GeoPark Limited (NYSE: GPRK): Strong performance in Argentina
• 2Q24 production was 35,608 boe/d, which is in line with 2Q24 but below April production of ~37.5 mboe/d, as the company has experienced sporadic blockades and weather-associated flooding at Llanos 34. As a result production in Colombia was only 33,956 boe/d (we forecasted 35.5 mboe/d). The waterflood programme now generates 3.7 mbbl/d.• GeoPark’s new Argentinian asset is performing very well with current WI production of 5.7 mboe/d with the Mata Mora Norte 2223 well producing 2,136 boe/d gross average production in 2Q24, in line with the best producing well in the block. The current production is already above our estimate of 5.5 mboe/d WI production for 3Q24. We only forecast 6 mboe/d in 4Q24.
• With multiple drilling catalysts in 2H24 including four unconventional horizontal wells in Argentina, and two conventional exploration wells in key targets (one in Ecuador and one at CPO-5 in Colombia), we re-iterate our target price of US$30 per share. The current dividend yield is ~6%.
Positive exploration results
At Llanos 123, the Toritos Norte 1 appraisal well has been put on production at a gross rate of 520 bbl/d (oil). GeoPark has decided to test the Toritos 2 appraisal well in the Barco formation. At CPO-5, the Lark-1 exploration well targets the Ubaque and the Guadalupe formations. In Ecuador, the Espejo Sur 3 exploration well has been put in production from the U-Sand formation at a current gross rate of 400 bbl/d (oil).
Valuation
Our Core NAV and ReNAV are unchanged at ~US$24 per share and US$29 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.
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