TIDMGPK
RNS Number : 3450W
Geopark Holdings Limited
25 January 2013
Embargoed for release at 7:00 25 January 2013
am
GEOPARK HOLDINGS LIMITED
RESULTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2012
GeoPark Holdings Limited ("GeoPark" or the "Company"), the Latin
American oil and gas explorer, operator and consolidator with
operations and producing properties in Chile, Colombia and
Argentina (AIM: GPK), is pleased to announce its third quarter
results for the nine months ended 30 September 2012. This
represents the first set of quarterly results to be released by
GeoPark. The intention is to issue unaudited quarterly results from
now on.
Summary
During the first nine months of 2012, GeoPark continued to
execute its business plan and grow its key performance measures of
oil and gas production, revenues, EBITDA and net income. The
results achieved are leading GeoPark to register its seventh
consecutive year of overall growth in 2012.
Operational Highlights
-- 49.8% increase in Oil and Gas Production: Total oil and gas
production increased 49.8% to 10,806 barrels of oil equivalent per
day ("boepd") in 9M2012 compared to 7,216 boepd in 9M2011. Total
crude oil production increased 214% to 6,532 barrels per day
("bopd") in 9M2012, (or 4,123 bopd in 9M 2012 excluding the
contribution of 2079 bopd from the new blocks acquired in Colombia)
as compared to 2,079 bopd in 9M2011. The like-for-like increase in
production from Chile reflects an improvement in GeoPark's
production balance towards oil. Current oil and gas production is
13,200 boepd.
-- Drilling of 34 Wells: In line with the guidance and
description of results provided in GeoPark's Quarterly Operations
Update, GeoPark drilled and/or participated in 34 new wells in
9M2012 (on a proforma basis), including 15 wells in Chile and 19
wells in Colombia. GeoPark has now completed its 2012 work program
of drilling 44 new wells (gross).
-- New Oil and Gas Discoveries in Colombia and Chile: From its
exploration drilling program in Colombia and in Chile, GeoPark made
the following new discoveries during 9M2012:
1. Max Oil Field / Block 34, Colombia (45% WI, GeoPark
operated): The Max 1 well was GeoPark's first oil discovery in
Colombia and is currently on production by electrical submersible
pump ("ESP") from the Guadalupe formation. An appraisal well Max 2
is currently being drilled.
2. Tua Oil Field / Block 34, Colombia (45% WI, GeoPark
operated): The Tua 1 well was GeoPark's second discovery in
Colombia and is currently on production by ESP from the Mirador
formation. Two additional appraisal wells, Tua 2 and Tua 3, have
been drilled and are now on production from the Guadalupe and
Mirador formations respectively.
3. Maniceño Oil Field / Block 32, Colombia (10% WI, GeoPark
non-operated): Maniceño was tested and put into production from the
Mirador formation.
4. Azor Oil Field / Arrendajo Block, Colombia (10% WI, GeoPark
non-operated): Azor was tested and put into production from the
Carbonera C5 formation.
5. Kosten Gas Field / Fell Block (100% WI, GeoPark operated),
Chile: Kosten 1 was tested and put into production from the
Springhill formation by natural flow.
6. Kiuaku Gas Field / Fell Block, Chile (100% WI, GeoPark
operated): Kiuaku 1 was tested and put into production from the
Springhill formation by natural flow.
-- Seismic Surveys: In Chile, GeoPark carried out 67 km of 2D
seismic in the Otway and Tranquilo Blocks and 289 km(2) of 3D
seismic in the Flamenco Block - one of GeoPark's newly acquired
blocks in Tierra del Fuego. In Colombia, GeoPark carried out 111
km(2) of 3D seismic work in the Llanos 62 Block.
-- Unconventional Resource Potential Assessment: In Chile,
GeoPark's acreage position in the Magallanes Basin contains the
Estratos con Favrella shale formation which has previously tested
and produced oil. GeoPark initiated a program of diagnostic
fracture injection tests (DFITs) on a selection of six to eight
wells on the Fell Block to determine the fracability and reservoir
properties of the shale.
Financial Highlights
-- Revenues Up 147%: Total revenues increased to US$182.1
million in 9M2012 from US$73.9 million in 9M2011, mainly as a
result of a significant increase in oil production and the
incorporation of new production from Colombia. Oil revenues from
Chilean operations increased by 111% to US$93.4 million and
Colombian operations incorporated additional oil revenues for
US$63.9 million. Oil revenues represented 86.9% of total
revenues.
-- Adjusted EBITDA Up 130%:Adjusted EBITDA (adjusted earnings
before interest, tax, depreciation, amortization and certain
non-cash items such as write offs and share based payments)
increased to US$94.8 million in 9M2012 compared to US$41.2 million
in 9M2011. In addition, cash flow from operating activities in
9M2012 increased by 103% to US$101.2 million from US$49.9 million
in 9M2011.
-- Netbacks Up 54%:Netback per boe produced increased to US$32.1
per boe in 9M2012 compared to US$20.9 per boe in 9M2011 reflecting
a higher weighting of oil in GeoPark's production mix, as well as
the incorporation of Colombian operations into the portfolio.
-- Net Income Up Significantly: Net income for 9M2012 increased
to US$24.4 million, compared to US$1.4 million reported in 9M2011.
The growth in net results is mainly associated with an improvement
in operating results which increased to US$35.9 million in 9M2012
(including US$5.2 million from our new Colombian operations)
compared to US$14.6 million in 9M2011. In addition, a gain of
US$8.6 million was recognized related to the acquisition of the
Colombian subsidiaries.
-- Total Equity Up 57%: Total Equity attributable to
shareholders increased to US$244.9 million as of 30/09/12 compared
to US$156.2 million as of 30/09/11.
-- Available Cash Resources: GeoPark had US$75.5 million in cash
and cash equivalents at the end of 9M2012 (US$64.9 million net of
overdrafts), with a liquidity ratio of 1.55x (current assets
divided by current liabilities), and total financial debt of
US$195.8 million.
