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BOGOTA - Latin American energy company GeoPark Limited (NYSE:GPRK), currently trading at $6.56 with a market capitalization of $338 million, has entered into an agreement with Pluspetrol S.A. to acquire two oil blocks in Argentina’s Vaca Muerta formation for $115 million, the company announced Thursday. According to InvestingPro analysis, the company maintains impressive gross profit margins of 74% and appears undervalued based on its Fair Value metrics.
The deal includes a 100% operated working interest in the Loma Jarillosa Este block and a 95% operated interest in the Puesto Silva Oeste block, following a required 5% transfer to Gas y Petróleo del Neuquen S.A. The transaction is expected to close before year-end 2025. With a healthy current ratio of 2.47, InvestingPro data shows GeoPark’s liquid assets comfortably exceed its short-term obligations, positioning the company well for this acquisition.
The acquisition spans over 12,300 acres in the Vaca Muerta black oil window with current production of 1,700-2,000 barrels of oil equivalent per day (boepd), primarily oil. GeoPark estimates the blocks contain more than 60 million barrels of recoverable resources.
"Today’s agreement marks a defining milestone for GeoPark, transforming the Company by adding immediate production, increased reserves, and significant long-term value," said Felipe Bayon, Chief Executive Officer of GeoPark.
The company plans to increase production to approximately 20,000 boepd by year-end 2028 through the development of 50-55 additional wells. The assets are expected to contribute $12-14 million to GeoPark’s adjusted EBITDA in 2025, potentially reaching $300-350 million at peak production based on a $70 per barrel Brent oil price. This would significantly add to GeoPark’s current EBITDA of $324 million. For deeper insights into GeoPark’s financial health and growth potential, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US-listed companies.
The development plan requires $500-600 million in investment through 2028. GeoPark will fund the initial $115 million payment at closing with available cash, having already provided a $22.7 million security deposit. The company’s strong financial position is further evidenced by its attractive dividend yield of 8.96% and robust free cash flow yield, as reported by InvestingPro.
The Loma Jarillosa Este block’s exploitation license is valid until 2057, while the Puesto Silva Oeste block will receive a new 35-year exploitation license. According to the company’s statement, the acquisition positions GeoPark to reach approximately 30,000 boepd on a consolidated basis in 2025.
In other recent news, GeoPark Ltd reported its second-quarter 2025 earnings, which showed a notable miss in earnings per share (EPS) but a slight beat in revenue expectations. The company reported an EPS of -$0.20, which was significantly below the anticipated $0.20, resulting in a 200% negative surprise. However, GeoPark’s revenue came in at $119.8 million, surpassing the forecast of $117 million. Despite the earnings miss, the revenue beat highlights a positive aspect for investors. These recent developments are crucial for stakeholders as they assess the company’s financial performance. Analyst commentary on these results was not available in the provided context. Investors may find the revenue performance particularly interesting, given the challenges in meeting EPS expectations.
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