TIDMGPK
RNS Number : 9352C
Geopark Holdings Limited
09 May 2012
Embargoed for release at 7:00 9 May 2012
am
GEOPARK HOLDINGS LIMITED
FIRST QUARTER 2012 OPERATIONS UPDATE
GeoPark Holdings Limited ("GeoPark" or the "Company") (AIM:
GPK), the Latin American oil and gas exploration and production
company operating in Chile, Colombia and Argentina, with interests
in 19 hydrocarbon blocks and 3.9 million gross acres under license,
is pleased to provide an operations update for the First Quarter
2012.
In order to keep shareholders up to date with GeoPark's
increased activity and multiple projects, the Company, going
forward, intends to provide updates in the form of regular
quarterly operations reports.
Highlights
Key achievements and developments during 1Q2012 include:
-- Colombian Platform Acquisition: GeoPark acquired Hupecol
Cuerva LLC ("Hupecol") and Winchester Oil and Gas and La Luna Oil
Co ("Winchester Luna") for a total consideration of US$105 million
plus possible contingent payments and working capital adjustments.
These new acquisitions created a solid growth platform in Colombia
with a balanced mix of production, development and exploration
assets with crude oil production of 3,000 barrels of oil per day
(bopd) and approximately 10 million barrels of 2P oil reserves
(Company estimate).
-- Oil and Gas Production Increase: Oil and gas production from
GeoPark's properties in Chile, Colombia and Argentina averaged
11,987 barrels of oil equivalent per day (boepd) during 1Q2012
(110% higher than 1Q2011), with approximately 63% representing
crude oil and condensate production (compared to 25% in
1Q2011).
-- Drilling of Fifteen Wells: GeoPark drilled and/or
participated in fifteen new wells, including six wells in Chile and
nine wells in Colombia (with results summarized below). Five wells
are currently being drilled. GeoPark's 2012 work program
encompasses drilling 45-55 new wells (gross) with a capital
expenditure budget of US$220-240 million.
-- Geophysical Surveys: In Chile, GeoPark carried out 67 km of
2D seismic in the Otway and Tranquilo Blocks and 191 km(2) of 3D
seismic in the Flamenco Block in Tierra del Fuego. In Colombia,
GeoPark carried out 111 km(2) of 3D seismic work in the Llanos 62
Block.
-- Chile Land Base Expansion: The State of Chile and GeoPark
executed two Special Operations Contracts for the Exploration and
Exploitation of Hydrocarbons ("CEOP") each for the new Flamenco and
Isla Norte Blocks in Tierra del Fuego. The CEOP for Campanario
Block in Tierra del Fuego is expected to be executed in 2Q2012.
-- Gas Market Improvement: GeoPark signed a new commercial
agreement with Methanex Corporation (gas purchaser in Chile) in
March 2012 with additional incentives provided to the Company to
explore for and develop its gas reserves in Chile.
-- Unconventional Resource Potential Assessment: A review of the
oil and gas resource potential of shale formations was initiated
throughout GeoPark's extensive acreage holdings in Chile and
Argentina. In Argentina, GeoPark has two blocks in the Neuquen
Basin with the attractive Vaca Muerta shale opportunity. In Chile,
GeoPark's acreage position in the Magallanes Basin contains the
Estratos con Favrella shale formation which has previously tested
and produced oil.
Drilling and Work Program
GeoPark's 2012 work program includes the drilling of 45-55 new
wells and an investment plan of US$220-240 million.