Strategic and New Project Highlights
-- Colombian Platform Acquisition: GeoPark acquired a solid
growth platform in Colombia consisting of interests in 10 blocks
with a balanced mix of production, development and exploration
opportunities, through two acquisitions closed during 1Q2012.
-- Tierra del Fuego Operations Start-Up: GeoPark initiated works
in the recently acquired Tierra del Fuego Blocks in Chile
(consisting of the Isla Norte, Campanario and Flamenco blocks),
through the registration of 289 sq. km of 3D
seismic in the Flamenco Block. Preliminary interpretation of
processed data suggests hydrocarbon prospects. GeoPark will
initiate its drilling campaign in Tierra del Fuego during the first
half of 2013.
-- Business Development: Along with its strategic partner, LG
International Corporation ("LGI"), GeoPark is continuing its
efforts to build a risk-balanced oil and gas asset portfolio
throughout Latin America by acquiring upstream properties and
interests in Colombia, Brazil, Argentina, Peru, and Chile. As part
of this alliance, in December 2012 LGI has joined GeoPark's
operations in Colombia through the acquisition of a 20% interest in
the Colombian business.
Commenting, James F. Park, CEO of GeoPark, said: "As evidenced
by our positive results for the first nine months of 2012, GeoPark
is continuing its steady upward growth. Our combined businesses,
consisting of Chile and Colombia, are now providing robust cash
flows, allowing us to continue to invest in and create value from
our assets - as well as to help support new projects. As we
continue to invest in our team, capabilities and properties, and to
undertake new operations, funding and strategic initiatives, we
look forward to accelerating the growth of our business in the
coming years - both organically by our success in developing new
oil and gas reserves on our current properties and through the
acquisition of new projects which we can convert into value-adding
assets."
In accordance with the AIM Rules, the information in this report
has been reviewed by Salvador Minniti, a geologist with 32 years of
oil and gas experience and Director of Exploration of GeoPark.
GeoPark can be visited online at www.geo-park.com
For further information please contact:
GeoPark Holdings Limited
Andres Ocampo (Buenos Aires) +54 11 4312 9400
Pablo Ducci (Chile) +56 2 2242 9600
Oriel Securities - Nominated Adviser and
Joint Broker
Michael Shaw (London) +44 (0)20 7710 7600
Tunga Chigovanyika (London)
Macquarie Capital (Europe) Limited - Joint
Broker
Jeffrey Auld (London) +44 (0)20 3037 2000
Steve Baldwin (London)
GEOPARK HOLDINGS LIMITED
THIRD QUARTER 2012 and 2011
INTERIM REPORT
INTERIM CONSOLIDATED FINANCIAL REPORT
FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2011 and 2012
CONTENTS
Page
3 Consolidated Statement of Income and Statement of Comprehensive
Income
4 Consolidated Statement of Financial Position
5 Consolidated Statement of Changes in Equity
6 Consolidated Statement of Cash Flow
7 Selected explanatory notes
CONSOLIDATED STATEMENT OF INCOME
Nine-months
Nine-months period
period ended ended 30 Year ended
30 September September 31 December
Amounts in US$ '000 Note 2012 2011 2011
====================================== ===== ============== ============ =============
NET REVENUE 2 182,139 73,867 111,580
====================================== ===== ============== ============ =============
Production costs (88,656) (36,726) (54,513)
====================================== ===== ============== ============ =============
GROSS PROFIT 93,483 37,141 57,067
====================================== ===== ============== ============ =============
Exploration costs (21,742) (7,932) (10,066)
====================================== ===== ============== ============ =============
Administrative costs (20,910) (13,224) (18,169)
====================================== ===== ============== ============ =============
Selling expenses (15,650) (1,704) (2,546)
====================================== ===== ============== ============ =============
Other operating income / (expense) 681 295 (502)
====================================== ===== ============== ============ =============
OPERATING PROFIT 35,862 14,576 25,784
====================================== ===== ============== ============ =============
Financial income 4 364 362 162
====================================== ===== ============== ============ =============
Financial expenses 5 (14,185) (10,935) (13,678)
====================================== ===== ============== ============ =============
Gain on acquisition of subsidiaries 10 8,624 - -
====================================== ===== ============== ============ =============
PROFIT BEFORE TAX 30,665 4,003 12,268
====================================== ===== ============== ============ =============
Income tax (6,266) (2,599) (7,206)
====================================== ===== ============== ============ =============
PROFIT FOR THE PERIOD/YEAR 24,399 1,404 5,062
====================================== ===== ============== ============ =============
Attributable to:
Owners of the parent 17,833 129 54
====================================== ===== ============== ============ =============
Non-controlling interest 6,566 1,275 5,008
====================================== ===== ============== ============ =============
Earnings per share (in US$)
for profit attributable
to owners of the Company.
Basic 0.4198 0.0031 0.0013
====================================== ===== ============== ============ =============
Earnings per share (in US$)
for profit attributable
to owners of the Company.
