TIDMGPK
RNS Number : 2606U
Geopark Limited
29 November 2013
29 November 2013
GEOPARK LIMITED
RESULTS FOR THE NINE MONTH ENDED 30 SEPTEMBER 2013
GeoPark Limited ("GeoPark"), the Latin American oil and gas
explorer, operator and consolidator with operations and production
in Chile, Colombia, Brazil and Argentina (AIM: GPK), is pleased to
announce its third quarter results for the nine months ended 30
September 2013.
Operational Highlights*
-- Oil Production up 57% to 11,163 bopd in 3Q2013 vs 3Q2012
-- Total Oil and Gas Production up 21% to 12,992 boepd in 3Q2013 vs 3Q2012
-- New Gas discovery: Cerro Sutlej gas field in Fell Block, Chile
-- Drilled Tigana 1 exploration well in Llanos 34, Colombia to be tested in 4Q2013
Financial Highlights*
-- Revenues up 49% to $89.7 million in 3Q2013 vs 3Q2012
-- Gross Profit up 57% to 41.0 million in 3Q2013 vs 3Q2012
-- Adjusted EBITDA up 33% to $125.9 million (as of September 30, 2013)
-- Cash position of $104.8 million
* Operational and Financial figures do not include results from
new Brazilian acquisition, which is expected to close in 4Q2013 or
1Q2014.
Strategic Highlights
-- Strategic alliance with Tecpetrol to identify, study and
potentially acquire upstream oil and gas opportunities in
Brazil
-- Registration process underway with the United States
Securities and Exchange Commission, SEC, to consider alternate
public market to obtain additional capital and increased financial
flexibility
In accordance with the AIM Rules, the information in this
announcement has been reviewed by Salvador Minniti, a geologist
with 32 years of oil and gas experience and Director of Exploration
of GeoPark.
GeoPark can be visited online at www.geo-park.com
For further information please contact:
GeoPark Limited
Pablo Ducci (Chile) +56 2 2242 9600
Oriel Securities - Nominated Adviser and Joint Broker
Michael Shaw (London) +44 (0)20 7710 7600
Tunga Chigovanyika (London)
Macquarie Capital (Europe) Limited - Joint Broker
Steve Baldwin (London) +44 (0)20 3037 2000
GEOPARK LIMITED
Interim condensed consolidated
financial statements
For the nine-months ended 30 September 2012 and 2013
CONSOLIDATED STATEMENT OF INCOME
Nine-months
Nine-months period
period ended
ended 30 September Year ended
30 September 2012 (1) 31 December
Amounts in US$ '000 Note 2013 (Unaudited) (Unaudited) 2012
NET REVENUE 2 250,530 182,139 250,478
Production costs 4 (129,834) (88,656) (129,235)
GROSS PROFIT 120,696 93,483 121,243
Exploration costs 5 (16,012) (21,742) (27,890)
Administrative costs 6 (32,050) (20,910) (28,798)
Selling expenses (12,526) (15,650) (24,631)
Other operating income 4,555 681 823
OPERATING PROFIT 64,663 35,862 40,747
Financial income 7 1,562 364 892
Financial expenses 8 (28,762) (13,962) (17,200)
Bargain purchase gain
on acquisition of subsidiaries 14 - 8,401 8,401
PROFIT BEFORE TAX 37,463 30,665 32,840
Income tax (12,260) (6,266) (14,394)
PROFIT FOR THE PERIOD/YEAR 25,203 24,399 18,446
Attributable to:
Owners of the parent 15,767 17,833 11,879
Non-controlling interest 9,436 6,566 6,567
Earnings per share (in
US$) for profit attributable
to owners of the Company.
Basic 0.36 0.42 0.28
Earnings per share (in
US$) for profit attributable
to owners of the Company.
Diluted 0.34 0.40 0.27
STATEMENT OF COMPREHENSIVE INCOME
Nine-months
period
Nine-months ended 30
period ended September Year ended
30 September 2012 (1) 31 December
Amounts in US$ '000 2013 (Unaudited) (Unaudited) 2012
Profit for the period
/ year 25,203 24,399 18,446
Other comprehensive income
Currency translation (573) - -
differences
Total comprehensive Income
for the period / year 24,630 24,399 18,446
Attributable to:
Owners of the parent 15,194 17,833 11,879
Non-controlling interest 9,436 6,566 6,567
(1) 30 September 2012 comparative information has been restated
reflecting the finalization of the purchase price allocation (see
Note 1).