The drilling program in 1Q2012 was mainly focused on reserve
development and appraisal in Chile and initiation of exploration in
the extensive prospect inventory in Colombia. Results are set out
below:
Block WI Country Well Type of Geological Depth Principal Current Expected
well Formation (Meters) Hydrocarbon Status date to
start
production
Selknam On
Fell 100% Chile 1 (1) Exploration Springhill 2,962 Oil Production Producing
Yagan
Norte On
Fell 100% Chile 2 ST (1) Development Tobifera 3,168 Oil Production Producing
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Copihue On
Fell 100% Chile 3 Appraisal Springhill 2,399 Oil Production Producing
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Dicky
Oeste Under
Fell 100% Chile 4 Development Springhill 3,140 Gas Completed Evaluation
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Martin On
Fell 100% Chile 2 Exploration Springhill/Tobifera 3,279 Gas/Oil Completion June 2012
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Waiting
Guanaco for
Fell 100% Chile 16 Development Springhill 2,772 Oil Completion June 2012
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Waiting
Konawentru for
Fell 100% Chile 2 Development Tobifera 3,098 Oil Completion May 2012
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
On
Fell 100% Chile Yagan 1 Workover Tobifera 3,148 Oil Production Producing
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Waiting
Tiuque for
Fell 100% Chile 1 Exploration Springhill 2,556 Gas Completion June 2012
=========== ===========
Renoval Explo. Tertiary Under Under
Tranquilo 29% Chile 1 Workover (Morro Chico) 3,047 Gas Evaluation Evaluation
=========== ===========
Cuerva Carbonera On
La Cuerva 100% Colombia 5B Development C5 1,318 Oil Production Producing
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Cuerva Carbonera On
La Cuerva 100% Colombia 5C Development C5B 1,314 Oil Production Producing
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Cuerva Carbonera Dry &Water
La Cuerva 100% Colombia 5D Development C7 1,433 - Disposal -
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Llanos 45% On
34 (2) Colombia Max 1 Exploration Mirador/Guadalupe 3,506 Oil Completion June 2012
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Waiting
Llanos 45% for August
34 (2) Colombia Agami 1 Exploration Mirador/Guadalupe 3,074 Oil Completion 2012
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Waiting
Llanos 36.8% Celeus for August
17 (*) (2) Colombia 1 Exploration Gacheta 3,497 Oil Completion 2012
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Llanos 10% On
32 (*) (2) Colombia Maniceno Exploration Mirador 3,628 Oil Completion June 2012
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Arrendajo 10% Carbonera On March
(*) (2) Colombia Azor 1 Exploration C5 2,294 Oil Production 2012
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
Arrendajo 10% Arrendajo Carbonera Dry
(*) (2) Colombia Norte 1 Exploration C5 - C7 2,111 Oil -Abandoned -
=========== ====== ========= =========== ============ ==================== ========= ============ =========== ===========
(*) Non-Operated
by GeoPark
(1) Wells drilled in 4Q2011
but completed in 1Q2012
(2) Subject to submission and
approval by ANH of certain assignments
-- Development well Yagan Norte 2 in the Fell Block (GeoPark
operated with a 100% working interest (WI)) was completed in
January 2012 with a successful open hole test in the Tobifera
formation. After completing the test, the well was tied-in and is
currently on stream and producing oil at an approximate rate of 970
bopd and gas at an approximate rate of 0.8 million standard cubic
feet per day (mmscfd). Yagan Norte 2 also has production potential
from the Springhill formation.
-- Appraisal well Copihue 3 in the Fell Block (GeoPark operated
with a 100% WI) was completed in January 2012 with a successful
test in the Springhill formation. After completing the test, the
well was tied-in and is currently on stream and producing oil at an
approximate rate of 95 bopd.
-- A recompletion with hydraulic facture of Yagan 1 well in the
Fell Block (GeoPark operated with a 100% WI) was performed in March
2012 with a successful test in the Tobifera formation. After
completing the test, the well was tied-in and is currently on
stream and producing oil at an approximate rate of 770 bopd and gas
at an approximate rate of 0.7 mmscfd. The Yagan 1 well had
previously produced 3.1 billion cubic feet (BCF) of gas and 36,350
barrels of oil from the Springhill formation.
-- The exploration well Renoval 1 on the Tranquilo Block
(GeoPark operated with a 29% WI), was stimulated with three
hydraulic fractures in three intervals. During production testing,
gas flowed at non-commercial rates (initial production of
approximately 0.9 mmscfd), however the test appears inconclusive.
GeoPark and its partners are currently evaluating the results and
defining next steps.
-- Development well Cuerva 5B in La Cuerva Block in Colombia
(GeoPark operated with a 100% WI) was completed in January 2012
with a successful test in the Carbonera formation - C7 Unit, with
initial production, after water cut stabilization, of 115 bopd.
