GeoPark (GPRK) Q4 2025 Earnings Call Transcript

Motley Fool Transcribing, The Motley FoolMon, March 2, 2026 at 5:37 AM UTC

0

Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Date

Thursday, Feb. 26, 2026 at 10 a.m. ET

Call participants -

Chief Executive Officer — Felipe Bayon

Chief Financial Officer — Jaime Caballero

Chief Operating Officer — Martin Tirado

Chief Exploration and Development Officer — Rodrigo Della Fiora

Shareholder Value and Capital Markets Director — Maria Catalina Escobar

Takeaways -

Production -- 28,233 barrels of oil equivalent per day averaged for the year, above the upper end of guidance, driven by stabilization in Colombia and early Argentina contributions.

Realized prices -- $58.1 per BOE for 2025 compared to $65.6 per BOE in the prior year, reflecting a materially lower oil price environment.

Adjusted EBITDA -- $277 million for the year and $46 million for the fourth quarter, with the quarterly figure affected by specific nonrecurring items including deferred sales, logistics adjustments, and Vaca Muerta startup costs.

Operating cost -- $13.4 per barrel for 2025, at mid-point of $12-$14 per barrel guidance according to management; Argentina's OpEx decreased from $32 per barrel to $22-$27 per barrel, with $10-$12 per barrel targeted by year-end as production ramps.

General & administrative cost -- $4.8 per barrel for the year; fourth-quarter one-offs mostly nonrecurring; G&A guided at $4 per barrel for 2026.

Structural cash savings -- $32 million achieved in 2025, with a targeted $45 million run-rate in annualized savings from 2026 onward.

Net leverage -- Closed at 1.6 times, with cash balance over $100 million, and no material debt maturities due before 2027.

Note repurchase -- Over $100 million of 2030 notes repurchased below par, resulting in a $10 million gain and $9.5 million reduction in annual interest expense.

Hedging -- Over 84% of 2026 production hedged via three-way collars; hedging for 2027 has commenced.

Capital expenditure -- $98 million invested in line with plan, yielding an adjusted EBITDA to CapEx ratio of 2.8 times and an 18% ROCE.

Argentina growth -- Vaca Muerta production started, with development underway and the first rig campaign to begin in March 2026; production plateau of 20,000 barrels of oil equivalent per day for Vaca Muerta targeted by 2028.

Acquisition of Frontera Energy's Colombian assets -- Announced in January 2026; doubles reserves and expected to increase pro forma production to approximately 40,000 barrels of oil equivalent per day, with the deal supported by completed Colombian antitrust approval (SIC) and scheduled Frontera AGM on April 10, 2026.

2028 outlook -- Standalone guidance is for 44,000-46,000 barrels per day and $490 million-$520 million adjusted EBITDA by 2028; pro forma with Frontera acquisition, targets production exceeding 90,000 barrels per day and adjusted EBITDA of approximately $950 million by 2028.

Polymer injection project (Janos 34) -- Launched in December 2025; initial injection in two wells, expanding to up to seven by mid-2026, with modeled recovery factor improvement of 3%-7% over the project area and 5% as the base expectation.

Dividend -- Board declared a $0.03 per share quarterly dividend; future distributions subject to review after free cash flow normalizes post-Vaca Muerta peak investment.

Colombian oil differential -- Vasconia benchmark discount widened from $3-$4 per barrel in 2Q/3Q 2024 to $7-$8 per barrel early 2026, driven by Venezuelan supply and seasonal refinery downtime; efforts underway to sell more CPO-5 volumes FOB Covenas to reduce Vasconia exposure.

Shareholder rights plan -- Scheduled to expire June 3, 2026; Board will evaluate renewal and communicate any changes when finalized.

Operational milestone -- "Inflection point" in Colombian production reached ahead of plan, underpinned by drilling and field optimization in key blocks.

Board actions -- Management emphasized established governance in response to Parex's director nominations, stating that all nominations will be reviewed per governance processes and that no shareholder action is required at this time.

Need a quote from a Motley Fool analyst? Email pr@fool.com

Risks -

Jaime Caballero stated that widening Vasconia discounts to $7-$8 per barrel (from $3-$4) are impacting realized pricing, due in part to increased Venezuelan supply and temporarily lower U.S. refinery demand.

Cost inflation risk exists from exchange rate volatility and labor provisions, though these are being addressed through operational efficiencies and pilots.

Uncertainty remains regarding the final approval and closing of the Frontera acquisition, with competing offers present and upcoming decisions by Frontera's AGM.

Disagreement with the Janos 34 partner over well approvals could affect 2026 drilling activity, but management states options exist to redeploy rigs if needed.

