Q2 2025 GeoPark Ltd Earnings Call
There will be a question and answer session if you'd like to ask a question at this time press star one on your telephone keypad, if he would like to withdraw your question press the pound key.
If you do not have a copy of the press release. It is available at the Investor with a section on the company's corporate website at Www Dot G O Dash Park dotcom.
A replay of today's call may be accessed through this webcast in the invest with US section of the <unk> 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 the protections afforded by the private Securities Litigation Reform Act of 1995.
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.
Those lists are intended to identify certain principal factors that could cause our 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 F. I.
I F. R. S and are stated in U S dollars unless otherwise noted.
Reserves figures correspond to P. R M S standards.
The call today from Geo Park, we have fully paid by young Chief Executive Officer.
Jaime Caballero.
Chief Financial Officer.
Martina, Colorado, Chief operating Officer, Rodrigo Delhi field it.
Chief exploration and about development officer, and Maria Catalina Escobar shareholder value and capital markets director.
And now I'll turn the call over to Mr. Elite They buy on Mr. <unk> you May now proceed.
Good morning, everyone and thank you for joining us on our second quarter 2025 conference call.
This is my first earnings calls as <unk> CEO.
Want to start by acknowledging the strong platform having country here.
Over the last couple of months I focus on taking a thorough and comprehensive view of every aspect of our business.
The project level asset by asset.
The work is ongoing and it's grounded on a simple objective ensuring geoponic is positioned to thrive in the current environment and build durable long term value for our shareholders.
This review as part of a broader strategic reserves to challenge legacy assumptions and strengthen the way, we prioritize capital and performance from day, one we've been working to identify opportunities to accelerate the development of our portfolio increase our ability to adapt and grow smartly.
We're also continuing our rigorous portfolio reassessment.
Our teams are actively working to enhance field productivity stabilized production and improve returns over time.
This is not about changing guidance today.
Building, the technical and operational foundation for better outcomes in the future.
Finally, we're working closely and constructively with authorities and partners to unlock additional activity across our core assets in Colombia.
These discussions are active and ongoing and they reflect our shared commitment to responsibly increased investment accelerate development and support the long term competitiveness of Colombia as oil and gas sector.
Let me now walk you through the quarter's performance.
Consolidated average production for the quarter reached 27380 barrels of oil equivalent per day.
Contributing to year to date average production of 28223 barrels of oil equivalent per day in line with our guidance of.
The 6% decline when compared to last quarter reflects the divestment of our non operated John's 32 block on 16 days of shutting production in CPO five block due to local blockades.
The strong operational delivery reflects stable performance across core assets. For example, Janus 34 delivered 70 605 barrels of oil equivalent per day net.
With base management waterflood on Workovers exceeding our expectations are.
Our drilling team also deliver step changes in efficiency for.
For example, <unk>.
<unk> well costs were reduced by more than 30% and pad to pad mobilization time dropped from seven days to just 18 hours.
In CPO five although some production was impacted by higher than anticipated downtime in relation to <unk> 2025 performance remained stable and the field is currently operating normally.
In general <unk>, two exploration wells critical tool and <unk> were drilled uncompleted contributor need production and demonstrating additional upside in.
In particular apparatus will appraise the strategic decision to reposition the well to intercept the meet other formation as a secondary target proved successful and revealed our new productive horizon for the block in late 2025, we plan to drill a second well to further explore and Ah.
Praise the potential of these discoveries.
On the financial side results reflect proactive cost management, and disciplined capital allocation and financial flexibility to pursue long term growth.
Adjusted EBITDA was 71, and a half million dollars with a 60% margin driven by cost discipline and a $4 9 million gain from the from our commodity hedging program operating costs remained within 2025 guidance at 12 $3 per barrel.
We invested approximately $24 million during the quarter and ended up with $266 million in cash and a net leverage ratio of one one.
One times.
We also completed an open market repurchase of 54 $5 million of.
Of our 2030 notes below par.
Thus enhancing long term financial flexibility and reducing future interest payments underscoring our disciplined approach to balance sheet optimization.
Finally as of to date, our hedging program has advanced to protect oil price volatility over approximately 9000 barrels of oil equivalent per day for the first half of 2026 and 8000 barrels of oil equivalent per day for the second half of 2026, Let me now turn briefly on how we see the second half of 'twenty.
25 shaping up.
We see our full year organic production range of 26000 to 28000 barrels of oil equivalent per day, which incorporates the strength of our core assets on the adjusted impact of <unk> 32, Manatee and Ecuador Divestments Importantly, these production range excludes volumes from inorganic acquisitions.
We expect the adjusted EBITDA of $260 million to $290 million at 65 to $70 per barrel, Brent supported by the quality and resilience of our base business and the price support provided by our existing hedging program.
We are executing this plan with a lean focused capital program of 90 to 120 million U S dollars directed primarily to short cycle high return development and appraisal drilling.
