GeoPark Limited

Good morning and welcome to the Geopark Limited conference call following the results announcement for the third quarter ending September 30th 2024. 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 you can do so by pressing Start followed by 2. If you do not have a copy of the press release, it is available at the Invest With Us section on the company's corporate website at www.geopark.com. A replay of today's call may be accessed through this website in the Invest With Us 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 Reserved figures correspond to PMRS standards. On today's call from Geopark is Andreas Ocampo, Chief Executive Officer, Jamie Cabrera, Chief Financial Officer, Augustus Zubalaga, Chief Technical Officer, Martin Toredo, Chief Operating Officer, and Maria Catalina Escobar, Shareholder Value and Capital Markets Director. I'll turn the call over to Mr. Andreas Ocampo. Mr. Ocampo, you may begin.

Good morning, everyone, and thank you for joining us to review together our third quarter of 2024 operational and financial performance. Our net revenue for the quarter was $159 million, down 16% from the second quarter, impacted mainly by lower realized oil prices and production. Despite these factors, our financial discipline allowed us to maintain robust margins and profitability. Our adjusted EBITDA for the quarter was close to $100 million, representing a strong 63% margin. In addition, the adjusted EBITDA for the first nine months of 2024 amounted to $339 million, representing approximately a 2% increase compared to the same period of 2023. Bottom line net profits for the quarter of $25 million also exceeded the same period of last year. This quarter was also marked by a significant cash flow generation, which translated into a cash build of more than two times compared to three months before. From $66 million of cash on June 30 up to $123 million on September and $140 million in October, what reinforces a strong liquidity and solid balance sheet. Our net leverage ratio remains low at 0.8 times, and we have no principal debt maturities until 2027. This position provides us with financial flexibility to manage through market volatility while continuing to invest in high-value projects. We have also continued to use our cash flow to return value to shareholders and maintained our quarterly dividends of $7.5 million announced yesterday. Our total cash distributed to shareholders during this year will amount to $73 million, which represents approximately an 18% capital return yield. With respect to some of our key operational highlights, in Colombia, we focused on development and abrasal activities in the Janus 34 block, which remains one of our core assets. We advanced our water flooding campaign and expanded facilities, both critical steps to enhance production and improve recovery rates. In CP05 block, we drilled two wells, further advancing our exploration and development goals. In our Janos exploration acreage, we continued with the abrasion and delineation of the Toritos and Visvita fields. The entire complex is currently producing approximately 4,000 barrels a day gross. We have currently two drilling rigs on site and expect further activity before year end and into 2025. Also in Colombia, we are looking forward to spot our first exploration well in the Putumayo Basin later in November this year, when we will drill the Bienparado Norte 1 exploration well. Our recent acquisition in the Vaca Muerta unconventional alloy plate, which became effective on July 1st, has marked a key milestone in geoparks expansion in Latin America. Vaca Muerta is today the most attractive hydrocarbon plate in the entire region. During the third quarter, the Path 4, which included four horizontal wells, was drilled, completed, and was put on production in October. The block achieved a gross average production of 12,600 barrels of oil per day during the quarter and reached 15,400 barrels a day equivalent, its all-time record, in August. The operator is currently drilling the four wells in Path 9, which is expected to finish in December. In addition to the reserves development activities in Matamora, Geopark and Phoenix have also finished the drilling and completion of the first exploration part in the Confluencia block in the province of Rio Negro. This part includes three horizontal exploration wells. These wells are currently testing and cleaning up, expecting results in the upcoming days. It is also important to mention that production and cash flow from Geopark's working interest in the Baca Muerta blocks belong to our company since July 1st. However, such production and cash flow will not be consolidated into our financial statements until the transaction is closed, which is expected to happen before year-end. Therefore, none of these results have been included in our reported 3Q financial statements. As anticipated, and to support the capital needs of our new assets, Geopark has secured important local capital market approvals in Argentina. including a AA plus Argentinian credit rating and an authorization to issue up to $500 million in local debt securities. This provides financial optimization and flexibility to continue developing these high potential assets. Looking ahead, we're on track to release our 2025 work program and investment guidelines before year end. This framework will outline our strategic priorities for sustainable growth, and capital allocation across our newly expanded and upgraded portfolio. We see particular promise in our new assets in Vaca Muerta, coupled with ongoing focus on optimizing our core operations to maximize long-term value. Thank you for your continued support and confidence in our company. We're now ready to take any questions you may have.

Thank you. If you'd like to register a question, please press Start followed by 1 on your telephone keypad ensuring you are unmuted locally. If you'd like to withdraw your question, you can do so at any time by pressing Start followed by 2 on your telephone keypad. Our first question comes from the line of Vincent Belanga of BBI. Your line is now open. Please go ahead.