Summary

The transcript details GeoPark (NYSE:GPRK)'s operational execution, portfolio expansion, and cost control amid low commodity prices, emphasizing the Frontera Energy (TSX:FEC) acquisition as a core strategy. Management signaled production and financial milestones, such as early Colombian inflection and Argentina’s Vaca Muerta startup, while acknowledging transient cost and pricing challenges. Details regarding hedging, funding, asset integration, and governance response to shareholder activity provide transparent context for market participants.

The company described the Frontera Energy acquisition as "a transformative deal that consolidates our position as the leading private operator in Colombia and strengthens our platform for disciplined long-term growth."

Operational expenditure transformation efforts in Argentina delivered a 37% cost reduction between the initial and subsequent workover campaigns in Vaca Muerta, with further reductions planned as production ramps and facility upgrades complete.

Management explicitly identified the "recent announcement by Parex (TSX:PXT) regarding director nominations" and classified the effort as a "deliberate and hostile strategy directed at GeoPark," asserting conflicts of interest and vowing ongoing diligence in governance review.

The company confirmed that the shareholders’ rights plan will expire on June 3, 2026, and that deliberations on renewal or adjustment are planned for subsequent Board meetings, with future announcements to the market when decisions are finalized.

GeoPark's CEO highlighted the company's readiness to evaluate "opportunities in Venezuela" for new business, emphasizing that the Board regularly assesses strategic and operational options to capitalize on evolving regional dynamics.

Industry glossary -

BOE (barrel of oil equivalent): Measurement converting natural gas and condensates to an oil-equivalent volume (1 BOE ≈ 6,000 cubic feet of gas or 1 barrel oil).

Vasconia: Colombian heavy crude oil benchmark used for pricing reference.

Three-way collar: Hedging structure using options to set a protected price band for commodity sales, limiting downside risk while capping upside.

Frac/Fracking: Hydraulic fracturing process used to stimulate oil or gas flow in unconventional reservoirs.

OpEx: Operating expense per barrel, an efficiency measure of field or corporate operating costs.

ROCE (Return on Capital Employed): Financial ratio measuring profitability and efficiency of capital use.

FOB Covenas: Sale of oil "Free On Board" at the Colombian port of Covenas, meaning delivery occurs at port for export.

Workover: Well intervention activity to restore or increase production.

Polymer flood: Enhanced oil recovery technique injecting polymer solutions to improve reservoir sweep and increase hydrocarbon recovery.

Full Conference Call Transcript

Felipe Bayon, Chief Executive Officer; Jaime Caballero, Chief Financial Officer; Martin Tirado, Chief Operating Officer; Rodrigo Della Fiora, Chief Exploration and Development Officer; and Maria Catalina Escobar, Shareholder Value and Capital Markets Director. I will now turn the call over to Mr. Felipe Bayon. Mr. Bayon, you may begin.

Felipe Bayon: Good morning, everyone. Thank you for joining GeoPark Limited's fourth quarter and full year 2025 results call. 2025 marked a turning point for GeoPark Limited, defined by strategic clarity, operational discipline, and a decisive portfolio reset well underway. We strengthened our foundation through an anticipated inflection point in production and continued financial discipline, repositioning the company for long-term value creation. Importantly, we delivered or exceeded our full-year guidance across all key metrics despite a materially lower oil price environment. Production averaged 28,233 barrels of oil equivalent per day for the full year 2025, above the upper end of our guidance, reflecting a platform in both Colombia and Argentina that is executing and evolving while staying grounded in operational discipline.

In Colombia, we achieved an earlier-than-anticipated production stabilization supported by resilient base production in Janos 34, sustained contribution from CPO-5, and successful drilling in Janos 123. We also launched a polymer injection recovery project in Janos 34 that delivered solid results. Argentina began contributing production ahead of plan and assets were integrated safely to our operations. Fourth quarter volumes averaged 28,351 barrels of oil equivalent per day, broadly in line with the prior quarter and reflecting the first production of our Vaca Muerta assets. Full year financial results primarily reflect lower realized prices, which averaged $58.1 per BOE in 2025 versus $65.6 per BOE in 2024. Adjusted EBITDA reached $277 million, within our guidance range, while margins remained resilient.

Fourth quarter adjusted EBITDA was $46 million, reflecting lower realized prices and the impact of specific nonrecurring items including deferred sales volumes, logistics-related adjustments, and startup costs in Vaca Muerta. These are timing-related effects, some of which will be reversed in our first quarter 2026 results. Even in a lower price environment, and with temporary quarterly impacts, our operational platform remained resilient and capital allocation disciplined. We invested $98 million during the year in line with our plan and delivered a 2.8 times adjusted EBITDA to CapEx ratio and achieved an 18% ROCE, underscoring disciplined returns-based capital allocation. We delivered meaningful structural efficiencies in 2025.

