GeoPark Limited

Good morning and welcome to the Geopark Limited conference call following the results announcement for the second quarter ended June 30th 2021. After the speaker's remarks there will be a question and answer session. If you would like to ask a question at this time please press star followed by one on your telephone keypad. If you'd like to withdraw your question please press star followed by two. If you do not have a If you do not have a copy of the press release, it is available at the investor support section on the company's corporate website at www.geo-park.com. A replay of today's call may be accessed through this webcast in the investor support 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 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 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 the PRMS standards. And on the call today, from Geopark is James F. Park, Chief Executive Officer, Augusto Zabuga, Chief Operating Officer, Andres Ocampo, Chief Financial Officer, Martin Tirado, Director of Operations, and Stacey Stimel, Shareholder Value Director. And now I'll turn the call over to Mr. James Park. Mr. Park, you may begin.

James F. Thank you and welcome, everyone. We are joining you this morning with our executive team in Columbia, the U.S., to report on our achievements and financial results during the second quarter of this year. Firstly, we wish to thank the women and men of Geopark for their efforts and professionalism in managing our business, including through any volatility such as the recent unrest in Colombia. Since our founding 19 years ago, this backbone and spirit are key drivers of our successful, steady, and continuous track record of growth and value delivery. We also want to especially thank our shareholders for their important support and for the many constructive conversations we had with them prior to our annual general meeting. Your votes and messages were clear, and we see this as further positive momentum for all the changes and continuous improvements that we have been pushing for and carrying out. One of Geopark's fundamental principles is to work to get better every day, and our history reflects a continuous and sometimes challenging evolution. We embrace a changing future and see it as a source of infinite new opportunities, particularly in the hyper-competitive world and exciting energy transition we are in today. Our company has built its reputation on operational performance, and we have repeatedly shown following our 19-year track record that our team can consistently deliver in any oil price environment. This is based on four key and different skill sets covering the full value chain of the E&P business that we have invested in and built within Geopark. These are our ability to one, explore for and find new oil and gas reserves and fields. Two, safely, cost effectively, and efficiently produce our oil and gas. Three, be compatible with and minimize any impact on the communities and surrounding natural environments where we work. And four, continuously locate, pursue, and acquire new prospective assets at the right price to build an enduring short, medium, and long-term growth fairway. This technical know-how has created our current exceptional low-cost asset base with a powerful cash generation that allows us to self-fund our business growth, manage the volatility inherent in our industry, and simultaneously give back to our shareholders. For example, in the second quarter 2021, our operation and financial performance delivered tangible value back to our shareholders through a significant cash flow generation with an operating net back of $74 million, which represented more than two times our capital expenditures. profitable operations, which allowed us to reduce our total debt by $105 million, extending maturities by more than two years, and reducing our annual interest costs by $9 million, while keeping a strong balance sheet with $85 million. A new debt structure, which now provides ample flexibility for further deleveraging. continuing to execute our share buyback and paying cash dividends, constantly working to reduce our cost structure and making us a lower cost and more efficient operator, and an ongoing review of our organic asset portfolio. As always, the foundation for Geoparks' performance is our in-house integrated value system we call SPEED. We continue to push forward our speed initiative, which predates and is more comprehensive than ESG and is helping us achieve our goal of having the cleanest and kindest hydrocarbons. This also includes our continuous and successful efforts to safeguard our team, communities, and operations from a lingering COVID in the region. Geopark was recently named one of the most honored companies in Latin America in the 2021 Institutional Investor Survey, voted on by the international financial community, which highlighted our team and its crisis management of COVID and our ESG disclosure. The second half of 2021 is underway, and we are moving forward in all aspects of our business. We have six rigs at work. Our team continues to identify attractive new leads and prospects in our big land base and is fully engaged in getting every molecule of oil and gas safely, cleanly, and profitably out of the ground. We also are working with all of our partners, such as on the CPO5 block, to develop options and alternatives to accelerate our work program execution. We are drilling 20 to 23 more wells during the second half and are targeting production growth to approximately 39 to 42,000 barrels per day. And we have just kicked off a key project to connect to the National Energy Grid in Columbia by the end of next year, which will lower costs, operational risks, and improve our carbon footprint. Our team has also initiated our annual capital allocation exercise to build our work program and budget for 2022, selecting the biggest shareholder value adding projects based on strategic, technical, economic, and social and environmental parameters. We look forward to spending time with our asset management teams while conducting this critical exercise to ensure our capital discipline and flexibility can value for our shareholders. Our huge organic land base and our rich inventory of new inorganic potential projects provides an abundant and exciting opportunity set, including highly attractive exploration prospects in our core YANOS 34 block, our CPO5 block, as well as our Janos Exploration Acreage adjacent to Janos 34, where we are partnering with Echo Patrol. During this process, we also determine the cash that will be allocated to give back to shareholders and or use to further deliver our company. Today, the Board approved a doubling of our quarterly dividend to our shareholders. Thank you. And we would be pleased to answer any questions you may have.

If you'd like to ask a question, please do so by pressing star followed by one on your telephone keypad now. Ricardo Resende from JP Morgan. Ricardo, your line will be open now if you'd like to proceed with your question.