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Company Geopark Holdings Limited
TIDM GPK
Headline

Operational Update

Released 07:00 28-Jan-2013
Number 4573W07

RNS Number : 4573W
Geopark Holdings Limited
28 January 2013
 



 

 

Embargoed for release at 7:00 am

January 28, 2013

 

 

GEOPARK HOLDINGS LIMITED

 

FOURTH QUARTER 2012 OPERATIONS UPDATE

 

GeoPark Holdings Limited ("GeoPark" or the "Company") (AIM: GPK), the Latin American oil and gas explorer, operator and consolidator operating in Chile, Colombia and Argentina, with a risk-balanced asset portfolio consisting of interests in 19 hydrocarbon blocks, is pleased to provide an operations update for the Fourth Quarter 2012.

 

Highlights

 

Key achievements during 4Q2012 include:

 

·     Oil and Gas Production Increase

 

Oil and gas production increased by 22% to 10,627 barrels of oil equivalent per day ("boepd") in 4Q2012 from 8,710 boepd in 4Q2011. Crude oil production increased by 110% to 7,939 barrels of oil per day ("bopd") in 4Q2012 from 3,783 bopd in 4Q2011. Yearly average production was 11,276 boepd in 2012, 49% higher than 2011. Current production is approximately 13,200 boepd.

 

·     Drilling Success in Chile and Colombia

 

Key wells drilled and put into production on the Fell Block in Chile during the fourth quarter included:

-     Yagan 2 (currently producing approximately 610 bopd)

-     Konawentru 4  (currently producing approximately 900 bopd)

-     Yagan 4 (currently producing approximately 600 bopd)

 

Key wells drilled and put into production on the Llanos 34 Block in Colombia included:

-     Tua 3 (currently producing approximately 1,100 bopd)

-     Tua 2 (currently producing approximately 1,700 bopd)

 

A complete list of wells drilled and results during 4Q2012 is provided below.

 

·     Expansion of LGI Strategic Partnership into Colombia

 

LG International Corporation ("LGI"), the Korean conglomerate, acquired an interest in GeoPark's 10 Colombian hydrocarbon blocks by becoming a 20% shareholder in GeoPark Colombia.

 

Fourth Quarter 2012 Drilling and Work Program

 

GeoPark's 2012 work program included the drilling of 44 new wells (gross) with a capital expenditure of over US$180 million. The drilling program in 4Q2012 was mainly focused on reserve appraisal and development in Chile and Colombia.  Results are set out below:

 

Block

WI

Country

Well

Type of well

Geological Formation

Depth (Meters)

Principal Hydrocarbon

Current Status

 

Wells Drilled in 4Q2012






 

Fell

100%

Chile

Yagán 2

Appraisal

Tobífera

3,126

Oil

On Production

 

Fell

100%

Chile

Konawentru 4

Appraisal

Tobífera

3,102

Oil

On Production

 

Fell

100%

Chile

Yagán Norte 4

Development

Tobífera

3,105

Oil

On Production

 

Fell

100%

Chile

Manekenk 2

Development

Tobífera



On Drilling

 

Fell

100%

Chile

Konawentru 3

Development

Tobífera



Waiting for Completion

 

Tranquilo

29%

Chile

Marcou Sur 1

Exploration

Loreto Inferior

1,496

Gas

Waiting for Completion

 

Tranquilo

29%

Chile

Palos Quemados 1

Exploration

Loreto Superior

1,600

Gas

Waiting for Completion

 

Tranquilo

29%

Chile

Ea Ma Antonieta 1

Exploration

El Salto Inferior

1,191

Gas

Waiting for Completion

 

Llanos 32 (1)

10%

Colombia

Maniceño 1

Disposal

-



Injecting in C1

 

Llanos 34

45%

Colombia

Tua 3

Development

Mirador/Guadalupe

3,276

Oil

On Production

 

Arrendajo (1)

10%

Colombia

Azor 3

Development

C5

2,033

Oil

On Production

 

Completions/Workovers Performed in 4Q2012






 

Otway

25%

Chile

Tatiana 1

Completion

Agua Fresca

2,202

Gas

Plug & Abandon

 

Fell

100%

Chile

Nika Oeste 4

Completion

Springhill / Tobifera

3,204

Gas

Waiting for Fracture

 

Fell

100%

Chile

Kosten 1

Workover

Springhill


Gas

On Production

 