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 September Year ended
At 30 September 2012 (1) 31 December
Amounts in US$ '000 Note 2013 (Unaudited) (Unaudited) 2012
ASSETS
NON CURRENT ASSETS
Property, plant and
equipment 9 571,394 429,639 457,837
Prepaid taxes 17,560 3,208 10,707
Other financial assets 3,952 6,813 7,791
Deferred income tax 21,405 19,451 13,591
Prepayments and other
receivables 1,968 556 510
TOTAL NON CURRENT
ASSETS 616,279 459,667 490,436
CURRENT ASSETS
Inventories 5,825 10,641 3,955
Trade receivables 49,729 21,924 32,271
Prepayments and other
receivables 42,355 43,120 49,620
Prepaid taxes 1,778 11,036 3,443
Cash at bank and
in hand 104,797 75,539 48,292
TOTAL CURRENT ASSETS 204,484 162,260 137,581
TOTAL ASSETS 820,763 621,927 628,017
EQUITY
Equity attributable
to owners of the
Company
Share capital 10 43 43 43
Share premium 120,338 112,302 116,817
Reserves 127,848 129,596 128,421
Retained earnings
(losses) 15,593 2,948 (5,860)
Attributable to owners
of the Company 263,822 244,889 239,421
Non-controlling interest 88,540 55,463 72,665
TOTAL EQUITY 352,362 300,352 312,086
LIABILITIES
NON CURRENT LIABILITIES
Borrowings 11 290,490 164,891 165,046
Provisions for other
long-term liabilities 12 26,619 27,697 25,991
Deferred income tax 23,834 24,218 17,502
Trade and other payables 13 8,344 - -
TOTAL NON CURRENT
LIABILITIES 349,287 216,806 208,539
CURRENT LIABILITIES
Borrowings 11 5,735 30,873 27,986
Current income tax 13,196 3,054 7,315
Trade and other payables 13 100,183 70,842 72,091
TOTAL CURRENT LIABILITIES 119,114 104,769 107,392
TOTAL LIABILITIES 468,401 321,575 315,931
TOTAL EQUITY AND
LIABILITIES 820,763 621,927 628,017
(1) 30 September 2012 comparative information has been restated
reflecting the finalization of the purchase price allocation (see
Note 1).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the
Company
Retained Non -
Share Share Other Translation (Losses) controlling
Amount in US$ '000 Capital Premium Reserve Reserve Earnings Interest Total
Equity at 1 January
2012 43 112,231 114,270 894 (18,549) 41,763 250,652
Profit for the nine
month period - - - - 17,833 6,566 24,399
Total comprehensive
income for the period
ended 30 September
2012 - - - - 17,833 6,566 24,399
Proceeds from transaction
with Non-controlling
interest - - 14,432 - - 7,134 21,566
Shared-based payment - 71 - - 3,664 - 3,735
- 71 14,432 - 3,664 7,134 25,301
Balance at 30 September
2012 (1) (Unaudited) 43 112,302 128,702 894 2,948 55,463 300,352
Balance at 31 December
2012 43 116,817 127,527 894 (5,860) 72,665 312,086
Profit for the nine
month period - - - - 15,767 9,436 25,203
Currency translation
differences - - - (573) - - (573)
Total comprehensive
income for the period
ended 30 September
2013 - - - (573) 15,767 9,436 24,630
Proceeds from transaction
with Non-controlling
interest - - - - - 6,439 6,439
Shared-based payment - 3,521 - - 5,686 - 9,207
- 3,521 - - 5,686 6,439 15,646
Balance at 30 September
2013 (Unaudited) 43 120,338 127,527 321 15,593 88,540 352,362
(1) 30 September 2012 comparative information has been restated
reflecting the finalization of the purchase price allocation (see
Note 1).
(1)
CONSOLIDATED STATEMENT OF CASH FLOW
Nine-months
Nine-months period
period ended
ended 30 September Year ended
30 September 2012 (1) 31 December,
Amounts in US$ '000 2013 (Unaudited) (Unaudited) 2012
Cash flows from operating
activities
Profit for the period/year 25,203 24,399 18,446
Adjustments for:
Income tax for the period/year 12,260 6,266 14,394
Depreciation of the period/year 49,546 36,228 53,317
Loss on disposal of property,
plant and equipment 568 455 546
Write-off of unsuccessful
exploration and evaluation
assets 11,955 20,298 25,552
Amortisation of other long-term
liabilities (1,359) (1,993) (2,143)
Accrual of borrowing's interests 17,913 11,471 12,478
Unwinding of long-term liabilities 1,049 630 1,262
Accrual of share-based payment 5,946 3,664 5,396
Deferred income - 5,550 5,550
Income tax paid (4,040) (408) (408)
Exchange difference generated
by borrowings (14) 39 35
Bargain purchase gain on
acquisition of subsidiaries
(Note 14) - (8,401) (8,401)
Changes in operating assets
and liabilities (20,699) 8,542 5,778
Cash flows from operating
activities - net 98,328 106,740 131,802
Cash flows from investing
activities
Purchase of property, plant
and equipment (187,237) (147,200) (198,204)
Acquisitions of subsidiaries,
net of cash acquired (Note
14) - (105,303) (105,303)
Collections related to financial 3,839 - -
assets
Collections related to financial 6,734 - -
leases
Cash flows used in investing
activities - net (176,664) (252,503) (303,507)
Cash flows from financing
activities
Proceeds from borrowings 292,259 38,883 37,200
Proceeds from transaction
with Non-controlling interest
(2) 37,577 10,019 12,452
Proceeds from loans from 8,344 - -
related parties
Proceeds from issuance of 3,521 - -
shares
Principal paid (179,359) (16,297) (12,382)
Interest paid (17,511) (5,552) (10,895)
Cash flows from financing
activities - net 144,831 27,053 26,375
Net increase (decrease) in
cash and cash equivalents 66,495 (118,710) (145,330)
Cash and cash equivalents
at 1 January 38,292 183,622 183,622
Cash and cash equivalents
at the end of the period/year 104,787 64,912 38,292
Ending Cash and cash equivalents
are specified as follows:
Cash in banks 104,774 75,515 48,268
Cash in hand 23 24 24
Bank overdrafts (10) (10,627) (10,000)
Cash and cash equivalents 104,787 64,912 38,292
(1) 30 September 2012 comparative information has been restated
reflecting the finalization of the purchase price allocation (see
Note 1).