At the same time, we've captured 12, and a half million dollars in structural efficiencies to date, which equates roughly to 70 and a half million annually.
As part of our anticipated portfolio optimization, we agreed to divest our interest in the pet equal and is therefore blocking it below this transaction reflects our ongoing focus on prioritizing material high return assets on streamlining the portfolio for maximum impact.
Divestments brought a nonrecurring impairment charge and as a result, our net loss for the quarter of $10 $3 million.
If we exclude this charge net profit for the quarter amounted to $20 7 million significantly higher than in previous quarters.
Finally, the board has approved the payment of a seven $5 million dividend for the second quarter of 2025, reflecting the companys performance during the period in parallel the board is actively reviewing the company's capital allocation priorities, including dividend distribution going forward in the.
<unk> of evolving strategic priorities and the need to preserve flexibility to pursue value accretive growth opportunities.
This review will continue over the coming months as part of our ongoing overall financial and our strategic positioning.
In summary, this was a resilient quarter for Geo Park.
Delivered solid results protected our financial strength and are actively reshaping the business to be more focused more agile and better positioned for long term value growth.
We're just getting started and we're committed to building a more competitive resilient on value driven Geo Park.
With that let me now open the floor for your questions.
Thank you so much.
We will now begin our Q&A session. So if you'd like to ask a question you can do so by pressing star one on your telephone keypad interim really good question for any reason you. Please press the pound key once again to ask a question press Star one as a reminder, if you are using a speakerphone. Please remember to pick up your handset before asking a question.
We will briefly pause here with questions or registered.
Our first question comes from Alejandro Demichelis of Jefferies.
Your line is now open.
Yes. Good morning, Thank you very much for taking my questions.
I.
Congratulations.
On your first few months here and welcome.
Couple of questions. If I may maybe you talk about the review that you're kind of taking over.
On the on the company, maybe you could give us some kind of examples of where you think that things can be improved where do you think that things can kind of move through that's probably the first part of the question and then the second one is you mentioned some of the inorganic.
Moved up you have been kind of working or maybe you can kind of give us some update on how you see things, particularly in Argentina. Thank you.
Okay.
Alejandro Hi, and thanks for being here today and thanks for the interest in <unk>. So so a couple of things and I'll share some personal reflections on this first couple of months.
The first thing I'd say is that since my arrival and jest.
Just for context, I have known <unk> for probably the last.
Eight or nine years, so I've had a lot of reference I mean, it's always been a company that are respected.
And when I joined the company I found a company that does things very well operates in a way that's safe efficient.
It operates.
And with a very very good relationships with our communities and stakeholders. So I just wanted to start there.
And one of the things we've done with.
With respect to our existing assets in the in the following contexts that I think there is directionally two things we need to do and I think you addressed both of them in your questions. The first one is how do we protect our existing business ongoing business on how do we create additional value. So that's.
Point number one on point number two is how do we return to a pathway of growth.
So I'll talk about the first one which is your first question. So.
And without going into all the.
The detailed because that will come in due time.
The teams have been working for some months now at three months or so.
Over the last couple of months that I've been here I've had the opportunity to look at it.
Every asset.
At the project level in detail.
Look at not only <unk>.
Current performance operationally.
And again I think the results show that we've been able to.
It delivered good results resilient results despite of.
The drop in Brent and some of the drop in production.
That's related to.
Some blockade that we have in some of the non operated areas.
So that review I think has.
Led to a place where I personally feel we can we can.
Extract.
A lot of value from the existing assets. So that's point number one there is a lot of things that the guys are doing in terms of the operations you know from.
Our efficiencies around how we drilled the wells how do we complete the wells how do we do things like water shut offs and well interventions how do we do the mob demob of the different drilling rigs.
Do we actually deal with it.
A water volumes so a lot of.
Details and specifics on the on the operations there.
Looking good on that.
That gives me.
Confidence Alejandro that back to the core business. We can continue to arrest decline natural decline, which is priority. It's a fundamental priority and two we can continue to.
Look for.
Other areas that can provide some some additional legs. If you will in the mid to long term.
And I'll talk specifically about doritos with Chris that's in the release, but.
It's in a well where we are.
On purpose.
<unk>.
The.
The direction of the well if you will we went through me that order and we have some very good results and that May open some additional area. So.
Very pleased with the with the ongoing business.
And again, we need to ensure that we have a solid robust business that creates the platform for us to grow. So that's to your first question in terms of the inorganic and especially Argentina.
Ill.
I'll give you a bit of context. So the first thing is that we.
We continue to look at the region as a whole.
We want to create a lot of focus so clearly Columbia is our focus for ongoing operations and I think <unk> provides in terms of unconventional.
A world class opportunity and.
And I'll share with you that.
I came to to this job on June the first.
By June the six I was.
Already at.
In no Ken I had a very good conversation with the governor of no Ken.
