Geopark Ltd · NYSE:GPRK
Geopark — Investor Day (June 2022)
48 slides from Geopark's investor day presentation, June 2022
Slide 1: GeoPark Management Presentation 2022
GEOPARK MANAGEMENT 20 PRESENTATION 22 mal taal GEOPARK
Slide 2: Agenda
Agenda Twenty Years Building the Right Business & Culture JAMES F. PARK, CEO & FOUNDER Sustainable Growth Strategy ANDRÉS OCAMPO, INCOMING CEO Political Landscape & Social Impact MARCELA VACA, GENERAL DIRECTOR AUGUSTO ZUBILLAGA, CHIEF TECHNICAL OFFICER Best & Smartest Oil & Gas Finders IGNACIO MAZAR
Slide 3: Disclaimer
Disclaimer The information contained herein has been prepared by GeoPark Limited (“GeoPark“, “we” or “us”) solely for informational purposes. No The information included in this presentation regarding GeoPark’s estimated quantities of proved, probable and possible reserves in Chile, representation o
Slide 4: Twenty Years Building the Right Business & Culture
Twenty Years Building the Right Business & Culture James F. Park - CEO and Founder Andrés Ocampo - Incoming CEO 4
Slide 5: Long-Term Value Proposition
Long-Term Value Building the Right Team Proven Team and Unique Culture Proposition Proven Track Record 2009-2021 Oil and Gas Production: CAGR 16% Leading Oil and Gas Finders Drilling Success Rate* 75%+ (2006 – 2021) 40 Low-Cost Operator 35 Operating and Structure Costs Per Barrel Below Peers 30 BRAZ
Slide 6: Track Record & Key Milestones
Track Record & Key ASSEMBLED* 4.6 MM ACRES Milestones (2002-2021) 4,600+ ACQUIRED SQ KM 3D SEISMIC DRILLED 400+ GROSS WELLS TRUE LATIN AMERICAN INDEPENDENT DISCOVERED 420+ MMBOE OF 2P RESERVES PRODUCED 100+ MMBOE NET VALUE CREATED* $2.3 BN From Zero to 1+ Billion 2P NPV10 MARKET CAPITALIZATION** 6 *
Slide 7: Founding Values Since Day One
Founding Values Since Day One COMMUNITY SAFETY PROSPERITY EMPLOYEES ENVIRONMENT DEVELOPMENT 7
Slide 8: Sustainable Growth Strategy
Sustainable Growth Strategy 88
Slide 9: Proven Business Model
Proven Business Model FULL CAPABILITIES ACROSS THE E&P VALUE CHAIN CLEANEST & KINDEST SAFEST, BEST & SMARTEST HYDROCARBONS LOWEST COST & OIL & GAS MOST EFFICIENT PRIORITIES FINDERS OPERATOR CONSISTENT FREE CASH FLOW & VALUE DELIVERY COMMITMENT & CULTURE Base Disciplined Energy Business and Profitabl
Slide 10: Base Business Performance & Delivery with Big Upside Potential
Base Business 5 YEAR HIGH GROWTH PLAN IN PLACE (2022-2026E) Performance & Delivery with ~10% ~$750-800 MM CAGR PRODUCTION DEVELOPMENT & EXPLORATION Big Upside GROWTH POTENTIAL CAPEX Potential 180-200 Gross wells 700-800 MMBOE DEVELOPMENT & EXPLORATORY GROSS UNRISKED EXPLORATION RESOURCES* ~100,000 U
Slide 11: Energy Transition and ESG Focus
Energy FAST, IMMEDIATE & AGGRESSIVE PLAN IN PLACE* Transition and ESG SHORT-TERM MEDIUM-TERM LONG-TERM Focus 35-40% 40-60% Net Zero Emissions intensity reduction** Emissions intensity reduction** Emissions by 2050** by 2025 or sooner by 2025-2030 KEY PROJECTS Oleoducto del Subsoil and Surface Casana