Fell

100%

Chile

Ovejero 2

Deepening

Tobifera

3,184

Oil

Waiting for Fracture

 

Fell

100%

Chile

Guanaco 10

Workover

Springhill


Oil

Converted to Injector

 

Fell

100%

Chile

Maku 1

Workover

Springhill


Gas

On Production

 

Fell

100%

Chile

Guanaco 16

Workover

Springhill


Oil

On Production

 

Fell

100%

Chile

Alakaluf 3

Workover

Springhill


Oil

Injector

 

Llanos 34

45%

Colombia

Tua 2

Completion

Guadalupe

3,374

Oil

On Production

 

Arrendajo (1)

10%

Colombia

Azor 2

Completion

C5

1,947

Oil

On Production

 

(1) Non Operated





 







Drilling Highlights:

 

·     Appraisal well Yagan 2 on the Fell Block in Chile (GeoPark operated with a 100% working interest ("WI")) was put into production from the Tobifera formation in November 2012 and is currently producing approximately 610 bopd.

 

·     Appraisal well Konawentru 4 on the Fell Block in Chile (GeoPark operated with a 100% WI) was put into production from the Tobifera formation in November 2012 and is currently producing approximately 900 bopd.

 

·     Appraisal well Yagan Norte 4 on the Fell Block in Chile (GeoPark operated with 100% WI) was put into production from the Tobifera formation in December 2012 and is currently producing approximately 600 bopd.

 

·     Appraisal well Manekenk 2 on the Fell Block in Chile (GeoPark operated with a 100% WI) was drilled and is waiting on completion and testing in the Tobifera and Springhill formations.

 

·     Development well Konawentru 3 on the Fell Block in Chile (GeoPark operated with a 100% WI) was drilled and is waiting on completion and testing in the Tobifera formation.

 

·     Exploration well Tatiana 1 on the Otway Block in Chile (GeoPark operated with a 25% WI) was drilled and completed in December 2012. The well encountered gas in the targeted objective but with a tight reservoir (low permeability) and no commercial production. The well was plugged and abandoned.

 

·     Appraisal well Tua 3 on the Llanos 34 Block in Colombia (GeoPark operated with a 45% WI) was put into production from the Mirador formation in December 2012 and is currently producing approximately 1,100 bopd gross.

 

·     Appraisal well Tua 2 on the Llanos 34 Block in Colombia (GeoPark operated with a 45% WI) was put into production from the Guadalupe formation in December 2012 and is currently producing approximately 1,700 bopd gross.

 

·     Appraisal well Azor 2 on the Arrendajo Block in Colombia (Non-operated with a 10% WI) was put into production from the C5 formation in October 2012 and is currently producing approximately 580 bopd gross.

 

·     Appraisal well Azor 3 on the Arrendajo Block in Colombia (Non-operated with a 10% WI) was put into production from the C5 formation in December 2012 and is currently producing approximately 490 bopd gross.

 

Oil and Gas Production

 

GeoPark's daily average oil and gas production increased to 10,627 boepd in 4Q2012 from an average of 8,710 boepd in 4Q2011. This increase resulted from a growth in Chilean oil production (from 3,723 bopd to 3,879 bopd) and new production from Colombian assets acquired (4,018 bopd). Oil production accounted for 75% of the total oil and gas production compared to 43% in 4Q2011.

 

 

4Q2012

Total
(boepd)

Oil
(bopd)

Gas
(mcfpd)

Chile

6,558

3,879

16,080

Colombia

4,027

4,018

50

Argentina

42

42

-

TOTAL

10,627

7,939

16,130

 

 

Relevant Market Announcements and Strategic Developments

 

·     New Project Efforts

 

LGI, the Korean conglomerate, has joined GeoPark's operations in Colombia through the acquisition of a 20% interest in GeoPark Colombia S.A., a company that holds GeoPark's Colombian assets and which includes interests in 10 hydrocarbon blocks.

 

GeoPark and LGI agreed to extend until 2015 their strategic alliance to build a portfolio of upstream oil and gas projects throughout Latin America. Following its successful acquisitions in Chile and Colombia in 2012, GeoPark continues to actively review a range of asset and corporate opportunities, from a risk-reward and shareholder value creation perspective, in Chile, Colombia, Peru, Brazil and Argentina. 

