GeoPark Limited

morning and welcome to the Geopark Limited conference call following the results announcement for the first quarter ended March 31st 2025. 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 press star 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.geo-park.com. A replay of today's call may be accessed through this webcast in the Invest With Us section of the Geocart 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 that 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 U.S. dollars unless otherwise noted. Reserved figures correspond to PRMS standards. On the call today from Geopark is Andres Acampo, Chief Executive Officer, Chief Caballero, Chief Financial Officer, Martin Tirado, Chief Operating Officer, Rodrigo Dallafiore, Chief Exploration and Development Officer, and Maria Catalina Escobar, Shareholder Value and Capital Markets Director. And now I'll turn the call over to Mr. Andres Acampo. Mr. Acampo, you may begin.

Good morning, everyone, and thank you for joining us to review our first quarter 2025 results. Our performance highlights the strength and resilience of the company we've built together, disciplined in operations, focused in strategy, and financially robust. Despite persistent market volatility and breadth fluctuations, we delivered solid results while preserving flexibility to pursue value-accretive opportunities. Proforma consolidated production averaged 36,000 barrels a day, exceeding our base case guidance of 35,000 barrels a day. The strong delivery was driven by stable output across our core assets in Colombia and Ecuador, and another record-breaking quarter from the new Argentina assets. These acquired Vaca Muerta blocks continue to demonstrate their transformative potential within our portfolio, with gross production reaching a record high of over 17,000 barrels a day in February. In the Matamoranorte block, our partner Phoenix completed pad 9, drilled pad number 12, and began the construction of new central processing facilities targeting 40,000 barrels a day gross capacity by mid-2026. Drilling also began on the second exploration pad in the Confluencia Sur block following last year's pivotal Rio Negro discovery. first quarter financial results do not yet consolidate production, revenue, or costs from these assets pending the completion of regulatory approvals by provincial authorities. We continue to work diligently to advance the approval process. We acknowledge that the delay in obtaining this approval has created material uncertainty around the timing and successful completion of these transactions. The agreement includes an outside date of May 13, 2025, marking one year since signing a standard milestone in transactions of this kind. After that date, either party has the right under the terms of the agreement to withdraw from the transaction. Unless a termination notice is given, the agreement remains fully in place and continues without change. Within this framework, the parties may also explore potential strategic alternatives taking into account the information and context available at such times. We remain committed to pursuing a positive outcome while we continue focused on protecting value and maintaining flexibility for Geobark. Regarding exploration in Colombia, the Curucutu One Well encountered approximately 70 feet of net pay in the barco formation and tested production of around 1,300 bars a day gross and boosted block output to nearly 5,000 bars a day, a new record. Financially, we delivered adjusted EBITDA of $88 million, up 13% from the previous quarter, with operating costs decreasing to $12.3 per barrel, in line with our full-year guidance. Net income reached $13 million, despite one-time costs related to the debt refinancing, which extended our average debt maturity to almost five years. We invested $23 million in our core assets and an additional $24 million pro forma in Vaca Muerta, supporting development, infrastructure, and our exploration campaign. We closed the quarter with over $308 million in cash and net leverage ratio of 0.9 times, preserving our financial flexibility and balance sheet strength. Our proactive hedging program remains highly effective, covering approximately 70% of our 2025 production with floors of $68 to $70 per barrel. continued our decisive cost reductions and efficiency drivers during the quarter. In January 34, our new next generation rig has already reduced cycle times by 20%, generating meaningful cost savings. Our drilling team has recently set a new record in the block, reaching total depth of 11,000 feet in just 6.1 days on the TIGI 53 well. This represents more than 25% reduction on the cost of the well. Even more impressively, the team has already taken on the challenge of breaking its own record again with the next well, TIGI 56, aiming to reach TD in just under six days. This relentless focus on operational excellence embodies who we are as an operator and represents one of the most effective ways to enhance returns while expanding our ability to reinvest in growth. We also took decisive steps to streamline our portfolio by divesting our interest in the General Study 2 block and the manatee gas field, aligned with our strategy to focus on high-impact material assets. Our efficiency program is on track, having already captured 90% of the targeted $5 to $7 million in annual savings. Reflecting our strong financial position and consistent cash generation, we declared a quarterly dividend of 15 cents per share reinforcing our ongoing commitment to shareholder returns, targeting an annualized $30 million dividend or approximately 9% dividend yield. Looking ahead, we're fully committed to executing our 2025 work program with seven wells in Colombia and four in Argentina during the second quarter. Our vision remains clear, build a more valuable and sustainable geopark focused on big assets in big basins with the right partners and the right strategies. Finally, as I prepare to hand over the leadership of Geopark to Felipe Bajon, I do so with deep pride and immense gratitude. Helping to build Geopark over these past 15 years has been the most rewarding chapter of my professional life. I've had the privilege of working alongside an exceptional group of women and men whose passion, integrity, and resilience have made everything possible. Together, We turn bold ambitions into real achievements, always guided by our core values, our responsibility to stakeholders, and our unwavering commitment to putting Geopark first. Our culture and our shared belief in doing things the right way have been the foundation of our success. I am deeply proud of what we have built and equally excited for all that lies ahead. I will continue to support Geopark, its board and its team as a long-term shareholder and as a friend. Thank you for your trust, your partnership and for walking this journey together. We will now take any questions you may have. Thank you.

If you would like to ask a question on today's call, please press star followed by one or your telephone keypad to enter the queue. And our first question today comes from Alejandro Demichelis from Jefferies. Alejandro, your line is open. Please go ahead.