Slide 12: Political Landscape & Social Impact
Political Landscape & Social Impact Marcela Vaca - General Director 12
Slide 13: Colombia's Oil & Gas Sector
Colombia’s Oil & Gas Sector 752,100 BOPD 363 KBPD $2+ BILLION 7.6 YEARS Average Daily Production Refining Capacity Proven Oil Reserves 1P Reserve Life Index DECISIVE SECTOR OF THE ECONOMY $6.9 BILLION $13.5 BILLION 3.3% $3+ BILLION $800 MILLION Government (~33%) of GDP Expected Foreign Direct E&P In
Slide 14: Cleanest & Kindest Hydrocarbons
GHG EMISSION INTENSITY REDUCTION TARGETS Cleanest & Scope 1 & 2 refer to GeoPark’s operated assets and using 2020 as baseline Kindest SHORT-TERM MEDIUM-TERM LONG-TERM Hydrocarbons 35-40% 40-60% Net Zero Emissions intensity reduction Emissions intensity reduction Emissions by 2050 by 2025 or sooner b
Slide 15: Neighbor of Choice
Neighbor of $6.1 MM COMMITED IN SOCIAL & ENVIRONMENTAL PROGRAMS 2021 Choice WELL-BEING AND QUALITY OF LIFE 86% INVESTMENT IN RURAL AREAS BENEFITING 288K+ PEOPLE ECONOMIC 89% LOCAL HIRING DEVELOPMENT $59 MM GOOD & SERVICES ACQUIRED FROM LOCAL SUPPLIERS UNITED NATIONS EDUCATION, CULTURE 36 PROJECTS AN
Slide 16: Highest Governance Standards
Highest Governance Standards FEMALE CHAIR DIRECTOR OVERBOARDING MAJORITY INDEPENDENT POLICY DIRECTORS KEY COMMITTEES 100% INDEPENDENT CHANGE OF INDEPENDENT Audit, Nomination & Corporate Governance, AUDITORS IN 2020 and Compensation Committees CULTURE OF ETHICS AND COMPLIANCE • Ethics Line • Complian
Slide 17: GeoPark People & Culture
GeoPark People & Culture OUR SECRET SAUCE INVESTING IN OUR PEOPLE - ALWAYS CULTURE! OWNERSHIP! 100% Employees are Shareholders 42% Senior Management are Women 33 Training Hours per Employee 83% Professional Team 42% Post-graduate Completed 8 Nationalities SUCCESSFULLY PROMOTING INTERNAL TALENT 17 So
Slide 18: Best & Smartest Oil & Gas Finders
Best & Smartest Oil & Gas Finders Augusto Zubillaga - Chief Technical Officer Ignacio Mazariegos - New Business Director 18
Slide 19: Leading Oil & Gas Finding Team
Leading Oil & THE POWER OF THE TEAM Gas Finding Team 75%+ 420+ DRILLING SUCCESS MMBOE GROSS RATE* 2006-2021 400+ Wells drilled (2006-2021) BARRELS DISCOVERED (2P) OUTSTANDING TRACK RECORD OF FINDING HYDROCARBONS Production 38.6 MBOED** 74% Coming from Barrels 2P Reserves 159 MMBOE*** 77% Discovered
Slide 20: Introducing New Ideas to the Llanos
Introducing New Ideas to the Llanos STRATIGRAPHIC Basin COLUMN EAST RANGE ANTITHETIC NORMAL FAULT LOCATION (Compressive Fault System) (Footwall Block Oil Accumulation) Max Field: 7.1 mmbbl LLANOS BASIN (Extensional Fault System) STRUCTURAL TRAP TYPES 20
Slide 21: Llanos 34: Largest Discovery in 20+ Years