(2) Proceeds from transaction with Non-controlling interest for
the period ended 30 September 2013 includes: US$ 6,439,000 from
capital contributions received in the period; and US$ 31,138,000 as
result of collection of receivables included in Prepayment and
other receivables as of 31 December 2012, relating to equity
transactions made in 2012 and 2011.
SELECTED EXPLANATORY NOTES
Note 1
General information
GeoPark Limited (the Company) is a company incorporated under
the law of Bermuda. The Registered Office address is Cumberland
House, 9th Floor, 1 Victoria Street, Hamilton HM11, Bermuda. The
Company is quoted on the AIM market of London Stock Exchange
plc.
The principal activity of the Company and its subsidiaries ("the
Group") are exploration, development and production for oil and gas
reserves in Chile, Colombia and Argentina. The Group has working
interests and/or economic interests in 19 hydrocarbon blocks.
On 30 July 2013 the shareholders approved the change of the
Company's name from GeoPark Holdings Limited to GeoPark
Limited.
This consolidated interim financial report was authorised for
issue by the Board of Directors on 29 November, 2013.
Basis of Preparation
The consolidated interim financial report of GeoPark Limited is
presented in accordance with IAS 34 "Interim Financial Reporting".
It does not include all of the information required for full annual
financial statements, and should be read in conjunction with the
annual financial statements as at and for the years ended 31
December 2011 and 2012, which have been prepared in accordance with
IFRSs.
The consolidated interim financial report has been prepared in
accordance with the accounting policies applied in the most recent
annual financial statements. For further information please refer
to GeoPark Limited's consolidated financial statements for the year
ended 31 December 2012.
The comparative information for the period ended 30 September
2012 has been restated from the original condensed financial
statements at that date to include the final estimation of the
purchase price allocation for the business combination related to
the acquisition in Colombia shown in Note 14.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual profit or
loss.
The activities of the Company are not subject to significant
seasonal changes.
Leases in which substantially all of the risks and rewards of
ownership are transferred to the lessee are classified as finance
leases. Under a finance lease, the Company as lessor has to
recognize an amount receivable equal to the aggregate of the
minimum lease payments plus any unguaranteed residual value
accruing to the lessor, discounted at the interest rate implicit in
the lease (see Note 9).
New and amended standards adopted by the Group
As from 1 January, 2013, the Company applied IFRS 10,
'Consolidated financial statements", IFRS 11, 'Joint arrangements',
IFRS 12, 'Disclosures of interests in other entities'. Those
standards did not materially affect the Company's financial
condition or results of the operations.
Also, as from 1 January 2013 the Company applied IFRS 13 "Fair
value measurement" . This standard has not have a significant
impact on the balances recorded in the financial statements but
would require the company to apply different valuation techniques
to certain items (e.g. debt acquired as part of a business
combination) recognised at fair value as and when they arise in the
future.
Estimates
The preparation of interim financial information requires the
use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the
Group's accounting policies. Actual results may differ from these
estimates
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
consolidated financial statements for the year ended 31 December
2012.
Financial risk management
The Company's activities expose it to a variety of financial
risks: currency risk, price risk, credit risk- concentration,
funding and liquidity risk, interest risk and capital risk. The
interim condensed consolidated financial statements do not include
all financial risk management information and disclosures required
in the annual financial statements, and should be read in
conjunction with the Company's annual financial statements as at 31
December 2012.
There have been no changes in the risk management since year end
or in any risk management policies.
Subsidiary undertakings
The following chart illustrates the Group structure as of 30
September 2013 (*):
(*) LG International is not a subsidiary, instead of it is
Non-controlling interest.
During 2013, with the purpose of conducting its multilocation
activities and for allowing future business structures, the Company
has incorporated certain wholly owned subsidiaries, that are
dormant companies at the date of the issuance of these interim
financial statements.
Details of the subsidiaries and jointly controlled assets of the
Company are set out below:
Ownership
Name and registered office interest
GeoPark Argentina Ltd.
Subsidiaries - Bermuda 100%
GeoPark Argentina Ltd.
- Argentine Branch 100% (a)
GeoPark Latin America 100%
GeoPark Latin America
- Agencia en Chile 100% (a)
100% (a)
GeoPark S.A. (Chile) (b)
GeoPark Brazil Exploracao
y Producao de Petróleo
e Gas Ltda. (Brazil) 100%
GeoPark Chile S.A. (Chile) 80% (a) (c)
GeoPark Fell S.p.A. (Chile) 80% (a) (c)
GeoPark Magallanes Limitada
(Chile) 80% (a) (c)
GeoPark TdF S.A. (Chile) 69% (a) (d)
GeoPark Colombia S.A.