Diluted 0.3973 0.0024 0.0012
====================================== ===== ============== ============ =============
STATEMENT OF COMPREHENSIVE INCOME
Nine-months Nine-months
period period
ended 30 ended 30 Year ended
September September 31 December
Amounts in US$ '000 2012 2011 2011
================================= ============ ============ =============
Profit for the period / year 24,399 1,404 5,062
================================= ============ ============ =============
Other comprehensive income - - -
================================= ============ ============ =============
Total comprehensive Income
for the period / year 24,399 1,404 5,062
================================= ============ ============ =============
Attributable to:
Owners of the parent 17,833 129 54
===================================== ============ ============ =============
Non-controlling interest 6,566 1,275 5,008
===================================== ============ ============ =============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Year ended
At 30 September At 30 September 31 December
Amounts in US$ '000 Note 2012 2011 2011
=================================== ===== ================ ================ =============
ASSETS
=================================== ===== ================ ================ =============
NON CURRENT ASSETS
=================================== ===== ================ ================ =============
Property, plant and equipment 6 429,639 200,680 224,635
=================================== ===== ================ ================ =============
Prepaid taxes 3,208 3,263 2,957
=================================== ===== ================ ================ =============
Other financial assets 6,813 5,226 5,226
=================================== ===== ================ ================ =============
Deferred income tax 19,451 488 450
=================================== ===== ================ ================ =============
Prepayments and other receivables 556 38 707
=================================== ===== ================ ================ =============
TOTAL NON CURRENT ASSETS 459,667 209,695 233,975
=================================== ===== ================ ================ =============
CURRENT ASSETS
=================================== ===== ================ ================ =============
Other financial assets - - 3,000
=================================== ===== ================ ================ =============
Inventories 10,641 660 584
=================================== ===== ================ ================ =============
Trade receivables 21,924 19,367 15,929
=================================== ===== ================ ================ =============
Prepayments and other receivables 43,120 3,929 24,984
=================================== ===== ================ ================ =============
Prepaid taxes 11,036 1,967 147
=================================== ===== ================ ================ =============
Cash and cash equivalents 75,539 139,616 193,650
=================================== ===== ================ ================ =============
TOTAL CURRENT ASSETS 162,260 165,539 238,294
=================================== ===== ================ ================ =============
TOTAL ASSETS 621,927 375,234 472,269
=================================== ===== ================ ================ =============
EQUITY
=================================== ===== ================ ================ =============
Equity attributable to
owners of the Company
=================================== ===== ================ ================ =============
Share capital 7 43 42 43
=================================== ===== ================ ================ =============
Share premium 112,302 108,592 112,231
=================================== ===== ================ ================ =============
Reserves 129,596 66,942 115,164
=================================== ===== ================ ================ =============
Retained earnings (losses) 2,948 (19,398) (18,549)
=================================== ===== ================ ================ =============
Non-controlling interest 55,463 12,532 41,763
=================================== ===== ================ ================ =============
TOTAL EQUITY 300,352 168,710 250,652
=================================== ===== ================ ================ =============
LIABILITIES
=================================== ===== ================ ================ =============
NON CURRENT LIABILITIES
=================================== ===== ================ ================ =============
Borrowings 8 164,891 134,663 134,643
=================================== ===== ================ ================ =============
Provisions for other long-term
liabilities 9 27,697 8,136 9,412
=================================== ===== ================ ================ =============
Deferred income tax 24,218 8,739 13,109
=================================== ===== ================ ================ =============
TOTAL NON CURRENT LIABILITIES 216,806 151,538 157,164
=================================== ===== ================ ================ =============
CURRENT LIABILITIES
=================================== ===== ================ ================ =============
Borrowings 8 30,873 26,088 30,613
=================================== ===== ================ ================ =============
Current income tax 3,054 - 187
=================================== ===== ================ ================ =============
Trade and other payables 53,291 25,681 28,535
=================================== ===== ================ ================ =============
Provisions for other liabilities 9 17,551 3,217 5,118
=================================== ===== ================ ================ =============
TOTAL CURRENT LIABILITIES 104,769 54,986 64,453
=================================== ===== ================ ================ =============
TOTAL LIABILITIES 321,575 206,524 221,617
=================================== ===== ================ ================ =============
TOTAL EQUITY AND LIABILITIES 621,927 375,234 472,269
=================================== ===== ================ ================ =============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the Company
=========================================================
Retained Non -
Share Share Other Translation (Losses) controlling
Amount in US$ '000 Capital Premium Reserve Reserve Earnings Interest Total
================================ ========= ========= ========= ============ ========== ============== ========
Equity at 1 January 2011 42 107,858 3,025 894 (19,527) - 92,292
================================ ========= ========= ========= ============ ========== ============== ========
Profit for the nine month
period - - - - 129 1,275 1,404
================================ ========= ========= ========= ============ ========== ============== ========
Total comprehensive income
for the period ended 30
September 2011 - - - - 129 1,275 1,404
================================ ========= ========= ========= ============ ========== ============== ========
Proceeds from transaction
with Non-controlling interest - - 58,743 - - 11,257 70,000
================================ ========= ========= ========= ============ ========== ============== ========
Shared-based payment - 734 - - 4,280 - 5,014
================================ ========= ========= ========= ============ ========== ============== ========
- 734 58,743 - 4,280 11,257 75,014
================================ ========= ========= ========= ============ ========== ============== ========
Balance at 30 September
2011 42 108,592 61,768 894 (15,118) 12,532 168,710
================================ ========= ========= ========= ============ ========== ============== ========
Balance at 31 December
2011 43 112,231 114,270 894 (18,549) 41,763 250,652
================================ ========= ========= ========= ============ ========== ============== ========
Profit for the nine month
period - - - - 17,833 6,566 24,399
================================ ========= ========= ========= ============ ========== ============== ========
Total comprehensive income
for the period ended 30
September 2012 - - - - 17,833 6,566 24,399
================================ ========= ========= ========= ============ ========== ============== ========
Proceeds from transaction
with Non-controlling interest
(1) - - 14,432 - - 7,134 21,566
================================ ========= ========= ========= ============ ========== ============== ========
Share-based payment - 71 - - 3,664 - 3,735
================================ ========= ========= ========= ============ ========== ============== ========
- 71 14,432 - 3,664 7,134 25,301
================================ ========= ========= ========= ============ ========== ============== ========
Balance at 30 September
2012 43 112,302 128,702 894 2,948 55,463 300,352
================================ ========= ========= ========= ============ ========== ============== ========
(1) The proceeds from transactions with Non-controlling interest
represent additional consideration receivables in respect of the
investment made into GeoPark Chile S.A. in 2011 by LG
International. Of the total consideration, US$ 17.6 million is
recognised as a receivable within Prepayments and other receivables
as at 30 September 2012.