Operating cost averaged $13.4 per barrel for the year, and G&A stood at an average of $4.8 per barrel, both within guidance. We also achieved $32 million in structural cash savings, setting a lower cost base expected to generate a run rate of approximately $45 million in annualized savings in 2026 and beyond. Our balance sheet and risk management remain strong. Cash stood at over $100 million and net leverage closed at 1.6 times, and we have no material debt maturities until 2027. During the year, we repurchased over $100 million of our 2030 notes below par, capturing a $10 million gain and a $9.5 million annual interest saving.

Over 84% of our 2026 production is now hedged through three-way collars, and hedging has already started for our 2027 production, ensuring continued cash flow protection. Our portfolio reset is well underway, reinforcing our Colombian foundation while establishing a new unconventional growth platform in Argentina. In October, we successfully closed the acquisition of Loma Harias Oeste and Bueso Silva Oeste blocks in Vaca Muerta, securing full operational control of two high-quality blocks in one of the most attractive unconventional plays in the world. Production is already online and development is underway, with a clear path towards the 20,000 barrels of oil equivalent per day plateau production by 2028 that we have shared with the market.

In January 2026, we announced the agreed acquisition of Frontera Energy's Colombian upstream assets, a transaction that more than doubles our reserves base and that brings an expected pro forma production of approximately 40,000 barrels of oil equivalent per day net to GeoPark Limited, which significantly expands our scale, diversification, and operating leverage. This is a transformative deal that consolidates our position as the leading private operator in Colombia and strengthens our platform for disciplined long-term growth. On a pro forma basis, this acquisition can take production to exceed 90,000 barrels of oil equivalent per day by 2028 and adjusted EBITDA of approximately $950 million, doubling our previously communicated standalone outlook.

Together, these two transactions reshape the company, materially increasing production, improving cash flow durability, and enhancing our ability to reinvest efficiently across the cycle. Our strategy remains clear: protecting and maximizing our cash-generating base in Colombia and scaling a transformational unconventional platform in Argentina. By 2028, we are targeting 44,000 to 46,000 barrels of oil equivalent per day and an adjusted EBITDA of $490 to $520 million, with additional upsides as the Frontera acquisition is integrated. In line with this roadmap, we reached a production inflection point in Colombia earlier than expected, anticipating the timeline we had originally outlined to the market. Execution remains disciplined and focused as we balance financial strength with long-term growth.

To support the strategy, the Board declared a quarterly dividend of $0.03 per share. As previously communicated, the Board will reassess shareholder distributions following the normalization of free cash flow after peak investments in Vaca Muerta. Before closing, I would like to briefly address the recent announcement by Parex regarding director nominations to GeoPark Limited's Board. Our Board remains fully committed to strong governance, disciplined capital allocation, and long-term value creation. All nominations will be reviewed under our established governance processes as we remain focused on executing our strategy and delivering results for all shareholders. GeoPark Limited shareholders do not need to take any action at this time.

Regarding Parex's proposal to acquire Frontera's upstream assets, GeoPark Limited remains fully committed to our agreement, which we believe creates a leading independent E&P platform across Colombia and Argentina. We have a strong conviction in the merits of the transaction and believe that, among other reasons, our strong operating expertise, deep local presence, and long-standing relationships in Colombia make us the strongest strategic fit for Frontera's assets. Our agreement follows more than a year of detailed evaluation, technical diligence, and structured discussions with Frontera, supported by comprehensive operational, financial, and contractual analysis. These steps of preparation underpin our confidence in the integration plan and value creation roadmap.

We believe the transaction delivers immediate and certain value to Frontera shareholders while enhancing long-term value for GeoPark Limited shareholders through greater scale, reserve depth, and cash flow durability. Our full-scale development approach is also expected to sustain production and investment in Colombia, supporting royalties, taxes, and employment while strengthening the country's energy platform. In summary, 2025 was a pivotal year for GeoPark Limited. We protected and optimized what we have while continuing to deliver results with consistency and focus. In parallel, we launched a new growth engine in Argentina and secured a transformational acquisition in Colombia that will improve scale, competitiveness, long-term optionality, and value for the company and our shareholders. We have entered 2026 with momentum.

We have a stronger, more diversified portfolio that has a leaner cost base and a clearer path forward to continue building long-term value for all of our shareholders. With that, let me open the floor for your questions.

Operator: When preparing to ask your question, please ensure that your device is unmuted locally. Our first question will be from the line of Alejandro Demichelis with Jefferies. Please go ahead. Your line is now open.

