GeoPark Limited (GPRK) Q3 2026 Earnings Report, Transcript and Summary

Good morning, and welcome to the GeoPark Limited conference call following the results announcement for the third quarter ended September 30, 2026. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question at this time, press 1 on your telephone keypad. If you would like to withdraw your question, press 1 again. If you do not have a copy of the press release, it is available in the invest with us section of the company's corporate website at www.geopark.com. A replay of today's call may be accessed through this webcast in the invest with us section of the GeoPark corporate website. Before we continue, please note that certain statements contained in the results press release and on this conference call are forward looking statements rather than historical facts and are subject to risks and uncertainties that could cause actual results to differ materially from those described. With respect to such forward looking statements, the company seeks afforded by the Private Securities Litigation Reform Act of 2000. These risks include a variety of factors including competitive developments and risk factors listed from time to time in the company's SEC reports and public releases. Those lists are intended to identify certain principal factors that could cause actual results to differ materially from those described in the forward looking statements, but are not intended to represent a complete list of the company's business. All financial figures included herein were prepared in accordance with the IFRS and are stated in US dollars unless otherwise noted. Reserves figures correspond to PRMS standards. On the call today from GeoPark is Felipe Bayon, chief executive officer. Jaime Caballero, chief financial officer; Martin Terrado, chief operating officer; Rodrigo Dalle Fiore, chief exploration and development officer and Maria Catalina Escobar, Shareholder Value and capital markets director. And now I will turn the call over to Mr. Felipe Bayon. Mr. Bayon, you may begin.

I would like to highlight 2 important developments that reflect the progress we are making in transforming GeoPark into a more diversified energy company with multiple platforms for long term growth. Earlier this week, we announced the successful completion of our strategic entry into Venezuela through the Bare block following the effectiveness of the 25 year production participation contract with PDVSA. This milestone was achieved well ahead of the original timeline and reflects the execution capabilities of our teams and the constructive collaboration we have built with PDVSA. With the contract now effective, our focus shifts to the safe and disciplined operational takeover of Bare, which we expect to complete before the end of the year. We have already assessed approximately 300-400 wells for potential reactivation establishing a foundation for the initial redevelopment phase. The transaction adds a large scale long duration redevelopment opportunity to our portfolio with significant potential to restore production by leveraging existing wells and infrastructure. It also marks an important step in our strategy to build a more regional platform. We also announced recently the award of Corralera Northeast Block in Argentina adding approximately 26.9 thousand gross acres to our position in northern Vaca Muerta. This is a very important expansion to our unconventional portfolio with material resource potential and a strategic location adjacent to an expanding development area. We will approach this opportunity through a phased appraisal program. Applying the same technical discipline and investment criteria that guide our capital allocation decisions across the company. Together, these developments reflect the progress we have made in expanding our portfolio beyond Colombia, while preserving the strong operating foundation that has supported GeoPark's growth over the past 2 decades. Turning now to our third quarter results, we delivered solid operational performance with stable production in Colombia and accelerating growth in Argentina. Consolidated production averaged 28 thousand barrels of oil equivalent per day increasing approximately 3% compared with the prior quarter. In Colombia, production remained stable at approximately 25.9 thousand barrels oil equivalent per day, Llanos 34 block continued benefiting from water flooding and polymer injection projects, while Llanos 23 delivered higher production supported by ongoing development activity. At CPO-5, we also achieved encouraging exploration results including the Milano 1 x discovery which has been testing at around 1 thousand barrels of oil equivalent per day reinforcing the remaining potential of our Colombian portfolio. Argentina continues to demonstrate the progress of our development program. Production increased by 51% quarter over quarter to approximately 2.1 thousand barrels of oil equivalent per day following the successful completion and startup of 5 wells at Pad 1.03 thousand in Loma Hariosa Este. These wells underwent a 180 hydraulic fracturing stages and gross field production exceeded 5 thousand barrels of oil equivalent per day following their startup. We are now preparing for the next phase of development with a focus on transitioning towards a more continuous and efficient drilling and completion program. From a financial perspective, the third quarter was more challenging. Despite our good operations performance. Although Brent prices remain relatively strong, averaging $91.4 per barrel, our results were significantly affected by wider crude oil differentials in both Colombia and Argentina. In Colombia, the Vasconia differential widened from a discount of $1.43 per barrel in the second quarter to $6.67 per barrel. In Argentina, the Medanito differential shifted from a premium of $1.79 per barrel to a discount of $3.50 per barrel. These movements, together with the impact of our existing commodity hedging contracts, reduced our combined realized price to $56.20 per barrel of oil equivalent compared to $67.20 per barrel in the prior quarter. Our commodity risk management contract resulted in a negative impact of $36.4 million on revenue compared to $41.2 million in the second quarter. In response, we have continued to actively manage our hedge portfolio to improve future price protection and participation in stronger market conditions, including optimizing our fourth quarter positions and extending coverage into 2028. At the same time, operating cost increased to $20.70 per produced barrel of oil equivalent compared to $17.90 in the prior quarter, mainly reflecting higher energy cost increased well intervention activities, and the appreciation of the Colombian and Argentine currencies. We recognize the importance of addressing these pressures. Our teams are implementing operational efficiencies and cost optimization initiatives, including energy price hedges designed to mitigate price volatility. As a result of these factors, quarterly revenue reached $116 million and adjusted EBITDA totaled $45.8 million representing a 39% margin. While financial performance was below the prior quarter, our operational results demonstrate the resilience of our portfolio and the progress of our development program. We remain focused on improving margins and cash generation through disciplined execution and active cost management. During the third quarter, we invested $72.2 million primarily focused on development activities in Vaca Muerta and continued production and infrastructure investments in Colombia. Operating cash flow was also impacted by lower profitability and working capital requirements. As expected, during this phase of elevated investment, free cash flow remained negative. This reinforces the importance of maintaining a disciplined approach to capital allocation and preserving liquidity as we advance our development plans. At quarter end, GeoPark held $253 million in cash with net leverage of 1.6 times the last 12 months adjusted EBITDA. Following quarter end, we successfully completed our liability management transaction including a $550 million senior notes issuance due in 2033. This transaction extended our debt maturity profile address our near term refinancing requirements, and secured long term funding for a substantial portion of our planned investment program in Vaca Muerta. It represents an important step in aligning our capital structure with our growth strategy and provides greater financial flexibility as we move through this investment phase. Looking ahead, we continue to expect full year production and adjusted EBITDA to remain within our guidance ranges. Supported by growing production contributions from Argentina and Colombia and the optimization of our fourth quarter hedge positions. Our priorities remain clear. Complete the safe operational takeover of the Bare block, accelerate development in Vaca Muerta, sustain the performance of our Colombian assets, and maintain discipline in the allocation of capital. When I look at the progress we have made over past year, I see a company that has significantly expanded its growth opportunities while continuing to build on the operating strengths of its Colombian business. We recognize the challenges reflected in this quarter's financial results, and we remain focused on the actions needed to improve profitability generate sustainable cash flow and create long term value for our shareholders. Finally, I want to recognize our employees for their commitment to safety, operational excellence and disciplined execution. And thank our partners and shareholders for their continued support. Thank you again for joining us today. With that, we are ready to take your questions.

