GeoPark Limited (NYSE: GPRK): Donwtime and blockades continue to impact production. All eyes on Argentina
• 3Q24 production was 33,215 boe/d with production in Colombia still impacted by downtime and blockades (we expected 34.6 mboe/d). Production at Llanos-34 continues to decline. Production in Brazil remains shut-in. GeoPark had highlighted these downside risks in August.• This was partially offset by (1) high production of 1,581 boe/d from Llanos Exploration (Llanos 87 and 123), mainly driven by the Toritos 2 and the Toritos Norte wells and (2) increasing production in Ecuador (1,786 boe/d).
• We now assume that Colombia production will continue to be impacted by blockades in 4Q24 with Llanos 34 and Platanillo continuing to decline. We also assume that production in Brazil will come-back online in early January rather than early October. Excluding Argentina, we now forecast ~33 mboe/d production in 4Q24.
• Argentina continues to be a bright spot. 3Q24 gross production at Mata Mora was 12,621 boe/d reaching 15,418 boe/d during August. We now anticipate that the Argentinian acquisition will complete during October orNovember rather than early October. This has no impact on our financial forecasts given that the effective date of the transaction has not changed. The first exploration pad (3 wells) at Confluencia Norte will start production next week. This could be material. Our unrisked NAV for this block is US$4.60 per share.
• As we incorporate (1) the lower production in Colombia, (2) the delay in restoring Brazil production, (3) a more conservative valuation of Llanos 34’s 3P reserves given the steeper decline than expected and (4) the negative result of the Espejo Norte A1 exploration well in Ecuador, we have changed our target price to US$26 per share that has been set in line with our new ReNAV. The current dividend yield is ~6.7%.
Upcoming drilling in Colombia
GeoPark will start drilling the Bienparado Norte-1 exploration well in Putumayo in November. Two appraisal wells will also be drilled at Llanos 123. The Cante Flamenco-2 exploration well at CPO-5, Toritos Sur (exploration well at Llanos-123) and Curucucu 4 (appraisal well at Llanos-34) will be tested imminently.
Valuation
Our Core NAV and ReNAV stand at ~US$22.4 per share and US$25.6 per share, respectively.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.