Alejandro Demichelis: Yes. Good morning. Thank you very much for taking my question. As we have a couple of questions, if I may, please. The first one is on your cost base. Obviously, we have seen, and you mentioned one-offs in the fourth quarter. So can you give us some indication of how you expect costs for the whole of the year to develop? What kind of range we can expect? That is the first question. And then the second question is, you mentioned the bid, or the offer for Frontera. There is a competing offer now on the table. So how do you see that situation?

And maybe you can comment on any kind of more recent discussions you have had with Frontera and how you see that situation, please?

Felipe Bayon: Alejandro, good morning, and thanks for being here today. We always value your interest in the company. Around the cost evolution, and then I will hand over to both Jaime and Martin to give us a bit more color. But one thing I would say, the first thing is that we met or exceeded all of the guidelines that we had given to the market, which I think is very, very important. Remember, and you would probably acknowledge this, I think it is only my third results call in the company.

It has been eight months, intense eight months, with the reset that I mentioned in my intro words, and the stabilization of the operation inflection point that we reached in 2025. We managed to work on decline through activity and all of the technical work that has been done by the team. From that point of view, Alejandro, I am very excited with the performance of the company. Kudos to the team, to the operations and the technical teams, and the people that support those operational teams.

In terms of the cost specifically, if you recall, we had given a guidance of $12 to $14 per barrel in terms of lifting; we are in the midpoint of that, $13.2, with an increase in 4Q, but most of those one-offs have been reversed or will not be present in 1Q, and we have managed to bring the cost back down, which is great news. Some of those had to do with very specific activities that we were conducting. With that, Alejandro, I will ask Jaime and Martin to give us a bit more color, which I think is warranted.

Jaime Caballero: Good morning, Alejandro. Thanks, Felipe. Basically, a few data points that are relevant when we think about the one-offs. Essentially, we can split them in two categories, and they have an effect both on OpEx per barrel and on G&A. On one hand, we had very particular startup costs associated to the reinitiation of the Platanillo operation in Putumayo and Vaca Muerta operations in Argentina. When you look at them on a full basis, the impact of that is in the order of $7 million in the quarter, which are not recurrent. They are split broadly, two-thirds of that is seen in OpEx and a third of that is seen in G&A, roughly.

It is something that we do not expect to see, and obviously, the important component of that is that these costs are going to seed production down the road. Platanillo, we are reactivating in a context of production, and clearly Vaca Muerta is the same case. So it is a cost but, at the same time, it is an investment that we are making to be able to mobilize production in those two areas. The other component is pure and typical seasonality. We had seasonal effects in 4Q in the order of $2 to $3 million.

These are very specific to labor-related provisions that we decided to take in the context of what we were anticipating—labor effects that were retroactive to 2025. There is an element of that, and there is also an element of the typical year-end projects, like, for instance, reserve certification, costs associated to that, and that type of elements. On a relative scale, they are not particularly material, but they do affect the per-barrel metrics. We are talking about $2 to $3 million that, in the context of the numbers that we are looking for, the OpEx, once normalized, would probably be at the $13 per barrel.

The G&A would be at the $4.5 per barrel, which is what we signaled in our announcement. As we look to 2026, our guidance is unchanged, Alejandro. Basically, what we are seeing is lifting costs that are going to be in the $13 to $15 per barrel area, and a G&A that we expect to deliver in the area of $4 per barrel. Martin?

Martin Tirado: Thank you, Jaime, and good morning, Alejandro. I will just add a few additional data points and stress again what Felipe was mentioning. Our guideline for 2025 was $12 to $14 per barrel, and we finished the year at $13.4, so we are very proud of the team and all the efforts that have been done. We had things that were already identified last year and were already underway, and I will share a little bit of that. For 2026, just to reiterate what Jaime was saying, our guideline for OpEx 2026 is $13 to $15 per barrel, and we feel confident around those values. We already have January and February numbers.

Like Felipe was mentioning, part of those things that hit us in the fourth quarter are gone, so we feel good about that. I will touch on a few items. I will start with Argentina. When we took over the operation in Argentina, the OpEx were $32 per barrel, and we have now brought it down to the order of $22 to $27 per barrel, and that is just by doing the workovers on the six wells and working with the teams on things like transportation optimization and other activities.

We expect to be by the end of the year, and that is part of our guideline, around $10 to $12 per barrel, and that is going to be because we are increasing production by bringing a rig that is about to start moving very shortly. The second one is, like Jaime mentioned, Putumayo. We started in the last quarter of the year that field back again. As we were starting, the OpEx were in the order of $45 per barrel. We are looking at that, and now we are lower than $40 per barrel, and with the recent announcements from the Ecuador government, we are looking at it, since we are not transporting crude through Ecuador anymore.