CONSOLIDATED STATEMENT OF CASH FLOW
Nine-months Nine-months
period ended period ended Year ended
30 September 30 September 31 December,
Amounts in US$ '000 2012 2011 2011
================================================ ============== ============== ==============
Cash flows from operating activities
================================================ ============== ============== ==============
Profit for the period/year 24,399 1,404 5,062
================================================ ============== ============== ==============
Adjustments for:
================================================ ============== ============== ==============
Income tax for the period/year 6,266 2,599 7,206
================================================ ============== ============== ==============
Depreciation of the period/year 36,228 16,761 26,408
================================================ ============== ============== ==============
Loss on disposal of property, plant
and equipment 455 1,040 2,010
================================================ ============== ============== ==============
Write-off of unsuccessful efforts 20,298 5,458 5,919
================================================ ============== ============== ==============
Amortisation of other long-term liabilities (1,993) - (1,038)
================================================ ============== ============== ==============
Impairment loss - - 1,344
================================================ ============== ============== ==============
Accrual of borrowing's interests 11,471 8,387 11,130
================================================ ============== ============== ==============
Unwinding of discount 630 484 350
================================================ ============== ============== ==============
Accrual of stock awards 3,735 5,014 5,298
================================================ ============== ============== ==============
Exchange difference generated by
borrowings 39 (48) (15)
================================================ ============== ============== ==============
Gain on acquisition of subsidiaries (8,624) - -
(Note 10)
================================================ ============== ============== ==============
Changes in working capital 8,286 8,760 89
================================================ ============== ============== ==============
Cash flows from operating activities
- net 101,190 49,859 63,763
================================================ ============== ============== ==============
Cash flows from investing activities
================================================ ============== ============== ==============
Purchase of property, plant and equipment (147,200) (62,679) (98,651)
================================================ ============== ============== ==============
Acquisitions of subsidiaries, net (105,303) - -
of cash acquired (Note 10)
================================================ ============== ============== ==============
Purchase of financial assets - - (2,625)
================================================ ============== ============== ==============
Deferred income 5,550 - 5,000
================================================ ============== ============== ==============
Cash flows used in investing activities
- net (246,953) (62,679) (96,276)
================================================ ============== ============== ==============
Cash flows from financing activities
================================================ ============== ============== ==============
Proceeds from borrowings 38,883 1,237 9,668
================================================ ============== ============== ==============
Proceeds from transaction with Non-controlling
interest 10,019 70,000 142,000
================================================ ============== ============== ==============
Principal paid (16,297) (8,876) (9,150)
================================================ ============== ============== ==============
Interest paid (5,552) (5,598) (10,779)
================================================ ============== ============== ==============
Cash flows from financing activities
- net 27,053 56,763 131,739
================================================ ============== ============== ==============
Net (decrease) increase in cash and
cash equivalents (118,710) 43,943 99,226
================================================ ============== ============== ==============
Cash and cash equivalents at 1 January 183,622 84,396 84,396
================================================ ============== ============== ==============
Cash and cash equivalents at the
end of the period/year 64,912 128,339 183,622
================================================ ============== ============== ==============
Ending Cash and cash equivalents
are specified as follows:
================================================ ============== ============== ==============
Cash in banks 75,515 139,610 193,642
================================================ ============== ============== ==============
Cash in hand 24 6 8
================================================ ============== ============== ==============
Bank overdrafts (10,627) (11,277) (10,028)
================================================ ============== ============== ==============
Cash and cash equivalents 64,912 128,339 183,622
================================================ ============== ============== ==============
SELECTED EXPLANATORY NOTES
Note 1
General information
GeoPark Holdings Limited (the Company) is a company incorporated
under the law of Bermuda. The Registered Office address is
Cumberland House, 9th Floor, 1 Victoria Street, Hamilton HM11,
Bermuda. The Company is quoted on the AIM market of London Stock
Exchange plc.
This consolidated interim financial report has been reviewed by
the Company's auditors. It was authorised for issue by the Board of
Directors on 21 January 2013.
The consolidated interim financial report of GeoPark Holdings
Limited is presented in accordance with IAS 34 "Interim Financial
Reporting". It does not include all of the information required for
full annual financial statements, and should be read in conjunction
with the annual financial statements as at and for the years ended
31 December 2010 and 2011, which have been prepared in accordance
with IFRSs.
The consolidated interim financial report has been prepared in
accordance with the accounting policies applied in the most recent
annual financial statements. For further information please refer
to GeoPark Holdings Limited's consolidated financial statements for
the year ended 31 December 2011.
Subsidiary undertakings
Details of the subsidiaries and jointly controlled assets of the
Company are set out below:
Name and registered office Ownership interest
==================== ==================================== ===================
Subsidiaries GeoPark Argentina Ltd. - Bermuda 100%
==================================== ===================
GeoPark Argentina Ltd. - Argentine
Branch 100% (a)
========================================================= ===================
Servicios Southern Cross Limitada
(Chile) 100% (b)
========================================================= ===================
GeoPark Latin America 100%
========================================================= ===================
GeoPark Latin America - Chilean
Branch 100% (a)
========================================================= ===================
GeoPark S.A. (Chile) 100% (a) (b)
========================================================= ===================
GeoPark Chile S.A. (Chile) 80% (a) (c)
========================================================= ===================
GeoPark Fell S.p.A. (Chile) 80% (a) (c)
========================================================= ===================
GeoPark Magallanes Limitada
(Chile) 80% (a) (c)
========================================================= ===================
GeoPark TdF S.A. (Chile) 69% (a) (d)
========================================================= ===================
GeoPark Colombia S.p.A. (Chile) 100% (a) (e)
========================================================= ===================
GeoPark Luna SAS (Colombia) 100% (a) (e)
========================================================= ===================
GeoPark Colombia SAS (Colombia) 100% (a) (e)
========================================================= ===================
GeoPark Llanos SAS (Colombia) 100% (a) (e)
========================================================= ===================
La Luna Oil Co. Ltd. (Panama) 100% (a) (e)
========================================================= ===================
Winchester Oil and Gas S.A.
