GeoPark Provides Update on Proposed Acquisition of Repsol Exploration and Production Assets in Colombia

Rhea-AI Summary

GeoPark (NYSE: GPRK) announced that Ecopetrol, the operator of the CPO-9 block, has exercised its preemptive rights to acquire 100% of Repsol Colombia O&G , which owns a 45% non-operated working interest in the CPO-9 Block. This development means GeoPark cannot proceed with the previously announced acquisition of the CPO-9 block from Repsol.

Regarding the acquisition of Repsol's 25% interest in SierraCol Energy Arauca (Llanos Norte) in Arauca Department, the process remains open as Repsol's partners can still exercise their preemptive rights. GeoPark will provide updates on the acquisition process as it develops.

Positive

• None.

Negative

• Failed acquisition of CPO-9 block due to Ecopetrol's preemptive rights exercise
• Uncertainty over Llanos Norte acquisition as partners may exercise preemptive rights

Insights

Energy Industry Analyst

This development represents a significant setback to GeoPark's expansion strategy in Colombia. The exercise of preemptive rights by Ecopetrol on the CPO-9 block effectively blocks GeoPark from acquiring a valuable non-operated working interest that would have enhanced their portfolio diversity and production capacity. The CPO-9 block was a key component of the previously announced Repsol asset acquisition deal.

The uncertainty surrounding the Llanos Norte acquisition (25% interest) further complicates GeoPark's growth plans. With a market cap of $451 million, this strategic setback could impact investor confidence in the company's ability to execute meaningful acquisitions in the competitive Colombian oil and gas sector. The loss of the CPO-9 opportunity means GeoPark must now reassess its capital allocation strategy and explore alternative growth opportunities.

For context, Ecopetrol's exercise of preemptive rights demonstrates the competitive nature of Colombian oil assets and the challenges smaller operators face when attempting to expand their footprint in the region. This development may lead to a near-term reassessment of GeoPark's valuation multiples, particularly given the company's size and its need to demonstrate viable growth pathways to investors.

M&A Specialist

The disruption of this acquisition deal highlights the inherent risks in M&A transactions involving assets with multiple stakeholders and preemptive rights provisions. The initial Repsol deal structure now requires significant modification, potentially affecting the overall transaction economics and strategic value proposition for GeoPark. The remaining Llanos Norte portion, if secured, would represent a considerably smaller scale opportunity than the original combined package.

From a deal perspective, the exercise of preemptive rights by Ecopetrol was a foreseeable risk that likely impacted the initial deal pricing and structure. For retail investors, this demonstrates why M&A announcements in the oil and gas sector should be viewed with appropriate caution until all stakeholder rights have been cleared. The development may require GeoPark to revise its capital deployment plans and could affect its negotiating position for the remaining Llanos Norte interest.

BOGOTA, Colombia--(BUSINESS WIRE)-- GeoPark Limited (“GeoPark” or the “Company”) (NYSE: GPRK), a leading independent energy company with over 20 years of successful operations across Latin America, announced today that Ecopetrol, the operator of the CPO-9 block, has exercised its preemptive rights under the terms of the Joint Operating Agreement to acquire 100% of Repsol Colombia O&G Limited, which owns a 45% non-operated working interest in the CPO-9 Block. As a result, GeoPark is not able to proceed with the acquisition of the CPO-9 block, as outlined in the Company’s previously announced transaction with Repsol on November 29, 2024.

With regards to the acquisition of Repsol’s 25% interest in SierraCol Energy Arauca LLC (“Llanos Norte”) in Arauca Department, at this stage, Repsol’s partners can still exercise their preemptive rights, and the process is still open.

GeoPark will provide further updates on the acquisition process in due course.

NOTICE

Additional information about GeoPark can be found in the “Invest with Us” section on the website at www.geo-park.com.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION

This press release contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this press release can be identified by the use of forward-looking words such as ‘‘anticipate,’’ ‘‘believe,’’ ‘‘could,’’ ‘‘expect,’’ ‘‘should,’’ ‘‘plan,’’ ‘‘intend,’’ ‘‘will,’’ ‘‘estimate’’ and ‘‘potential,’’ among others.

Forward-looking statements that appear in a number of places in this press release include, but are not limited to, statements regarding the intent, belief or current expectations, regarding various matters, including, expected production, reserves and the closing of the acquisition. Forward-looking statements are based on management’s beliefs and assumptions, and on information currently available to the management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors.

Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances, or to reflect the occurrence of unanticipated events. For a discussion of the risks facing the Company which could affect whether these forward-looking statements are realized, see filings with the U.S. Securities and Exchange Commission (SEC).

View source version on businesswire.com: https://www.businesswire.com/news/home/20241230944532/en/

INVESTORS:

Maria Catalina Escobar

Shareholder Value and Capital Markets Director

mescobar@geo-park.com

Miguel Bello

Investor Relations Officer

mbello@geo-park.com

Maria Alejandra Velez

Investor Relations Leader

mvelez@geo-park.com

MEDIA:

Communications Department

communications@geo-park.com

Source: GeoPark Limited

FAQ

Why did GeoPark's acquisition of CPO-9 block from Repsol fail?

The acquisition failed because Ecopetrol, the operator of the CPO-9 block, exercised its preemptive rights to acquire 100% of Repsol Colombia O&G , which owns a 45% non-operated working interest in the block.

What is the status of GeoPark's acquisition of Repsol's stake in Llanos Norte?

The acquisition of Repsol's 25% interest in SierraCol Energy Arauca (Llanos Norte) remains uncertain as Repsol's partners still have the option to exercise their preemptive rights.

What percentage stake was GeoPark attempting to acquire in the CPO-9 block?

GeoPark was attempting to acquire a 45% non-operated working interest in the CPO-9 block through the purchase of Repsol Colombia O&G

What is the impact of Ecopetrol's preemptive rights exercise on GPRK's expansion plans?

Ecopetrol's exercise of preemptive rights prevents GeoPark from proceeding with the acquisition of the CPO-9 block, affecting their previously announced expansion plans with Repsol.