GeoPark Limited

Good morning, everyone, and welcome to the Geopark Limited conference call following the results announcement for the first quarter ended March 31, 2026. 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 1 again. 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 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 protection supported 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 the U.S. dollars unless otherwise noted. Reserves figures correspond to PRMS standards. On the call today from Geopark is Felipe Bayon, Chief Executive Officer, Jaime Caballero, Chief Financial Officer, Martin Terado, Chief Operating Officer, Rodrigo D'Alefiore, Chief Exploration and Development Officer, and Maria Carolina Escobar, Sellholder, Value, and Capital Markets Director. And now I'll turn the call over to Mr. Felipe Bayon, Mr. Bayon, you may begin.

Good morning, everyone, and thank you for joining us for our first quarter 2026 results call. We delivered a strong start for the year with results that reflect consistent operational execution, improved benchmark pricing, and the financial discipline we have been reinforcing across the businesses all this while advancing our strategic priorities. During the quarter, we achieved average production of 27,249 barrels of oil equivalent per day from both our operations in Colombia and Argentina, performing within our 2026 guidance and higher than our fourth quarter of 2025. This performance confirms the inflection point we accomplished at the end of 2025 and reflects stable base production, solid execution, and continued progress across our portfolio. During the quarter, our operational focus was not only on maintaining the strength of our core assets, but also on advancing our growth initiatives, particularly in Vaca Muerta, Argentina. In Vaca Muerta, we successfully initiated drilling activities in the Loma Jarillosa Este block while continuing to progress key infrastructure, marking an important step forward in the development of these assets. These milestones reflect a disciplined transition into execution as we continue to position Argentina as a key contributor to our future growth. We expect production to increase from 1,430 barrels of oil equivalent per day as of the first quarter of 2026 to 5,000 to 6,000 barrels of oil equivalent per day by December 2026. In Colombia, performance across the portfolio demonstrated the resilience and quality of our asset base. In Janus 34, secondary recovery, particularly water flooding, played a critical role in supporting production and mitigating the effects of natural decline and temporary operational factors during the quarter. CP05 delivered production above plan, highlighting its underlying strength despite social disruptions. In Janos 123, production increased by 13%, versus the prior quarter supported by strong base performance and continued progress in the Vis Vita water flooding project, reinforcing the positive momentum of the asset. Importantly, all operations were conducted with strong health and safety performance and with zero injuries and no major process safety events. The quarter benefited from a constructive pricing environment with Brent averaging $77.9 per barrel. This translated into a combined realized price of $60.4 per barrel compared to $54.8 per barrel in the prior quarter. While wider differentials and our hedging program moderated the upside, we were still able to capture a meaningful improvement through disciplined commercial execution and active risk management. This operational and pricing performance translated into strong financial results. Revenues reached $128.4 million. This is up 16% compared to the fourth quarter, supported by an 8% increase in sales volumes, including the commercialization of deferred volumes from the last year. Adjusted EBITDA was $71.3 million, representing a 56% margin and a 54% increase versus the prior quarter, reflecting both higher revenues and improved cost performance. Operating profit increased to $58 million from $20.6 million in the fourth quarter, and net income for the period was $20.2 million, even after the impact of non-recurring items and a higher tax charge associated with the increased profitability and the oil price-related surcharge in Colombia. Cost performance remained very strong, with operating costs decreasing to $14.7 per barrel from $15.8 per barrel in the fourth quarter of 2025 within our full-year guidance. Structured costs have a trajectory from $5.6 per barrel in the fourth quarter of 2025 to $4 per barrel in the first quarter of this year, which also confirms the positive impact of all the interventions we initiated last year and the organizational focus on efficiency and cost control. We invested $22 million during the quarter, primarily resulting in a 3.4 times EBITDA to CAPEX ratio and a return on average capital employed of 19%, underscoring our disciplined returns-based capital allocation. Our balance sheet remains strong. We generated operating cash flows of $32.9 million, fully funding our investment program. In addition, we enhanced our liquidity position through several strategic actions, including $65 million in local debt raised to pursue the Frontera acquisition, $100.3 million from escrow recovery and breakup fee of the unconsummated Frontera deal, and a $107 million equity investment from the Grupo Gidinski, who joined as a new long-term strategic partner. As a result, We ended the quarter with a robust cash position of $274.9 million, giving us flexibility and optionality to pursue value-accredited growth opportunities. Net debt stood at $333.1 million, with a leverage ratio of 1.3 times reflecting a solid and flexible capital structure, with no principal debt maturities until January 2027. This positions us well to navigate volatility while maintaining the flexibility to execute our plans. In terms of risk management, we have secured oil price protection covering approximately 19,000 barrels of production per day for 2026 through three-way collars with downside protection and retained upside participation. For 2027, we have already hedged approximately 11,000 barrels per day under similar structures, reinforcing visibility and stability in our cash flows. Overall, we are delivering consistent operational execution and strengthening our financial position, supported by a high-quality asset base and disciplined capital management. With all this in the backdrop, the board declared a quarterly dividend of $0.023 per share. Finally, the entry of Grupo Bilinski as a strategic investor represents a very significant milestone, strengthening our shareholder base and aligning the company with a long-term partner that enhances our financial flexibility to pursue growth opportunities in a disciplined way. our strategy remains clear and unchanged. Protecting and maximizing the value of our core assets in Colombia while advancing Argentina as a key driver of transformational growth. At the same time, we remain committed to identifying and evaluating value-accretive opportunities that fit our capabilities and our disciplined approach to capital allocation. This includes opportunities both in Colombia and Argentina and also a careful and structured effort to understand potential in other parts of the region, including Venezuela. Before closing, I would like to recognize the continued commitment of our teams. Their focus on safety, operational excellence, and efficiency is what allows us to consistently deliver these results. Thank you again for joining us, and with that, Let's open the floor to your questions.

Thank you, sir. And once again, everyone, if you have a question today, please press star 1 on your telephone keypad. Up first is Daniel Guardiola from BTG.