We will now begin the question and answer session. If you would like to ask a question, please press 1 to raise your hand. To withdraw your question, press 1 again. We do ask that you pick up your handset when asking a question. To allow for optimum sound quality. If you are muted locally, please remember to unmute your device. If you would like to submit a question via the webcast, you may do so by clicking the Q and A button in the bottom right corner of your screen. Now please stand by while we compile the Q&A roster. Your first question comes from the line of Jacob Roberts with TPH Research. Your line is open. Please go ahead.

Good morning. I wanted to start on Venezuela and some of the numbers that were referenced in the September call and then also this morning. But roughly, we are looking at 300 to 400 reactivations, I think, a 100 workovers and then 30 potential new drill horizontals by 2030, I think with the new drill starting in 2028, So now that the CPP is effective, you are taking over before year end, can you walk us through the cadence across those 3 buckets year by year to reach that 2030 exit rate?

Thanks, Jacob, and good morning again, everyone. And good news, I found the unmute button because I did not at the beginning of the call. So apologies for that. I think you may have missed my first sentence. So, absolutely, Jacob, in terms of Bare, the Bare block, we signed the contract and we had up to a hundred and 20 days to make that effective. We actually took only 65 days. Roughly. To make that happen. So we are well ahead of schedule, which is great. And currently, we are, I mean, with our teams and working with PDVSA, to take over the operation before year end. So, a lot of, activity, a lot of preparation, a lot of work being done in terms supply chain, people, the likes. But I would like to ask Martin to take us through some of the details especially around reactivations, workovers, and everything else. and how we are viewing that. Martin?

