Year 2006 - Operational Highlights
Oil and gas production increased to approximately 1,400 barrels of oil per day equivalent (boepd) at year-end – representing an increase of over 400% since the IPO in 2Q 2006.
Proved and probable reserves of 29 million barrels of oil equivalent (boe) were appraised by DeGolyer & MacNaughton in 2Q 2006. DeGolyer & MacNaughton also appraised 27.8 million boe of possible reserves, 48.3 million boe of contingent resources (best estimate) and 39.2 million boe of prospective resources (best estimate).
GeoPark became the first private-sector producer in Chile when oil and gas production was initiated in 2Q 2006. Following well work-over, testing and infrastructure operations, six new oil and gas fields were put on production during 2006 – resulting in a total of eight fields now on production in Chile and Argentina.
New 3D seismic surveys (covering approximately 1,000 square kilometres) were carried out in Argentina and Chile. The surveys, now being interpreted, form the technical basis for the 2007 drilling program expected to include the drilling of 8-11 new wells.
A drilling rig was secured through a long term contract and a workover rig was acquired. The workover rig began operating during 4Q 2006 and the drilling rig is currently being rigged up to begin drilling during 2Q 2007. Two gas plants and approximately 22 kilometres of pipelines were constructed in Chile – and a contract was executed for the delivery of a dew point plant and gas compression facility to Chile for start-up in 3Q 2007.
Participation in the Fell Block (440,000 acres) in Chile was increased from 90% to 100% in 2Q 2006.
Year 2006 - Financial Highlights
International Finance Corporation of the World Bank (“IFC”) became a shareholder in 1Q 2006 with a US$ 10 million equity investment after a thorough technical, financial and environmental review. In 4Q 2006, the IFC provided an additional US$ 20 million loan to the Company.
GeoPark was admitted to the London Stock Exchange Alternative Investment Market (AIM) in 2Q 2006. The IPO raised US$35 million for new capital investment and established an institutional shareholder base.
Revenue increased 111% to US$ 6.0 million compared to 2005. Mainly attributable to exceptional fund raising and capital restructuring costs (including the IPO, stock options and preferred share redemptions), the Company had a net loss after tax in 2006 of US$ 11.3 million. Capital and available facilities at year-end were US$ 37 million.
Gas prices increased approximately 40% to US$ 2.31 per mcf at year-end 2006 compared to US$ 1.65 per mcf in 2Q 2006 when gas deliveries began. (An MOU was signed in 1Q 2007 with the largest regional gas consumer in order to establish a new long term gas sales contract based on a higher price regime.) Average oil prices increased in 2006 by 25% compared to average 2005 prices.