Page 15 - LatAmOil Week 16 2020

LatAmOil
NEWS IN BRIEF
LatAmOil
The Company has discretion over when to undertake all major capital projects.
PetroTal’s Bretana field is located in Block 95.
Financial Update: The Company continues to prudently manage its cash resources. In order to increase its financial flexibility, PetroTal is in dis- cussions to establish a credit facility either based on the increased year-end 2019 reserve valua- tion, or from the recently completed production facilities investment.
Having access to such a credit facility will strengthen PetroTal’s liquidity and allow it to continue to progress the majority of its devel- opment plans. The Company has additional flexibility to further reduce its cost structure as needed. Such measures include further deferrals of non-essential capital expenditures, seeking cost reductions from suppliers and extension of payment terms. Taking these steps will help to ensure the sustenance of resource operations in Peru, for all parties.
Dividend Suspension: Due to the financial impact of the global oil price disruption, the Company has decided to suspend declaration and payment of all dividends in order to manage cash for business operations. The Board of Direc- tors will evaluate this decision on a semi-annual basis going forward and expects to reinstate its dividend policy when appropriate.
Manolo Zuniga, President and Chief Execu- tive Officer, commented: “PetroTal is pleased to announce another strong drilling result, with 6H being our third horizontal well drilled on time andunderbudget.The6Hwellcomplementsthe performance of the 4H and 5H wells, and over the next few months, PetroTal will focus on opti- mising production from our seven producing oil wells and preserving the Company’s capital position.”
He added: “PetroTal is fortunate to have loyal and understanding partners amongst its many contractors and related Peruvian government ministries and agencies and we are pleased to have already achieved an increase in netbacks to $12 a barrel.”
PetroTal, April 21 2020
GeoPark announces
operational update
for Q1-2020
GeoPark, a leading independent Latin American oil and gas explorer, operator and consolidator with operations and growth platforms in Colom- bia, Peru, Argentina, Brazil, Chile and Ecuador, today announced its operational update for the three-month period ended March 31, 2020 (Q1-2020).
Highlights include keeping team safe and healthy/continuity of field operations: protocols,
preventive measures and crisis response plans in place across six-country platform; field teams reduced to minimum with back-up teams and contingencies in place; office functions moved to home; supporting local communities with safety, medical and food supplies.
Low break-even oil and gas production base: 90% oil and gas production cash flow positive at $20-30 per barrel Brent oil price; principal Lla- nos 34 block (GeoPark operated, 45% WI) oil fields with break-even price of approximately $15-17 per barrel; new CPO-5 block (GeoPark non-operated, 30% WI) with break-even price of approximately$6-7perbarrel);self-funded2020 investment and work programme reduction (2020 work programme reduced by 60-65% (or $110-130mn) to $70-80mn; targeting 43,000- 44,000 boepd average production and operating netbacks of $210-230mn assuming Brent of $30 per barrel.
Decisive and ongoing cost reductions further improving GeoPark’s leading cost efficiencies with ongoing cost-cutting initiatives at operat- ing, G&A and capital investment levels, volun- tary salary and bonus reduction by management, Board of Directors and employees (20-50% reductions); temporary suspension of quarterly cash dividends and share buybacks, to date total capital and cost reductions nearly $200mn.
Strong cash position and balance sheet with safety nets in place: $75mn oil prepayment facil- ity, with $50mn committed, $163mn of cash and approximately $168mn in uncommitted credit lines; long-term financial debt maturity profile with no principal payments until September 2024.
The S&P and Fitch agencies recently reaf- firmed GeoPark’s long-term corporate credit rating at B+.
Protecting base oil price: 65-70% of oil pro- duction hedged in Q2-2020, 40-45% of oil pro- duction hedged in Q3-2020.
Preparing for recovery: protecting critical tools and capabilities necessary for the short, medium and long-term; flexible work pro- grammes, quickly adaptable and expanded if Brent prices recover to $35-40 per barrel.
Q1-2020 production and operations high- lights: Consolidated oil and gas production growth of 16% to record production of 45,7317 boepd; in Colombia, nine new wells tested and put on production in the Llanos 34 block; in Chile, discovery of the new Jauke Oeste gas field in the Fell block (GeoPark operated, 100% WI); successful operational takeover and integration ofAmerisurResourcesPlc(“Amerisur”)assets
James F. Park, Chief Executive Officer of GeoPark, said: “Congratulations to our team for a powerful first quarter with 16% production growth and for our fast and decisive reaction to the historic pandemic and oil price collapse. We immediately moved to safeguard our people and secure our field operations across our six-coun- try platform, while simultaneously protect- ing our cash by implementing capital and cost reductions that could exceed $200mn through the year and still ensuring a self-funded work program.
“We also protected our base oil price above our break-evens and secured a new safety-net financing facility to guarantee access to addi- tional liquidity if needed.
“Our low-cost production base provides a competitive advantage to GeoPark during times of low oil prices and our 17-year track-record of successfully working through multiple global and local crises reflects the proven ability of our seasoned team to prevail during times of stress. We also continue to focus on the medium and longer term to take advantage of the downturn to streamline even more our business and prepare to emerge even stronger and better during the recovery.”
GeoPark, April 20 2020
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