And expressing that.
<unk> Park wants to be part of the development of unconventional seen Argentina, a particularly in the province of Neuquen.
We want to invest we want to operate so.
There is a clear intent of us to go into the inorganic opportunities in working with them.
And the other thing that I'll mention Alejandro as that.
We have I think a very.
Fluid and solid pipeline of opportunities for unconventional sinovac come with them.
And it's a combination of things that.
We have been looking at.
And also things that a lot of potential partners have brought to the table in these conversation, which is great. You know that people are saying, we want to team up with Geoponic.
We see them as a good partner that brings a lot to the conversation so.
That's also.
That's also happening and obviously Alejandro will will.
<unk> on both things you know how do we.
Progress on these.
Reassessment.
Our current portfolio and two how do we progress on M&A.
Thanks Alejandro.
Thank you very much.
Okay.
Thank you.
Our next question comes from Lockheed about that balance capital.
Your line is now open.
Hello.
Philippe.
Two questions.
First could you provide more color on your plans to hang on to the <unk> Reserve life.
How are you approaching.
Reserves replacement and what portion of this strategy is expected to come from organic versus inorganic efforts. That's the first question.
Okay.
Was waiting for you to put on the second question, but I'll go at the first one then so the first thing I'll mention and this is linking it back to.
Some of the things that Alejandro was asking us about and some of the response that I gave first thing is that is in terms of context.
Order of magnitude.
And this is as of end of 2024 to peer reserves for the company in Colombia at around 84 million barrels.
And so this is broader than <unk>, but if you look at that number and then you link it to the exercise that I was referring to.
Where we have a detailed look at all of the assets.
At our execution plans look at our understanding of the subsurface look at everything in terms of how we can develop those.
Those areas.
Say that.
Both actually.
Our linked together very well in terms of these reserves life I'm talking about two P that could take us through the end of the decade and beyond.
510 years actually in terms of how we see that that projection going forward.
Is very very well aligned with the internal review, we've we're doing so in that sense.
A lot of focus in actually.
Bringing some more.
<unk>.
Actually accelerating some of those reserves as well.
I'll take the opportunity to.
To put something out there that it was in the release, but I just want to highlight it.
And is that a prior guidance on capex was around $80 to $100 million for this year.
In this release that you guys have seen we've increased that to $90 million to $120 million. So that's basically I think a reflection of.
How efficiently we can operate how we can deploy the capital and also that we see good opportunities going forward that we can actually assess now so I think that that message in terms of us increasing our capital expenditure guidance.
He is also a relevant in that in that sense.
And then the other thing.
And obviously the inorganic efforts will come when they come right additional sort of guy.
Guidance or increased guidance in terms of capital expenditures. So we can have some additional opportunities. This year and then in terms of being organic which was the second part of your first question was.
We're very thoughtful we're looking at a good pipeline of opportunities and obviously when they come we will be talking about them in detail, but as I said on my initial response.
There's quite a few potential partners that have reached out to us and we're assessing opportunities. So.
That will come when they come.
And hopefully they will provide additional.
The upside on potential on reserves.
Want to go with your second question.
Yes sure.
Okay and I have been in line with your when you're on Sir My second question is following recent divestments from noncore areas are you planning to accelerate capex in core assets to offset declined more aggressively or is it the focus shifting towards inorganic growth opportunities to sustain.
But it was <unk>.
Sure shoot, but I'd say, yes, we've done some divestments, we announced yesterday.
The release <unk> and closing on that will take.
Some months, but yeah, absolutely. So I think we are deploying some more capex, which is great news.
We finalized these divestments we continue to.
Look at our portfolio constantly we're reassessing portfolio and we'll let you guys know when we have something around new opportunities that actually come into the fold and we actually have.
Agreed on some inorganic opportunities thanks for that.
Thank you Philippe.
Thank you.
Our next question comes from and Man of Bank of America.
Your line is now open good money good.
Martin Thank you very much for the call. It's nice to hear you on the call for replay and Hello to Hydrocodone and then the rest of the team.
Good to hear from him.
So my questions are following up on some of the strategic comments you've made already.
So maybe it sounds like you are.
Chris on your strategic side is Colombia for current production in Argentina for Nonconventional going forward, you've divested Ecuador, I guess, one question with a prince now.
That fits into the strategic plan and then on the Argentina element, maybe just out of curiosity with the lower prices. This year have you seen changes in the valuation of the types of transactions, you're seeing and if you were to go forward.
I guess the question with the since your experience that Joe pocket, primarily unconventional do you have the staffing or would that be partners that have staffing would you want to be the operator on a transaction or would you prefer to be at a partner there that would be my first or the big strategic question and the second is more financial related to the.
Our bond buyback that you did and I guess the question is would you consider doing more if the prices stay at those low levels and secondly.
One thing investors are very happy about it's a large cash balances.
Crackled currently had.
