GeoPark's Q1 2025 Earnings Call: Unraveling Contradictions on CapEx, Production Growth, and Regulatory Challenges

CapEx and production growth in the current oil price environment, Argentina acquisition and regulatory delay, production growth expectations in Ecuador, energy cost management, and production growth expectations are the key contradictions discussed in GeoPark's latest 2025Q1 earnings call.



Production and Asset Performance:
- GeoPark reported pro forma consolidated production averaged 36,000 barrels a day in Q1 2025, exceeding its base case guidance of 35,000 barrels a day.
- This was driven by stable output across core assets in Colombia and Ecuador, and record-breaking performance from new Argentina assets, with Vaca Muerta blocks reaching a gross production of over 17,000 barrels a day in February.

Financial Resilience and Cash Generation:
- The company delivered adjusted EBITDA of $88 million in Q1 2025, up 13% from the previous quarter, with operating costs decreasing to $12.3 per barrel.
- GeoPark maintained financial flexibility, closing the quarter with over $308 million in cash and a net leverage ratio of 0.9x.

Dividend and Shareholder Returns:
- GeoPark declared a quarterly dividend of $0.15 per share, targeting an annualized dividend of approximately $30 million or around 9% dividend yield.
- This commitment to shareholder returns reflects the company's strong financial position and consistent cash generation.

Operational Excellence and Cost Efficiency:
- The company achieved a record drilling time of 6.1 days to reach total depth of 11,000 feet on the Tigui 53 well, representing a 25% reduction in well costs.
- This operational excellence was driven by a focus on improving drilling efficiency and cost reductions, enhancing returns and reinvestment opportunities.