After completing the test on the C5 Unit, the well was tied-in and
is currently on stream and producing oil at an approximate rate of
207 bopd.
-- Development well Cuerva 5C in La Cuerva Block in Colombia
(GeoPark operated with a 100% WI) was completed in February 2012
with a successful test in the Carbonera formation - C5 Unit. After
completing the test, the well was tied-in and is currently on
stream and producing oil at an approximate rate of 97 bopd.
-- Development well Cuerva 5D in La Cuerva Block in Colombia
(GeoPark operated with a 100% WI) was drilled in February 2012 and
resulted in a non-commercial pay zone in Carbonera formation - C5
Unit. The well was deepened and converted to water disposal.
-- Exploration well Max 1, the first exploration well in the
Llanos 34 Block in Colombia (GeoPark operated with a 45% WI),
reached total depth (TD) in March 2012 with oil shows in the
Mirador, Guadalupe, Gacheta and Ubaque formations. Testing will be
carried out during May 2012.
-- Exploration well Maniceno 1, the first exploration well in
the Llanos 32 Block in Colombia (operated by P1 Energy with GeoPark
owning a 10% WI), was spudded in March 2012 and reached TD of
11,027 feet in April 2012 targeting Mirador and Ubaque formations.
Log information in the Mirador formation indicates approximately 50
feet of net pay. On a 21 hour production test the well accumulated
(natural flow and with jet pump) total production of 3,219 barrels
with less than 7% basic sediment and water (BS&W). This initial
result requires further confirmation from a longer term production
test (expected during 2Q2012).
-- Exploration well Azor 1 in the Arrendajo Block in Colombia
(operated by Pacific Rubiales with GeoPark owning a 10% WI), had an
initial production test of 1,130 bopd of 34.9[deg] API oil. Current
production from a long term test is 829 bopd from the Carbonera C5
formation.
-- Exploration well Arrendajo 1 (and 1ST) in the Arrendajo Block
in Colombia (operated by Pacific Rubiales with GeoPark owning a 10%
WI), was drilled to test the Carbonera C3, C5, and C7 formations
which were found to be water-bearing. The well was plugged and
abandoned.
Oil and Gas Production
GeoPark's daily average production increased to 11,987 boepd in
1Q2012 from an average of 5,710 boepd in 1Q2011 due to the increase
in Fell Block production (from 5,626 boepd to 8,940 boepd) and to
the acquisitions of Winchester Luna (833 bopd) and Hupecol (2,149
bopd). Oil production accounted for 63% of the total oil and gas
production compared to 25% in 1Q2011.
1Q2012 Total Oil Gas % Oil
(boepd) (bbl/d) (mcf/d)
----------- --------- --------- --------- ------
Chile 8,940 4,527 26,477 50.6
Colombia 2,982 2,967 87 99.5
Argentina 65 51 81 79.1
TOTAL 11,987 7,545 26,645 63.0
----------- --------- --------- --------- ------
Oil and Gas Reserves
DeGolyer and McNaughton ("D&M") concluded its independent
reserve certification of GeoPark's properties in Chile and
Argentina dated 31 December 2011 with a 2P reserve estimate of 49.5
million barrels of oil equivalent (mm boe), comprising 34% oil and
66% gas. These figures do not include approximately 10.0 mm boe
(100% oil) of 2P reserves (GeoPark internal estimate) resulting
from the two Colombian acquisitions completed during 1Q2012.
