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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Geopark | LSE:GPK | London | Ordinary Share | BMG383271050 | COM SHS USD0.001 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 400.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMGPK
RNS Number : 2606U
Geopark Limited
29 November 2013
29 November 2013
GEOPARK LIMITED
RESULTS FOR THE NINE MONTH ENDED 30 SEPTEMBER 2013
GeoPark Limited ("GeoPark"), the Latin American oil and gas explorer, operator and consolidator with operations and production in Chile, Colombia, Brazil and Argentina (AIM: GPK), is pleased to announce its third quarter results for the nine months ended 30 September 2013.
Operational Highlights*
-- Oil Production up 57% to 11,163 bopd in 3Q2013 vs 3Q2012 -- Total Oil and Gas Production up 21% to 12,992 boepd in 3Q2013 vs 3Q2012 -- New Gas discovery: Cerro Sutlej gas field in Fell Block, Chile -- Drilled Tigana 1 exploration well in Llanos 34, Colombia to be tested in 4Q2013
Financial Highlights*
-- Revenues up 49% to $89.7 million in 3Q2013 vs 3Q2012 -- Gross Profit up 57% to 41.0 million in 3Q2013 vs 3Q2012 -- Adjusted EBITDA up 33% to $125.9 million (as of September 30, 2013) -- Cash position of $104.8 million
* Operational and Financial figures do not include results from new Brazilian acquisition, which is expected to close in 4Q2013 or 1Q2014.
Strategic Highlights
-- Strategic alliance with Tecpetrol to identify, study and potentially acquire upstream oil and gas opportunities in Brazil
-- Registration process underway with the United States Securities and Exchange Commission, SEC, to consider alternate public market to obtain additional capital and increased financial flexibility
In accordance with the AIM Rules, the information in this announcement has been reviewed by Salvador Minniti, a geologist with 32 years of oil and gas experience and Director of Exploration of GeoPark.
GeoPark can be visited online at www.geo-park.com
For further information please contact:
GeoPark Limited
Pablo Ducci (Chile) +56 2 2242 9600
Oriel Securities - Nominated Adviser and Joint Broker
Michael Shaw (London) +44 (0)20 7710 7600
Tunga Chigovanyika (London)
Macquarie Capital (Europe) Limited - Joint Broker
Steve Baldwin (London) +44 (0)20 3037 2000
GEOPARK LIMITED
Interim condensed consolidated
financial statements
For the nine-months ended 30 September 2012 and 2013
CONSOLIDATED STATEMENT OF INCOME
Nine-months Nine-months period period ended ended 30 September Year ended 30 September 2012 (1) 31 December Amounts in US$ '000 Note 2013 (Unaudited) (Unaudited) 2012 NET REVENUE 2 250,530 182,139 250,478 Production costs 4 (129,834) (88,656) (129,235) GROSS PROFIT 120,696 93,483 121,243 Exploration costs 5 (16,012) (21,742) (27,890) Administrative costs 6 (32,050) (20,910) (28,798) Selling expenses (12,526) (15,650) (24,631) Other operating income 4,555 681 823 OPERATING PROFIT 64,663 35,862 40,747 Financial income 7 1,562 364 892 Financial expenses 8 (28,762) (13,962) (17,200) Bargain purchase gain on acquisition of subsidiaries 14 - 8,401 8,401 PROFIT BEFORE TAX 37,463 30,665 32,840 Income tax (12,260) (6,266) (14,394) PROFIT FOR THE PERIOD/YEAR 25,203 24,399 18,446 Attributable to: Owners of the parent 15,767 17,833 11,879 Non-controlling interest 9,436 6,566 6,567 Earnings per share (in US$) for profit attributable to owners of the Company. Basic 0.36 0.42 0.28 Earnings per share (in US$) for profit attributable to owners of the Company. Diluted 0.34 0.40 0.27
STATEMENT OF COMPREHENSIVE INCOME
Nine-months period Nine-months ended 30 period ended September Year ended 30 September 2012 (1) 31 December Amounts in US$ '000 2013 (Unaudited) (Unaudited) 2012 Profit for the period / year 25,203 24,399 18,446 Other comprehensive income Currency translation (573) - - differences Total comprehensive Income for the period / year 24,630 24,399 18,446 Attributable to: Owners of the parent 15,194 17,833 11,879 Non-controlling interest 9,436 6,566 6,567
(1) 30 September 2012 comparative information has been restated reflecting the finalization of the purchase price allocation (see Note 1).