Actually with some of the volatility in the market what would be the minimum cash that you would want to have since you do have increased.
Yes top up program you do pay dividends I mean, you did buy back bonds. Thank you.
Thanks, Hannah and it's a it's great to hear you and thanks for being here today.
So in terms of.
I think Youre right you know in terms of.
What are we focusing on in terms of Colombia and in Argentina.
Colombia, we have a very I think solid business that has operated very well.
And we continue to find legs in that business. That's the way I would think about it.
So again, there is some and I referred to particular.
<unk> 123, or CFO antitrust authority suppressed, but those opportunities are those wells actually continue to open up some areas, where we can go into some more stuff, which is great. So.
Existing licenses.
Please bear in mind there is.
Licenses that have production right now, but theres licenses that have a lot of exploration opportunities. So we will continue to look at those and as I said, we need to ensure that we strengthen the base.
So we can grow on top of that in terms of Argentina, you are right inorganic and I'll, probably just give you a bit more color. So we are focused on.
<unk>, we like the unconventional as you know I'm, a big believer in unconventional as you know from past experiences.
We have both lenses you know we can be an operator, we can be a non operating partner. So we're comfortable with both.
We have.
The capability on the Knowhow in house, and I think that's very important to remember that.
When <unk> did.
Our prior deal in Argentina, we had a team that actually was embedded in the operator, you know there were 600 into the operations.
And we've we've kept that team under very very extremely knowledgeable they have a lot of experience.
Not only from Geo Park times, but from prior experiences a lot of them have worked can know Ken for most of their careers. So we do have the capability.
Something you didn't ask but I'll put out there and.
We're looking at the 30 to 50 million barrel opportunity kind of size. Just so you guys can have.
Some reference.
This could be in the order of 300 to 500 million Bucks you know.
Combination of ticket plus initial commitments and stuff and.
I'm, just giving you pulp ballpark numbers, but that's that's how we're looking at Argentina right now.
In terms of valuation.
Yeah.
A lot of people want to go into Argentina.
But theres also a lot of people that are refocusing, our exiting Argentina, so theres always opportunity theres always opportunities and remember that Geo Park.
I mean.
It made this deal last year. So there's a lot of knowledge inside the organization in terms of valuation in terms of <unk>.
Potentials in terms of the rocks in terms of how do we actually.
Actually.
Can develop these are these opportunities in a way that makes sense you know how can we go into factory mode.
And develop the unconventional.
And again personally very enthused with the opportunities.
And we'll let you know when we when we have something pencils down and signed off in terms of Brazil, you know the manatee.
<unk> divestment.
We're going to take some time.
For it to close but I will say that.
We continued to permanently permanently.
Assess and filter opportunities in the region.
And I'm talking about the broader region.
With the focus as you were putting it in Colombia, and Argentina. So I think I think that's where I would leave it.
And in terms of your additional question, which is more a financial one.
Very happy with how that repurchase actually went it created value for us and I think it reflects a good.
Use of our ability to.
To deploy capital I would just say and I'll hand over to high minutes. So he can give us more color.
There's things that we're doing around cost efficiencies as well, you'll see that we're doing some redeployment of capital you see that we repurchased some bonds. So everything I think needs to be looked at holistically in terms of how we manage capital timing.
Okay. Thanks Philippe.
Hi, Ann.
I guess I'll go through how we're thinking about liquidity if you look at that.
At the first half of the year, you know, we're ending with a cash balance of around $270 million.
And when you look at the breakdown of what's behind it you actually see on EBITDA of about $160 million.
But then you actually see these outflows and I'm going to go into a little bit of detail, but because they're actually quite meaningful taxes were $87 million just the tax component.
Capex was $47 million debt service was $60 million on where I'm trying to go here is that our current cash position is very strong. Despite the significant outflows, particularly those related to tax which were which are seasonal and we're actually quite extraordinary given the.
Strong year that we had last year.
So where I'm going out with this is that when you look at going forward. The second half of the year actually that that second half is actually going to benefit.
Throw in three big changes first materially lower tax outflow because.
The tax season east effectively over so while we're going to see some some mining our outflows associated to withholding tax that income tax which is the big component of our of our tax burden is in the past now youre actually going to see lower debt service as well as well as associated to that.
Repurchases that we did and we're actually going to see also inhibit.
The benefit of the lower cost structure interventions that have been made so so going forward. When you see all things equal right. If we normalize if you will for Bryson on and we can given that we are significantly hedged the outlook of <unk>.
Cash generation for the second half of the year.
Should should should amply support the capex for the organic business that we are anticipating so thats that tactic.
Tactical here, but it's important to to to see that those components have seasonality support.
Good cash position going forward now when you take that to a strategic level of capital allocation and what we're seeing there is that that $270 million that we have provides ample room for again for the organic capex requirements that we might see which may may go up to $120 million this year a bit.
