GeoPark Limited

Good morning and welcome to the Geopark Limited conference call following the results announcement for the third quarter ended September 30, 2021 and the 2022 work programme and investment guidelines. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at this time, press star 1 on your telephone keypad. If you would like to recall your question, press the pound key. 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 companies' 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 noticed. Reserve figures correspond to PRMS standards. On the call today from Geopark is James F. Park, Chief Executive Officer, Augusto Zubillaga, Chief Operating Officer, Andreas Ocampo, Chief Financial Officer, Martin Tirado, Director of Operations, and Stacey Steinmeier, Shareholder Value Director. And now I'll turn the call over to Mr. James Park. Mr. Park, you may begin.

Thank you and welcome, everyone. We are joining you this morning with our executive team in Colombia and the U.S. to report on our achievements and financial results during the third quarter of 2021. Firstly, we would like to recognize and thank the women and men of Geopark for their resilience and commitment as proven again by our performance in this last quarter. Production was up compared to last quarter as we continued low-risk development in the Janos 34 block. Our growing low break-even production generated strong free cash flow. Revenues doubled from a year ago, and adjusted EBITDA was 54 percent higher, with a net profit of $37 million, the equivalent of 61 cents per share. Every $1 of invested CapEx yielded $2.8 in adjusted EBITDA. We continue to manage and consolidate our project portfolio by divesting our economically marginal and high carbon assets in Argentina, expecting to close by year end. Our Brazil asset divestment is also underway with expectations to close during the first half of 2022. Our relentlessly passionate focus on speed Our internal value system we refer to as ESG plus included a concrete roadmap with an accountable schedule to reducing greenhouse gas emissions. Already with a peer leading low carbon intensity, we embarked on immediate actions to further reduce scope one and two emissions by 35 to 40% in the next three years 40% to 60% by 2025 to 2030, and net zero by 2050 or sooner. And, of course, we continue to return tangible value to our shareholders through our active dividend and share buyback programs. A new development involved Geopark shares being included in the S&P Global BMI Index and four S&P sub-indexes, which represents an expansion of our investor base and opens the opportunity for being included in additional indexes. During the quarter, we carried out our capital allocation process to develop the work program and budget for 2022. This represents a healthy opportunity to review every asset in the portfolio and make them compete for investment on rigorous technical, economic, strategic, social, and environmental criteria. Our outcome was a new 2022 investment program of $160 to $180 million, which targets drilling 40 to 48 wells composed of 25 to 28 development wells to develop our reserves and increase production, and 15 to 20 exploration wells to test a powerful portfolio of high impact, low risk prospects on adjacent acreage, which can generate cash flow quickly if successful. It also includes a significant pickup in activity on our CPO5 block. As always, This is a flexible work program that can be easily adjusted up or down depending on oil prices. We are giving guidance of a 5% to 10% production increase after divestments on the producing assets, but this does not include one single barrel from the 15 to 20 exploration wells we are drilling next year, all with a chance to find and open up new promising fields. So for 2022, we will be generating significant free cash flow that will self-fund the full enchilada. This includes tangible shareholder returns, balance sheet strengthening, including potential deleveraging, a real emission reduction plan, continued efforts to expand scale by acquiring new projects, a growing high-return production base, and an aggressive, low-risk, big potential exploration campaign. We believe that being able to self-fund from cash flow and simultaneously achieve these objectives represent the right business model for our industry today and provide Geopark with a comparative advantage in an energy-transitioning world. Thank you. And we would be pleased to answer any questions you may have.

Thank you. We will now proceed with the Q&A session. If you would like to ask a question, you can press star 1 on your telephone keypad. Please ensure you're unmuted locally when asking your question. Our first question for today comes from Ricardo Rezende from JP Morgan. Ricardo, your line is now open.