Absolutely. Felipe, And good morning, Jacob. And so I will put a little bit of color into where we are and reiterate what Felipe was saying. Safely taking over the operations is our top priority. And that is something that we are planning and feel comfortable on doing before the end of this year. The first phase of the 3 phases that we presented is reactivation followed by drilling and then steam injection. So, for the first year we are going to be doing reactivation and eventually we will start doing drilling next year. What we have and when we look at the numbers out of the 300 to 450 reactivations we are going to be doing in by 2030. 1 third of those would be done next year. So we are talking about 100 to 150 reactivations that we are going to be performing. that is basically OpEx When we move to the next category, which is workover, so you spend a little bit time on that and more money. Out of the 100 workovers that we set by 2030, it is going to be about a fourth, so 25% of those will be done in 2027. And then when we talk about drilling, by 2030, we did say 30 wells. that is about 12 to 15 wells per year And we will start drilling operations in 2028. So from drilling perspective, it is zero for 2027. Now I do want to take a few more minutes to talk about 2 things. 1 is readiness. And the other 1 is our relationship with PDVSA, which is very, very good. On readiness, right now we have more than 50% of the contracts that are critical to takeover operations already awarded. And we are awarding the remaining in the next 2 to 3 weeks. So we feel confident about that. And which are those contract? that is rigs, chemicals, artificial lift, tubulars, and engineering because on the reactivation, it is not only reactivating wells, but we are aware that as we go into some paths, we will have to do some engineering to understand integrity of facilities. That 1, we feel very good about it. And, actually, we had a visit with PDVSA in which we got really high ranking. And that is part of the requirements to get the effective approval. Other 1 I want to talk about, readiness teams on the ground. We have teams both in Caracas and in El Tigre. For the past month and a half, we have offices in both places. And we already have an understanding on the names of the employees that are going to be joining the Vario block development. And finally, I just wanna say once again that we feel that the reason why we have been able to accelerate the. this timing that Felipe was saying to be effective is not only what GeoPark is doing but our relationship with PDVSA And we continue to work on many fronts including identifying which of the wells that we are reactivating, jointly with them. So it is very good about what is coming in Venezuela. Thanks, Martin.

Thank you. That was, that was great detail and super helpful. And then and then on. For my second question, I wanted to move to Argentina, and I apologize for my pronunciation here. But in the Corralera Northeast, we just do not have access to much well data. So I am wondering if you could talk about the technical case of the asset and specifically what data your team was looking at. What you are seeing in terms of rock quality, all those kind of details. And then and then, ultimately, what you are expecting out of the asset to make it competitive with the current Vaca Muerta blocks.

So absolutely, Jacob. And before handing over to Rodrigo, I will give you a bit of context, which I think is relevant. The first thing is that the award is official now for Corralera, so that is great. We are in the process of closing. So it will take some, some weeks probably to get everything sorted. In terms of, the contracts and everything else and as probably you. You are aware and we have announced this to the market, it is that we have 4 years initially to do a lot of work to derisk the area. And I know Rodrigo will go into some detail But, briefly, if you think about the neighborhood, obviously, this is different from where we have the other 2 blocks that we are operating right now. But there is probably around 80 thousand barrels of production being done by other companies in the area. This is around 27 thousand acres gross So that would take us, in terms of GeoPark, adding the existing 2 blocks and this 1 to 39 thousand acres, which is great. And we have identified remember in Loma Jarillosa and Puesto Silva Oeste, we have 2 landing zones In this 1, we see 2-4 landing zones. So good news, we have the acreage. We have the possibility of starting the work. We have 4 years to start this de risking. So in that sense, we can phase things accordingly in terms of capital efficiency and logistics and everything else. So Rodrigo, if you can provide us a bit of more detail, that would be great.

Sure. First of all, this asset we consider complement our current portfolio in Argentina because we have 12 thousand acres as Felipe mentioned, 3 years of development in the current asset. This new asset can provide, before the activity that we have to do to evaluate the subsurface potential Another 27 acreage that allow us to continue developing the area and with the drill rigs and also with new wells. The asset is located in the oil window, so that is very important for us. it is located in the north of the basin in what we call the new hub near to infrastructure, so that is good. Chevron, Pluspetrol, Tecpetrol, and YPF in the North actually are developing unconventional in the area. So that is why we believe we are in the bright neighborhood. The information you asked about, the information we have, the previous operator did a well. With the well, we know that the reservoir is there. What we are going to test during this 4 years is the potential and the productivity of the well. 1 of the uncertainty that we have is the water cut that we are going to produce. The well type that we are looking for here is similar like Entrapial. In the South, the Chevron producing from Entrapial very good results from there. What we are expecting is try to achieve that well type. We are talking about more than 1 million barrels per well in that case. The landing zones we are going to test during these 4 years is the T7 and the Vaca Muerta. Those landing zones are tested by the neighborhood, but not tested by the previous operators. that is why we are going to introduce something new in the equation here. You asked about competitive. Competitiveness. So the plan that we have today is preliminary as with the information surrounded. We are talking about more than 120 wells for the development. We are thinking about conventional well at the moment. So 3 thousand lateral length because the polygon of the block allow us to think about that. More than 120 million of potential reserve in the future. And the well cost is between $14 million and $15 million as you can see many of the other operator in the area. So it is preliminary We have to test the potential of the reservoir, but that is the bet that we have in Vaca Muerta today. Thanks, Rodrigo.

