EM LATAM CREDIT: Colombia's Geopark 1Q 2025 Earnings Results Beat: Negative take

Geopark (GEOPAR; -/B+/B+)

• Colombia based oil and gas E&P company Geopark reported a drop in production which along with lower oil prices led to a decline in sales and EBITDA that the market already expected.

• Oil production fell 15% while the Brent oil price dropped 9% leading to a revenue decline of 18%, a drop in operating profit of 40% and a fall in adjusted EBITDA of 21% YoY.

• The company said it hedged 70% of their production against a drop in oil prices.

• Geopark has a relatively small scale of operations with oil production of 28,972 bpd versus over 700,000 boepd for Ecopetrol, over 40,000 boepd for Sierracol and over 140,000 boepd for Tecpetrol. Proforma for the Vaca Muerta assets, production rises to 36,279 bpd.

• Geopark acquired some assets in the Vaca Muerta region of Argentina that are just starting to produce and are expected to offset production declines in Colombia.

• The company issued USD550mn 5NC2 notes in January 2025 and tendered for USD412,753,000 of 2027s thereby reducing balance sheet liquidity risk.

• Leverage remained low at .9x vs .8x a year ago. Free cash flow was negative with higher working capital required but with the new note issuance net of the tender the company increased its cash balance by about USD30mn.

• GEOPAR 2030 notes were last quoted USD81.20, down 13 points QTD and lower by about 19 points since issuance in late January 2025. Oil prices are down 14% YTD.