GeoPark's 430% 2P Reserve Replacement and Strategic Expansion in Vaca Muerta: A Blueprint for Long-Term Value Creation

GeoPark Ltd. has emerged as a standout performer in the global energy sector, driven by its exceptional 2P reserve replacement rate of 430% in 2025 and a strategic pivot toward Argentina's Vaca Muerta unconventional resource play. This achievement, coupled with disciplined capital allocation and operational efficiency, positions the company as a compelling case study in high-growth, low-cost resource development.

Reserve Replacement and Strategic Acquisitions

GeoPark's 2025 2P reserve replacement ratio of 430%-a figure far exceeding industry benchmarks-was fueled by the acquisition of two high-potential blocks in Vaca Muerta: Loma Jarillosa Este and Puesto Silva Oeste. These unconventional oil assets added 36.7 mmboe to the company's reserves, with net additions of 31.2 mmboe after accounting for divestments. This represents 30% of GeoPark's total 2025 reserves, underscoring the transformative impact of its Argentina strategy. The acquisitions not only diversified GeoPark's asset base but also aligned with its focus on low-cost, high-margin unconventional plays, a critical factor in sustaining long-term value creation.

Operational Discipline in Vaca Muerta

The company's operational execution in Vaca Muerta has been equally impressive. By Q3 2025, production from the region had already reached 1,660 boepd, with plans to further boost output through infrastructure upgrades such as rod pump installations and permit acquisitions according to company reports. Looking ahead, GeoPark aims to leverage synergies with existing operators and service providers in the region to accelerate development. This approach reflects a disciplined, phased strategy that prioritizes capital efficiency while minimizing operational risks.

Cost reductions have also been a hallmark of GeoPark's operations. Drilling and completion (D&C) costs in Vaca Muerta fell from $15.9 million per well in 2022 to $14.3 million in 2023, while lifting costs dropped from $8.10 per boe to $5.80 per boe over the same period according to financial analysis. These improvements, driven by technological advancements and operational learning curves, highlight GeoPark's ability to maintain low-cost production in a challenging resource environment.

Capital Allocation and Long-Term Growth

GeoPark's capital efficiency strategy is equally robust. The company has outlined a multi-year development plan for the Mata Mora Norte Block, including the addition of a second drilling rig in late 2025 to support 12–15 wells in 2024 as per company updates. By 2028, the full-scale development of Vaca Muerta is expected to require $500–600 million in gross investment, with production projected to ramp up from 1,700–2,000 boe/d in 2025 to 20,000 boe/d by late 2028. This phased approach ensures that capital is allocated to high-impact projects while maintaining flexibility to respond to market conditions.

Notably, GeoPark has suspended dividends during peak investment phases to prioritize value-driven returns. This decision, while short-term, underscores the company's commitment to disciplined capital allocation. For 2026 and 2027, CAPEX is projected to rise to $155 million and $380 million, respectively, reflecting a strategic shift toward scaling operations in Argentina while preserving its high-margin Colombian assets as per financial projections.

Conclusion: A Model for Sustainable Value Creation

GeoPark's 430% 2P reserve replacement rate and strategic expansion in Vaca Muerta exemplify a rare combination of aggressive growth and operational discipline. By leveraging low-cost unconventional resources, optimizing capital efficiency, and maintaining a long-term development horizon, the company is well-positioned to deliver sustained value to stakeholders. As the energy transition continues to reshape the industry, GeoPark's focus on high-margin, scalable assets in Vaca Muerta offers a compelling blueprint for navigating the challenges of a dynamic market.