GEOPARK LIMITED 2026 Q2 Earnings Call

Good morning, everyone. Thank you for joining us for our second quarter 2026 results call. We delivered another quarter of consistent execution, demonstrating the resilience of our core business while continuing to advance in our strategic priorities. Colombia continues to provide resilient production and cash generation while Argentina is progressing well and becoming an increasingly important contributor to our future growth. During the second quarter, we achieved production on an average of 27,271 barrels of oil equivalent per day, performing within our full year guidance and broadly in line with the first quarter. This consistency reflects disciplined reservoir management and the operational capabilities of our teams. In Argentina, execution accelerated significantly during the quarter. We completed drilling on Pad 1030, advanced the hydraulic fracturing campaign, secured environmental approval for the next phase of drilling in Loma Jarillosa Este.

These milestones reinforce our confidence in the quality of the assets and in our ability to deliver the targeted exit production of approximately 5,000 to 6,000 barrels of oil equivalent per day by year-end 2026. Importantly, we also secured a dedicated drilling rig under a 3-year agreement, providing long-term execution certainty for the development of our Vaca Muerta program. In addition, together with Gas y Petróleo del Neuquén, we applied to Argentina's RIGI Investment Incentive Program, which supports the development of our unconventional oil hub and reinforces our long-term growth strategy. Argentina continues to evolve into a transformational growth platform for GeoPark. In Colombia, Llanos 34 continues benefiting from disciplined reservoir management and secondary recovery initiatives. CPO-5 remained a very stable contributor despite operational challenges experienced earlier in the year, while Llanos 123 continued to perform well through ongoing development activities.

Together, these assets continue to provide stable production and cash generation. Importantly, all operations were conducted with strong health and safety performance, with no injuries and no major process safety events. The quarter also benefit from a stronger commodity price environment. Brent averaged approximately $97 per barrel, a narrower Vasconia differential supported higher realized prices, partly offset by hedging costs. This operational and commercial performance translated into solid financial results. Revenue increased 12% sequentially to $143.3 million, supported by stable production and improved realized prices. Adjusted EBITDA reached $73.1 million, representing a 51% margin despite higher energy costs and the strong appreciation of the Colombian and Argentine currencies, which impacted our operating costs. Operating profit totaled $40.8 million.

Compared with the previous quarter, it is important to remember that the first quarter results included a non-recurring breakup fee associated with the Frontera acquisition. Net income for the quarter was $14 million. Capital allocation remained disciplined throughout the quarter. We invested approximately $76 million with nearly two-thirds directed to Argentina as we continue executing the Vaca Muerta development plan while maintaining a 19% return on average capital employed. Our balance sheet remains one of GeoPark's key competitive advantages. During the quarter, our cash position increased to $316 million, and we reduced net leverage to 1.2 times EBITDA. We also renewed and extended a committed contingent credit facility throughout 2028, providing additional financial flexibility as we execute our investment program. Our disciplined risk management approach also remains unchanged.

We continue protecting cash flows through three-way collars covering approximately 19,000 barrels per day during 2026, while approximately 19,000 barrels per day of expected 2027 production has already been protected under similar structures. This approach provides downside protection while preserving upside participation. The board declared a quarterly dividend of $0.023 per share, representing the final payment under the dividend framework announced last year. As previously communicated, our capital allocation priorities are now on completing this peak investment phase while preserving balance sheet strength and positioning the company for the next stage of their free cash flow generation. Overall, we believe GeoPark is very well-positioned. Our Colombian portfolio continues generating resilient cash flows. Argentina is advancing, and our balance sheet provides the financial flexibility to continue with the disciplined pursuit of material inorganic options in Colombia, Argentina, and Venezuela.

I would like to recognize the continued commitment of our employees and contractors and their focus on safety, operational excellence, and efficiency to deliver these results. Before closing, I would like to take a moment to thank our shareholders for their continued support reflected in the successful outcome of our annual general meeting, where all resolutions were approved by more than 99% of votes cast. Following the strengthening of our long-term shareholder base earlier this year with a strategic investment from Grupo Gilinski, we have been glad to welcome a number of other long-term shareholders to our company. The AGM approved the appointment of new members to our board of directors. To this effect, I would like to sincerely thank Sylvia Escovar and Marcela Vaca for their dedication and valuable contributions to GeoPark over the years, and welcome Dorita Gilinski and Camilo Martinez to our board.

We look forward to their contributions. Thank you again for joining us. With that, let's open the floor to your questions.

Thank you. Thanks, Alejandro, good morning, thanks for joining the call, thanks for your congratulations on the results.

First thing in terms of Colombia, I'll start there. We're very pleased with the incoming government. The incoming administration has been very vocal in terms of their support to oil and gas and mining and infrastructure and an overall private investment and creating good conditions for that investment to be received by Colombia. I think from that point of view, we're very pleased. Especially, Alejandro, with the backdrop of the current government that has been against industry, quite publicly in terms of no new licensing for oil and gas and absolutely very little support for industry. From that point of view, I think we're very pleased. We've already had discussions with the incoming administration. As you know, GeoPark is a long-term investor in Colombia.