(Panama) 100% (a) (e)
========================================================= ===================
GeoPark Cuerva LLC (United States) 100% (a) (e)
========================================================= ===================
Sucursal La Luna Oil Co. Ltd.
(Colombia) 100% (a) (e)
========================================================= ===================
Sucursal Winchester Oil and
Gas S.A. (Colombia) 100% (a) (e)
========================================================= ===================
Sucursal GeoPark Cuerva LLC
(Colombia) 100% (a) (e)
========================================================= ===================
GeoPark Brazil S.p.A. (Chile) 100% (a) (b)
========================================================= ===================
Raven Pipeline Company LLC (United
States) 23.5% (h)
========================================================= ===================
Jointly controlled
assets Tranquilo Block (Chile) 29% (f)
==================================== ===================
Otway Block (Chile) 25%
========================================================= ===================
Flamenco (Chile) 50% (g)
========================================================= ===================
Isla Norte (Chile) 60% (g)
========================================================= ===================
Campanario (Chile) 50% (g)
========================================================= ===================
(a) Indirectly owned.
(b) Dormant companies.
(c) Since 20 May 2011, LG International acquired 20% interest.
(d) LG International has 20% interest through GeoPark Chile S.A. and a 14% direct interest.
(e) During the first quarter of 2012, the Company entered into a
business combination acquiring 100% interest in each entity (see
Note 10).
(f) On 14 April 2011 following Governmental approval the new
ownership of the Tranquilo Block was confirmed. The other partners
in the JVs are Pluspetrol (29%), Methanex (17%) and Wintershall
(25%).
(g) After participating in a farm-in process organized by ENAP,
GeoPark was awarded 3 blocks in Tierra del Fuego, Chile (Isla Norte
Block, Flamenco Block and Campanario Block). GeoPark will be the
operator in all blocks with a share of 60% for Isla Norte Block and
50% for the other 2 blocks (See Note 12).
(h) Raven Pipeline Company LLC had no movements during 2012.
Note 2
Net revenue
Nine-months Nine-months
period ended period ended Year ended
30 September 30 September 31 December
Amounts in US$ '000 2012 2011 2011
===================== ============== ============== =============
Sale of crude oil 158,309 45,464 73,508
===================== ============== ============== =============
Sale of gas 23,830 28,403 38,072
===================== ============== ============== =============
182,139 73,867 111,580
===================== ============== ============== =============
Note 3
Segment Information
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the strategic steering committee.
This committee is integrated by the CEO, Managing Director, CFO and
managers in charge of the Geoscience, Drilling, Operations and
SPEED departments. This committee reviews the Group's internal
reporting in order to assess performance and allocate resources.
Management has determined the operating segments based on these
reports.
The committee considers the business from a geographic
perspective.
The strategic steering committee assesses the performance of the
operating segments based on a measure of adjusted earnings before
interest, tax, depreciation, amortisation and certain non cash
items such as write offs and share based payments (Adjusted
EBITDA). This measurement basis excludes the effects of
non-recurring expenditure from the operating segments, such as
impairments when it is result of an isolated, non-recurring event.
Interest income and expenditure are not included in the result for
each operating segment that is reviewed by the strategic steering
committee. Other information provided, except as noted below, to
the strategic steering committee is measured in a manner consistent
with that in the financial statements.
Note 3 (Continued)
Segment Information (Continued)
Nine-months period ended 30 September 2012
Amounts in US$ '000 Total Argentina Chile Colombia Corporate
=========================== ======== ========== ======== ========= ==========
NET REVENUE 182,139 972 117,244 63,923 -
=========================== ======== ========== ======== ========= ==========
GROSS PROFIT 93,483 302 68,314 24,867 -
=========================== ======== ========== ======== ========= ==========
OPERATING PROFIT / (LOSS) 35,862 (5,628) 41,767 5,230 (5,507)
=========================== ======== ========== ======== ========= ==========
Adjusted EBITDA 94,793 (808) 76,721 24,265 (5,385)
=========================== ======== ========== ======== ========= ==========
Nine-months period ended 30 September 2011
Amounts in US$ '000 Total Argentina Chile Colombia Corporate
=========================== ======= ========== ======= ========= ==========
NET REVENUE 73,867 1,144 72,723 - -
=========================== ======= ========== ======= ========= ==========
GROSS PROFIT 37,141 516 36,625 - -
=========================== ======= ========== ======= ========= ==========
OPERATING PROFIT / (LOSS) 14,576 (3,763) 23,244 - (4,905)
=========================== ======= ========== ======= ========= ==========
Adjusted EBITDA 41,239 28 44,334 - (3,123)
=========================== ======= ========== ======= ========= ==========
Total Assets Total Argentina Chile Colombia Corporate
=================== ======== ========== ======== ========= ==========
30 September 2012 621,927 8,619 411,354 200,567 1,387
=================== ======== ========== ======== ========= ==========
31 December 2011 472,269 10,895 453,384 - 7,990
=================== ======== ========== ======== ========= ==========
30 September 2011 375,234 9,634 363,008 - 2,592
=================== ======== ========== ======== ========= ==========
A reconciliation of total Adjusted EBITDA to total profit before
income tax is provided as follows:
Nine-months Nine-months
period ended period ended
30 September 30 September
2012 2011
===================================== ============== ==============
Adjusted EBITDA for reportable
segments 94,793 41,239
===================================== ============== ==============
Depreciation (36,228) (16,761)
===================================== ============== ==============
Accrual of stock awards (3,664) (4,280)
===================================== ============== ==============
