GeoPark declines to increase offer for Frontera’s Colombian assets

GeoPark, an vigor institution operating successful Latin America, has announced it volition not summation its connection for Frontera Energy’s Colombian exploration and accumulation assets.

The company’s Board of Directors ruled that raising the bid would not align with its superior allocation principles oregon semipermanent worth objectives, particularly aft evaluating the revised presumption pursuing a competing connection from Parex Resources.

GeoPark had antecedently agreed successful January to get each of Frontera’s Colombian lipid and state assets for $375m (1.4tn pesos). Last month, Parex Resources revealed plans to get the aforesaid assets for $500m.

Frontera’s committee informed GeoPark that Parex Resources had submitted a “superior proposal” nether the existing statement agreement, prompting a contractual matching period.

During this period, GeoPark reassessed the economics of the acquisition and decided that expanding the connection would not conscionable its risk-adjusted instrumentality criteria. As a result, GeoPark volition person the instrumentality of $75m held successful escrow, on with interest, and a $25m break-up interest arsenic stipulated by the statement terms.

GeoPark indicated it remains focused connected optimising operations astatine its Llanos 34 artifact and crossed its Colombian portfolio. A caller certification reported a 22% summation successful 2P archetypal lipid successful spot astatine Llanos 34, which expands the assets basal for the company.

Production successful Colombia is expected to proceed generating escaped currency travel and enactment further initiatives, said the company.

In Argentina, GeoPark is advancing its unconventional level successful the Neuquén Basin pursuing the integration of Loma Jarillosa Este and Puesto Silva Oeste.

The institution plans to accelerate drilling enactment successful Vaca Muerta. It predicts that these assets could scope astir 20,000 barrels of lipid equivalent per time (boepd) of gross accumulation successful 2028 and lend $300–350m of gross adjusted net earlier interest, taxes, depreciation and amortisation (EBITDA) astatine a Brent lipid terms of $70 per barrel.

By opting not to rise its connection for Frontera’s Colombian assets, GeoPark retains fiscal flexibility for alternate investments successful Venezuela, Argentina, Colombia and different determination opportunities.

The institution stated that it volition proceed to measure imaginable projects that conscionable its strategical criteria and enactment semipermanent shareholder returns.

GeoPark CEO Felipe Bayon said: “GeoPark’s Board of Directors takes earnestly its work to beryllium bully stewards of shareholder value, and our determination not to summation our connection for Frontera’s assets reflects our committedness to a highly disciplined attack to superior allocation.