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Investing.com -- S&P Global Ratings has revised GeoPark Ltd.’s outlook to stable from negative while affirming its ’B+’ ratings following the company’s acquisition of two blocks in Argentina’s Vaca Muerta formation.
The October acquisition of Loma Jarillosa Este and Puesto Silva Oeste blocks from Pluspetrol represents a strategic move that positions GeoPark to resume production growth after expected declines in its Colombian operations. The newly acquired blocks are located in the core oil window of one of Latin America’s most prolific unconventional oil and gas basins.
The acquired assets add 11.4 million barrels of oil equivalent (boe) in proved reserves to GeoPark’s existing 64 million boe reported as of December 2024. This acquisition extends the company’s reserve life index from five to seven years.
Current production from the blocks ranges between 1,700-2,000 boe per day (95% oil, 5% gas). S&P projects Argentina production will gradually increase to about 2,000 boe/d in 2026, 8,000 boe/d in 2027, and reach 20,000 boe/d by late 2028.
The rating agency expects GeoPark’s consolidated production to decrease to around 27,000 boe/d in 2025 and 2026, down from 34,000 boe/d in 2024, primarily due to lower volumes from Colombia. However, production is forecast to recover to 32,000 boe/d by 2027 and 40,000 boe/d by 2028 as Argentine operations ramp up.
EBITDA is projected to decline to approximately $332 million in 2025 and $241 million in 2026, compared to $443 million in 2024, reflecting lower crude prices and production volumes. S&P anticipates EBITDA will recover to around $320 million in 2027 as Argentina operations contribute an additional $100 million.
The development plan for the new blocks includes 50-55 additional wells, a pipeline connecting the two blocks, and a new central processing facility, requiring gross investment of $500-600 million through 2028. GeoPark’s total capital expenditure is expected to increase to about $155 million in 2026 and $380 million in 2027.
Despite the increased capital spending, S&P expects GeoPark to maintain debt to EBITDA between 2x and 2.5x through 2027, with adequate liquidity and no significant debt maturities until January 2030.
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