Llanos 34: Largest Discovery in 20+ Years 2012 2014-2015 2016-2022 NEW IDEAS & FIRST OIL BIG TIGANA & JACANA DISCOVERIES NEW DISCOVERIES + DELINEATION LEADING SUBSURFACE AND PROJECT EXECUTION CAPABILITIES KEY FEATURES Tigana & Jacana 0.8-1 BN 148 MM 13 Ranked Within Top 10 Barrel Original Oil Gross
Slide 22: Multiyear Exploration Inventory in Colombia
Multiyear 90+ PROJECTS Exploration LOW RISK EXPLORATION PORTFOLIO Inventory TO SUSTAIN FUTURE GROWTH In Colombia 0.9-1.8 0.4-0.8 BN BOE GROSS BN BOE NET (UNRISKED) (UNRISKED) EXPLORATION INVENTORY IN LLANOS & LLANOS BASIN PUTUMAYO / ORIENTE PUTUMAYO/ ORIENTE # Estimated Gross Projects (Leads & Prosp
Slide 23: Llanos Basin Exploration Inventory
HIGH GROWTH POTENTIAL IN WELL-KNOWN BASIN Llanos Basin 2022 CAMPAIGN Exploration (Gross Wells) Expanding Inventory 2-3 EXPLORATION Knowledge WELLS 4,000+ sq km 3D Seismic Merge 2 EXPLORATION WELLS LLANOS 87 5-7 EXPLORATION LLANOS 124 LLANOS 32 WELLS 1-2 EXPLORATION WELLS 20X LLANOS 34 SIZE OF LLANOS
Slide 24: Scale With Value
Scale With 20 YEARS GROWING THROUGH ACQUISITIONS FOLLOWED BY DELIVERY Value 2022 NO TI CR ~40,000 BOEPD DA EA EN 159 MMBOE 2P TI MM EV Achieve CO OR Scale With Primary target basins RE IG 2020 IN D Value AT AN Secondary target basins IO W N IE OF V ESG RE OP AMERISUR US PO UO 2019 RT Great Balanced
Slide 25: Amerisur Case Study
INVESTMENT THESIS Amerisur 1. Consolidate most attractive acreage on trend of Llanos 34 - with high Case Study production fields and big exploration upside 2. Gain access to Putumayo with existing infrastructure and carried exploration for $93 MM 3. Financial and operational synergies in Colombia AC
Slide 26: Low Cost, Low Carbon & Safe Production
Low Cost, Low Carbon & Safe Production Martín Terrado - Chief Operating Officer 26
Slide 27: Safety First
Lost Time Injury Rate Safety (per million hours worked) First 1.14 0.61 0.42 0.40 0.29 2017 2018 2019 2020 2021 • First Oil & Gas Company to Receive 0.05 BBL COVID-19 Bureau Veritas Certification of oil spilled per RESPONSE • COVID-19 Committee: prevention, million barrel produced mitigation and car
Slide 28: Proven Operator
Proven Operator 60,000+ BOEPD 100+ MM GROSS NET BOE PRODUCED OPERATED 2006-2021 PRODUCTION ZERO TO 40,000 BOEPD PRODUCTION GROWTH (2006-2022E) 38,500-40,500 BOEPD 70+% OF NET PRODUCTION OPERATED BY GEOPARK 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022E Producti
Slide 29: Cost Efficiencies Achieved & Maintained
Cost Efficiencies Achieved & OPERATING COSTS DOWN 50% ($/BOE) Maintained 16 50% Decrease 11 ~95% OF PRODUCTION IS CASH FLOW POSITIVE 8 8 8 AT $20-30 BRENT 7 7 7 Oil ($40-50 /BBL) 100% Oil ($20-30 /BBL) 2014 2015 2016 2017 2018 2019 2020 2021 ~95% Gas ~10% Sustainable Cost Reductions (Unaffected by o
Slide 30: Fastest, Most Efficient & Lowest Cost Driller in Colombia