We will decide in the next weeks the future of Putumayo. Finally, on Janos 34, the OpEx went up in the last quarter. We had well interventions, and we are always looking at reliability of the energy, so we had some activities to make sure that we were entering 2026 with as good energy reliability in the field as in the past, and we confirm we are already back at the levels that we had in the third quarter. There are some things that we know are risks or challenges, especially around exchange rate, and we are working on additional things that we can implement. Some of them are around more ideas for the rigs doing workovers and well services.

We have some pilots and some ideas that we are about to start implementing. We are bringing a fourth workover rig in March in Janos 34, and we are already working in Janos 123 to eliminate most of the rentals on facilities that we have. That is part of the plan as we move from temporary facilities to the final facilities in this block.

Felipe Bayon: Thanks, Martin. And, Alejandro, I will go back to your second question in terms of how the Frontera situation is evolving. First, let me highlight some of the things that I already mentioned in my remarks.

In January, when we announced a month ago the acquisition of Frontera's assets in Colombia, clearly a transformational transaction in which reserves double, it brings additional production, helps us in terms of delivering more value, and actually it provides the opportunity of a long-term commitment to the country, which is fundamental in terms of ensuring that deployment of technology and activity can be done in those blocks—all this in the context that we will always keep in mind, which is ensuring that value accretion and protection of our shareholders is present in every situation and every decision that we make.

In terms of where we are in the process right now, first of all, I want to acknowledge Frontera's team; the work that we have done so far is exceptional in terms of all the integration and all the process and everything that has to do with getting us ready for closing of the deal. You will remember, Alejandro, that we have mentioned this is something that, as part of our valuation framework, with some conservative price assumptions and a very detailed operation plan, we have been looking at for some years now, with more detailed conversations with Frontera over the last year, over the last twelve months or so.

We are fully convinced that it is not only in terms of Frontera's capability—the people, the teams they have—but it is a very complementary portfolio to the operations that we already have. In that sense, in terms of the process itself, we are progressing with Frontera in our conversations. One data point that I will share with you today on the call: a couple of days back, we received formal approval from SIC—it is the antitrust body in Colombia, the antitrust agency—which is great. It was a major milestone in terms of the Colombian approvals. The AGM for Frontera is scheduled for April 10, so we are progressing in that sense.

I will just reiterate something with the use of the offer from Parex that came in this week. As I mentioned in my remarks, first I would say that, as a Board, we will continue to assess, study, analyze, and pursue any and all options that seek and are directed at creating long-term value for our shareholders. We will always evaluate opportunities within the frame of financial discipline and the best interests of our shareholders. We are very pleased—these are great assets with opportunity. The fact that there is a new offer from a different company demonstrates that our strategy is sound and solid, that the deal is actually an increasingly accretive deal for us and shareholders.

We are very pleased. We are very happy, Alejandro. Thanks for the questions.

Alejandro Demichelis: Thank you very much for the detailed answer. Thank you.

Operator: The next question today will be from the line of Stephane Guy Foucaud with Oaktree Advisors. Please go ahead. Your line is now open.

Stephane Guy Foucaud: Yes. Hi. Thank you for taking my questions. I have three. So the first one, back on Frontera. What are the value steps until closing? And are there things, bar increasing your offer, that you could do to prevent the deal to go to a spike? Possibly thinking about break fees or things like that. Second, on the nomination by Parex of directors for GeoPark Limited. I was thinking they are making an offer on the Frontera asset; they are nominating directors. I was wondering whether there would not be any conflict of interest, and I was interested in your thoughts on that. And lastly, where are we on Argentina with regard to current production? Thank you.

Felipe Bayon: Stephane, thanks, and great to have you here on the call. I will expand a bit in terms of Frontera. The first thing is that it is in Frontera's camp to assess the new offer that they have received. It is up to Frontera to decide what they want to do with that offer. In the meantime, as I have mentioned, our arrangement agreement is in place. I just talked about the local approvals, one which is very important that we received a couple of days ago, but it is down to Frontera to actually look.

One thing I would say, and I want to be very explicit on this, in the context of GeoPark Limited and its Board and reviewing all of the options that are available to us—and there are always multiple options in terms of things that we can do that need to create long-term value for shareholders—one of the things, Stephane, that we need to be very careful and mindful of is that we do not lose that discipline in pursuit of something specific. It could be a deal; it could be an operation. But we should always ensure that we remind ourselves that we are here to create value for shareholders. I think that is very important.