There's good projects coming in from from our team. So that's the first priority.
Our second priority is M&A deployment and when we look at how those transactions could be could occur and when you look at the when can they close and what kind of down payments would they require we see that our position supports that very well and then we look at the minimum liquidity necessary for our organic.
Business, which is probably 30 or $40 million or so it's no more than that so in that context with all of that considered.
There could be there could be some headroom for further potential for debt repurchases, it's going to be it's going to be opportunistic is what it's going to depend on how we see things evolving over the next few months and we're going to add on the basis of that right, but there could be some potential.
For that.
<unk>.
Excellent. Thank you very much.
Thank you.
Our next question comes from Kristine <unk> of K N G security.
Your line is now open.
Okay.
Hi, Felipe welcome Thank Florida Nicole.
So I have two questions one by one.
First question is if you could comment on whether there are any additional asset divestment.
In the near term.
Thanks.
Thanks, Christian and thanks for joining the call on our site.
Referred to in one of our prior responses I would say that we.
We've done the divestments, finishing with a filer that we announced yesterday and we will constantly continue to look at our portfolio. We want to ensure that we're optimizing value and in that sense, creating value for shareholders. So.
I won't talk about any specifics or if theres anything else planned, but we will continue to look at our assets and remember you know I was saying earlier that we've had in depth in depth very detailed review of all of our assets you know at the project level. So we will continue to do that.
Next question Christian Alright.
Yes.
Can you remind us of the updated guidance for the year.
Sure Chris.
I'll give you.
Some headlines but.
We've talked about our production rates between 26020 8000 barrels of oil equivalent per day, So I think thats.
The first thing and you saw where we ended up not only in the average 441 half or the first half of the year, but in <unk>.
EBITDA.
Adjusted it to $260 million to $290 million that would be in the $65 to $70 per barrel range for Brent.
I'll repeat the Capex number remember we had guidance that was 80 to 100 that were reviewing to 90 to $1 20.
So it does show that.
We've come up with a lot more opportunities and the other thing that we haven't talked too much I briefly mentioned it but.
But we've captured already $12 $5 million in a structural efficiencies.
And this is over the last couple of months.
We've we've gone out we've looked for them. The teams are working very hard Lee on that and then Steve you. If you look at that what that is.
What would that mean on an annual basis, it's equivalent to $17 $5 million. So.
That's sort of the framework premium that I would use four to describe what's what's coming in terms of our.
Next few months to close the year.
Just a quick follow up on that so are those efficiencies reflected in the operating costs that we see that continuing day continue to decline.
Yes. Some of them are some of them have been implemented you know and I'll ask Martin to expand on that a bit to give us more color and detail remember that we've given guidance on the 12 to $14 per barrel range. We ended up at roughly 12 and a half so we're in a good place and.
Efficiencies in terms of operating is always part of the focus that we have Martin do you want to expand on that please.
Good morning, everybody and thanks, Philippe Christiane and thanks for your interest in <unk>.
So like Philippe was saying our guidance on operating expenses is 12% to 14, and we took the challenge of keeping that guidance, even though about <unk> that was gone that guidance was the guidance that we had with Viacom water production, but also.
<unk> had around six six to $7 per barrel.
So the teams not only from operations, but back here in Bogota supporting the field, we have been working on.
Several initiatives that are already implemented and I'll give you a little bit OEM a flavor of what are the things that we've done the.
First one we can talk about energy efficiency on energy efficiency. It is critical for these assets since most of the <unk>.
Opex is our own energy.
Not only are we looking at the price of the energy that we pay but also trying to use less energy.
We've been communicating to you guys. The success of Workovers and he says success not only getting additional production, but also we're shutting off water. So year to date, we have shut off 5% of the water that we were producing so that's around 24000 barrels of water per day, that's energy that.
We used to produce it and then E check did back in the ground. So that's one example, I'll give you. Another example.
Have been working very thorough lead to use all of the associated gas that comes with their production. So we've been working together to reduce our emissions and the last thing that we did and it's already implemented is that that gas is not only capture bodies.
Generating energy and Thats around 2% of the total consumption. So we're basically saving of going out and purchasing that energy.
Second Big one is around innovation in innovation. The example, we want to share each channels $1 23.
We just put them on stream about a month ago and water treatment plant that water treatment plant.
Basically helping us save around $2 per barrel versus what we were doing before which was trucking the water.
And when we look ahead.
What's coming is that modular facilities that were designed in house, we're going to start applying in other blocks.
We operate in we're also sharing that with our not those blocks where were non operators.
<unk>.
Examples of how our.
Pushing for and reducing the opex.
In another.
Another themes that we're working on right now is around maintenance and.
Pooling efficiencies one of the things that we will continue doing EC and trying to use the workover rig the less amount of time as possible undo rig less integrations and by doing that we're saving around 25% of the cost since their release.
It's much cheaper so those are the things that.
