GeoPark(US:GPRK)2021-03-11 17:26Financial Data and Key Metrics Changes - The company reported oil and gas production growth for the 18th consecutive year, reaching over 40,000 barrels per day [5] - The 2P reserves increased to 175 million barrels with a net present value of $2.5 billion [5] - The company achieved savings of over $290 million and generated EBITDA of $217 million from a $75 million investment [6] - Cash in hand nearly doubled to $200 million [6] Business Line Data and Key Metrics Changes - The company expanded its Colombian exploration resources to over 750 million barrels [5] - The work program for 2021 includes an investment of $130 million to $150 million to drill 37 to 42 wells, primarily in the Llanos 34 block [9] Market Data and Key Metrics Changes - The company operated without interruption throughout 2020 despite low oil prices of $40 to $45 [7] - The current oil price environment is above $65, prompting discussions on potential acceleration of activities and shareholder returns [12][14] Company Strategy and Development Direction - The company aims to accelerate profitable production growth while maintaining a strong balance sheet [9] - The focus is on reinvesting in existing assets, managing the balance sheet, and returning value to shareholders [14] - The company is actively participating in divestiture initiatives across the region, particularly in Brazil and Colombia [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to emerge stronger from the challenges faced in 2020 [5] - The company anticipates generating significantly more free cash flow if oil prices remain high, allowing for a combination of reinvestment, debt reduction, and shareholder returns [14] - The production guidance for 2021 includes a brief period of production setbacks due to protests, but the situation has normalized [15][16] Other Important Information - The company has implemented an integrated value system called SPEED, focusing on safety, governance, employee welfare, environmental impact, and community development [8] - The exploration program for 2021 targets a small fraction of the total prospective resources, with plans to prepare for further drilling in 2022 [30] Q&A Session Summary Question: Will the company consider accelerating the activity program or increasing dividends if oil prices remain high? - Management indicated that excess cash generation would likely be allocated to reinvestment, shareholder returns, and debt management [12][14] Question: What is the current status of production in Putumayo? - Production guidance for 2021 included the impact of recent protests, but the situation has been resolved, and production is expected to return to normal levels [15][16] Question: Will the company accelerate its hedging program given current oil prices? - Management confirmed plans to accelerate the hedging strategy, with current hedges covering around 70% of production for the first half of the year [19] Question: What are the expected production levels from Llanos 34 and CPO-5 in 2021? - Production from Llanos 34 is expected to remain flat to grow by 5%, while CPO-5 is targeting to double production compared to the previous year [42] Question: What are the priorities for excess cash generation in 2021? - The main priorities include reinvestment in assets, debt reduction, and returning value to shareholders [46]