(Chile) 80% (a) (c)
100% (a)
GeoPark Luna SAS (Colombia) (e) (f)
GeoPark Colombia SAS 100% (a)
(Colombia) (e) (f)
100% (a)
GeoPark Llanos SAS (Colombia) (e) (f)
La Luna Oil Co. Ltd. 100% (a)
(Panama) (e) (f)
GeoPark Colombia PN S.A. 100% (a)
(Panama) (e) (f)
GeoPark Cuerva LLC (United 100% (a)
States) (e) (f)
Sucursal La Luna Oil 100% (a)
Co. Ltd. (Colombia) (e) (f)
Sucursal GeoPark Colombia 100% (a)
PN S.A. (Colombia) (e) (f)
Sucursal GeoPark Cuerva 100% (a)
LLC (Colombia) (e) (f)
GeoPark Brazil S.p.A. 100% (a)
(Chile) (b)
Raven Pipeline Company
LLC (United States) 23.5% (b)
GeoPark Colombia Cooperatie
U.A. (The Netherlands) 100% (b)
GeoPark Brazil Cooperatie
U.A. (The Netherlands) 100% (b)
Jointly controlled
assets Tranquilo Block (Chile) 29%
Otway Block (Chile) 100% (g)
Flamenco Block (Chile) 50% (h)
Isla Norte Block (Chile) 60% (h)
Campanario Block (Chile) 50% (h)
(a) Indirectly owned.
(b) Dormant companies.
(c) LG International has 20% interest.
(d) LG International has 20% interest through GeoPark Chile S.A.
and a 14% direct interest.
(e) During the first quarter of 2012, the Company entered into a
business combination acquiring 100% interest in each entity (see
Note 14).
(f) During 2013, the Company has started a merger process by
which a sole company will continue the operations related to the
referred companies. The Company estimates that the process will be
completed by year end.
(g) In April 2013, the Group voluntarily relinquished to the
Chilean Government all of our acreage in the Otway Block, except
for 49,421 acres. In May 2013, our partners under the joint
operating agreement governing the Otway Block decided to withdraw
from such joint operating agreement and to apply to withdraw from
the Otway Block CEOP, such that, subject to the Chilean Ministry of
Energy's approval, the Group will be the sole participant, and have
a working interest of 100%, in our two remaining areas in the Otway
Block.
(h) GeoPark is the operator in all blocks with a share of 60%
for Isla Norte Block and 50% for the other 2 blocks (See Note
16).
Note 2
Net revenue
Nine-months Nine-months
period period
ended 30 ended 30 Year ended
Amounts in US$ September September 31 December
'000 2013 2012 2012
Sale of crude
oil 235,225 158,309 221,564
Sale of gas 15,305 23,830 28,914
250,530 182,139 250,478
Note 3
Segment Information
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the strategic steering committee.
This committee is integrated by the CEO, COO, CFO and managers in
charge of the Geoscience, Drilling, Operations and SPEED
departments. This committee reviews the Group's internal reporting
in order to assess performance and allocate resources. Management
has determined the operating segments based on these reports.
The committee considers the business from a geographic
perspective.
The strategic steering committee assesses the performance of the
operating segments based on a measure of Adjusted EBITDA. Adjusted
EBITDA is defined as profit for the period before net finance cost,
income tax, depreciation, amortization and certain non-cash items
such as impairments and write-offs of unsuccessful exploration and
evaluation assets, accrual of stock options and stock awards. Other
information provided, except as noted below, to the strategic
steering committee is measured in a manner consistent with that in
the financial statements.
Nine-months period ended 30 September 2013
Amounts in US$
'000 Total Argentina Chile Brazil Colombia Corporate
NET REVENUE 250,530 1,118 119,359 - 130,053 -
GROSS PROFIT 120,696 936 69,546 - 50,214 -
OPERATING PROFIT
/ (LOSS) 64,663 (2,643) 47,971 (2,323) 29,390 (7,732)
Adjusted EBITDA 125,894 (1,361) 73,570 (2,278) 60,852 (4,889)
Nine-months period ended 30 September 2012
Amounts in US$
'000 Total Argentina Chile Brazil Colombia Corporate
NET REVENUE 182,139 972 117,244 - 63,923 -
GROSS PROFIT 93,483 302 68,314 - 24,867 -
OPERATING PROFIT
/ (LOSS) 35,862 (5,628) 41,767 - 5,230 (5,507)
Adjusted EBITDA 94,793 (808) 76,721 - 24,265 (5,385)
Total Assets Total Argentina Chile Brazil Colombia Corporate
30 September
2013 820,763 4,934 449,695 29,964 270,703 65,467
31 December 2012 628,017 6,108 405,674 - 213,202 3,033
30 September
2012 621,927 8,619 411,354 - 200,567 1,387
A reconciliation of total Adjusted EBITDA to total profit before
income tax is provided as follows:
Nine-months Nine-months
period ended period ended
30 September 30 September
2013 2012
Adjusted EBITDA for reportable
segments 125,894 94,793
Depreciation (49,546) (36,228)
Accrual of stock awards (5,946) (3,664)
Write-off of unsuccessful
exploration and evaluation
assets (11,955) (20,298)
Others (a) 6,216 1,259
Operating profit 64,663 35,862
Financial results (27,200) (13,598)
Bargain purchase gain
on acquisition of subsidiaries - 8,401
Profit before tax 37,463 30,665
(a) Includes internally capitalised costs, fees earned from
co-venturers and other costs recovery.