And thanks, Jacob. Great con.

No. Thank you, guys. I appreciate the time.

Your next question comes from the line of Alejandro Anibal Demichelis with Jefferies. Your line is open. Please go ahead.

Good morning, guys. Thank you very much for taking my questions. Couple of questions, if I may. The first 1 is, Felipe, you mentioned your on cost structure now that all of the team is looking at that. Maybe you can kind of indicate how you are seeing this evolution of cost both in Argentina and also in Colombia and also with a new acreage that you have coming up in Venezuela? And the second question is a bit of a what you discussed on Venezuela. Now you have closed the deal there is still some kind of milestones that may trigger or may not actually trigger call it an extra amount of shares for your controller. So could you kind of explain what those milestones are and how you see those kind of evolving?

Thanks, Alejandro. And if I may, I will probably start with the second question and then I will ask Jaime and Martin to help us with the first 1. So, in terms of, the Bare block, you know, and, and how do we view it, as I was mentioning before, Alejandro, we still need to start operations, which is great. We wanna do that before year end, and I mean, all the attention focus is on that. You know? How do we as Martin was explaining, conduct operations in a way that is safe, that is efficient, And, again, we are gonna start. Even though we have done assessments of the area of the wells, we have gathered the data, it is 1 thing when you go in and get to the field and start putting the wells into operations and restoring production. So that. that is gonna take us some time, and Martin was clearly explaining. Focus is gonna be on reactivating the wells. The good news is the well stock is very ample. You know? We have looked at 3 to 400 of the 1.1 thousand wells next year, it is gonna be 120 or something in that range. So from that point of view, I think, Alejandro, we are good. In terms of the milestones, you know, that may trigger or not, and probably Jaime can go into some more detail, we did announce the issuance of the shares related to Bare, to the Bare block, and we announced a potential additional of shares that could be triggered by milestones mainly related to some tax events that could happen in Venezuela. So, Jaime, do you wanna talk a little bit about that?

Sure. Absolutely. So the milestones that Felipe refers to they are basically linked to the tax conditions in Venezuela, particularly around corporate income tax that applies to the different types of fields that you have in Venezuela. The specific circumstance is that there are. There is an ongoing discussion between the Venezuela executive and the congress around what are the most appropriate conditions to reactivate the industry going forward. And in that context, there is the possibility that the corporate income tax that is applicable to a field such as Bare gets a downward revision. So, currently, our business case has the assumption that we are going to be paying a 50% corporate income tax over time and there is the possibility that this could be reviewed downwards over the next few weeks. While we have agreed with Grupo Gilinski as part of this transaction is that if these revisions occur by the December 1, of this year we would have an adjustment. Importantly, the revision needs to be absolutely clear in scope. It needs to be very clear that it applies to Bare in its integrity and if we have that condition met then we would apply this clause that implies a additional shared grant to the Grupo Gilinski. Thanks, Jaime.

And if we can go to the, the first question from Alejandro. On cost.

