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BOGOTA - GeoPark Limited (NYSE: NYSE:GPRK), an independent Latin American energy company, has announced its 2025 Work Program, outlining a strategy to enhance shareholder value through disciplined capital allocation, operational excellence, and sustainable growth. According to InvestingPro data, the company maintains a "GREAT" overall financial health score and impressive gross profit margins of 75%. The Board-approved plan aims to achieve a mid-term production target of 70,000 barrels of oil equivalent per day (boepd) by 2028 and 100,000 boepd by 2030.
The company's 2025 capital expenditure (CAPEX) is set between $275 million and $310 million, supporting an average production estimate of 35,000 boepd, with a plus-minus range of 2,500 boepd. The production mix is anticipated to be 97% oil and 3% natural gas, focusing on both unconventional (22%) and conventional (78%) resources.
GeoPark's operations span Colombia, Argentina, Brazil, and Ecuador, with the majority of production coming from Colombia (26,000 boepd) and the Vaca Muerta shale formation in Argentina (7,400 boepd). In Colombia, the Llanos 34 and CPO-5 blocks are key focus areas, while in Argentina, the Mata Mora Norte and Confluencia Sur blocks in Vaca Muerta are highlighted for development and exploration.
Financially, the company projects an adjusted EBITDA of $350 million to $430 million for 2025, assuming a Brent crude price of $70 to $80 per barrel. GeoPark also anticipates maintaining a net debt to EBITDA ratio between 1.5x and 2.1x, with an ending cash position of $120 million to $180 million. Approximately 50% of its estimated average production for 2025 is hedged to protect against downside price risk. Based on InvestingPro analysis, the stock appears undervalued, with analysts maintaining a strong buy consensus. Get access to the full Pro Research Report and 7 additional ProTips by subscribing to InvestingPro.
GeoPark plans to continue its annual dividend payment of around $30 million to shareholders, which represents a yield of 6-7% based on the market capitalization as of December 31, 2024. The company has consistently raised its dividend for six consecutive years, with the current yield at 5.46% and a strong free cash flow yield of 31%.
The company is committed to reducing its environmental footprint, aiming for a 35-40% reduction in carbon intensity by 2025 compared to 2020 levels. This initiative is part of a broader sustainability strategy that includes best-in-class health, safety, and environmental practices.
The information in this article is based on a press release statement from GeoPark Limited.
In other recent news, GeoPark's acquisition of a 45% interest in the CPO-9 block in Colombia has been halted due to Ecopetrol's decision to exercise its preemptive rights. Despite this, GeoPark's potential to acquire Repsol (OTC:REPYY)'s 25% interest in SierraCol Energy Arauca LLC remains open. In other developments, both GeoPark and Parex Resources face a potential tax hike as the Colombian government considers raising taxes on oil and gas industries, according to Jefferies.
GeoPark reported mixed Q3 results, with a 16% decline in net revenue to $159 million, primarily due to lower oil prices and production. However, the company achieved a net profit of $25 million and saw a significant improvement in cash flow, with cash reserves rising to $140 million.
In other company developments, Parex disclosed that it had entered into a farm-in agreement with EcoPetrol. These are the recent developments that investors should be aware of as they assess the future prospects of both companies.
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