Write-off of unsuccessful efforts (20,298) (5,458)
===================================== ============== ==============
Others 1,259 (164)
===================================== ============== ==============
Operating profit 35,862 14,576
===================================== ============== ==============
Financial results (13,821) (10,573)
===================================== ============== ==============
Gain on acquisition of subsidiaries 8,624 -
(Note 10)
===================================== ============== ==============
Profit before tax 30,665 4,003
===================================== ============== ==============
Note 4
Financial income
Amounts in US$ '000
Nine-months Nine-months Year ended
period ended period ended 31 December
30 September 30 September 2011
2012 2011
===================== ============== ============== =============
Exchange difference 17 248 32
===================== ============== ============== =============
Bank interest 347 114 130
===================== ============== ============== =============
364 362 162
===================== ============== ============== =============
Note 5
Financial expenses
Nine-months Nine-months
period ended period ended Year ended
30 September 30 September 31 December
Amounts in US$ '000 2012 2011 2011
==================================== ============== ============== =============
Bank charges and other financial
costs 1,038 1,216 1,856
==================================== ============== ============== =============
Exchange difference 2,994 716 496
==================================== ============== ============== =============
Unwinding of long-term liabilities 630 484 350
==================================== ============== ============== =============
Interest and amortisation
of debt issue costs 10,520 8,805 11,573
==================================== ============== ============== =============
Less: amounts capitalised
on qualifying assets (997) (286) (597)
==================================== ============== ============== =============
14,185 10,935 13,678
==================================== ============== ============== =============
Note 6
Property, plant and equipment
Exploration
Furniture, Production Buildings and
Amounts in Oil & gas equipment facilities and Construction evaluation
US$'000 properties and vehicles and machinery improve-ments in progress assets TOTAL
============== ============ ============== ============== ============== ============ ============== ==========
Cost at 1
January
2011 126,626 1,445 38,142 2,076 16,197 23,412 207,898
============== ============ ============== ============== ============== ============ ============== ==========
Additions 1,269 542 513 - 21,909 39,703 63,936
============== ============ ============== ============== ============== ============ ============== ==========
Disposals (227) (156) (657) - - - (1,040)
============== ============ ============== ============== ============== ============ ============== ==========
Write-off and
impairment - - - - - (1) (5,458) (5,458)
============== ============ ============== ============== ============== ============ ============== ==========
Transfers 19,354 79 5,519 358 (5,549) (19,761) -
============== ============ ============== ============== ============== ============ ============== ==========
Cost at 30
September
2011 147,022 1,910 43,517 2,434 32,557 37,896 265,336
============== ============ ============== ============== ============== ============ ============== ==========
Cost at 1
January
2012 171,956 2,175 47,102 2,437 32,896 42,140 298,706
============== ============ ============== ============== ============== ============ ============== ==========
Additions 12,034 627 19,397 - 52,769 62,781 147,608
============== ============ ============== ============== ============== ============ ============== ==========
Disposals (438) - (17) - - - (455)
============== ============ ============== ============== ============== ============ ============== ==========
Write-off and
impairment - - - - - (1) (20,298) (20,298)
============== ============ ============== ============== ============== ============ ============== ==========
Transfers 73,024 - 7,623 595 (37,266) (43,976) -
============== ============ ============== ============== ============== ============ ============== ==========
Acquisitions
of
subsidiaries
(Note 10) 63,942 482 10,865 - 9,359 29,729 114,377
============== ============ ============== ============== ============== ============ ============== ==========
Cost at 30
September
2012 320,518 3,284 84,970 3,032 57,758 70,376 539,938
============== ============ ============== ============== ============== ============ ============== ==========
Depreciation
and
write-down
at 1 January
2011 (33,508) (851) (13,308) (514) - - (48,181)
============== ============ ============== ============== ============== ============ ============== ==========
Depreciation (12,824) (212) (3,590) (135) - - (16,761)
============== ============ ============== ============== ============== ============ ============== ==========
Disposals - 61 225 - - - 286
============== ============ ============== ============== ============== ============ ============== ==========
Depreciation
and
write-down
at 30
September
2011 (46,332) (1,002) (16,673) (649) - - (64,656)
============== ============ ============== ============== ============== ============ ============== ==========
Depreciation
and
write-down
at 1 January
2012 (53,604) (1,123) (18,628) (716) - - (74,071)
============== ============ ============== ============== ============== ============ ============== ==========
Depreciation (29,631) (495) (5,866) (236) - - (36,228)
============== ============ ============== ============== ============== ============ ============== ==========
Depreciation
and
write-down
at 30
September
2012 (83,235) (1,618) (24,494) (952) - - (110,299)
============== ============ ============== ============== ============== ============ ============== ==========
Carrying
amount at
30 September
2011 100,690 908 26,844 1,785 32,557 37,896 200,680
============== ============ ============== ============== ============== ============ ============== ==========
Carrying
amount at
30
September
2012 237,283 1,666 60,476 2,080 57,758 70,376 429,639
============== ============ ============== ============== ============== ============ ============== ==========
(1) Corresponds to write-off of Exploration and evaluation
assets in Colombia US$ 4,727, Chile US$ 13,627
(US$ 5,458 in 2011) and Argentina US$ 1,944 (nil in 2011).
