GeoPark enters Venezuela with acquisition of Bare block

GeoPark announced its entry into Venezuela through the purchase of 95% of an entity controlling the Bare block, a heavy crude producing area located in the Orinoco Petroleum Belt. The company will assume operations under a Productive Participation Agreement with PDVSA Petróleo.

The block contains approximately 15.7 billion barrels of original oil in place, over 700 million barrels of cumulative production, and roughly 1,100 existing wells. It currently produces about 11,000 barrels per day, while the company estimates maximum potential of between 85,000 and 95,000 barrels per day.

The redevelopment plan will be executed in phases, with capital investments, facility rehabilitation, and application of additional recovery techniques. GeoPark projects achieving net production of between 55,000 and 62,000 barrels per day for over ten years, along with cumulative production of approximately 400 million barrels.

The company estimates that the field's recovery factor, currently between 4% and 5%, could increase to the 8% to 9% range. Under the contractual framework, GeoPark will finance all planned investments and will have a net economic interest of 65%. The agreement will have a term of 25 years, although it still must complete regulatory authorizations and requirements related to applicable sanctions.

The transaction will also modify GeoPark's shareholding structure. The company will issue 42.1 million shares to an entity of the Gilinski Group, valued at US$12.22 per share, in exchange for the remaining interest in the entity linked to the contract. Following the transaction, the group would control approximately 56.3% of ordinary shares, a percentage that could reach 58.4% under an adjustment mechanism.

Additionally, a tender offer of up to US$100 million at the same per-share price is contemplated. GeoPark will continue to trade on the New York Stock Exchange and will maintain a board with an independent majority. The company expects that the development of Bare, together with expansion in Vaca Muerta, will contribute to bringing its total production to between 75,000 and 85,000 barrels of oil equivalent per day by 2030.

With information from Mejor Energía.