Sure. So, Alejandro. Sorry, and I did not actually say hi. So on cost, I would start by saying that of course, the company continues to have a very stringent view around, you know, operating costs. And we are very conscious that over the over this quarter and the last, we have had a significant increase in our unit cost. Right? I think the way to think about it is if you think about our earlier guidance for this year, where we were in the $13 to $15 per barrel range, you know, and now we are at 20. How do we describe the $56 of difference? And fundamentally, what is happening is 2-thirds of that variation is associated to Colombia macro factors, that are largely outside of our control. Is energy cost, which represent about $1.5 per barrel, and the FX impact associated to a stronger peso that represents about $1.5 per barrel. The other element, the other 1-third is more activity. We are having more activity levels in Repsol in particular, and Martin is gonna explain that in a moment. I wanna focus on what. what is going on in energy and in FX and what we are doing about it. Basically, in energy, due to the basically, the gas shortages in Colombia, which imply significant imports, we are having a material increase in the in the cost associated to electricity. Coming from the grid. there is a number of sources. I do not wanna go into a lot of detail here, but, basically, that expansion of imports associated to gas reflects in spot prices in the grid. In GeoPark, we had historically a significant exposure to spot pricing. Because it is proven to be most cost effective over the long term than fixed prices. That was the reality in the past. Right? As we go into this transition in B, in the Colombian energy grid, that is changing. And we are moving to a place where spot pricing is becoming very volatile it is expected to grow over the next few years. Significantly and we are making that transition from a spot price to fixed price. And that gives us a better outlook going forward. there is 3 specific things that we see that are kicking in 4Q. The first 1 is we are starting to see some of the fixed pricing coming in before 4Q. We are basically gonna move from a place where about 60% of our pricing is fixed coming from Bell, which is the grid that hits James. To a place where only about 45% is going to be bought from spot. The second thing that is gonna kick in is pedal grip rates. The CREG, which is the commission with the new government that governs energy matters in Colombia, already made an intervention that represents about a 30% discount on energy rates that we are getting from the grid. that is kicking in as well this quarter. And the last thing that I want to highlight is some energy hedges that we have contracted. Those energy hedges basically guarantee us a fixed price that is about a third of the rate that we paid over 3Q. So it has substantial saving on the spot pricing that we paid over 3Q. And all of that starts to kick in 4Q. That gives us a better outlook. Now as we look into the longer term what we want to do over 2027 is move to a place where about 75% of our demand is linked to fixed pricing. And that is something that is work in progress, and we will keep you updated around that. With regards to FX, you know, that is public, and it is. you can very easily see what is going on with it between the Colombian peso and the dollar. Essentially, what we are doing is we are ensuring that we have downside protection. If we have an extreme scenario, where the exchange rates go below 3 thousand pesos per dollar where protected against that. We have hedges that protect us against that. So if you will, the downside exposure is already limited. The other thing that we are doing is we are reviewing our entire cost base to see where we can have opportunities to improve efficiency and mitigate that exposure that we have. Having said that, to the extent that the FX rate stays at the current levels around 3.2 thousand pesos, 3.3 thousand pesos per dollar we will continue to have that increase, if you will, dollar based exposure. So with that, I am gonna hand it over to Martin to talk a bit more about the activity drivers.

Yeah. I will build on Jaime and Alejandro. Thanks again for joining our call. So if we think about Colombia, Jaime was saying, you know, 1.5 energy 1.5 exchange rate, and that is dollars per barrel. And the remaining is mainly operations and Colombia, if we think about Llanos 34, and that is where most of the OpEx increase has happened, I will talk a little bit about Llanos 123, but in Llanos 34, the first half of the year, we had a failure rate that was outside of the ranges we used to have. That means more pulling jobs than expected. That has changed. We are not having that in the second half of the year. And the other component from that incremental in pulling jobs is proactively have done what we call deepening which is basically to put the well. The pump at the lower depth or a bigger pump and produce more fluid, so that we can arrest the declines. And we still had some of those candidates early in the year. So that is when you think about the pulling reason for the OpEx being higher, So what are the things that we are doing in Colombia to arrest part of these incremental OpEx. And I will say it is mainly 2 big buckets. The first big bucket is water management. So that is why workovers are so important in Llanos 34. Some of those workovers are doing water shut offs or they are doing incremental production or both. And we continue to do workovers. We are actually doing about 8 more workovers than expected, agreed with our partner, and they are delivering good value. When you look at channels 23, water management means simplifying and reducing water And, so we have done that in the past 9 months. We have 2 pads and we have reduced the water tracking between paths by engineering some of the facilities. So that we can treat the water and inject it in the same location. So that is another of the things that we have done. And then the other component, it is for Colombia. What else can we do on energy efficiency and 1 of the things that we are doing is like Jaime was saying, not only hedges, but can we switch a little bit the feed of our machines, from diesel to other sources? that is giving us some savings year to date got savings of around $7 million that are, you know, being contrasted with the with the effect of exchange rate and energy. And I do not wanna forget about Argentina. And yes, Argentina is contributing with around 5 thousand barrels of the total production that we got. And for the quarter, it was like we mentioned, around 28 thousand barrels of oil per day. So but Argentina, when we took over operations a little bit over a year ago, the OpEx was high 20s low 30s. So between 29 and $32 per barrel. I do not remember exactly, but that was the order. And now we are, below $10 per barrel. And that is because of all the work, and you guys have follow us on the facilities and the investments. Very proud of what the Till has done incident free and now we are not trucking crude. The crude goes into a pipeline. We are not tracking water. The water goes into a disposal well. And we are also piping the gas. So all of those things plus the up upscaling that we did in Loma Jarillosa battery is helping us keep the OpEx on the trend that we have in mind and is our plan. Thank you, Martin.