We've been doing there are some risks.
And the main risks looking ahead and first one is around like I said increased total fluid production on cost of the energy.
So that's one and second one is a.
Community claims.
Yes, they are blockages on some of those mortgages.
Many times.
Our result in some increased cost.
And finally is not going to hit us this year, but it's something that we're monitoring very close in close E zone in Colombia, they any labor cost regulations.
With that.
Those are one of the things we're doing what are the risks finally to close our guidance space that we're going to be we tuned it 12% to $14 per barrel before the end of the year on average for the year.
Thanks, Martin got it. Thank you Christiane youre very much anything out yet.
My final question is regarding your cash usage for 2025 and 2026.
Do you anticipate further bond buybacks and our dividend distributions. Thank you.
Thanks, Chris and I think.
Hi, Mary alluded to that earlier.
<unk>.
As we were saying Theres obviously.
The minimum requirements in terms of cash for the operations.
There is an increase in the guidance on Capex.
There are some efficiencies that we continue to pursue in terms of cost efficiencies.
Again, I would say that we do have we do have.
The right amount in terms of balancing sources and uses.
To pursue.
Should this phase b, there additional repurchases of bonds.
Well, we just announced a dividend distribution yesterday.
And be able to do M&A. So I think I think in that sense. We're in a good shape. Thanks Christian.
Thank you Olivier.
Thank you.
Our next question comes from Brian Jose Manners of BTG Pactual.
Your line is open.
Okay.
Hi, Thank you.
Philippe on highway for further presentation.
Yes.
Last question here regarding Colombia.
Looking ahead to turn into new six with an election year in Colombia.
What new opportunities could open up for <unk> Park.
Market friendly government comes to power on.
Yes.
<unk> did you see.
If I change of regime happens here in Colombia. Thank you. Thank you again for the presentation.
Thanks, Juan Jose and Thanks again for your interest in Geo Park.
I'd give you my views, but obviously.
Lots of uncertainty still in especially in this sector you know on the oil and gas industry in particular there is.
Production overall production in terms of oil that has not increased dramatically in country. There is some if you look at the industry as a whole not just fuel park.
Number of rigs has has reduced the investment.
<unk> has also gone down.
And I think.
Industry is looking at what's going to come in 2026.
So there is one scenario, where we continue with.
The government that has the same policies as the current one which is no more exploration acreage being led to industry.
I see and Im leaking these back to how I started my response, a lot of the decline in.
Activity I think has been led by that you know people seeing.
That there is no additional acreage and Theres no more licensing going on having said that on the flip side.
And it's still early days remember that elections first round are in May and second round should their need.
Need to be one it would be in June.
There is a lot of.
Pre candidates right now that are talking about.
Re strengthening in the sector.
Being able to let more.
The licenses.
To the industry, which would be good.
And something that we haven't discussed but.
There is some candidates talking about unconventional in Colombia.
And if you look at the long shot.
We ask Geo Park are very interested in Vaca <unk>.
And using some of the experience and expertise and capabilities we have.
The developing further abilities in that space in there Ken.
And.
Assuming the flipside scenario, which is unconventional as being back on the table in Colombia, you could bring that experience back home.
Or back here, where we currently are so I just wanted to put that on the table.
But again, we'll see we'll see Juan Jose what happens still early days.
Thanks for the question.
Thank you Felipe.
Thank you.
Our next question comes from Stephanie for Cod of this advisor.
Your line is now open morning, guys things or taking my questions.
Three the first one in the context of those located and so forth what's the current production excluding equinox.
Hello, Steven this is Martin.
So I'll go from the high to the low.
View, the highest viewed our guidance 26 to 28 on our first half like Philippe was mentioning.
We were at 28 2000 barrels of oil per day in July we are in similar values to that average for the first half of the year on the on the high range.
When you look at the different fronts.
<unk> E channels 34, we had had a very successful infield drilling campaign.
Within the expected.
Production workhorse and outsize, it's again another very good story in channels 34 that each providing fresh production, but also as I mentioned before reducing our opex by shutting down water, that's contributing around 11% and then the water flooding keeps providing.
Good resort results at around 14% of their production. So in China's 34 were delivering according to our plan. When we look at channels 123, we have increased by 16% the production quarter on quarter to <unk> three is Phillip.
Philippe mentioned.
A very good result.
We're having discussions with our partner we are actually right now.
<unk>.
Drilling about to start drilling.
Well and so on that asset we continue drilling appraisals on some exploration wells.
I think finally, when we go to <unk> CPO five had a.
Really good success story on our Workovers that basically where the water encroaches.
We had to put artificial lift from natural flow to artificial lift so.
Those results have been above average and <unk> been able to compensate for the blockages that we had.
Overall on blockages, we have been.
<unk> been.
Being able to work really good with the communities on those where we operate really low downtime on CPO five.
He has led this advantage that is not connected to the <unk>.