Management's current estimate of GeoPark's oil and gas reserves
are as follows:
Reserve Oil Gas
Country Type (MM BBL) (BCF) BOE (MMBOE) % Oil
============= ========== ========== ======= ============ ======
Chile P1 5.8 60.3 15.8 37%
(Certified) P2 8.7 135.6 31.3 28%
P3 8.8 272.2 54.2 16%
P1+P2 14.5 195.9 47.1 31%
P1+P2+P3 23.3 468.1 101.3 23%
======================== ========== ======= ============ ======
Argentina P1 0.6 0.1 0.7 97%
(Certified) P2 1.7 0.0 1.7 100%
P3 3.3 0.0 3.3 100%
P1+P2 2.4 0.1 2.4 99%
P1+P2+P3 5.6 0.1 5.6 100%
------------------------ ---------- ------- ------------ ------
Total P1 6.4 60.5 16.5 39%
(Certified) P2 10.4 135.6 33.0 31%
P3 12.1 272.2 57.5 21%
P1+P2 16.8 196.0 49.5 34%
P1+P2+P3 28.9 468.2 106.9 27%
======================== ========== ======= ============ ======
Colombia P1 5.7 0.0 5.7 100%
(Company P2 4.5 0.0 4.5 100%
estimates) P3 0.0 0.0 0.0
P1+P2 10.1 0.0 10.1 100%
P1+P2+P3 10.1 0.0 10.1 100%
------------------------ ---------- ------- ------------ ------
Total P1 12.1 60.5 22.2 55%
P2 14.8 135.6 37.4 40%
P3 12.1 272.2 57.5 21%
P1+P2 26.9 196.0 59.6 45%
P1+P2+P3 39.0 468.2 117.1 33%
======================== ========== ======= ============ ======
New Project Growth and Strategic Developments
-- Acquisition of Two Colombian Companies: In February 2012, GeoPark acquired Winchester Luna, privately-held exploration and production companies operating in Colombia. In March 2012, GeoPark acquired Hupecol, a privately-held company with two exploration and production blocks in Colombia. The combined Hupecol and Winchester Luna purchases (acquired for a total cash consideration of US$105 million, adjusted for working capital, plus certain possible contingent payments) provide GeoPark with the following in Colombia:
-- Interests in 10 blocks (ranging from 5% to 100%), located in
the Llanos, Magdalena and Catatumbo basins, covering an area of
approximately 220,000 gross acres.
-- Risk-balanced asset portfolio of existing reserves, low risk
development potential and attractive exploration upside.
-- Current oil production of approximately 3,000 bopd from three blocks.
-- 2P oil reserves of approximately 10 million barrels and
prospective oil resources (unrisked) in excess of 25 million
barrels (Company estimates).
-- Successful Colombian operating and administrative team to
support a smooth transition and start-up by GeoPark in
Colombia.
-- Three New High Potential Blocks in Tierra del Fuego: In March
2012, the Ministry of Energy and Mines of Chile signed the CEOPs
for the Flamenco (GeoPark 50% WI) and Isla Norte Blocks (GeoPark
60% WI) in Tierra del Fuego, Chile, and which enabled GeoPark to
begin seismic operations in the area. The Campanario Block CEOP
(GeoPark 50% WI) is pending final regulatory approval, which the
Company expects to obtain during 2Q2012. These three blocks cover
more than 400,000 acres and are similar and geologically contiguous
to the Fell Block. Following its successful methodology employed on
the Fell Block, the Company will also evaluate early production
opportunities from existing non-producing wells. GeoPark has
committed to spend in excess of US$101 million on these blocks over
the next three years.
2012 Outlook
GeoPark has begun 2012 with strong fundamentals in place:
-- Continuous track record of execution and growth performance,
-- Expanded asset base, including a new platform for growth in
Colombia and a growing platform in Chile,
-- Improved capabilities and organization,
-- Healthy financial position resulting from significant cash
reserves and supporting operating cash flows, and
-- Increased portfolio of new project opportunities.
During 2012, the Company expects to realize important
operational and financial performance gains following an aggressive
investment plan, which will include:
-- Risk-balanced production, development and exploration work
programs on 19 blocks in 3 countries (Chile, Colombia and
Argentina),
-- Capital expenditures of US$220-240 million,
-- Drilling of 45-55 new wells - with approximately 35%
representing exploration for new reserves.
2012 Planned Drilling Program
GeoPark's 2012 planned exploration drilling program includes
(but is not limited to) the new wells listed on the table below
(pre-drill information):
Block Country WI Operator Prospect Unrisked CoS Well Status / Comment
Name Resources
P90-P10
=========== ========== ====== ========== =========== =========== ==== ======================================
Drilling was completed in
March 2012 with oil shows
in the Mirador, Guadalupe,
Gacheta and Ubaque formations.