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 September Year ended At 30 September 2012 (1) 31 December Amounts in US$ '000 Note 2013 (Unaudited) (Unaudited) 2012 ASSETS NON CURRENT ASSETS Property, plant and equipment 9 571,394 429,639 457,837 Prepaid taxes 17,560 3,208 10,707 Other financial assets 3,952 6,813 7,791 Deferred income tax 21,405 19,451 13,591 Prepayments and other receivables 1,968 556 510 TOTAL NON CURRENT ASSETS 616,279 459,667 490,436 CURRENT ASSETS Inventories 5,825 10,641 3,955 Trade receivables 49,729 21,924 32,271 Prepayments and other receivables 42,355 43,120 49,620 Prepaid taxes 1,778 11,036 3,443 Cash at bank and in hand 104,797 75,539 48,292 TOTAL CURRENT ASSETS 204,484 162,260 137,581 TOTAL ASSETS 820,763 621,927 628,017 EQUITY Equity attributable to owners of the Company Share capital 10 43 43 43 Share premium 120,338 112,302 116,817 Reserves 127,848 129,596 128,421 Retained earnings (losses) 15,593 2,948 (5,860) Attributable to owners of the Company 263,822 244,889 239,421 Non-controlling interest 88,540 55,463 72,665 TOTAL EQUITY 352,362 300,352 312,086 LIABILITIES NON CURRENT LIABILITIES Borrowings 11 290,490 164,891 165,046 Provisions for other long-term liabilities 12 26,619 27,697 25,991 Deferred income tax 23,834 24,218 17,502 Trade and other payables 13 8,344 - - TOTAL NON CURRENT LIABILITIES 349,287 216,806 208,539 CURRENT LIABILITIES Borrowings 11 5,735 30,873 27,986 Current income tax 13,196 3,054 7,315 Trade and other payables 13 100,183 70,842 72,091 TOTAL CURRENT LIABILITIES 119,114 104,769 107,392 TOTAL LIABILITIES 468,401 321,575 315,931 TOTAL EQUITY AND LIABILITIES 820,763 621,927 628,017
(1) 30 September 2012 comparative information has been restated reflecting the finalization of the purchase price allocation (see Note 1).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the Company Retained Non - Share Share Other Translation (Losses) controlling Amount in US$ '000 Capital Premium Reserve Reserve Earnings Interest Total Equity at 1 January 2012 43 112,231 114,270 894 (18,549) 41,763 250,652 Profit for the nine month period - - - - 17,833 6,566 24,399 Total comprehensive income for the period ended 30 September 2012 - - - - 17,833 6,566 24,399 Proceeds from transaction with Non-controlling interest - - 14,432 - - 7,134 21,566 Shared-based payment - 71 - - 3,664 - 3,735 - 71 14,432 - 3,664 7,134 25,301 Balance at 30 September 2012 (1) (Unaudited) 43 112,302 128,702 894 2,948 55,463 300,352 Balance at 31 December 2012 43 116,817 127,527 894 (5,860) 72,665 312,086 Profit for the nine month period - - - - 15,767 9,436 25,203 Currency translation differences - - - (573) - - (573) Total comprehensive income for the period ended 30 September 2013 - - - (573) 15,767 9,436 24,630 Proceeds from transaction with Non-controlling interest - - - - - 6,439 6,439 Shared-based payment - 3,521 - - 5,686 - 9,207 - 3,521 - - 5,686 6,439 15,646 Balance at 30 September 2013 (Unaudited) 43 120,338 127,527 321 15,593 88,540 352,362
(1) 30 September 2012 comparative information has been restated reflecting the finalization of the purchase price allocation (see Note 1).
(1)
CONSOLIDATED STATEMENT OF CASH FLOW
Nine-months Nine-months period period ended ended 30 September Year ended 30 September 2012 (1) 31 December, Amounts in US$ '000 2013 (Unaudited) (Unaudited) 2012 Cash flows from operating activities Profit for the period/year 25,203 24,399 18,446 Adjustments for: Income tax for the period/year 12,260 6,266 14,394 Depreciation of the period/year 49,546 36,228 53,317 Loss on disposal of property, plant and equipment 568 455 546 Write-off of unsuccessful exploration and evaluation assets 11,955 20,298 25,552 Amortisation of other long-term liabilities (1,359) (1,993) (2,143) Accrual of borrowing's interests 17,913 11,471 12,478 Unwinding of long-term liabilities 1,049 630 1,262 Accrual of share-based payment 5,946 3,664 5,396 Deferred income - 5,550 5,550 Income tax paid (4,040) (408) (408) Exchange difference generated by borrowings (14) 39 35 Bargain purchase gain on acquisition of subsidiaries (Note 14) - (8,401) (8,401) Changes in operating assets and liabilities (20,699) 8,542 5,778 Cash flows from operating activities - net 98,328 106,740 131,802 Cash flows from investing activities Purchase of property, plant and equipment (187,237) (147,200) (198,204) Acquisitions of subsidiaries, net of cash acquired (Note 14) - (105,303) (105,303) Collections related to financial 3,839 - - assets Collections related to financial 6,734 - - leases Cash flows used in investing activities - net (176,664) (252,503) (303,507) Cash flows from financing activities Proceeds from borrowings 292,259 38,883 37,200 Proceeds from transaction with Non-controlling interest (2) 37,577 10,019 12,452 Proceeds from loans from 8,344 - - related parties Proceeds from issuance of 3,521 - - shares Principal paid (179,359) (16,297) (12,382) Interest paid (17,511) (5,552) (10,895) Cash flows from financing activities - net 144,831 27,053 26,375 Net increase (decrease) in cash and cash equivalents 66,495 (118,710) (145,330) Cash and cash equivalents at 1 January 38,292 183,622 183,622 Cash and cash equivalents at the end of the period/year 104,787 64,912 38,292 Ending Cash and cash equivalents are specified as follows: Cash in banks 104,774 75,515 48,268 Cash in hand 23 24 24 Bank overdrafts (10) (10,627) (10,000) Cash and cash equivalents 104,787 64,912 38,292
(1) 30 September 2012 comparative information has been restated reflecting the finalization of the purchase price allocation (see Note 1).
