GeoPark Limited

Good morning and welcome to the Geopark Limited conference call following the results announcement for the fourth quarter ended December 31st 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, press star 1 on your telephone keypad. If you would like to withdraw your question, please press star 2. 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 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 Security 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 report 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 businesses. All financial figures included herein were prepared in accordance with IFRS and are stated in US dollars unless otherwise noted. Reserves figures correspond to PRMS standards. On the call today from Geopark is James F. Park, Chief Executive Officer, Augusta Zabalaga, Chief Operating Officer, Andre Ocampo, Chief Financial Officer, Martin Tirado, Director of Operations, Veronica Davila, Commercial Director, and Stacey Stemmel, Shareholder Value Director. And now I 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 Bogota, Colombia, to report on our achievements and financial results during the last quarter and for the full year 2021. As always, we want to begin by thanking all the hardworking women and men at Geoparks for delivering another successful year. And personally, I want to emphasize my admiration and gratitude for this unique team of people as I begin to transition out of my role as CEO. I'm very pleased to announce that this gentleman beside me, Andres Ocampo, will become the new CEO of Geopark. This decision is the result of a thoughtful and long-planned succession process. It is a natural and healthy progression, and change has been a continuous positive characteristic of Geoparks history since our founding 20 years ago. It is also the right time to make this change with Geoparks stronger than ever and with so many incredible opportunities in front of us and a leadership team ready to take over. Andres has been a key member of our executive team for more than a decade. Most of you know Andres and share my confidence that he is the right leader to take over as CEO and has the character, vision, and knowledge of the business to continue executing on our proven business strategy and guide Geopark through our next promising chapter of growth and success. Andres will be well supported by our colleagues on the executive team with backing from our exceptional technical and operations professionals. This is a proven team that has worked successfully together for over 10 years. Our commercial director, Veronica Davila, will now step up into being CFO, showing again the depth and strength of Geoparks Bench. Reflecting briefly, not only on 2021, but also on the past couple of extraordinary years, for the world and for Geopark, we have seen an unprecedented global pandemic followed by a year of resistance and frustration in Colombia and across Latin America. These events challenged Geopark in new ways that, as always, our team rose to the occasion. We pushed ourselves to perform and capture opportunities and completed the largest acquisition in our history and a massive acreage expansion. 2021 delivered excellent results with powerful cash generation from our core low-cost asset base. Five key 2021 highlights. First, what we do best discovering and producing oil and gas. We drilled 32 wells in the year and learned more to extend the Tigey and Hakana fields in our Yano 34 block. Second, our oil and gas production and the recovery in oil prices produced a top line revenue increase of 90% to almost $700 million and a strong bottom line profit of $61 million for the year. Third, Our drive to continuously improve capital and operating cost efficiencies allowed us to reduce structure costs by 16%. And our capital expenditures of $129 million generated an EBITDA of 2.3 times that amount. Fourth, With our big cash generation, we're able to pay down over $100 million in debt and improve our balance sheet with more deleveraging in the works. Our net debt to EBITDA ratio closed the year under two times, moving us towards our target range of one to one and a half times, which we expect to hit this year. We continue to return tangible value back to our shareholders by improving the underlying value of our company, buying back Geopark shares, and by doubling cash dividends for the second time in less than a year. And our momentum is building with our big 2022 work program already underway and yielding good results. This is the most impressive drilling program in our history. spending between $160 and $180 million to drill 40 to 48 wells, with almost half of those being exploration wells. Ten rigs are currently working in four basins, and we have already drilled 10 successful wells, including a new discovery in Ecuador, and put on production another prolific 4,000-plus barrel-per-day well in the CPO5 block in Colombia. And we are expecting some more results soon from new wells being completed. At $80 to $85 Brent, and not including any expected exploration discoveries, this program will generate more than $200 million in free cash flow, a 25% to 30% free cash flow yield. And of course, prices are even higher now and providing an even stronger wind at our back. As always, the foundation for Geoparks' performance is our in-house integrated value system we call Speed, or ESG+. Our speed initiatives continue to advance. The electrification project is 51% complete, and the solar plant is now 80% complete. Both projects are key components of the plan announced last November, which concretely moved Geopark on its path to lower carbon emissions. Before going to questions, I wish to thank our shareholders for your trust and the opportunity to work for you all these years. I look forward to continuing to serve as vice chair of the board and a mentor to the team, and then committed to remain one of the largest shareholders of the company. As a shareholder, I am very excited by this transition and believe that Geopark's best days are ahead of us. Thank you, and we would be pleased to answer any questions you may have.

Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your phone is unmuted locally. We will pause for a moment to allow questions to be registered. Our first question comes from Alexandro de Michelis from NAU Securities. Alexandro, please go ahead.