Llanos 45% 0.5-10.0 Testing will begin in May
34 Colombia (*) GeoPark Max MMbbl 46% 2012.
----------- ---------- ------ ---------- ----------- ----------- ----
Drilling was completed in
April 2012 with oil shows
in Mirador and Guadalupe formations.
Llanos 45% 0.1-2.4 Testing will begin in June
34 Colombia (*) GeoPark Agami MMbbl 46% 2012.
----------- ---------- ------ ---------- ----------- ----------- ---- --------------------------------------
Llanos 45% 0.3-20
34 Colombia (*) GeoPark Tua MMbbl 27% Spud target: May 2012.
----------- ---------- ------ ---------- ----------- ----------- ---- --------------------------------------
Drilling was completed in
April 2012. Log information
in the Mirador formation indicated
approximately 50 feet of net
pay. On short-term production
test, the well flowed at an
initial average rate of 3,030
bopd with less than 7% BS&W.
This result requires further
Llanos 10% 0.1-2.1 longer term production testing
32 Colombia (*) P1 Energy Maniceno MMbbl 37% - scheduled for May 2012.
----------- ---------- ------ ---------- ----------- ----------- ---- --------------------------------------
Llanos 10% Samaria 0.1-2.6
32 Colombia (*) P1 Energy Norte MMbbl 42% Spud target: May 2012.
----------- ---------- ------ ---------- ----------- ----------- ---- --------------------------------------
Drilling was completed in
April 2012 with oil shows
Llanos 36.8% 1.0-18.0 in Gacheta formation. Testing
17 Colombia (*) Ramshorn Celeus MMbbl 44% will begin in June 2012.
----------- ---------- ------ ---------- ----------- ----------- ---- --------------------------------------
Llanos 36.8% 0.5-6.7
17 Colombia (*) Ramshorn Mapora MMbbl 38% Spud target: May 2012
----------- ---------- ------ ---------- ----------- ----------- ---- --------------------------------------
7-70
Otway Chile 25% GeoPark Cabo Negro BCF 22% Spud target: August 2012
----------- ---------- ------ ---------- ----------- ----------- ---- --------------------------------------
21-220
Otway Chile 25% GeoPark Tatiana BCF 30% Spud target: July 2012
----------- ---------- ------ ---------- ----------- ----------- ---- --------------------------------------
Marcou 8-98
Tranquilo Chile 29% GeoPark Sur BCF 22% Spud target: June 2012
----------- ---------- ------ ---------- ----------- ----------- ---- --------------------------------------
(*) Subject to submission and approval by Colombian Agencia Nacional
de Hidrocarburos (ANH) of certain assignments.
Commenting, James Park, Chief Executive Officer, said: "As
expected, 2012 began with significant activity - both from our work
and drilling programs and our new project acquisition efforts. An
aggressive 50 well drilling program and US$240 million investment
plan puts us into position to realise important gains through the
year. The expansion of our asset base also creates a multi-country
risk-balanced diversified portfolio which provides a platform for
continuous steady growth with step-change upside
opportunities."
In accordance with AIM Rules, the information in this release
has been reviewed and signed off by Salvador Minniti, a geologist
with 32 years of oil and gas experience and Director of Exploration
of GeoPark. Reserve and resource estimates in this release have
been compiled by DeGolyer and MacNaughton and the Company in
accordance with the 2011 Petroleum Resources Management System
produced by the Society of Petroleum Engineers.
GeoPark can be visited online at www.geo-park.com
For further information please contact:
GeoPark Holdings Limited
Andres Ocampo (Buenos Aires) +54 11 4312 9400
Nick Clayton (London) +44 207 734 9922
Oriel Securities - Nominated Adviser and
Joint Broker
Michael Shaw (London) +44 (0)20 7710 7600
Tunga Chigovanyika (London)
Macquarie Capital (Europe) Limited - Joint
Broker
Paul Connolly (London) +44 (0)20 3037 2000
Steve Baldwin (London)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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