The Latin American oil company GeoPark Limited has communicated its "strategic entry" into Venezuela through the purchase of the Bare block, a field located in the Orinoco Oil Basin that is already in operation and has a production horizon of several decades.
The company, with a presence in Colombia, Argentina, and Brazil, has detailed that Bare represents a "large-scale and long-term redevelopment opportunity" with a "considerable remaining recovery potential" that will allow for a "significant" increase in the group's value.
The Bare block originally had 'in situ' reserves of 15.7 billion barrels, of which more than 700 million have already been extracted. It currently generates around 11,000 barrels of crude per day through 1,100 wells, although internal studies indicate that it could rise to a maximum range of between 85,000 and 95,000 barrels per day.
The agreements signed with the Venezuelan state contemplate for GeoPark a net accumulated production close to 400 million barrels, which will allow increasing the recovery factor from the current 4-5% to a range of 8-9%, with a "significant remaining production potential yet to be captured."
With the addition of the Bare block and the expected increase in activity in its Vaca Muerta assets (Argentina), the company projects that its total production will reach between 75,000 and 85,000 barrels per day by 2030, that is, approximately 2.7 times the current volumes.
The role of the Gilinski Group and the new controlling shareholder
GeoPark has explained that access to Bare has materialized thanks to the intermediation of the Gilinski Group, a Colombian conglomerate of the family of the same name. The participation of this group has been "fundamental" to closing a 25-year productive participation contract (CPP) with the state oil company Petróleos de Venezuela (PDVSA).
In return, the Gilinski Group will come to control up to 58.4% of GeoPark's capital once the shares are offered in a public acquisition offer (OPA) that will incorporate an issuance premium. The operation will be structured through the exchange for shares of GeoPark itself with the aim of maintaining the strength of the balance sheet and its cash position.
"GeoPark is well positioned to responsibly carry out this opportunity, combining expertise in mature assets, operational experience in the region, and capital discipline," said the company's CEO, Felipe Bayón.
"The transaction further strengthens GeoPark's long-term growth prospects, renews the portfolio with attractive valuation metrics, and generates significant value for shareholders, while providing liquidity optionality as the Gilinski Group becomes the controlling shareholder of the company," he added.