So, more to come, I guess. It is in Frontera's camp to decide if they want to fully consider and then take next steps on the new offer that came in. Again, in terms of the arrangement agreement that is in place, that we are pursuing and working diligently between our team and Frontera's team, we have options going forward, and those options, as I have mentioned, will be assessed by management and our Board. In terms of the nominations by Parex, and you mentioned specifically conflict of interest, the first thing is I would say that I do believe there is a conflict of interest, absolutely.

If you think about the nomination, which in essence is nominating a control slate for the Board, and this without any additional context or even an offer that appropriately values GeoPark Limited, I think it only serves to benefit Parex by providing Parex with optionality at the expense of GeoPark Limited's shareholders. In that context, I think it just demonstrates from Parex that there has been a deliberate and hostile strategy directed at GeoPark Limited. In terms of Argentina, I think Martin provided a bit of context, but I will give you the high-level view. We are extremely pleased with our entry and returning to Argentina, this time to do unconventional in Vaca Muerta.

As you know, we received the keys to all the operation on October 16 of last year. We have already done two workover campaigns, and one thing that is very thrilling, Stephane, is that next week, as early as next week, we will start mobilizing a Nabors rig that has an open window from a third-party operation from another operator. We will mobilize the rig to start drilling a limited campaign. It is five wells, plus some ancillary works that need to be done, but that means that we will start drilling in Vaca Muerta and we will start fracking operations in Vaca Muerta. I think that is a massive milestone for the company.

Remember that we have given the market the signal that we will see an uplift in production by the end of the year. With these wells and some of the activities that Martin was referring to in terms of facilities and commercial agreements and operational agreements with neighbors, we will see that uplift in production by the end of the year. Very exciting. There are additional opportunities that are being assessed in Argentina as well, and we are very pleased.

The last thing, which I have mentioned in prior calls, is that there will be an opportunity, I am convinced, to bring some of the expertise that we reinforce and further deepen in Argentina back to Colombia and look at unconventionals in Colombia. Martin, do you want to give us a bit more color around Argentina?

Advertisement

Martin Tirado: Absolutely, Felipe, and good morning, Stephane. Thanks for your question. I will reiterate that Vaca Muerta is going very well, and we are advanced on the key milestones. If we think about it, 2025 was about taking over, finalizing the team, and putting together contracts. Then 2026, as we showed when we were in New York in the last quarter of last year, is about four things, and I will go through all four of them. Before moving into those, 2025 also—everything we have done has been incident-free, with no recordables, and that is one of our values. Going into a new area again shows how we operate. In New York, we said four things. First, production optimization.

Like Felipe mentioned, we did two campaigns of workovers. The first one was actually starting the day that we took over; the second one we did in January. Between those two campaigns, we continued to optimize. The second campaign was 37% cheaper than the first one. Second, environmental permits. We know they are critical, and we submitted those permits in January, so they are well within the program that we have. Specifically, the one that is important is for the pipeline that we are going to construct. We do not need any environmental permit for doing the drilling activity or doing any upgrades in our existing facilities, which is part of the work that we are doing.

Third is around facilities, and I will mention that we have already awarded the contract for the Loma Hariosa ST upgrade actually a little bit lower than what we had in plan, for $616 million. We have already finalized an agreement with the neighbor operator so that we can put together a pipeline and connect to the spare capacity that operator has. That way, we will continue to optimize as we will not be having to truck oil and water into the production that we have. The last one is around drilling.

We said we were going to start drilling, and like Felipe said, we worked with existing operators in a collaborative way, and we got a rig that is a Nabors rig—very efficient, a hot rig, with crews already working and maintenance done—by a known operator in Argentina, and we are mobilizing that rig in early March—next week. The activity there will be: there is a pad that has five wells, out of which two are fully drilled, and for the remaining three wells we need to drill the horizontal branches. It is two branches of 2,100 meters and one branch of 3,000 meters. That will take us around 45 days.

Then we are already locking the frac set so that we will go and frac all five wells in that pad. It is around 220 fracs in all the wells for around 60 days. So we are very excited about how we finished 2025 in Vaca Muerta and, most importantly, how we are advancing on the key milestones. We have a team that is fully in place and integrated, and our exit rate for the year in Vaca Muerta is, like we have been saying in the past, 5,000 to 6,000 barrels of oil per day within our guidance, and that is again showing how we deliver production and value in Argentina.

Felipe Bayon: Thanks, Martin. Thank you.

Operator: Next question will be from the line of Oriana Cobalt with Balanis Capital. Please go ahead. Your line is now open.

Adena (Balanis Capital): Hi. Thanks for taking my call. This is Adena calling with Balanis. I have one brief one regarding your 2026 work program. What is the status of the negotiations with your Janos partner? I believe there was a discrepancy between the guidance that you had provided and your partner in the area. Should we expect any changes in activity versus the previously shared plan? Thank you.

