Geopark (NYSE:GPRK) reported higher third-quarter production but weaker financial results as wider crude oil discounts, hedging losses and rising operating costs offset growth in Argentina.
Production averaged 27,973 barrels of oil equivalent per day in the quarter ended Sept. 30, 2026, up approximately 3% from the prior quarter. Revenue was $116.2 million, and adjusted earnings before interest, taxes, depreciation and amortization were $45.8 million, for a 39% margin.
Chief Executive Officer Felipe Bayón said the company still expects full-year production and adjusted EBITDA to fall within its guidance ranges. He cited growing contributions from Argentina and Colombia and changes to fourth-quarter hedges.
Price discounts and costs pressure results
Despite Brent crude averaging $91.40 per barrel in the quarter, Geopark’s combined realized price fell to $56.20 per barrel of oil equivalent from $67.20 in the second quarter. Bayón attributed the decline to wider crude differentials in Colombia and Argentina and the company’s existing commodity hedges.
The Vasconia differential in Colombia widened to a discount of $6.67 per barrel from $1.43 in the prior quarter. Argentina’s Medanito differential moved to a $3.50 discount from a $1.79 premium. Commodity risk management contracts reduced revenue by $36.4 million, compared with a $41.2 million negative impact in the second quarter.
Chief Financial Officer Jaime Caballero said increased heavy crude supply and higher freight costs had affected the Vasconia differential. He said Geopark views the situation as tied to current market conditions rather than structural, although he could not say when it might normalize. The company has adjusted some fourth-quarter hedges to allow greater participation in higher prices and is discussing commercial measures with other Colombian operators.
Operating costs rose to $20.70 per produced barrel of oil equivalent from $17.90 in the prior quarter. Management cited energy costs, well interventions and stronger Colombian and Argentine currencies. Caballero said fixed-price energy arrangements, lower grid rates and energy hedges should begin helping in the fourth quarter.
Free cash flow remained negative as Geopark invested $72.2 million during the quarter. The company ended the period with $253.4 million in cash and net leverage of 1.6 times trailing 12-month adjusted EBITDA.
Venezuela takeover and development plans
Geopark’s 25-year production participation contract with PDVSA for Venezuela’s Bare Block has become effective, and the company expects to take over operations before year-end, Bayón said. Geopark has assessed approximately 300 to 400 wells for potential reactivation.
Chief Operating Officer Martín Terrado said the company plans 100 to 150 reactivations in 2027, representing roughly one-third of the 300 to 400 targeted through 2030. It also expects to complete about a quarter of its planned 100 workovers in 2027. Drilling is expected to begin in 2028, with 30 wells planned through 2030.
Terrado said more than half of the contracts critical to taking over operations had already been awarded. For the first 100 days, he said the company would focus on safe operations, bringing equipment into the block and reactivating wells.
Caballero also addressed a potential additional share grant to controlling shareholder Grupo Gilinski. He said the grant would be triggered if a qualifying reduction in Venezuela’s corporate income tax, clearly applicable to the entire Bare Block, occurs by Dec. 1, 2026. Geopark’s business case currently assumes a 50% corporate income tax rate.
Argentina growth and financing
Argentina production increased 51% from the prior quarter to approximately 2,100 barrels of oil equivalent per day after five wells at Pad 1030 in Loma Jarillosa Este began production. Bayón said gross field production exceeded 5,000 barrels of oil equivalent per day following startup.
Geopark has also been awarded the Corralera Noreste Block in northern Vaca Muerta, adding approximately 26,900 gross acres. Bayón said the company was working to close the award and initially has four years to assess the area.
Chief Exploration and Development Officer Rodrigo Dalle Fiore described a preliminary development concept of more than 120 wells and more than 120 million barrels of potential future reserves. He cautioned that Geopark must test the reservoir’s potential and productivity, including uncertainty around water production.
After quarter-end, Geopark issued $550 million of senior notes due in 2033. Caballero said net proceeds after refinancing the 2027 notes and tendered 2030 notes would total about $170 million. Including cash and available undrawn credit lines, he estimated available financing at $600 million to $700 million and said the company’s aggregate 2027 requirements, including Vaca Muerta, Bare and Corralera, were funded.
On a planned share tender associated with the Grupo Gilinski agreement, Caballero said the contract provides a 90-day period after closing. The offer will be available to shareholders other than Grupo Gilinski, with tenders allocated on a pro rata basis if oversubscribed.
About Geopark (NYSE:GPRK)
GeoPark Limited is an independent Latin American oil and natural gas exploration and production company. Its activities include identifying prospective hydrocarbon resources, acquiring and developing oil and gas assets, drilling wells, and producing and selling crude oil and natural gas.
Founded in 2002, the company has built a portfolio of upstream assets in South America. Its operations have included the Llanos and Putumayo basins in Colombia, as well as assets in Brazil, Chile, Peru and Argentina at various points in its history.
