GeoPark’s Q1 2025 Update: Strong Production, Strategic Growth, and Financial Resilience

GeoPark Limited (OTCMKTS: GPARK) delivered a robust operational update for Q1 2025, showcasing resilience in production, exploration successes, and disciplined financial management. The results position the company as a key player in Latin American energy, with catalysts ahead that could drive valuation upside.

Production Beats Guidance, Highlighting Operational Grit

GeoPark’s pro-forma consolidated production of 36,279 boepd in Q1 2025 surpassed its 2025 guidance of 35,000 boepd, driven by record output from its Vaca Muerta assets and cost efficiencies. Excluding pending Vaca Muerta regulatory approvals, production totaled 29,076 boepd, though this reflected strategic moves: the suspension of Platanillo and the divestiture of Llanos 32 (both non-core assets).

Regional performance was mixed but instructive:
- Colombia: Production fell 16% year-over-year to 27,610 boepd, as divestitures and operational shifts took effect.
- Vaca Muerta: Achieved a record 17,358 boepd gross in February 2025, with average quarterly production of 15,533 boepd gross. This asset remains the crown jewel, though its inclusion in official figures hinges on regulatory approval.

Operational efficiency gains stood out. In Colombia’s Llanos 34 Block, a new rig slashed drilling time by 20% and cut costs by 25% per well, saving $6.6 million across six wells. Meanwhile, waterflooding in Llanos 34 contributed 15% of total block production, underscoring the potential of enhanced recovery techniques.

Exploration Successes Fuel Future Growth

GeoPark’s exploration program delivered three key discoveries in Colombia’s Llanos Basin:
- Currucutu-1 Well: Produced 1,360 bopd gross with minimal water cut, setting a new quarterly record for the Llanos 123 Block.
- Bisbita Oeste-1 Well: Delivered 585 bopd gross, while Zorzal Este-2 added 285–300 bopd.

The Putumayo Basin’s Bienparado Sur-1 Well also tested at 350 bopd, though Bienparado Norte-1 proved dry. Despite this miss, GeoPark’s focus on high-impact targets—like the planned Q2 2025 exploration well in Llanos 104—suggests a disciplined approach to risk.

Financial Strength Anchored by Hedging and Liquidity

GeoPark’s $308 million cash position (as of March 2025) provides a solid buffer, bolstered by a $152 million prepayment agreement with Vitol. The company has hedged 70% of 2025 production at floors of $68–70/bbl, shielding it from oil price volatility.

Cost discipline is evident: a new program targets $5–7 million annual savings via workforce reductions and contractor optimization. CAPEX guidance of $275–310 million remains aligned with production growth goals, while debt maturity extension to 4.6 years reduces refinancing risks.

Catalysts Ahead: Infrastructure and Regulatory Milestones

Q2 2025 promises further momentum:
- Drilling: 7 gross wells in Colombia (including infill wells in Llanos 34) and 4 in Argentina’s Vaca Muerta.
- Infrastructure: Progress on CPF-2 (40,000 bopd capacity) and the Duplicar Plus Pipeline (19,000 bopd) could unlock Vaca Muerta’s full potential.

The May 7 financial results release and May 8 conference call will be critical for investors, as management addresses Vaca Muerta’s regulatory status and 2025 guidance.

Conclusion: A Balanced Play for Energy Investors

GeoPark’s Q1 results reinforce its status as a well-managed, growth-oriented energy firm. Key positives include:
- Production resilience: Exceeding guidance despite asset sales and operational hiccups.
- Cost leadership: $6.6M savings in Llanos 34 and a $5–7M annual cost-cutting program highlight operational excellence.
- Financial prudence: $308M liquidity, 70% hedged production, and extended debt maturity reduce downside risks.

Risks remain, notably regulatory delays in Argentina and execution risks for infrastructure projects. However, with a $30 million annual dividend policy (yielding ~6–7%) and a 35–40% GHG reduction target by 2025, GeoPark balances growth and sustainability.

Investors should watch for Vaca Muerta’s regulatory approval and Q2 drilling results, which could catalyze a re-rating. At current prices, the stock offers exposure to a disciplined operator with a clear path to high-margin production growth—a compelling story in a volatile energy landscape.