Fastest, Most Efficient & Lowest LOW-COST CHAMPION Cost Driller in USD PER METER DRILLED* AVERAGE DRILLING DAYS PER WELL* Colombia 1,658 1,622 35% 64% 22.9 Decrease Decrease 21.5 20.8 Llanos 34 in Review 17.1 17.8 16.6 15.7 15.5 14.1 688 696 684 642 627 608 585 2013 2014 2015 2016 2017 2018 2019 202
Slide 31: Transport Cost Savings in Colombia
Transport Cost Savings in COMMERCIAL & TRANSPORTATION DISCOUNTS ($/BBL) Colombia ODCA STARTED 44% OPERATIONS IN 2019 Decrease 42 Km LENGTH 16 15 15 15 11 8 8 4Q2015 4Q2016 4Q2017 4Q2018 4Q2019 4Q2020 4Q2021 KEY PROJECT: OLEODUCTO DE CASANARE (ODCA) ~$1.5/BBL 80,000 BOPD $16 MM TIGANA CONNECTION TRAN
Slide 32: Electrification of Llanos 34
Electrification KEY METRICS of Llanos 34 37 KM 94 2 SUB-STATIONS LINE TOWERS TIGANA/JACANA Improving Carbon EXTENSION Performance & Operational Reliability 68 MW 115 KV 100,000 TONS/YEAR TRANSMISSION VOLTAGE LOWER EMISSIONS CAPACITY EXECUTION TIMELINE May 2022 July 2022 2H2022 INTERCONNECTED INTERCO
Slide 33: Llanos 34: A World Class Asset
Llanos 34: KEY METRICS A World Class Asset 58,818 ~$5.5/BBL <$20/BBL GROSS BOPD OPERATING BREAKEVENS* (1Q2022) COSTS GeoPark Operated, 45% WI 95% 11.5 YEARS 17.4 KgCO E/BOE 2 PRODUCTION 2P RESERVE LOW EMISSIONS EFFICIENCY** LIFE INDEX*** WELL ECONOMICS NET PRODUCTION AND RESERVES GROWTH NET PRODUCTI
Slide 34: CPO-5: Unlocking the Upside
CPO-5: KEY METRICS Unlocking the Upside 20,148 ~$3/BBL <$10/BBL GROSS BOPD OPERATING BREAKEVENS* (April-May 2022) COSTS GeoPark Non-operated, 30% WI 5 14.7 YEARS ~8,000 PRODUCING 2P RESERVE GROSS BOPD WELLS (May 2022) LIFE INDEX** ADDED IN 2022YTD INDICO-2 WELL ECONOMICS PRODUCTION & RESERVE GROWTH
Slide 35: Innovation: Do it Efficiently, Do it Better
Innovation: Do it Efficiently, Do it Better Increase Optimize Reduce Mitigate Reduce Carbon Production Processes Costs Risks Footprint FOCUS SOLUTIONS ORIENTED OPERATOR 60+ 120+ Projects People (2021-2022YTD) Involved RESULTS Training Strategic Acknowledgements Workshops Partnerships & Awards 35
Slide 36: Innovation Case Study: Predicting Pump Failure
Innovation Case Study: Predicting Pump Failure INDUSTRY STANDARD: REACTIVE PUMP REPAIR INNOVATIVE SOLUTION: AI TO PREDICT FAILURES Pump 7 days 10 days Failure Alarm 7 days 10 days Pump Rig to Production Pump Rig to Production Failure Repair Pump Restored Failure Repair Pump Restored • Opportunity to
Slide 37: Disciplined Capital Allocation & Capital Structure
Disciplined Capital Allocation & Capital Structure Verónica Dávila - Incoming CFO Marcelo Iribarne - Capital Markets Director 37
Slide 38: Capital Efficiency Leads to Superior Results
Capital Efficiency Leads to Superior Results CASH GENERATION 2-4X CAPEX IN EVERY OIL PRICE ENVIRONMENT Operating Netback CAPEX 590-620 2.9x Operating Netback/CAPEX Ratio (x times) 3.2x 3.5x 447 2.7x 398 3.7x 2.1x 352 3.1x 276 2.4x 228 200-220 118 122 125 126 129 106 75 49 39 2015 2016 2017 2018 2019