Note 4
Production costs
Nine-months Nine-months Year
period period ended
ended ended 31 December
30 September 30 September 2012
Amounts in US$ '000 2013 2012
Depreciation 48,423 35,529 52,307
Royalties 13,010 9,900 11,424
Staff costs 12,195 6,102 14,171
Transportation costs 8,494 5,112 7,211
Well and facilities
maintenance 13,423 5,749 9,385
Consumables 11,636 7,639 9,884
Equipment rental 5,562 5,504 5,936
Other costs 17,091 13,121 18,917
129,834 88,656 129,235
Note 5
Exploration costs
Amounts in US$ '000 Nine-months Nine-months Year ended
period period 31 December
ended 30 ended 30 2012
September September
2013 2012
Staff costs 5,681 2,449 4,418
Allocation to capitalised
project (1,608) (1,669) (1,849)
Write-off of unsuccessful
exploration and evaluation
assets 11,955 20,298 25,552
Amortisation of other
long-term liabilities
related to unsuccessful
efforts (600) (1,500) (1,500)
Recovery of abandonments
costs (759) - -
Other services 1,343 2,164 1,269
16,012 21,742 27,890
Note 6
Administrative costs
Nine-months Nine-months
period period
ended 30 ended 30 Year ended
September September 31 December
Amounts in US$ '000 2013 2012 2012
Staff costs 15,251 9,072 9,575
Consultant fees 4,396 4,119 5,122
New projects 1,741 710 2,927
Office expenses 1,880 1,196 3,293
Director fees and
allowance 1,263 1,356 1,516
Travel expenses 1,640 973 1,563
Depreciation 1,123 699 1,010
Other administrative
expenses 4,756 2,785 3,792
32,050 20,910 28,798
Note 7
Financial income
Nine-months Nine-months Year ended
period period 31 December
ended 30 ended 30 2012
Amounts in US$ September September
'000 2013 2012
Exchange difference 722 17 348
Interest received 840 347 544
1,562 364 892
Note 8
Financial expenses
Nine-months Nine-months
period period
ended 30 ended 30 Year ended
September September 31 December
Amounts in US$ '000 2013 2012 2012
Bank charges and other
financial costs 2,774 815 1,764
Bond GeoPark Fell SpA 8,603 - -
cancellation costs
(Note 11)
Exchange difference 870 2,994 2,429
Unwinding of long-term
liabilities 1,049 630 1,262
Interest and amortisation
of debt issue costs 16,774 10,520 13,114
Less: amounts capitalised
on qualifying assets (1,308) (997) (1,369)
28,762 13,962 17,200
Note 9
Property, plant and equipment
Exploration
Oil & Furniture, Production Buildings and
Amounts in gas equipment facilities and Construction evaluation
US$'000 properties and vehicles and machinery improve-ments in progress assets TOTAL
Cost at 1
January
2012 171,956 2,175 47,102 2,437 32,896 42,140 298,706
Additions 12,034 627 19,397 - 52,769 62,781 147,608
Disposals (438) - (17) - - - (455)
Write-off and
impairment
(1) - - - - - (20,298) (20,298)
Transfers 73,024 - 7,623 595 (37,266) (43,976) -
Acquisitions
of
subsidiaries 63,942 482 10,865 - 9,359 29,729 114,377
Cost at 30
September
2012 320,518 3,284 84,970 3,032 57,758 70,376 539,938
Cost at 1
January
2013 344,371 3,576 86,949 3,198 54,025 93,106 585,225
Additions 3,313 1,456 273 - 75,167 111,287 191,496
Disposals (2) (546) (22) (15,870) - - - (16,438)
Write-off and
impairment
(1) - - - - - (11,955) (11,955)
Transfers 97,140 117 16,889 4,019 (69,807) (48,358) -
Cost at 30
September
2013 444,278 5,127 88,241 7,217 59,385 144,080 748,328
Depreciation
and
write-down
at 1 January
2012 (53,604) (1,123) (18,628) (716) - - (74,071)
Depreciation (29,631) (495) (5,866) (236) - - (36,228)
Depreciation
and
write-down
at 30
September
2012 (83,235) (1,618) (24,494) (952) - - (110,299)
Depreciation
and
write-down
at 1 January
2013 (98,156) (1,836) (26,336) (1,060) - - (127,388)
Depreciation (42,016) (660) (6,404) (466) - - (49,546)
Depreciation
and
write-down
at 30
September
2013 (140,172) (2,496) (32,740) (1,526) - - (176,934)
Carrying
amount
at 30
September
2012 237,283 1,666 60,476 2,080 57,758 70,376 429,639
Carrying
amount
at 30
September
2013 304,106 2,631 55,501 5,691 59,385 144,080 571,394
(1) Corresponds to write-off of Exploration and evaluation
assets in Colombia US$ 3,244,000 (US$ 4,727,000 in 2012), Chile US$
8,711,000 (US$ 13,627,000 in 2012) and Argentina nil (US$ 1,944,000
in 2012).
