GeoPark Limited

one on your telephone keypad. If you would like to withdraw your question, press the pound key. 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 -park.com. A replay of today's call may be accessed through this webcast 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 are for-looking statements rather than historical facts and are subject to risk and uncertainties that could cause actual results to differ materially from those described. With respect to such for-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 for-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. Reserve figures correspond to PRMS standards. On this call today from GeoPark, we have Felipe Bayon, Chief Executive Officer, Jaime Cabellero, Chief Financial Officer, Martin Torado, Chief Operating Officer, Rodrigo Dale Fiore, Chief Exploration and Development Officer, and Maria Catalina Escobar, Shareholder, Vialio, and Capital Markets Director. And now I'll turn the call over to Mr. Felipe Bayon. Mr. Bayon, you may now proceed.

Good morning everyone and thank you for joining us at our second quarter 2025 conference call. This is my first earning calls as GeoPark CEO and I want to start by acknowledging the strong platform I've encountered here. Over the last couple months, I've focused on taking a thorough comprehensive view of every aspect of our business at the project level asset by asset. The work is ongoing and it's grounded on a simple objective, ensuring GeoPark is positioned to thrive in the current environment and build durable long-term value for our shareholders. This review is a broader strategic research to challenge legacy assumptions and strengthen the way we prioritize capital and performance. From day one, we've been working to identify opportunities to accelerate the development of our portfolio, increase our ability to adapt, and grow smartly. We're also continuing a rigorous portfolio reassessment where teams are actively working to enhance field activity, stabilize production, and improve returns over time. This is not about changing guidance today, but about building the technical and operational foundation for better outcomes in the future. Finally, we're working closely and constructively with authorities and partners to unlock additional activity across our core assets in Colombia. These discussions are active and ongoing and they reflect our shared commitment to responsibly increase investment, accelerate development, and support the long-term competitiveness of Colombia's oil and gas sector. Let me now walk you through the quarter's performance. In the second quarter, GeoPark delivers solid operational and financial results despite having market volatility, a lower-bred price environment, divestment of some of our non-core assets, and some temporary blockades that operate. Consolidated average production for the quarter reached 27,380 barrels of oil equivalent per day, contributing to -to-date average production of 28,223 barrels of oil equivalent per day in line with our guidance. The 6% decline when compared to last quarter reflects the divestment of the non-operated Janus 32 block and 16 days of shutting production in CPO5 block due to local blockades. The strong operational delivery reflects stable performance across core assets. For example, Janus 34 delivers 17,605 barrels of oil equivalent per day net with base management, water flooding, and workovers exceeding our expectations. Our drilling team also delivers step changes in efficiency. For example, average well costs were reduced by more than 30% and -to-pad mobilization time dropped from seven days to just 18 hours. In CPO5, although some production was impacted by higher than anticipated downtime in relation to 1Q 2025, performance remains stable and the field is currently operating normally. In Janus 123, two exploration wells, and Torito Sur 3 were drilled and completed, contributing new production and demonstrating additional upside. In particular, at Torito Sur 3, the strategic decision to reposition the well to intercept the Mirador formation as a secondary target proved successful and revealed a new productive horizon for the block. In late 2025, we plan to drill a second well to further explore and appraise the potential of this discovery. On the financial side, results reflect proactive cost management, disciplined capital allocation, and financial flexibility to pursue long-term growth. Adjusted EBITDA was $71.5 million with a 60% margin driven by cost discipline and a $4.9 million from our commodity hedging program. Operating costs remain within 2025 guidance at $12.3 per barrel. We invested approximately $24 million during the quarter and ended up with $266 million in cash and a net leverage ratio of 1.1 times. We also completed an open market repurchase of $54.5 million of our 2030 notes below par, thus enhancing long-term financial flexibility and reducing future interest payments, underscoring our disciplined approach to balanced sheet optimization. Finally, as of today, our hedging program has advanced to protect all price volatility over approximately 9,000 barrels of oil equivalent per day for the first half of 2026 and 8,000 barrels of oil equivalent per day for the second half of 2026. Let me now turn briefly on how we see the second half of 2025 shaping up. We see a full year organic production range of 26,000 to 28,000 barrels of oil equivalent per day, which incorporates the strength of our core assets and the adjusted impact of Janus 32, Manatee, and Ecuador divestments. Importantly, this production range excludes volume from inorganic acquisitions. We expect the adjusted EBITDA of $260 to $290 million at $65 to $70 per barrel Brent, supported by the quality and resilience of our base business and the price support provided by our existing hedging program. We're executing this plan with a lean, focused capital program of $90 to $120 million U.S. directed primarily to short cycle, high return, development, and appraisal drilling. At the same time, we've captured $12.5 million in structural efficiencies to date, which equates roughly to $17.5 million annually. As part of our anticipated portfolio optimization, we agreed to divest our interest in the Perico and Espejo blocks in Ecuador. This transaction reflects our ongoing focus on prioritizing material, high return assets, and streamlining the portfolio for maximum impact. Divestments brought a non-recurring impairment charge and, as a result, a net loss for the quarter of $10.3 million. If we exclude this charge, net profit for the quarter amounted to $20.7 million, significantly higher than in previous quarters. Finally, the board has approved a payment of a $7.5 million dividend for the second quarter of 2025, reflecting the company's performance during the period. In parallel, the board is actively reviewing the company's capital allocation priorities, including dividend distribution going forward in the context of evolving strategic priorities and the need to preserve flexibility to pursue value-accretive growth opportunities. This review will continue over the coming months as part of our ongoing overall financial and strategic positioning. In summary, this was a resilient quarter for GeoPark. We delivered solid results, protected our financial strength, and are actively reshaping business to be more focused, more agile, and better positioned for long-term value growth. We're just getting started, and we're committed to building a more competitive, resilient, and value-driven GeoPark. With that, let me now open the floor for your questions.

Thank you so much. We'll now begin our Q&A session. So if you'd like to ask a question, you can do so by pressing star 1 on your telephone keypad. And to remove your question, for any reason you please press the pound key. Once again, to ask a question, press star 1. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We will briefly pause here as questions are registered. Our first question comes from Alejandro de Mecheluz of Jeffreys. Your line is not open.