Thanks, Jaime.

Thank you very much, both.

And we now have a few questions from the webcast. Daniel Guardiola from BTG asks, given Felipe's experience operating large oil and gas assets across Latin America, which do you believe represents the greater execution challenge today? Scaling up a relatively new unconventional development in Vaca Muerta, or rehabilitating a mature underinvested asset in Venezuela? And how does that assessment influence where you allocate management attention and capital?

Thanks for the question, and Daniel, thanks for following us always and for the interest in the company. So I would say that the 2 are different, and they actually give us probably different challenges and different opportunities. If you step back for a second and you think about GeoPark, and I think, with the current portfolio, now that we have made very effective, the CPP contract effective, we are in reality with a platform in Latin America that has conventional oil in Colombia with heavy crude as well, unconventionals in Argentina, and extra heavy oil in Venezuela. So 3 different types of crude 3 different operations. The good news over the last year, in Vaca Muerta in particular And with the team that we have managed to assemble, with a lot of people with many years of experience around unconventionals, we are actually advancing well, you know, in terms of activity, in terms of intensity. And as we have described before, Vaca Muerta is gonna be highly intensive CapEx development over the next few years. So it is about execution on drilling, and factory mode drilling, which starts in December. And the good news, we have already drilled 5 wells. And that was done earlier in this year in March, April, So all that information, all that experience, all the things we found in the subsurface have been incorporated into the plans going forward. And the other good thing that we probably have not talked too much about we actually just finished a, a very high quality 3 d seismic survey in the area that is gonna provide a lot of data. Going forward. So very specific in terms of, the challenges that entails or that brings with itself in terms of Vaca Muerta. And we are on track with the investment, and we. The ramp up of production. So that is good. And as Martin was highlighting, over the last year, a good reduction in lifting costs. Which is always important. And in terms of Bare, you know, and when you step back again, a field that has or a block that has close to 16 billion barrels oil in place. Where we have at least identified that over the next 25 years, we can produce some 600 million barrels has plenty of opportunities. You know, and it is around reactivation. So challenges there would be around getting the pulling rigs and the small rigs. I mean, the 53 horse 55 horsepower in the field, on time, starting the reactivations, getting the right people And as Martin was highlighting, we have already awarded, around 50% of the services that are required. And we are very comfortable. You know? A lot of those companies that we have operated with before. Or that have a lot of experience in La Faja. Which is great. And the other thing, Daniel, I will step back I think, and you rightly point out, different challenges, different of the developments, We have very, very good teams for both. Vaca Muerta and Barre. So I am I am very confident with that. And in parallel with that, we will keep on taking care of Colombia. You know? So we are not forgetting what has brought us here and what is enabling us to take this step. So personally, I am very thrilled I am very optimistic. I mean, there will be things down the road There will be probably surprises. But I think the opportunity set is 1 that is that is, very high quality, And again, puts us in the range of a regional platform for investors and for people that wanna be with GeoPark for the long term. Thanks for the question.

Daniel's second question is, given the significant losses recognized this year and your substantial hedging commitments through 2028, how are you balancing downside protection against the opportunity cost of capping upside, particularly as production ramps up in Argentina and Venezuela.

Thanks, Anita. And I will link it to the first question you made. So clearly, Argentina and Venezuela are providing additional, volumes going forward So there will be increasing production in Vaca Muerta, as we drill and we finish some of the facilities By the way, we have over the last couple of weeks, we have already done the initial times to regional oil pipelines and gas pipelines. So, evacuation is something that we are in a much better place right now with reduced trucking. So there will be volumes. And, as we take control of operations in Venezuela of the Bare block, we will start seeing production increase And, I mean, we have told before in terms of gross numbers, probably around 15 thousand to 20 thousand barrels in terms of body. And if you step back, you think that our volumes that are hedged for next year are roughly 22 thousand barrels average for the year So there will be incremental volumes coming in that will be to some extent, able to be exposed to the to higher prices should they should they remain. And I think it is important, just to step back for a second. You know? A year ago, when we made the decision to, enter into the 2 blocks in Vaca Muerta, we very specifically said we need the hedging to ensure that we can fund the CapEx and pay our debts. And we knew that this quarter, 3Q in particular, was gonna be tough. And that we were going to be in a sort of tight spot But I think it is delivering the strategy going forward And, again, I think we are in a good place in that sense, being able to deliver investments going forward. So thanks for the question.

And the final question from Daniel is given Grupo Gilinski's role in originating the Bare transaction, should we expect additional investment opportunities in Venezuela to emerge through the controlling shareholder. If so, how would GeoPark approach funding these acquisitions, and what safeguards would be in place to ensure the future transactions do not result in further dilution of minority shareholders or create potential conflicts of interest.