(2) During 2013, the Company entered into a finance lease for
which it has transferred a substantial portion of the risk and
rewards of some assets which had a book value of US$ 14.1 million.
As of 30 September 2013 prepayments and other receivables include
receivables under finance leases for amount of US$ 7.8 million,
which US$ 6.3 million are maturity no later than one year and US$
1.5 million between one and five years. Total unearned interest
income amounts to US$ 1.5 million .
Note 10
Share capital
Nine-months Nine-months
period period
ended 30 ended 30 Year ended
September September 31 December
Issued share capital 2013 2012 2012
Common stock (US$ '000) 43 43 43
The share capital is distributed
as follows:
Common shares, of nominal
US$ 0.001 43,495,585 42,474,274 43,495,585
Total common shares in
issue 43,495,585 42,474,274 43,495,585
Authorised share capital
US$ per share 0.001 0.001 0.001
Number of common shares
(US$ 0.001 each) 5,171,949,000 5,171,949,000 5,171,949,000
Amount in US$ 5,171,949 5,171,949 5,171,949
Note 11
Borrowings
The outstanding amounts are as follows:
At At Year ended
Amounts in US$ 30 September 30 September 31 December
'000 2013 2012 2012
Bond GeoPark Latin 294,037 - -
America Agencia
en Chile (a)
Bond GeoPark Fell
SpA (b) - 131,720 129,452
Methanex Corporation
(c) - 8,036 8,036
Banco de Crédito
e Inversiones (d) 2,178 7,881 7,859
Overdrafts (e) 10 10,627 10,000
Banco Itaú
(f) - 37,500 37,685
296,225 195,764 193,032
Classified as follows:
Current 5,735 30,873 27,986
Non-Current 290,490 164,891 165,046
(a) During February 2013, the Company successfully placed US$
300 million notes which were offered under Rule 144A and Regulation
S exemptions of the United States Securities laws.
The Notes, issued by the Company's wholly-owned subsidiary
GeoPark Latin America Limited Agencia en Chile ("the Issuer"), were
priced at 99.332% and will carry a coupon of 7.50% per annum to
yield 7.625% per annum. Final maturity of the notes will be 11
February 2020. The Notes are guaranteed by GeoPark Limited and
GeoPark Latin America Chilean Branch and are secured with a pledge
of all of the equity interests of the Issuer in GeoPark Chile S.A.
and GeoPark Colombia S.A. and a pledge of certain intercompany
loans. Notes were rated single B by both Standard & Poor's and
Fitch Ratings.
The net proceeds of the notes were partially used to repay debt
of approximately US$ 170 million, including the existing Reg S
Notes due 2015 and the Itaú loan. The remaining proceeds will be
used to finance the Company's expansion plans in the region. The
transaction extends GeoPark's debt maturity significantly, allowing
the Company to allocate more resources to its investment and
inorganic growth programs in the coming years.
(b) Private placement of US$ 133,000,000 of Reg S Notes on 2
December 2010. The Notes carried a coupon of 7.75% per annum and
mature on 15 December 2015. These Notes were fully repaid in March
2013.
(c) The financing obtained in 2007, for development and
investing activities on the Fell Block, was structured as a gas
pre-sale agreement with a six year pay-back period and an interest
rate of LIBOR flat. The loan has been fully repaid during 2013.
In addition on 30 October 2009 another financing agreement was
signed with Methanex Corporation under which Methanex have funded
GeoPark's portions of cash calls for the Otway Joint Venture for
US$ 3,100,000. This financing did not bear interest. The loan was
fully repaid during 2012.
(d) Facility to establish the operational base in the Fell
Block. This facility was acquired through a mortgage loan granted
by the Banco de Crédito e Inversiones (BCI), a Chilean private
bank. The loan was granted in Chilean pesos and is repayable over a
period of 8 years. The interest rate applicable to this loan is
6.6%. The outstanding amount at 30 September 2013 is US$
247,000.
During the last quarter of 2011, GeoPark TdF obtained short-term
financing from BCI. This financing is structured as letter of
credit with a pledge of the seismic equipment acquired to start the
operations in the new blocks. The maturity is February 2014 and the
applicable interest rate ranging from 4.45% to 5.45%. The
outstanding amount at 30 September 2013 is US$ 1,931,000.
(e) At 30 September 2013, the Group has credit lines availables
with several banks for approximately US$ 77,000,000.
(f) GeoPark Limited executed a loan agreement with Banco Itaú
BBA S.A., Nassau Branch for US$ 37,500,000. GeoPark used the
proceeds to finance the acquisition and development of the La
Cuerva and Llanos 62 blocks. This loan was fully repaid in February
2013.
