GeoPark(US:GPRK)2022-03-10 18:47Financial Data and Key Metrics Changes - The company reported a top-line revenue increase of 90% to almost $700 million and a strong bottom-line profit of $61 million for the year [8] - Structural costs were reduced by 16%, and capital expenditures of $129 million generated an EBITDA of 2.3 times that amount [8] - The net debt to EBITDA ratio closed the year under 2x, moving towards the target range of 1x to 1.5x [9] Business Line Data and Key Metrics Changes - The company drilled 32 wells in 2021, extending the Tigui and Jacana fields in the Llanos 34 block [8] - Production from CPO 5 increased from around 8,000 barrels gross to approximately 17,000 barrels gross, with expectations of a 20% to 40% increase in production by year-end [17][18] Market Data and Key Metrics Changes - Current production in Colombia is above 34,000 barrels of oil per day, reflecting a 3% to 5% increase compared to the previous year [22] - The company expects an overall operating expense increase of about 5% to 10% for 2022, estimating costs between $8.5 to $9 per BOE [34] Company Strategy and Development Direction - The company aims to be one of the leading independents in Latin America, focusing on being the lowest cost and safest operators while delivering consistent free cash flow [16] - The 2022 work program is ambitious, with plans to drill 40 to 48 wells, including almost half being exploration wells [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, highlighting the strong cash flow generation and the positive impact of higher oil prices [10][16] - The transition in leadership is seen as timely, with a strong executive team ready to continue executing the business strategy [5][16] Other Important Information - The company completed the largest acquisition in its history and expanded its acreage significantly [8] - The electrification project is 51% complete, and the solar plant is now 80% complete, contributing to lower carbon emissions [11] Q&A Session Summary Question: Transition and growth opportunities - Management emphasized continuity in strategy and the ambition to be a leading independent in Latin America, focusing on cash flow generation and operational efficiency [14][16] Question: Current overall production in Colombia - Current production is above 34,000 barrels per day, with successful drilling in CPO-5 and Platanillo fields contributing to increased output [22] Question: Increased operating costs and royalties - Operating costs increased due to inventory build in Platanillo, with expectations of a 5% to 10% increase in overall OpEx for 2022 [34] Question: Update on divestiture in Brazil - The transaction has not closed yet, pending conditions that should be met by the end of the month, with production performing better than expected [38] Question: Priorities for excess cash flow - The top priority is to fund potential acceleration in the organic portfolio, followed by debt reduction and increasing shareholder returns [39][40]