason for this reduction was the repayment of a $152 million advance payment from a customer (Vitol), of which $19.2 million remained outstanding at quarter-end - Customer advance payments dropped from $152.0 million at year-end 2024 to $19.2 million at March 31, 2025[72] - Between February and March 2025, GeoPark repaid $126.4 million in cash and $6.4 million in kind from the Vitol advance payment[72] Note 19: Business Transactions During the quarter, GeoPark executed two key divestments. It agreed to sell its non-operated working interest in the Llanos 32 Block in Colombia for $19 million. It also agreed to sell its 10% non-operated interest in the Manati gas field in Brazil for $1 million plus a potential $1 million contingent payment. Assets and liabilities related to the Manati field have been classified as held for sale - On March 14, 2025, GeoPark agreed to sell its non-operated working interest in the Llanos 32 Block (Colombia) for a total consideration of $19.0 million[79] - On March 27, 2025, GeoPark agreed to sell its 10% non-operated working interest in the Manati gas field (Brazil) for $1.0 million, plus a contingent payment of an additional $1.0 million[80] - Assets of $6.2 million and liabilities of $12.8 million related to the Manati gas field were classified as held for sale[81] Note 21: Subsequent Events After the quarter-end, GeoPark noted significant oil price volatility with Brent crude falling over 20% in early April 2025 before partially recovering. The company also announced the appointment of Felipe Bayon, former CEO of Ecopetrol, as its new Chief Executive Officer, effective June 1, 2025. Additionally, new currency risk hedging contracts were entered into for the second half of 2025 - In early April 2025, international crude oil prices experienced a significant decline, with Brent falling by more than 20% to below $60 per barrel before partially recovering[83] - On April 24, 2025, GeoPark announced the appointment of Felipe Bayon as its new CEO, effective June 1, 2025. Mr. Bayon was previously the CEO of Ecopetrol[87][88] - In April 2025, the company entered into new zero-premium collar currency hedges for a notional amount of $30 million to mitigate exposure to the Colombian Peso in H2 2025[86]