Note 7
Share capital
Nine-months Nine-months
period ended period ended Year ended
30 September 30 September 31 December
Issued share capital 2012 2011 2011
======================================= =============== =============== ===============
Common stock (US$ '000) 43 42 43
======================================= =============== =============== ===============
The share capital is distributed
as follows:
======================================= =============== =============== ===============
Common shares, of nominal US$
0.001 42,476,576 42,474,274 42,474,274
======================================= =============== =============== ===============
Total common shares in issue 42,476,576 42,474,274 42,474,274
======================================= =============== =============== ===============
Authorised share capital
======================================= =============== =============== ===============
US$ per share 0.001 0.001 0.001
======================================= =============== =============== ===============
Number of common shares (US$
0.001 each) 5,171,969,000 5,171,969,000 5,171,969,000
======================================= =============== =============== ===============
Amount in US$ 5,171,969 5,171,969 5,171,969
======================================= =============== =============== ===============
Note 8
Borrowings
The outstanding amounts are as follows:
At At Year ended
30 September 30 September 31 December
Amounts in US$ '000 2012 2011 2011
======================= ============== ============== =============
Bond (a) 131,720 130,768 128,315
======================= ============== ============== =============
Methanex Corporation
(b) 8,036 18,280 18,068
======================= ============== ============== =============
Banco de Crédito
e Inversiones (c) 7,881 426 8,845
======================= ============== ============== =============
Overdrafts (d) 10,627 11,277 10,028
======================= ============== ============== =============
Banco Itaú (e) 37,500 - -
======================= ============== ============== =============
195,764 160,751 165,256
======================= ============== ============== =============
Classified as follows:
Current 30,873 26,088 30,613
============= ======== ======== ========
Non-Current 164,891 134,663 134,643
============= ======== ======== ========
Note 8 (Continued)
Borrowings (Continued)
(a) Private placement of US$ 133,000,000 of Reg S Notes on 2
December 2010. The Notes carry a coupon of 7.75% per annum and
mature on 15 December 2015. The Notes are guaranteed by the Company
and secured with the pledge of 51% of the shares of GeoPark Fell.
In addition, the Note agreement allows for the placement of up to
an additional US$ 27,000,000 of Notes under the same indenture,
subject to the maintenance of certain financial ratios.
(b) The financing obtained in 2007, for development and
investing activities on the Fell Block, is structured as a gas
pre-sale agreement with a six year pay-back period and an interest
rate of LIBOR flat. In each year, the Group will repay principal up
to an amount equal to the loan amount multiplied by a specified
percentage. Subject to that annual maximum principal repayment
amount, the Group will repay principal and interest in an amount
equal to the amount of gas specified in the contract at the
effective selling price.
In addition on 30 October 2009 another financing agreement was
signed with Methanex Corporation under which Methanex have funded
GeoPark's portions of cash calls for the Otway Joint Venture
for
US$ 3,100,000. The loan has been fully repaid during 2012. The
purpose was to finance the exploration of natural gas from the
Otway Block. This financing did not bear interest.
(c) Facility to establish the operational base in the Fell
Block. This facility was acquired through a mortgage loan granted
by the Banco de Crédito e Inversiones (BCI), a Chilean private
bank. The loan was granted in Chilean pesos and is repayable over a
period of 8 years. The interest rate applicable to this loan is
6.6%. The outstanding amount at 30 September 2012 is US$
372,000.
During the last quarter of 2011, GeoPark TdF obtained short-term
financing from BCI. This financing is structured as letter of
credit with a pledge of the seismic equipment acquired to start the
operations in the new blocks. The maturity is May 2013 and the
applicable interest rate ranging from 4.45% to 5.45%. The
outstanding amount at 30 September 2012 is US$ 7,509,000.
(d) The Group has been granted with credit lines for
approximately US$ 46,000,000.
(e) GeoPark Holdings Limited has executed a loan agreement with
Banco Itaú BBA S.A., Nassau Branch for US$ 37,500,000. GeoPark will
use the proceeds to finance the acquisition and development of the
La Cuerva and Llanos 62 blocks. These blocks represent two of the
ten production, development and exploration blocks, which GeoPark
currently owns in Colombia (see Note 10).
The loan, which has a maturity of five years, amortising from
month 21 in 14 equal quarterly instalments, is ring-fenced by and
secured against 100% of the capital of GeoPark Llanos SAS, the
owner of the La Cuerva and Llanos 62 blocks. Interest on the loan
is accrued at LIBOR + 4.55%.
Note 9
Provision for other liabilities
The outstanding amounts are as follows:
At At Year ended
30 September 30 September 31 December
Amounts in US$ '000 2012 2011 2011
============================== ============== ============== =============
Assets retirement obligation
and other environmental
liabilities 20,039 4,668 5,450
============================== ============== ============== =============
Royalties and other
taxes 9,146 992 611
============================== ============== ============== =============
Deferred income 7,518 3,468 3,962
============================== ============== ============== =============
Salaries and payroll
taxes 4,716 2,145 3,858
============================== ============== ============== =============
Other 3,829 80 649
============================== ============== ============== =============
45,248 11,353 14,530
============================== ============== ============== =============
Classified as follows:
Current 17,551 3,217 5,118
============= ======= ====== ======
Non-Current 27,697 8,136 9,412
============= ======= ====== ======
Note 10
Acquisitions in Colombia
In February 2012, GeoPark acquired two privately-held
exploration and production companies operating in Colombia,
Winchester Oil and Gas S.A. and La Luna Oil Company Limited S.A.
("Winchester Luna").
In March 2012, a second acquisition occurred with the purchase
of Hupecol Cuerva LLC ("Hupecol"), a privately-held company with
two exploration and production blocks in Colombia.
The combined Hupecol and Winchester Luna purchases (acquired for
a total consideration of
US$ 105,000,000, adjusted for working capital) provide GeoPark
with the following in Colombia:
-- Interests in 10 blocks (ranging from 5% to 100%), with
license operations in four of them, located in the Llanos,
Magdalena and Catatumbo Basins, covering an area of approximately
220,000 gross acres.
-- Risk-balanced asset portfolio of existing reserves, low risk
development potential and attractive exploration upside.
-- Successful Colombian operating and administrative team to
support a smooth transition and start-up in Colombia together with
Associations and JVs with principal Colombian operators.