 

·     Gas Market

 

Methanex Corporation, which purchases all of GeoPark's Chilean gas production, announced it expects to idle its Chile operation in March 2013 and restart it later in the present year due to anticipated insufficient natural gas supply. Gas supply for the plant is expected to decrease during the winter months of 2013 given the seasonal gas demand increase from the city of Punta Arenas, which is 100% supplied by the Chilean State Oil Company ENAP, and whose gas production is supplemental to GeoPark's gas supply to the Methanex plant.

Despite this temporary stoppage, Methanex has agreed to continue to purchase gas from GeoPark in 2013 in accordance with the minimum committed gas volumes per the Gas Sales Agreement. GeoPark may need to sell any excess gas to other buyers, such as ENAP or local distribution companies. GeoPark's total gas revenues for 2013 are expected to represent less than 5% of total revenues.

 

·     Portfolio Restructuring

 

In Argentina, GeoPark, in November 2012, relinquished approximately 85.6% of the Del Mosquito Concession to the Santa Cruz Province; resulting in a remaining exploitation area of 17,300 acres.

 

In Chile in January 2013, GeoPark formally advised the Ministry of Energy of a decision by the Tranquilo Block JV partners to not proceed with the Second Exploratory Period of the Tranquilo Block CEOP. GeoPark and its partners will relinquish the Tranquilo Block, except for an area of 92,417 acres consisting of protected exploitation zones for the Cabo Negro, Marcou Sur, Maria Antonieta and Palos Quemados prospects.

 

1Q2013 Outlook and Key Wells

 

Following its successes in 2012, GeoPark will continue its ambitious drilling program with the addition of approximately 35 to 45 gross new wells with a capital expenditure budget of approximately US$200-230 million for 2013.

 

The overall 2013 program is designed to increase oil and gas production and reserves, increase cash flow, improve project economics and performance and manage risk through a mix of exploration and development drilling program.

 

Block

Country

WI

Operator

Prospect

Name

Unrisked Resources

P90-P10(*) MMbbl

CoS(*)

Well Status / Comment

Llanos 34

Colombia

45%

GeoPark

Max 2

n.a.

n.a.

Spud Target Mar/13

Llanos 34

Colombia

45%

GeoPark

Taro Taro 1

22.6-1.6

43

Spud Target Mar/13

Llanos 32 (1)

Colombia

10%

P1 Energy Corp

Bandola

n.a.

n.a.

Spud Target Mar/13

Yamu

Colombia

75%

GeoPark

Potrillo 1

2.6-0.4

32

Spud Target Mar/13

Fell

Chile

100%

GeoPark

Various Tobifera Wells

n.a.

n.a.

Oil prone - Exploration/Appraisal

Fell

Chile

100%

GeoPark

Asetan

5 - 2.3

32%

Oil / Gas Prospect

TdF

Chile

50%

GeoPark

Chercan

1.1 - 0.1

32%

Oil Prospect

                 (*) Only for exploratory wells
(1) Non Operated







Commenting, James Park, Chief Executive Officer, said: "GeoPark completed 2012 with a strong fourth quarter resulting from our successful drilling results in Chile and Colombia and an important increase in oil and gas production and cash flow. We were pleased to exit the year producing over 12,500 boepd (now 13,200 boepd), which is leading us to register our seventh consecutive year of bottom-line performance growth. This consistent growth has been led by our success with the drill bit and by our ability to acquire underperforming assets and convert them into value generating projects. We are beginning 2013 in a strong position with the critical pieces in place for an exciting year of both organic growth and new project expansion."

 

In accordance with AIM Rules, the information in this release has been reviewed and signed off by Salvador Minniti, a geologist with 32 years of oil and gas experience and Director of Exploration of GeoPark. Reserve and resource estimates in this release have been compiled by DeGolyer and MacNaughton and the Company in accordance with the 2011 Petroleum Resources Management System produced by the Society of Petroleum Engineers.

 

GeoPark can be visited online at www.geo-park.com 

 

For further information please contact:

 

GeoPark Holdings Limited


Andres Ocampo (Buenos Aires)

Pablo Ducci (Chile)

+54 11 4312 9400

+56 2 2242 9600



Oriel Securities - Nominated Adviser and Joint Broker


Michael Shaw (London)

+44 (0)20 7710 7600

Tunga Chigovanyika (London)




Macquarie Capital (Europe) Limited - Joint Broker


Jeffrey Auld (London)

+44 (0)20 3037 2000

Steve Baldwin (London)




 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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