Felipe Bayon: Oriana, thanks for being here, and thanks for the opportunity to comment. With most of the partners, we already have agreement in terms of the work programs and budgets and everything else, which basically support and underpin the guidance that we have given to the market. Specifically with regards to Janos 34, I will give you a bit more detail and some data points. We have 21 workovers that have been approved, both technically and from a budget perspective, which is great, and some facilities upgrades and works that have been approved.

In terms of the wells themselves, from a technical point of view, there are 14 wells that have been approved by both teams, by both companies, but our partner has only approved eight of those wells. We continue to diligently work with them to ensure that they have all the data and that they understand that these are value-accretive operations. Remember, these are wells in Janos 34 that provide value to not only the companies but their shareholders, which is very relevant.

One thing I would say, Oriana, is that we will very constructively continue with this dialogue to ensure that the partner can ensure that they have the funds to fully support the budget, and I know they probably have some other commitments as well in terms of their own operations. If we do not get into an agreement with them, we have optionality, and we can always put this rig into other areas and do other things that will be beneficial for GeoPark Limited and its shareholders. Thanks, Oriana.

Oriana Cobalt: Thank you.

Operator: Thank you. We will now move to text questions submitted from the webcast.

Eduardo Muniz: If the Frontera deal does not close, how does that change your Colombia growth outlook? Second, could you give us an update on the polymer injection project, which started in December, including incremental production impact, if any, and how this project could influence 2026 output and recovery factors? Thank you.

Felipe Bayon: Eduardo, good morning, and thanks for being here today. We will start with question number two, and I will ask Rodrigo to give an update on the polymer injection. I would say we are very satisfied and thrilled. Things are progressing well in terms of the different milestones and increasing concentrations of polymer and everything else. Rodrigo, please give us a bit more color. Go ahead, Rodrigo.

Rodrigo Della Fiora: Thank you, Felipe. Good morning, Eduardo. Polymer flood is an important element in our development plan for Janos 34. It started last year in December with two initial wells. The expectation that we have is to incorporate another two wells next month or in April. What we have seen until now is a very good performance in terms of operations. We are waiting for results in the second part of this year, so we are not expecting results in these early times, but operationally, and the concentration that we are incorporating in the polymer in the water, are working very well. The plan that we have is not to stay there for long.

We are going to add five more wells in the second part of the year. At the same time, we are monitoring, and we are expecting to anticipate that five wells by the half of this year. That is the intention that we have in order to be more proactive. Also, something that we are aiming at is to accelerate the expansion in the north of the block. We are seeing very interesting results in the simulation that we are doing in the north of the block in the Tigana area. That is the next step, so we are not going to keep only here; we are also going beyond that.

The expectation that we have in terms of recovery factor—in the simulation that we have—is between 3% in the pessimistic scenario and 7% in the optimistic scenario that we expect in the areas where we are injecting. The results according to our own experience and the neighbors is about 5% on average for the recovery factor.

Felipe Bayon: Thanks, Rodrigo. Eduardo, in terms of the outlook and the deal, first I would say that where we are, we have the arrangement agreement in place, and as I have mentioned before, we are pursuing very diligently with Frontera—both teams—the work to closing. The second thing is that, obviously, I will go back to the financial discipline comments that I have made. The Board will assess all options and opportunities that are available to us and always within this frame of financial discipline. I think that is very important.

We will not and should not lose sight of what is a priority for us, which is ensuring that there is value creation, and it is always in the best interest of our shareholders. That will be the framing with which we will think about it. Again, as we have done with the guidance and updates to the market, we will continue to keep you apprised. Thanks, Eduardo.

Operator: Thank you.

Isabella Pacheco: When does the limited duration shareholders’ rights plan expire, and is the Board discussing to renew it? Thank you.

Felipe Bayon: Thanks, Isabella, and thanks for being here. It is great to have you on today's call. The shareholders' rights plan has a rate of a year, and it expires on June 3. That is the date on which the rights plan will expire. The Board, as with many other matters, will discuss in due time the nature, conditions, and specifics around the shareholders' rights plan. When those discussions are final and when the company is ready to announce a decision or directionally where we want to go with that, we will communicate that promptly to the market. Thanks, Isabella.

Operator: Thank you.

Vicente Falango: Have you seen any impacts on your business from the formalization of the Venezuelan market? Thank you.

Felipe Bayon: Thanks, Vicente. I will ask Jaime to take on the market conditions, volumes, and how that is impacting us. Before I do that, at least the way in which I understand the question, there are two things. There are obviously volumes and differentials and stuff like that, but there is also a window that is opening in terms of opportunities in Venezuela. That is one of the things that, as I have mentioned before, the company and the Board will continue to assess—optionality and opportunities going forward—that we are reviewing as well, because we do believe that, given our track record as a prudent, safe, efficient, reliable operator, there are opportunities in that camp.