Note 12
Provision for other long-term liabilities
The outstanding amounts are as follows:
At At Year ended
Amounts in US$ 30 September 30 September 31 December
'000 2013 2012 2012
Assets retirement
obligation and
other environmental
liabilities 19,590 14,663 16,213
Deferred income 6,010 7,518 7,369
Cash awards (Note 260 - -
17)
Other 759 5,516 2,409
26,619 27,697 25,991
Note 13
Trade and other payables
The outstanding amounts are as follows:
At At Year ended
Amounts in US$ 30 September 30 September 31 December
'000 2013 2012 2012
Trade payables 78,736 53,291 54,890
Payables to related 8,516 - -
parties (1)
Staff costs to
be paid 6,038 4,716 5,867
Royalties to be
paid 4,892 4,553 3,909
Taxes and other
debts to be paid 6,812 7,846 5,418
To be paid to co-venturers 3,533 436 2,007
108,527 70,842 72,091
Classified as follows:
Current 100,183 70,842 72,091
Non-Current 8,344 - -
(1) In December 2012, LGI entered into GeoPark's operations in
Colombia through the acquisition of a 20% of interest in GeoPark
Colombia S.A. As part of the transaction, LGI committed to fund the
operations in Colombia through loans (See Note 35 to the audited
Consolidated Financial Statements as of 31 December 2012). The
maturity of these loans is December 2015 and the applicable
interest rate is 8% per annum.
Note 14
Acquisitions in Colombia
In February 2012, GeoPark acquired two privately-held
exploration and production companies operating in Colombia,
Winchester Oil and Gas S.A. and La Luna Oil Company Limited S.A.
("Winchester Luna").
In March 2012, a second acquisition occurred with the purchase
of Hupecol Cuerva LLC ("Hupecol"), a privately-held company with
two exploration and production blocks in Colombia.
The following table summarises the combined consideration paid
for Winchester Luna and Hupecol, the fair value of assets acquired
and liabilities assumed for these transactions:
Amounts in US$ Winchester
'000 Hupecol Luna Total
Cash (including
working capital
adjustments) 79,630 32,243 111,873
Total consideration 79,630 32,243 111,873
Cash and cash equivalents 976 5,594 6,570
Property, plant
and equipment (including
mineral interest) 73,791 37,182 110,973
Trade receivables 4,402 4,098 8,500
Prepayments and
other receivables 5,640 2,983 8,623
Deferred income
tax assets 10,344 5,262 15,606
Inventories 10,596 1,612 12,208
Trade payables
and other debt (20,487) (11,981) (32,468)
Borrowings - (1,368) (1,368)
Provision for other
long-term liabilities (5,632) (2,738) (8,370)
Total identifiable
net assets 79,630 40,644 120,274
Bargain purchase
gain on acquisition
of subsidiaries - 8,401 8,401
In 2012, the results of the operations corresponding to
Winchester Luna and Hupecol were consolidated since the acquisition
date, February and April, respectively.
See Note 35 to the audited Consolidated Financial Statements as
of 31 December 2012.
Note 15
Entry in Brazil
Proposed acquisition in Brazil
GeoPark entered into Brazil with the proposed acquisition of a
ten percent working interest in the offshore Manati gas field
("Manati Field"), the largest natural gas producing field in
Brazil. On May 14, 2013, GeoPark executed a stock purchase
agreement ("SPA") with Panoro Energy do Brazil Ltda., the
subsidiary of Panoro Energy ASA, ("Panoro"), a Norwegian listed
company with assets in Brazil and Africa, to acquire all of the
issued and outstanding shares of its wholly-owned Brazilian
subsidiary, Rio das Contas Produtora de Petróleo Ltda ("Rio das
Contas"), the direct owner of 10% of the BCAM-40 block (the
"Block"), which includes the shallow-depth offshore Manati Field in
the Camamu-Almada basin.
The Manati Field is a strategically important, profitable
upstream asset in Brazil and currently provides approximately 50%
of the gas supplied to the northeastern region of Brazil and more
than 75% of the gas supplied to Salvador, the largest city and
capital of the northeastern state of Bahia. The field is largely
developed with existing producing wells and an extensive pipeline,
treatment and delivery infrastructure and is not expected to
require significant future capital expenditures to meet current
production estimates. Additional reserve development may be
possible.
The Manati Field is operated by Petrobras (35% working
interest), the Brazilian national company, largest oil and gas
operator in Brazil and internationally-respected offshore operator.
Other partners in the block include Queiroz Galvao Exploracao e
Producao (45% working interest) and Brasoil Manati Exploracao
Petrolifera S.A. (10% working interest).
GeoPark has agreed to pay a cash consideration of US$140 million
at closing, which will be adjusted for working capital with an
effective date of April 30, 2013. The agreement also provides for
possible future contingent payments by GeoPark over the next five
years, depending on the economic performance and cash generation of
the Block. The closing of the acquisition is subject to certain
conditions, including approval by the Brazilian National Petroleum,
Natural Gas and Biofuels Agency ("ANP") and the Brazilian antitrust
authorities.
The Manati Field acquisition provides GeoPark with:
- A solid foundational platform in Brazil to support future
growth and expansion in Brazil - one of the world's most attractive
hydrocarbon regions.
- Participation in an economically-attractive and strategic
asset representing the largest non-associated gas producing field
in Brazil, with a gross production of over 200 million cubic feet
per day of gas and a secure attractively-priced long term off take
contract that covers 75% of proven reserves (100% of proven
developed reserves).
