GeoPark's Q4 2024: Contradictions Uncovered on DUPLICAR Capacity, Argentina Acquisition, and CapEx Strategy
Thursday, Mar 6, 2025 11:40 am ET
1min read These are the key contradictions discussed in GeoPark Limited's latest 2024Q4 earnings call, specifically including: DUPLICAR project capacity, Argentina acquisition timeline and regulatory processes, and CapEx allocation strategy:
Production Performance in Vaca Muerta:
- GeoPark's unconventional hydrocarbon blocks in Vaca Muerta delivered an average production of over 15,000 barrels a day gross in the fourth quarter of 2024, which is 19% higher than the third quarter of 2024 and almost 50% higher than when the transaction was announced.
- The increase in production is attributed to the quality of the assets and the impressive operating skills of the partner, Phoenix.
Reserves and Reserve Life Index:
- Pro forma 2P reserves reached nearly over 160 million barrels, driven by the addition of 74.6 million barrels from the Vaca Muerta assets, a 41% year-on-year increase.
- This growth extended the reserve life index to 13 years on a 2P basis and the 1P reserves to 8.2 years, reinforcing the company's long-term value creation.
Financial Performance and Cash Generation:
- Full year 2024 adjusted EBITDA was $416 million, representing an 8% decrease compared to 2023, following lower production and one-off financial expenses.
- Despite operational challenges and a lower oil price environment, the company was able to sustain its cash generation capacity and maintain a strong capital efficiency ratio of 2.2 times adjusted EBITDA.
Shareholder Returns and Financial Health:
- GeoPark rewarded shareholders with almost $74 million through dividends and buybacks in 2024, representing a record annual shareholder cash return of around 14% yield.
- The company's net leverage remains well below the target of under 1.5 times adjusted EBITDA, with no significant debt commitments until 2030, enhancing financial flexibility.
Sustainability and Environmental Responsibility:
- GeoPark has been recognized for its commitment to sustainability, being included in the S&P Sustainability Yearbook for the first time and maintaining its AA rating in the MSCI Index.
- The company's dedication to operating responsibly and creating value for all stakeholders is highlighted by these achievements.
Production Performance in Vaca Muerta:
- GeoPark's unconventional hydrocarbon blocks in Vaca Muerta delivered an average production of over 15,000 barrels a day gross in the fourth quarter of 2024, which is 19% higher than the third quarter of 2024 and almost 50% higher than when the transaction was announced.
- The increase in production is attributed to the quality of the assets and the impressive operating skills of the partner, Phoenix.
Reserves and Reserve Life Index:
- Pro forma 2P reserves reached nearly over 160 million barrels, driven by the addition of 74.6 million barrels from the Vaca Muerta assets, a 41% year-on-year increase.
- This growth extended the reserve life index to 13 years on a 2P basis and the 1P reserves to 8.2 years, reinforcing the company's long-term value creation.
Financial Performance and Cash Generation:
- Full year 2024 adjusted EBITDA was $416 million, representing an 8% decrease compared to 2023, following lower production and one-off financial expenses.
- Despite operational challenges and a lower oil price environment, the company was able to sustain its cash generation capacity and maintain a strong capital efficiency ratio of 2.2 times adjusted EBITDA.
Shareholder Returns and Financial Health:
- GeoPark rewarded shareholders with almost $74 million through dividends and buybacks in 2024, representing a record annual shareholder cash return of around 14% yield.
- The company's net leverage remains well below the target of under 1.5 times adjusted EBITDA, with no significant debt commitments until 2030, enhancing financial flexibility.
Sustainability and Environmental Responsibility:
- GeoPark has been recognized for its commitment to sustainability, being included in the S&P Sustainability Yearbook for the first time and maintaining its AA rating in the MSCI Index.
- The company's dedication to operating responsibly and creating value for all stakeholders is highlighted by these achievements.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.