Thanks, Daniel, and a great question. And first of all, I just wanna acknowledge that working with Grupo Gilinski over the Venezuela opportunity was fundamental to get to where we are today. You know, very, very quickly and in a way that was very efficient get the opportunity in front of GeoPark and then being able to close on the deal with Grupo Gilinski. And the 1 thing I would say, Daniel, is that any opportunity and all opportunities coming forward for the company will be managed through GeoPark. So everything will be done using GeoPark as a vehicle in Venezuela, or should there be other opportunities going forward? But I just wanna reinforce 1 point. I think that over the last 12 months, we have managed to assemble a very competitive portfolio. And, right now, I think our focus is mostly on execution. You know, on delivery of what we have managed to build as a very, very competitive high quality portfolio. Thanks, Anit.

And returning to our audio questions, your next question is coming from the line of Joaquin Robet with Balen's Capital. Your line is open. Please go ahead. Joaquin, are you there? I believe Joaquin has also sent a quest-- Oh, are you there, Joaquin? We will we will move on to our next text question.

It comes from Vicente Falanga from Bradesco. What is the company's expectations regarding the timing of the tender process for shares? Is the offer proportional to all shareholders? that is the first question from Vicente. And then he follows up with in the release, GeoPark said it could already assume operations before year end. What will be the key short-term operational milestones for the first 100 days? I understand if answers your questions.

I. On. I will take the first 1. And, basically, the timing of the tender process is governed by the contract. The PSA that we agreed with Grupo Gilinski, And it basically provides for a 90-day period post closing to perform the tender. And that initiated, like, last Monday, and it is gonna, you know, go through the next 88 days, if you will. The offer is proportional to all shareholders, excluding Grupo Gilinski. So it is it is available to all the shareholders of the company outside of Grupo Gilinski and in the event of an oversubscription, tenders are gonna be awarded on a pro rata basis over to Martin.

Yeah. Thanks for your question. So in relation to. Okay. What are the short term operational milestones I will give a little bit more of information of what I described before, but I will say that it is mainly around safely taking over the operations, it is mainly around incorporating equipment to the block and that is so that we can reactivate wells and incorporating equipment is the rigs, we are targeting between 1 and 2 rigs to start and then we will continue to ramp up. And equipment is also well ahead tubulars and so forth. And the other component in the first 100 days, sorry, is make sure that, you know, we are just like we did in Argentina. The teams are bonding and that we got, you know, to continue to have a good relationship with PDVSA. In our way forward. So how are we gonna measure that? I will say that our key performance indicators for the first 100 days are going to be incident free operations. So safety again, then it is gonna be around production levels. I mean, where are we on production versus what we got when we started the operations? And then we will move into efficiencies. But I will say that in the first 100 days is going to be about reactivation and safe operations. Thanks, Martin.

Your next question comes from Joaquin Robet From Balance Capital. And they ask, after the recent bond issuance, how much additional funding do you need through 2027 including Vaca Muerta, Corralera, and Barre? If there is a remaining funding gap, beyond the Vitol facility, how do you plan to cover it and how much of that financing is already committed?

Hi, Joaquin. Thanks for your questions. So first, I would say that we are very happy to have secured investor support to our growth plans recently with these foundations. You know, the 2033 tenor provides ample room to deliver our growth plans. That revolve around the portfolio transition that Felipe has described. So from that angle, it is it is very strategic that we are getting that investor support, and we really appreciate it. Now when going to the numbers, you know, when you look at the net proceeds of the recent issuance, once we refinance the 2027, which we already did, so that is taken care of on the 20 thirties, everything that was standard our net proceeds sum about $170 million So that $170 million to be added to our existing cash position which, as you would have seen in the 3Q results, was in the order of $250 million and on top of that, we have a number of available committed lines undrawn which include Vitol's but there is more to that. We have a couple of other lines including a top line with a set of international and Colombian banks that is in the amount of $150 million plus a number of revolving facilities in which are available to the Vaca Muerta operation which together, those lines in Argentina amount about $150 million So where I am going here is that, basically, when you add all that up, we are talking about available financing in the order of 600 to $700 million which provides ample leeway for what we are trying to do in Vaca Muerta. Now to put to put that in context, of course. Now we. As we look at market conditions over the next year and how Vaca Muerta is progressing, we are gonna be seeing what is the most efficient use of those lines, And I would characterize the Vitol line and the contingent line with the plot deal as contingent lines for safety nets. They are not part of our core plan. Power, but they are available. So I think our decisions around funding Vaca Muerta are gonna depend a lot on how market conditions evolve over the next you know, 12 months or so. But 2027 is funded you know, in aggregate, including all the requirements, not only of Vaca Muerta, but of Bare and Corralera. Thanks. Thank you, Jaime.