Pipeline and oil pipeline and two electric lines. So we've been working hand in hand with OTC. The operator lost luggage was a really positive result.
And it seems that one all of July we had no blockages.
So.
I don't know if I answered it up exactly what you you were looking for but that's where we stand today.
July and August again, the first couple of days of all of US are strong days on production as well.
Great.
That's useful.
Second on exploration So you reported.
Real quick.
So it was two or three.
So I was wondering what sort of EUR potential put ensure additional resources towards those two.
And maybe as a follow on I saw that there is a write down associated with you'll find that England, rather quarter, you'll have a disappointing dream and keep you on it could you. Thank you.
And I have another question.
Okay.
Stefan Hi, how are you this is timing.
I'm going to start with your second question about about write policy and CPO five so we actually haven't had any write offs CPO five this year, you're probably what you are referring to ease some notes that we had comparing year to year on a year to year basis last year, we did have a unexplored.
<unk> write off in CPO five it was associated with two wells that we had wanting to Q wanting to Ricky in <unk>. It was the seasoning and the large wells at the time, which a in total debt.
Total amount of write off associated to those in both quarters was $7 million.
But that's how 2024 event.
<unk> had any write offs associated to two CPO five in 2025 and.
So over to Rodrigo on your first question.
Hello is defined going back to your question about the recent discovery that we announced from <unk> hundred 23, we can start with political to one we had a very good results in that well, we started with more than 1000 barrels per day of folio today, we are producing about.
Of our 400.
Baroness.
The per day, they're preliminary result looks at very <unk>, we are working with our partner trying to incorporate one more well in this structure because we need to delimitate. The area. So it's too preliminary to talk about volume right now we need to incorporate more activity to estimated potential but definitely we see.
As we saw there.
Related with <unk> and meet other formation.
ALLETE is very promising we're seeing 900 barrels per day, we'd know why are you. So next step <unk>.
This incorporates our new we'll definitely we want to data as soon as possible.
If we can do it before the end of this year, it's going to be good.
With that result, we are going to be in position to say the size of the discovery that we have there, but both <unk> and the 133 looks very promising and as they grow as our lease is where we want to grow in the next coming months and years, what we are doing in thermal fixed operation today we.
Our drilling macro caito in the block <unk> hundred <unk> hundred four so that is the first well in the block and we want to we plan to do another one back to these well before the end of this year. The name has been cycles. So thats. The current activity that we are doing we expect more exploration through this year.
We will see the results.
Looking forward of course, we need to drill Christina <unk>.
The project that we have been talking about for lung is that this is CPO. Five. So we are trying to agree with the primary <unk> to start with that and the next drilling campaign and we see some prospect in <unk> 87, and continue deploying the Gen 133, where we see a lot of near field.
Exploration opportunities.
Thanks Roger.
Thank you that's great and thank you for putting out the CPO probably July time dependent.
Last question is more around strategy.
Now.
I was wondering was that you could talk about the focus on Argentina and generally.
In the region.
Now in the context, that's proven to be quite difficult to execute them in.
In Argentina, Brian even historically.
Why.
Right.
Venezuela is probably a no go.
Yeah.
So generally have to PTC.
The landscape how difficult is it to transact.
With regards to recent menu strategy.
And where do you differentiate.
Yes.
<unk> defense, so I would say that I mean.
Obviously.
In the region in Argentina in particular.
I'd say there is plenty of opportunities there is a.
A lot of activity.
Let's bear in mind that this is an area that we're.
Close to $10 billion are being invested on a yearly basis.
There is a line of sight of over $100 billion of commitments going forward.
So there is plenty of opportunities there is plenty of assets.
And I think that Geo park brings to the table.
<unk>.
This is reinforced by the conversations we've had.
With.
The local province authorities.
Some of our potential.
Our partners in the future where they want.
The expertise we bring in terms of operations in terms of efficiencies in terms of subsurface knowledge.
So theres a lot of alignment in that sense, So I think theres always.
Opportunity and I think they.
The other thing that I would say and I mentioned earlier that on the sixth of June I was actually meeting with.
The governor of note Ken.
The sort of figure it all out.
Dave mentioned publicly that they.
They want companies like us coming into the province, So, we'll see where that takes us Stefan but clearly there is there always will be competition in terms of some of the opportunities, but I think we're very well positioned.
You actually go and capture some of those thank you.
Thank you that's it for me.
Thank you.
That will conclude the audio portion of today's call. So we do have tax questions that did come in from the webcast. Our first question is from Ed White on the knees Santander question. Please hi, thanks for taking my questions. Congrats on the results and welcome Philippe <unk>.
Following the recent the recent part failure reveal what should we expect in terms of capital allocation priorities, whether that is M&A reinvestment buybacks or dividends.
I'll do those decisions align with your growth ambitions over the next couple of years.
Thanks, a lot and thanks for being part of the call today through the webcast. So.
