GeoPark Limited, a leading independent Latin American oil and gas explorer, operator and consolidator with operations and growth platforms in Colombia, Peru, Argentina, Brazil, Chile and Ecuador announces the acquisition of Amerisur Resources Plc.

Strategic Rationale: Capturing Scale

GeoPark has a 17-year track record of creating value by systematically building a strong, sustainable and diversified portfolio of assets across Latin America, both organically and through acquisitions. The acquisition of Amerisur is in line with GeoPark’s strategy of continued expansion, on the way to its longterm production target of 100,000 boepd and beyond. In addition to providing growth in reserves, production and cash flow, this acquisition will significantly enrich GeoPark’s inventory of short, medium and long-term exploration opportunities. Increased scale will benefit GeoPark by a larger more riskbalanced portfolio, creating a more efficient and stable cost structure, expanding the new project opportunity set, and continuing to improve access to a wider investment community. 

Deal Summary: All Cash

GeoPark will acquire the entire issued and to be issued share capital of Amerisur for a total cash consideration of approximately £242 million, being an offer price of 19.21 pence per share. The Transaction follows from a strategic review including a formal sales process announced by Amerisur on July 19, 2019 under the UK Takeover Code. Closing of the Transaction is expected in December 2019 or January 2020, following approval of Amerisur shareholders and subject to customary regulatory approvals.

The Transaction will incorporate 12 production, development and exploration blocks in Colombia, covering 2.5 million gross acres, including 11 operated blocks in the Putumayo basin and the CPO-5 non-operated block in the Llanos basin, a successful operating team, and the Oleoducto Binacional Amerisur (the “OBA”), an export oil pipeline from Colombia to Ecuador. 

Oil & Gas Production: Growing Light Oil

Amerisur’s working interest production for September 2019 was 6,865 bopd from two blocks, with light oil representing 100% of the mix. The Platanillo block (100% WI, Amerisur operated) produced 4,503 bopd of 30° API light oil for the same period. The CPO-5 block (30% WI, ONGC Videsh (“ONGC”) operated) produced 7,872 bopd of 36-41° API light oil, 2,362 bopd net to Amerisur, from two undeveloped oil fields for the same period. 

Oil & Gas Reserves: Low Risk Development Opportunities

Amerisur reports total net proven reserves (“1P”) and total net proven and probable reserves (“2P”) of 15.0 and 21.8 million barrels, respectively (certified by McDaniel & Associates as of end July 2019, as announced by Amerisur on September 20, 2019). Amerisur reports 2P reserves for the Platanillo block of 12.3 million barrels and the CPO-5 block of 9.5 million barrels, where multiple development drilling opportunities have been identified to continue growing production. As of September 2019, the two main producing fields in the CPO-5 - Indico and Mariposa - were producing from natural flow, each from a single well, at a combined gross rate of 7,872 bopd with zero water-cut. The Mariposa 1 well has accumulated more than 2.1 million bbls in approximately 23 months, and the Indico 1 well has accumulated more than 1.0 million bbls in approximately 10 months. 

Exploration Resources: New High Impact Acreage and a New Basin

Amerisur’s CPO-5 block, covering 0.5 million acres, is adjacent to and geologically on trend with GeoPark’s prolific Llanos 34 block (45% WI, GeoPark operated). There are two 3D seismic surveys (1,555 sq km), covering the majority of the block where the GeoPark team has identified and delineated multiple exploration prospects in multiple geological formations. Additional prospects may be delineated after new 3D seismic surveys are carried out in the uncovered acreage. Following the acquisition, GeoPark will have a contiguous land position of more than one million gross acres in one of the most productive and high-potential areas of the Llanos basin in Colombia.

Amerisur’s Putumayo blocks provide an extensive position of 2.0 million gross acres in a new basin, with existing production, a dedicated cost-effective transportation solution and significant exploration potential. Occidental Petroleum (“Oxy”) has agreed to invest $93.25 million (and to carry Amerisur) in the exploration of the Put-9, Mecaya, Terecay and Tacacho blocks to earn a 50% working interest. Additionally, Oxy acquired a 50% working interest (no carry) in the Put-8 block for total a cash consideration of $19.1 million. Entry into the Putumayo basin will give GeoPark access to an underexplored high potential hydrocarbon basin, logistically integrated and part of the rich Marañon-Oriente-Putumayo petroleum system spanning Peru, Ecuador and Colombia – a building block of GeoPark’s long-term growth strategy.

On behalf of Amerisur, McDaniel & Associates has estimated a mean of 289 million barrels in consolidated working interest unrisked exploration resources across Amerisur’s portfolio, with a highend estimate of 566 million barrels.

Link to GeoPark Colombia country profile   l   KeyFacts Energy: Acquisitions & Mergers news