GeoPark (GPRK) Q2 2024 earnings summary

Executive summary

• Revenue rose 14% sequentially to $190.2 million in Q2 2024, driven by higher oil prices and stable production.

• Adjusted EBITDA increased 15% to $128 million (67% margin), with net profit of $25.7 million impacted by Colombian peso devaluation.

• Capital discipline: $49 million in capex generated nearly 3x in adjusted EBITDA.

• Shareholder returns exceeded 2023 totals, with $66 million returned via dividends and share repurchases by Q3 end, including a successful tender offer reducing shares by 8%.

• Vaca Muerta acquisition effective July 1, expected to close by end of Q3 2024, will increase pro forma production to over 41,000 boepd.

Financial highlights

• Cash position at quarter-end was $66 million after outflows for share repurchase ($43.7M), taxes ($52M), Vaca Muerta down payment ($49M), and dividends ($7.5M).

• Return on average capital employed over the last 12 months was 38%.

• Adjusted EBITDA to capital expenditures ratio was 2.6x in Q2 2024.

• Dividend yield approximately 6.8% annualized.

• Two strategic oil prepayment agreements enhanced liquidity and financial flexibility.

Outlook and guidance

• 2024 Adjusted EBITDA guidance remains $420–$550 million, assuming Brent at $80–$90/bbl.

• Drilling, workover, and water flooding campaigns to continue in Llanos 34; 3-5 new wells planned before year-end.

• Initial activities underway in Putumayo 8, with first exploration well (Machaca 1) to be drilled before year-end.

• Vaca Muerta production (5,000–5,500 boepd net) to be consolidated post-transaction close, not yet included in current production figures.

• 2H2024 production risks include delayed Manati field restart, base decline in Llanos 34, and potential blockades in Colombia, with downside risk of 1,500–2,500 boepd.