• Improved Volume Delivery in 4Q2023 Underpins Sustained Cash Returns
• Quarterly Cash Dividend of $0.136 Per Share
• Tender Offer for up to $50 Million Shares
• MSCI ESG Rating Upgraded to ‘AA’: ESG Leader

GeoPark Limited, a leading independent Latin American oil and gas explorer, operator, and consolidator, reports its consolidated financial results for the three-month period ended December 31, 2023 and for the year ended December 31, 2023.

FOURTH QUARTER AND FULL-YEAR 2023 SUMMARY

In 2023, GeoPark delivered $451.9 million Adjusted EBITDA, an EBITDA margin of 60%, and $111.1 million of net profit. These results were leveraged by the success of new exploration and development campaigns and ongoing efficiencies in our operated assets. Results were achieved despite i) lower realization prices compared to 2022, ii) lower volumes due to the effects of a partial shut-in at the CPO-5 Block (GeoPark non-operated, 30% WI) during the first 9 months of 2023; and iii) a higher effective tax rate.

During 2023, GeoPark invested $199.0 million in capital expenditures to drill 48 gross wells, which resulted in a 110% 2P Replacement Ratio and annual average production of 36,563 boepd. 4Q2023 quarterly average oil and gas production reached 38,315 boepd, up 10% compared to 3Q2023, supported by exploration successes in the Llanos 123 and 87 blocks (GeoPark operated, 50% WI), CPO-5 Block and Perico Block (GeoPark non-operated, 50% WI) in Ecuador, and the resumption of shut-in production in the CPO-5 Block.

Improved operating results during 4Q2023 translated into $117.8 million Adjusted EBITDA for 4Q202(3), the highest of 2023. Despite lower annual production and realization prices, GeoPark reported a solid and resilient cash generation with an Adjusted EBITDA of $451.9 million, underpinned by lower production and operating costs, lower hedge losses and lower administrative costs.

Capital efficiency was once again a key feature of the year. Each dollar invested in capital expenditures yielded $2.3 in Adjusted EBITDA and the return on average capital employed reached 35%.

Annual net profit in 2023 reached $111.1 million (approximately $2 per share), 51% lower than in 2022, mainly impacted by one-off costs and impairments associated with Chile’s divestment, the appreciation of the Colombian peso and a higher total effective tax rate(1). Nonetheless, GeoPark ended 2023 with a stronger balance sheet illustrating its sustained commitment to financial discipline. The cash position continued to strengthen and reached $133.0 million at year-end, net leverage stood at 0.8 times, and the debt profile remained robust with no principal maturities until 2027.

These financial achievements and discipline allowed GeoPark to reward its shareholders with a 13% capital return yield(2) or $61.2 million balanced between buybacks and dividends. The 2023 buyback program allowed GeoPark to reduce its outstanding shares by 4% to 55.3 million.

In 2024 and in acknowledgement of GeoPark’s long-standing commitment to its SPEED value system, MSCI recognized GeoPark as an ESG ‘leader’ by further upgrading its rating to “AA” (GeoPark was rated as “B” in 2018, “BB” in 2019, “BBB” in 2021 and “A” in both 2022 and 2023). GeoPark also received a rating upgrade by Carbon Disclosure Project (CDP) Climate and reached a “B” rating (up from a “C” rating).

Colombia’s licensing authority recently granted the environmental license for the Putumayo-8 Block (GeoPark operated3, 50% WI). It was the result of several years of working closely with local leaders and communities, as well as a rigorous stakeholder participation process in coordination with local and national authorities, opening a very attractive exploration target in the Putumayo Basin in Colombia and targeting to drill by the end of 2024.

Looking forward to 2024, GeoPark’s organic activities will be focused on continuing the development of its core operations in the Llanos 34 (GeoPark operated, 45% WI) and CPO-5 blocks, delineating the new plays opened in 2023 and preparing new blocks for future exploration, while continuing to evaluate inorganic options that are consistent with long-term value accretion.

Reinforcing its commitment to continue returning value to its shareholders, GeoPark has the intention to commence a modified “Dutch Auction” tender offer to purchase for cash up to $50 million of GeoPark common shares at a price per share of not less than $9.00 and not greater than $10.00, which could represent approximately 10% of outstanding shares. GeoPark intends to commence the tender offer before the end of March and to fund it using cash on hand. If commenced, the tender offer will remain open for at least twenty (20) business days. Further details, including the terms and conditions of the tender offer, will be provided in the offer to purchase and other documents to be filed with the U.S. Securities and Exchange Commission (SEC) in connection with the tender offer. The tender offer is in addition to the previously approved share repurchase program in November 2023.

Andrés Ocampo, Chief Executive Officer of GeoPark, said: 
“The fourth quarter marked a strong finish to a challenging year on the production front. Despite a lower price environment compared to 2022, GeoPark ended the year with replenished 2P reserves, sustained cash returns to shareholders, and a stronger balance sheet. We are proud to announce our upgrade by MSCI to ‘AA’ status, placing us in the ESG ‘Leader’ bracket for the first time. The intention to execute an extraordinary buyback announced today reflects the financial health of the company and our confidence in our assets, which makes share buybacks rank very high in our capital allocation contest. Further, we continue to be committed to step-changing our growth trajectory by improving our underlying base business performance as well as by expanding our portfolio of assets. This will translate into more energy, more value, and more shared prosperity. We are working decidedly in this direction.”

(1) Starting in fiscal year 2023, Colombia introduced an income surtax whose amount depends on Brent oil prices. For 2023 the income tax surtax was 10%, bringing Colombia’s corporate tax rate to 45%.
(2) Based on GeoPark’s average market capitalization from December 1, 2023 to January 1, 2024.
(3) Through its affiliate Amerisur Exploration Colombia Limitada.

Oil and Gas Production and Operations

• Quarterly average oil and gas production of 38,315 boepd, up 10% vs 3Q2023, due to recent exploration successes and the resumption of shut-in production in the CPO-5 Block
• Annual average production of 36,563 boepd / 2023 exit production of over 38,000 boepd
• 2023 exploration drilling added 5,500+ gross bopd with 48 gross wells4 drilled and a 75% success rate
• GeoPark’s 2024 drilling campaign will continue delineating the new plays opened in 2023

KeyFacts Energy: GeoPark Colombia country profile   l   Ecuador