GeoPark, a leading independent Latin American oil and gas explorer, operator, and consolidator, today announced its work program and shareholder return framework for 2023. All figures are expressed in US Dollars.

2023 Work Program Summary ($80-90/bbl Brent)

• Production: 39,500-41,500 boepd average production (assuming no production from the 2023 exploration drilling program)
• Drilling plan: 50-55 gross wells, including 10-15 gross exploration and appraisal wells

Capital expenditures program: $200-220 million, to be allocated as follows:

• $130-140 million (or ~65%) to low-risk development growth focused on core Llanos 34 (GeoPark operated, 45% WI) and CPO-5 (GeoPark non-operated, 30% WI) blocks
• $70-80 million (or ~35%) to exploration of high-potential, short-cycle and near-field projects in the Llanos basin, next to core Llanos 34 and CPO-5 blocks
• Assuming $80-90 per bbl Brent base case, GeoPark expects to generate an Adjusted EBITDA(1) of $510-580 million(2) in 2023, over 2 times total capital expenditures, or over 3.5 times growth development capital

Tax Reform in Colombia

In November 2022, the Colombian Congress approved a tax reform that contemplates an increase in the government take for the oil and gas industry. The main impacts for the oil and gas industry include provisions that prevent the deduction of royalties paid to the government from the income tax calculation and the establishment of a surcharge linked to Brent oil price. The new tax provisions will go into effect in 2023 and do not affect current tax bases or tax rate for fiscal year 2022. Please refer to Note 18 of GeoPark’s consolidated financial statements for the period ended September 30, 2022 for further details.

GeoPark’s 2023 work program, cash flows and shareholder returns are based on estimates, as of the date of this press release, regarding the impact that this tax reform could have on GeoPark’s business, and are therefore subject to change based on many factors, including government decrees affecting the details and effective applicability of the tax reform.

Production breakdown

The 2023 production guidance of 39,500-41,500 boepd (assuming no production from the 2023 exploration drilling program) includes 35,000-36,500 boepd in Colombia, 1,700-2,000 boepd in Chile, 1,300-1,500 boepd in Ecuador and 1,300-1,500 boepd in Brazil. The production mix is expected to be ~93% oil and ~7% natural gas.

Capital Expenditures and Activity Breakdown

Colombia - $185-210 million: Focus on continuing development of core Llanos 34 block, accelerating development and exploration activities in high-potential blocks near Llanos 34 plus 3D seismic and other pre-drilling activities to continue adding new plays, leads and prospects.

The activity breakdown in Colombia includes:

• Llanos 34 block: 35-40 gross development, appraisal and injector wells plus infrastructure and facilities to continue optimizing operations
• CPO-5 block: the operator, ONGC, plans to drill 4-6 gross wells (1-2 development and 3-4 exploration wells), acquire 3D seismic and other infrastructure and facilities
• Llanos 87 block (GeoPark operated, 50% WI): 1-2 gross exploration wells
• Llanos 123 block (GeoPark operated, 50% WI): 1-2 gross exploration wells
• Llanos 124 block (GeoPark operated, 50% WI): 2-3 gross exploration wells
• Platanillo block (GeoPark operated, 100% WI): 1-2 gross development wells
• Seismic acquisition and reprocessing and other preoperational activities in the Llanos and Putumayo basins

Activity in Ecuador:

$10-15 million: 3-4 gross appraisal and exploration wells plus facilities, environmental and other optimization projects in the Perico (GeoPark non-operated, 50% WI) and Espejo (GeoPark operated, 50% WI) blocks.

2023 Shareholder Returns

GeoPark’s high-quality asset base and low-breakeven production have allowed the Company to fully fund its work programs since 2015, while maintaining a strong balance sheet and increasing shareholder returns over time.

Since January 2022 to date, the Company reduced gross debt by $170 million and paid $50 million in direct shareholder distributions (through dividends and buybacks). Continued improvement in GeoPark’s operational and financial performance and outlook allows the Company to further strengthen its shareholder returns in 2023.

In 2023, GeoPark will target the return of approximately 40-50% of its free cash flow to shareholders. This distribution will be paid to shareholders through a combination of base dividends and discretionary buybacks and/or variable dividends.

KeyFacts Energy: GeoPark Colombia country profile   l   Ecuador