GeoPark CEO on oil prices: "We've been here before"
Latin America-focused oil and gas company GeoPark is well-positioned to weather an extended period of lower global crude prices, according to CEO James Park.
"Our long-term risk balance strategy in Latin America has provided a steady track record of growth every year for the last eight years," Park said in a Q3 results conference call, "including through the 2008 global crisis and oil price collapse. We've been here before."
The company's approach, Park continued, is defined by a focus on "high netback projects that can be profitable in even very low - for example, US$50 to US$60 per barrel - oil price environments."
Park said the company expects to meet its full-year 2014 production and cash flow guidance, but that the 25% drop in global crude prices seen over the last four months is expected to dent adjusted Ebitda by 6-8%.
Geopark's 2015 work program is budgeted on a US$80/b WTI oil price, Park said.
Geopark operates 30 blocks totaling 4mn gross acres (1.62Mha) in Colombia, Brazil, Peru, Chile and Argentina.
Q3 highlights included drilling success at the Llanos 34 block in Colombia, particularly in the Tigana field, where GeoPark updated its estimated 3P oil reserves to 45-65Mb. "This field size increase gives us 30-45 potential new drilling locations," Park said.
Park also highlighted the October acquisition from PetroPeru of a 75% interest the Morona block (also known as block 64), which the executive called "a potentially transformational acquisition."
GeoPark reported a Q3 revenue increase of 47% to US$132mn compared to the same period a year ago on increased production, and profits of US$11.9mn.
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