And our final question is from Andres Pautaso from Itau BBA, Argentina. I am surprised by the level of Vasconia differential over the quarter and the transport cost. What are the main drivers that affected them during their quarter? What do you foresee for the remainder of the year and first half of 2027? What mitigation measures you are taking to counter the impact on realized prices.

Hi, Andres. Hola. So on Vasconia, so the first thing that I would say is that we were also surprised with what is happening in Vasconia. This is completely unprecedented. it is completely unexpected. Right? And we need to start from there. Right? it is it is a very atypical market situation that we have never seen before. It does not affect just your part. It affects all the Colombian operators that use the Vasconia reference. And it is not just affecting Vasconia. it is affecting basically all the heavy oil crudes that go to the Gulf Of Mexico refineries, you know, essentially. So this is a, if you will, an industry issue which actually has knock on effects on Medanito, but it is primarily right now about Colombian crude that is going to Gulf Of Mexico, and that is the connection with Vasconia. So, basically, what is what is happening, it is it is multiple factors, but I would summarize it around 3 things. You know? Basically, with the with the sustained high prices that we have seen over this year, it provides an incentive to a otherwise not profitable heavy oil to be produced. So, basically, we are getting. We are getting new supply from Canada from Mexico into the Gulf Of Mexico. Which is in turn depreciating, if you will, or taking off competitiveness of Colombian crude. that is 1 of the factors. The second factor is that freight cost have gone significantly high, you know, across the Caribbean. And, actually, it is a worldwide phenomenon, associated to that or most disruption, what is going on in The Gulf. Basically, as the conflict has sustained, you know, for now more than 6 months, it is all reflected in freight costs, and those freight costs are affecting the Vasconia differential and the transport cost associated to that group. So that is the second important component, I would say, Now when you think about is this structural or temporary our view is this is not structural. This is linked to the current oil market conditions. And disruptions. And to the extent that those geopolitical situations unwind this is gonna go back. This is gonna go back to normal because the fundamentals are still there. The crude has not lost its quality. The crude has not lost its appeal for the Gulf Of Mexico refineries, and so that should normalize. The question is, how long is it gonna take? And we do not know. We do not know how long is it gonna take. So what are we doing about it? We are doing 2 or 3 things. The first thing is we are actually optimizing our hedging positions. You know? And there is been a number of questions around hedging. We have left space within our hedging policy to do a specific you know, like, if you will, surgical interventions in our hedging position, and we are doing that in the fourth quarter. Basically, what we have done is we. We have taken part of the volume that we have hedged in 4Q and we released ceilings that we had associated to that, through a rollover mechanism, basically, Basically, what we are doing is we are taking the existing positions into the future at better pricing conditions because the futures curve has improved. And we are giving ourselves more room to capture A higher pricing in 4 q. That should to a large extent, offset what is going on with Vasconia, provided that stays within reasonable levels. And we are going to see how that evolves over the next 45 days. that is been 1 intervention. The other intervention that we are doing is revisiting our commercial strategy along with other operators that you saw us going to reference. You know, we are we are not alone. If you look at basically all the Colombian operators used to either directly or indirectly Tavasconia referenced, and we are in discussions with them around how to navigate this situation in terms of whether there is possibility of planning crew together, aggregating supply so we get better conditions and things like that. And more technical things such as working with flats, in terms of ensuring that the Vasconia marker is adequately priced, or you know, if there are opportunities around that. So those are the sort of things that we are doing right now, which should help us mitigate to some degree what is going on in the broader market. Thanks. Thank you, Jaime, and thanks, Andres, for the question.

This concludes the question and answer session. I would now like to turn the call back over to mister Bayon for closing remarks.

Thank you, and thanks again for being here with us today. For your interest in GeoPark, We are very excited with the moment we are in terms of our strategy that was laid out almost a year ago when we decided to protect what we have and get back to growth. Growth does come with some pains. You know? And we have had to increase our level of activity, our CapEx, and we have addressed some of those issues during our release and during this call today. We are on track in terms of Vaca Muerta. You know, there is gonna be intensity ramping up as we drill more wells and we have factory drilling mode. And we are absolutely thrilled with getting control of operations in Bare block. Before the end of the year. And again, thanks for being here today. Thanks for the questions. And hopefully, we will be able to see you in the next results conference call.

This concludes today's call. Thank you for attending. You may now disconnect.