Jaime, if you can take the one on the volumes.

Jaime Caballero: Hi, Vicente. When we think about Venezuela, I think the most immediate impact that we have seen is, of course, around the heavy oil markets as such, particularly as it relates to the Vasconia and Castilla references in Colombia. The Vasconia reference is relevant to us because it is probably the most relevant benchmark that we use both for Janos 34 and CPO-5 crudes. Generally, our crudes are not exactly the Vasconia reference. Actually, our crudes have improved quality and less sulfur content than Vasconia from a purist standpoint, if you think about the specs, but as a benchmark of commercial differentiation, we are to some degree connected to that.

What has happened with Vasconia is that we have seen a widening differential. If you look at probably 2Q or 3Q of last year, we were seeing differentials—commercial discounts—in the order of $3 to $4. Those commercial discounts are today probably in the $7 to $8 amount, and to a large degree, that has been influenced by what has been happening in Venezuela. Basically, you are seeing about a million or so of new barrels from Venezuela going into the market, particularly to the U.S. market, the Gulf Coast refining area.

What we are seeing there is actually a combination of two things: you have new supply from Venezuela, but at the same time, we are at that part of the season—first quarter of the year—typically in the refining sector you see relatively lowish demand. It is a quarter where typically maintenance work is going on, refinery runs are lower. Therefore, you have this combination of supply coming in—new supply from Venezuela and from Mexico—and a lower demand from the refineries. We think this is temporary. What we believe is that the market will adapt to absorb the new Venezuelan crude, and demand generally with the refinery runs will increase around summer.

Summer is the typical high-demand season in the U.S. because there is massive consumption associated to people on vacation, traveling, extended days, and long hours. So we are expecting a stabilization, if you will, of that supply and demand, and particularly what we see is that Vasconia and Colombian references, relatively speaking, provide better quality than the Venezuelan offer that you have currently. Having said that, we are obviously moving on fronts to look at ways to further mitigate that. One of our strategies is around decoupling ourselves from the Vasconia reference by doing FOB exports. That is what we are doing with CPO-5.

Basically, the bulk of the CPO-5 volumes that we have—which are in the order of 6,000 barrels a day—are actually being sold in Covenas for export, and that deal helps us reduce that effect. So we are more tied to Brent rather than to Vasconia on that particular reference, and that helps. The other angle around your question of impacts on our business is that, from a new business standpoint, Venezuela is opening up. We are starting to see inbound interest in that area, looking for operating capabilities that can help restart production in a number of fields and improve production in a number of fields.

As you are probably aware, the dimension and scale of the Venezuelan industry is massive, so there could be opportunities on that front, and that is something that we are actively evaluating.

Felipe Bayon: Thanks, Jaime, and thanks, Vicente.

Operator: We will now close Q&A, and I would like to hand the call back to Mr. Felipe Bayon for closing remarks.

Felipe Bayon: Thanks, Harry. Thanks for the help, and again, thanks, everyone, for being here on the call today. Very briefly, just a few remarks from myself. First, 2025 closed in a very strong point operationally. As I have mentioned, we met or beat the guidelines that we had given the market, with specifics around the inflection point and stabilizing operations and production in Colombia, and entering Vaca Muerta. We are very pleased with those major milestones.

Strategy is in place, and we are executing and deploying capital in a very disciplined way in terms of protecting assets and the operations and the value that we have, and pursuing the avenue of growth, which both Vaca Muerta and the deal with Frontera underpin very nicely and directly. We are very happy with the start of 2026, and we have shared some of the highlights as well. We will continue to work with Frontera on the arrangement agreement and work towards closing. Again, very thankful to the team in Frontera and to our team in terms of how diligent they have been in keeping us on track.

Having the SIC approval, I think, is a major milestone for us as well. We will remain disciplined in terms of our decisions and the financial framework that we use at the management level and with the Board to continue to assess all and any options that are available to the company. With that, I again thank everyone who has been present at today's call. Thanks for the interest in GeoPark Limited. Thanks for the great questions. I think it allowed us the opportunity to share some of our views, and please stay safe. Have a great day.

Operator: This concludes the GeoPark Limited 4Q 2025 results conference call. You may now disconnect your lines.

Should you buy stock in GeoPark right now?

Before you buy stock in GeoPark, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and GeoPark wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $519,015!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,086,211!*

Now, it’s worth noting Stock Advisor’s total average return is 941% — a market-crushing outperformance compared to 194% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of March 2, 2026.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Original Article on Source

Source: “AOL Money”