Slide 39: High Impact Capital Allocation
High Impact ASSET-BASED CAPITAL ALLOCATION Capital Allocation LLANOS PRODUCTION CPO-5 ORIENTE RN BAL RETU ANC E DER SHE KEY CRITERIA EHOL ET PUTUMAYO CHILE / BRAZIL SHAR LLANOS EXPLORATION Technical Strategic ALLOCATING CAPITAL SELF-FUNDED AND TO HIGHEST RANKING FLEXIBLE WORK PROJECTS PROGRAMS Econo
Slide 40: Ambitious 2022 Capital Investment Program
100 95-100 Ambitious 2022 Brent ($/bbl) 72 Capital Investment 71 64 55 Program 54 45 45 CAPEX 238 200- ($MM) 220 125 126 129 106 75 49 39 2014 2015 2016 2017 2018 2019 2020 2021 2022E 2022 WORK PROGRAM HIGHLIGHTS $90-105 MM $200-220 MM ~10% 50-55 $100-115 MM PRODUCTION GROSS $70-90 MM GROWTH* WELLS
Slide 41: Strong Free Cash Flow
2022E Free Cash Flow* ($mm) at $95-100 per bbl (Brent) Strong Free (100-115) Cash Flow (90-105) (50-55) High Return 590-620 (40-45) Barrels (38-42) 250-280 Operating Netback Development Capex Exploration Capex Cash G&A/G&G Cash Taxes Ma ndatory Debt Fre e Cash Flow Service Payments SENSITIVITY TO BR
Slide 42: Deleveraging Generates Savings
Comfortable Reducing Deleveraging Debt Profile Cost of New Debt Generates ($MM) As of May 31, 2022 500 Savings SUCCESSFULL Expected to be redeemed in CONSENT 2H2022* 7.6% 6.5% 5.6% 5.1% 87 2022 2023 2024 2025 2026 2027 2013 2017 2020 2021 2021-2022E GROSS DEBT EVOLUTION ($MM) 775 -105 587 -83 500 -8
Slide 43: Proven Balance Sheet Management
Proven GROSS & NET LEVERAGE (GROSS AND NET DEBT / ADJUSTED EBITDA) Balance 5.1 Sheet 4.6 COVENANT: Management 4.0 3.6 3.6 NET LEVERAGE <3.25X LONG-TERM OBJECTIVE: 2.4 2.7 2.2 NET LEVERAGE <1.5X 1.7 1.9 1.4 1.2 0.8 - 0.9 1.0 0.9 0.6 - 0.7 2015 2016 2017 2018 2019 2020 2021 2022 (E) 2022E* Gross Debt
Slide 44: Disciplined Risk Management
Disciplined STRUCTURE TENOR Risk 2016-2019 2020-2021 2022E - ONWARDS Management ZERO 12-15 COST MONTHS COLLARS 30-50% 50-75% 30-50% PRODUCTION PRODUCTION PRODUCTION HEDGED HEDGED HEDGED HEDGES IN PLACE TO SECURE BASE OIL PRICE 130 Call $112.6 Call $111.8 110 Hedged Production Call $92.6 (bbl/d) BREN
Slide 45: Shareholder Value Return
Shareholder Value Return 141% $95 MM $25 MM TOTAL SHAREHOLDER RETURN* SHARE BUYBACK PROGRAM CASH DIVIDEND Comprehensive & (Share Price Change + Dividends) May 2017- May 2022 2019-2022YTD 2019-2022YTD ~2% Dividend Yield Flexible Strategy SUCCESSFUL CONSENT ADDS FLEXIBILITY TO ESTABLISH A LONG-TERM SH
Slide 46: The Next Generation
The Next Generation Andrés Ocampo - Incoming CEO 46
Slide 47: The Next Generation
The Next CLEANEST & Generation BEST & SMARTEST KINDEST HYDROCARBONS SAFEST, LOWEST OIL & GAS COST & MOST FINDERS EFFICIENT OPERATOR CONSISTENT FREE CASH FLOW & VALUE DELIVERY COMMITMENT & CULTURE Base Business ~10% ~$3 Billion Performance and Delivery CAGR PRODUCTION 2022-2026E CASH GROWTH POTENTIAL
Slide 48: ole
ole lead GEOPRARK