- A low-risk and fully-developed producing gas field with no
significant drilling or capital expenditure investments
expected.
- A valuable partnership with Petrobras, the largest operator in Brazil.
- An established geoscience and administrative team to manage
the assets - and seek new growth opportunities.
New operations in Brazil
On 14 May 2013, the Company has been awarded seven new licenses
in the Brazilian Round 11 of which two are in the Reconcavo Basin
in the State of Bahia and five are in the Potiguar Basin in the
State of Rio Grande do Norte.
The licensing round was organized by the ANP and all proceedings
and bids have been made public. On 17 September 2013, the winning
bids were approved by the ANP.
For its winning bids on the seven blocks, GeoPark has committed
to invest a minimum of US$15.3 million (including bonus and work
program commitment) during the first 3 years of the exploratory
period. The new blocks cover an area of approximately 54,850
acres.
Note 16
Drilling operations start-up in Tierra del Fuego
In April 2013, the Company has started the exploration drilling
in Tierra del Fuego in Chile in its partnership with Empresa
Nacional de Petroleo de Chile ("ENAP") with the spudding of the
Chercán 1 well on the Flamenco Block. Chercán 1 is the first of 21
exploratory wells on the Flamenco, Campanario and Isla Norte Blocks
in Tierra del Fuego as part of an estimated US$ 100 million
investment commitment during the First Exploration Period. As of
the date of this interim consolidated financial report 3 wells have
been drilled and more than 1,200 sq km of 3D seismic have been
carried out over the three blocks; out of a total 3D seismic
program of approximately 1,500 sq km.
Note 17
Share-based payment
During the third quarter of 2013, as part of its Long-term
Incentive Plan, the Company approved two new share-based
compensation programmes: i.) a stock awards plan oriented to
Managers (non Top Management) and key employees which qualifies as
an equity-settled plan and ii.) a phantom awards plan, oriented to
all non-management employees which qualifies as a cash-settled
plan.
Main characteristics of both plans are:
- Exercise price: US$ 0.001
- Grant date: July 2013
- Grant price: GBP 5.8
- Vesting date: 31 December 2015
- Conditions to be able to exercise:
-- Continue to be an employee
-- Obtain the Company minimum Production, Adjusted EBITDA and
Reserves target for the year of vesting
-- The stock market price at the date of vesting should be
higher than the share price at the price of grant
- Estimated amount of shares for both plans: 1,000,000
In addition, the Company also approved a plan named Value
creation plan ("VCP") oriented to Top Management. The VCP
establishes awards payables in a variable number of shares with
some limitation, subject to certain market conditions, among
others, reach certain stock market price for the Company share at
vesting date. VCP has been classified as an equity-settled
plan.
For the measure and recognition of the three new plans the
Company has applied IFRS 2.
Note 18
Strategic alliance with Tecpetrol in Brazil
On 30 September 2013, the Company and Tecpetrol S.A.
("Tecpetrol") announced the formation of a new strategic alliance
to jointly identify, study and potentially acquire upstream oil and
gas opportunities in Brazil, with a specific focus on the Parnaiba,
Sao Francisco, Reconcavo, Potiguar and Sergipe-Alagoas basins.
Tecpetrol is the oil and gas subsidiary of the Techint Group (a
multinational oilfield and steel conglomerate) with an extensive
track-record as an oil and gas explorer and operator with its
portfolio of assets currently in Argentina, Peru, Colombia,
Ecuador, Mexico, Bolivia, Venezuela and the United States, and with
a current net production of over 85,000 barrels of oil equivalent
per day.
At 30 September 2013, there is no accounting impact of the
creation of the alliance.
Note 19
Initial Public Offering in Progress with the United States
Securities and Exchange Commission (SEC)
On 10 September 2013, the Company announced a listing on the New
York Stock Exchange (NYSE) in order to create a public market for
its common shares in the United States and to facilitate future
access to international equity markets, as well as to obtain
additional capital and financial flexibility.
A registration statement relating to the common shares has been
filed with the SEC but has not yet become effective. The common
shares may not be sold, nor may offers to buy be accepted, in the
United States prior to the time the registration statement becomes
effective.
As of the date of these financial statements, the Company is
evaluating the optimum timing for its proposed listing and common
shares offering on the NYSE, which is expected to be in the first
half of 2014.
Note 20
Subsequent events
On 29 October 2013, the Company put into place an irrevocable,
non-discretionary share purchase program for the purchase up to
400,000 of our common shares, or the Purchase Program, for the
account of our Employee Benefit Trust, or EBT.
The Purchase Program will last from 29 October 2013 through 31
December 2013, and will be managed by Banco BTG Pactual S.A. -
Cayman Branch and Oriel Securities Limited. The common shares
purchased under the program will be used to satisfy future awards
under the incentive schemes. Under the program, the Company may
procure the purchase in any one day of not more than 25% of the
average daily volume over the preceding 20 business days.
The Company has made the following purchases pursuant to the
program: i) on 5 November 2013, 10,000 common shares at a purchase
price of GBP 5.45; and ii) on 14 November 2013, 10,000 common
shares at a purchase price of GBP 5.40.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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