Note 10 (Continued)
Acquisitions in Colombia (Continued)
Under the terms of the sale and purchase agreement entered into
in 2012 in respect of the acquisition of Winchester Luna, the
Company has to make certain payments to the former owners arising
from the production and sale of hydrocarbons discovered by
exploration wells drilled after 25 October 2011 on the working
interests of the companies at that date. These payments which
involve both, an earnings based measure and an overriding revenue
royalty, equate to an estimated 4% carried interest on the part of
the vendor. As at the balance sheet date and based on preliminary
internal estimates of additions of 2P reserves since acquisition,
the Company's best estimate of the total commitment over the
remaining life of the concession is a range of US$ 35 million - US$
42 million (assuming a discount rate of 9.7% and oil price of US$
94 pbl).
In Colombia, royalties on production are payable to the
Columbian Government and are determined at a rate of 8%.
The purchase price allocation performed is preliminary, since
the valuation process is ongoing. This process will be completed
during the first quarter of 2013. In accordance with the
acquisition method of accounting, the acquisition cost was
allocated to the underlying assets acquired and liabilities assumed
based primarily upon their estimated fair values at the date of
acquisition. We used an income approach (being the net present
value of expected future cash flows) to determine the fair values
of the mineral interest. Estimates of expected future cash flows
reflect estimates of projected future revenues, production costs
and capital expenditures based on our business model. The excess of
acquisition cost, if any, over the net identifiable assets acquired
represents goodwill.
The following table summarises the combined consideration paid
for Winchester Luna and Hupecol, the preliminary fair value of
assets acquired and liabilities assumed for these transactions:
Winchester
Amounts in US$ '000 Hupecol Luna Total
=========================== ========= =========== =========
Cash (including working
capital adjustments) 79,630 32,243 111,873
=========================== ========= =========== =========
Total consideration 79,630 32,243 111,873
=========================== ========= =========== =========
Cash and cash equivalents 976 5,594 6,570
=========================== ========= =========== =========
Property, plant and
equipment (including
mineral interest) 76,885 37,492 114,377
=========================== ========= =========== =========
Trade receivables 4,402 4,098 8,500
=========================== ========= =========== =========
Prepayments and other
receivables 7,045 5,247 12,292
=========================== ========= =========== =========
Deferred income tax
assets 12,321 7,404 19,725
=========================== ========= =========== =========
Inventories 7,586 1,680 9,266
=========================== ========= =========== =========
Trade payables and other
debt (20,899) (12,380) (33,279)
=========================== ========= =========== =========
Deferred income tax
liabilities (3,467) (4,412) (7,879)
=========================== ========= =========== =========
Borrowings - (1,368) (1,368)
=========================== ========= =========== =========
Provision for other
long-term liabilities (5,219) (2,488) (7,707)
=========================== ========= =========== =========
Total identifiable net
assets 79,630 40,867 120,497
=========================== ========= =========== =========
Gain on acquisition
of subsidiaries - 8,624 8,624
=========================== ========= =========== =========
Note 10 (Continued)
Acquisitions in Colombia (Continued)
In accordance with disclosure requirements for business
combinations, the Company has calculated its net revenue and
profit, considering as if the mentioned acquisitions had occurred
at the beginning of the reporting period. The following table
summarises both results:
Amounts in US$ '000 Total
======================= ========
Net revenue 206,712
======================= ========
Profit for the period 26,838
======================= ========
Note 11
Agreement with Methanex
In March 2012, the Company and Methanex signed a third addendum
and amendment to the Gas Supply Agreement to incentivise the
development of gas reserves. Through this new agreement, the
Company is undertaking a programme consisting of drilling a minimum
of five new gas wells during 2012. Methanex will contribute to the
cost of drilling the wells in order to improve the project
economics. As of 30 September, the Company has already fulfilled
the minimum drilling commitment for 2012.
The Agreement also includes monthly commitments of delivering
certain volume of gas; in case of failure, the Company could make
up it with future deliveries without penalties during a period of
three months. Otherwise, the Company has to recognise the
corresponding liability. As of 30 September 2012, the accrued
penalty amounts to US$ 1.2 million.
Note 12
Subsequent events
GeoPark TdF S.A. CEOPs signature
On 6 November 2012, the Chilean Government signed the CEOPs
related to Flamenco and Isla Norte blocks. Subsequently, on 9
January 2013, the Chilean Government also signed the CEOP for
Campanario block.
Expansion of LG International - GeoPark partnership into
Colombia
LG International, has joined GeoPark's operations in Colombia
through the acquisition of a 20% interest in GeoPark Colombia S.A.,
a company that holds GeoPark's Colombian assets and which includes
interests in 10 hydrocarbon blocks. The total consideration for
this transaction amount to US$ 20.1 million in cash.
In addition, GeoPark and LGI announced their agreement to
extend, in March 2013, their strategic alliance to build a
portfolio of upstream oil and gas assets throughout Latin America
through 2015.
Note 12 (Continued)
Subsequent events (Continued)
Relinquishment Del Mosquito
In Argentina, on 22 November 2012 the Group relinquished 85.57%
of the remaining area of the Del Mosquito Block back to the
government in accordance with the terms of the Del Mosquito
license. The remaining area is 70 sq km. The seismic surveys
included in the relinquished area were written-off as of 30
September 2012 for a total amount of US$ 1.9 million and have not
affected the current productive area.
Directors' Dealings
On 23 November 2012, the Company granted options over ordinary
shares of US$ 0.001 each to James Park, Chief Executive of the
Company, and Gerald O'Shaughnessy, Chairman of the Company,
according to the following table:
Director Number of Options Option Exercise Vesting date
Awarded Price
--------------------- ------------------ ---------------- -------------
James Park 450,000 US$ 0.001 23 November
2015
--------------------- ------------------ ---------------- -------------
Gerald O'Shaughnessy 270,000 US$ 0.001 23 November
2015
--------------------- ------------------ ---------------- -------------
The above options were granted pursuant to the GeoPark Group
Stock Awards Plan.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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