GeoPark Limited (GPRK) Q4 2025 Earnings Call Summary

1Key Financial Results and Metrics

Production: Average production for 2025 was 28,233 barrels of oil equivalent per day (boe/d), exceeding guidance. Q4 production averaged 28,351 boe/d.

Realized Prices: Average realized price for 2025 was $58.1 per boe, down from $65.6 in 2024.

Adjusted EBITDA: Full-year adjusted EBITDA reached $277 million, with Q4 adjusted EBITDA at $46 million, impacted by lower prices and nonrecurring items.

Capital Expenditures: Invested $98 million in 2025, achieving a 2.8x adjusted EBITDA to CapEx ratio and an 18% return on average capital employed (ROACE).

Operating Costs: Average operating costs were $13.4 per barrel, with G&A at $4.8 per barrel. Q4 costs included one-time expenses expected to reverse in Q1 2026.

Balance Sheet: Cash over $100 million, net leverage at 1.6x, and no material debt maturities until 2027. Repurchased over $100 million of 2030 notes, capturing a $10 million gain.

2Strategic Updates and Business Highlights

Portfolio Reset: GeoPark is undergoing a strategic portfolio reset, focusing on strengthening its Colombian operations while expanding into unconventional plays in Argentina, particularly Vaca Muerta.

Acquisitions: Closed the acquisition of Loma Jarillosa Este and Puesto Silva Oeste blocks in Vaca Muerta, with plans to reach a plateau production of 20,000 boe/d by 2028. Announced an agreement to acquire Frontera Energy's Colombian upstream assets, potentially doubling production to approximately 40,000 boe/d.

Operational Efficiency: Achieved $32 million in structural cash savings in 2025, with expectations of $45 million in annualized savings in 2026 and beyond.

3Forward Guidance and Outlook

Production Goals: Targeting production of 44,000 to 46,000 boe/d and adjusted EBITDA of $490 million to $520 million by 2028.

Cost Guidance: For 2026, lifting costs are expected to be in the range of $13 to $15 per barrel, with G&A projected at $4 per barrel.

Dividend: The Board declared a quarterly dividend of $0.03 per share, with future distributions to be reassessed post-normalization of free cash flow.

4Bad News, Challenges, or Points of Concern

Lower Oil Prices: The decline in realized oil prices impacted revenues and EBITDA margins.

Frontera Acquisition Competition: A competing offer from Parex for Frontera's assets raises uncertainty around the acquisition, although GeoPark remains confident in its agreement.

Operational Risks: Potential challenges in cost management and production optimization in both Colombia and Argentina, particularly with fluctuating exchange rates and operational integration.

5Notable Q&A Insights

Cost Management: Management indicated that Q4's elevated costs were due to one-time start-up expenses and seasonal factors, with expectations for normalized costs in 2026.

Frontera Acquisition: The CEO emphasized the importance of maintaining financial discipline and shareholder value in light of the competing offer from Parex, while expressing confidence in GeoPark's strategic fit for Frontera's assets.

Argentina Operations: Progress in Vaca Muerta includes upcoming drilling campaigns and operational improvements, with expectations for production increases by year-end 2026.

Market Conditions: The impact of Venezuelan oil re-entry into the market has widened differentials for Colombian crude, but management is optimistic about long-term stabilization and is exploring strategies to mitigate impacts. In summary, GeoPark demonstrated resilience in a challenging oil price environment, achieving operational milestones and strategic growth through acquisitions while navigating competitive pressures and cost management challenges.