And I think we've touched on some of these elements are already in some of the responses we've given.
But in terms of capital allocation. The first thing I'd say, we want to be very disciplined.
So when we're reviewing the options, especially the uses of capital, we're very disciplined and ill go back and make reference to some of the things that we've.
Highlighted over the last couple of days first one.
<unk> increased guidance on Capex.
That basically reflects that we have some good opportunities that we can go and pursue before year end, so again from 80% to 100.
Yeah.
To 90 to 120, so I think that's one.
We've talked about not only the cost efficiencies and all the efforts we're doing that we've talked about dividends that we declared yesterday.
That were approved by the board.
We've talked about the debt reduction and repurchase of our bonds and we've talked about M&A. So I think in that sense.
All of your elements in the question that you posed to US are included and we will continue to in our view.
Very disciplined way review those and ensure that we can.
Actually make the right allocation of Capex and in terms of the longer term view or vision.
I'll go back to where I started.
This Q&A session was two things we need to protect the ongoing business.
And I think the guys Martijn Rodrigo have talked in detail about some of those things.
And we will continue to do that.
Case in point is the redeployment of some capex in that sense and second Rick.
Turn to the pathway of growth and we've talked about M&A.
I think in a nutshell, that's how I would reflect on your question. Thank you.
Yeah.
Thank you.
Our next question is from Jason <unk> for longer.
Bradesco.
The question reads could you. Please provide an update on the result of the polymer injection in Atlanta.
When should we have final results.
Thanks, Vicente and I would say we are very enthused you know, we're very happy with the polymer injection project.
All of the approvals have been gained so we have all the approvals and we should start in in December of this year. So it's going to take some months before we see results, but rather eagle why don't you expand a bit on that yes, we are proactively.
We're actively moving forward with the project. The study that we have conducted along with the background information shared by our bottom there biotechs coming from Governor sterile field that is.
Next to our field General 34 are very encouraging. So we are very excited to move forward with the project. We also complete the meeting process. So we have already select both not only the volume there but.
The associated facilities as well so that the result will show us.
How good it is the technology for the field, but we are ready to expand it can only be as soon as we identify those results and we are able to dimension. How good is the thermal economics. So thats the status today of the projects. Thanks, Rodrigo and thanks Vicente.
Thank you.
Our last question of todays call is from Joelle Kubena Sunau research.
The question reads, how is your relationship with Pampa Energia going do you plan to partner in that come with that.
Joe I'll, thanks, and thanks for being here today with us.
Yes, I wish I was mentioning earlier that are <unk>.
Sixth of June I had the.
The opportunity to visit the governor of no Ken.
In his office and since then have had some discussions with them with the provincial authorities and with the governor himself.
The day before that on the fifth.
Had the opportunity to meet with bumper.
And when our scientists and I'd say very very encouraging very respectful conversation.
And we're always I think striving to identify.
Opportunities, where we can jointly partner.
That.
Conversation. So those conversations continue you know our ongoing those conversations have have continued to actually happen and and obviously.
I won't go into more details, but I think we have a very respectful conversation with Tampa and the other thing I would say you know Pampa has been a very successful company over the last years, you know and Dave very aggressively.
Looked at the gas developments or looking at Theyre actually pursuing oil developments and stuff. So.
A lot of respect for Pampa, and we're having some very good conversations with them. Thanks to you all.
Thank you.
That concludes the Q&A portion of today's call. So I'll pass it back over to suddenly they ban for any closing remarks.
Thank you so much. Thanks, thanks for that then again.
Thanks for your help with the call today, and especially thanks to all of those all of you that participated in the call. So before we close I'd like to share with you. Some results of our AGM. So our 2025 annual General meeting was held earlier today. This morning.
And a few things coming out of that the first one is that all nominated candidates were duly elected and confirmed as members of the board of directors for dual part.
The second one.
Ian why Ernst and young audit SaaS was appointed as external auditor to the company.
And the third one is that the audit committee, which is part of the board was authorized to determine remuneration for the auditor. So I just wanted to provide that update which I think it's very timely.
I will tell you that we will continue and Geo park to be focused on capital discipline and I know theres a lot of interest I mean, I don't know probably 50% of our questions have some element of capital discipline. So thanks for that.
We'll protect our financial strength.
We will continue to invest to position the company.
For the next phase that will be profitable and sustainable in the long term.
With a vision of growth, we remain very confident in our strategy and our ability to continue to create value.
Louis safely responsibly and consistently and again, thanks, everybody for your interest and support in Geoponic on we're always here to answer any questions. If there is follow up questions. Please reach out to the guys in the team and we'll be happy to.
Dresden, So regan thanks for your help and everybody else. Thanks.
Thanks for being here today and have a great day.
Hello, everyone. Thanks.
Thank you.
Now I'll conclude today's call. Thank you for your participation you may now disconnect your lines.