(2) Proceeds from transaction with Non-controlling interest for the period ended 30 September 2013 includes: US$ 6,439,000 from capital contributions received in the period; and US$ 31,138,000 as result of collection of receivables included in Prepayment and other receivables as of 31 December 2012, relating to equity transactions made in 2012 and 2011.
SELECTED EXPLANATORY NOTES
Note 1
General information
GeoPark Limited (the Company) is a company incorporated under the law of Bermuda. The Registered Office address is Cumberland House, 9th Floor, 1 Victoria Street, Hamilton HM11, Bermuda. The Company is quoted on the AIM market of London Stock Exchange plc.
The principal activity of the Company and its subsidiaries ("the Group") are exploration, development and production for oil and gas reserves in Chile, Colombia and Argentina. The Group has working interests and/or economic interests in 19 hydrocarbon blocks.
On 30 July 2013 the shareholders approved the change of the Company's name from GeoPark Holdings Limited to GeoPark Limited.
This consolidated interim financial report was authorised for issue by the Board of Directors on 29 November, 2013.
Basis of Preparation
The consolidated interim financial report of GeoPark Limited is presented in accordance with IAS 34 "Interim Financial Reporting". It does not include all of the information required for full annual financial statements, and should be read in conjunction with the annual financial statements as at and for the years ended 31 December 2011 and 2012, which have been prepared in accordance with IFRSs.
The consolidated interim financial report has been prepared in accordance with the accounting policies applied in the most recent annual financial statements. For further information please refer to GeoPark Limited's consolidated financial statements for the year ended 31 December 2012.
The comparative information for the period ended 30 September 2012 has been restated from the original condensed financial statements at that date to include the final estimation of the purchase price allocation for the business combination related to the acquisition in Colombia shown in Note 14.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.
The activities of the Company are not subject to significant seasonal changes.
Leases in which substantially all of the risks and rewards of ownership are transferred to the lessee are classified as finance leases. Under a finance lease, the Company as lessor has to recognize an amount receivable equal to the aggregate of the minimum lease payments plus any unguaranteed residual value accruing to the lessor, discounted at the interest rate implicit in the lease (see Note 9).
New and amended standards adopted by the Group
As from 1 January, 2013, the Company applied IFRS 10, 'Consolidated financial statements", IFRS 11, 'Joint arrangements', IFRS 12, 'Disclosures of interests in other entities'. Those standards did not materially affect the Company's financial condition or results of the operations.
Also, as from 1 January 2013 the Company applied IFRS 13 "Fair value measurement" . This standard has not have a significant impact on the balances recorded in the financial statements but would require the company to apply different valuation techniques to certain items (e.g. debt acquired as part of a business combination) recognised at fair value as and when they arise in the future.
Estimates
The preparation of interim financial information requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. Actual results may differ from these estimates
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2012.
Financial risk management
The Company's activities expose it to a variety of financial risks: currency risk, price risk, credit risk- concentration, funding and liquidity risk, interest risk and capital risk. The interim condensed consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's annual financial statements as at 31 December 2012.
There have been no changes in the risk management since year end or in any risk management policies.
Subsidiary undertakings
The following chart illustrates the Group structure as of 30 September 2013 (*):
(*) LG International is not a subsidiary, instead of it is Non-controlling interest.
During 2013, with the purpose of conducting its multilocation activities and for allowing future business structures, the Company has incorporated certain wholly owned subsidiaries, that are dormant companies at the date of the issuance of these interim financial statements.
Details of the subsidiaries and jointly controlled assets of the Company are set out below:
Ownership Name and registered office interest GeoPark Argentina Ltd. Subsidiaries - Bermuda 100% GeoPark Argentina Ltd. - Argentine Branch 100% (a) GeoPark Latin America 100% GeoPark Latin America - Agencia en Chile 100% (a) 100% (a) GeoPark S.A. (Chile) (b) GeoPark Brazil Exploracao y Producao de Petróleo e Gas Ltda. (Brazil) 100% GeoPark Chile S.A. (Chile) 80% (a) (c) GeoPark Fell S.p.A. (Chile) 80% (a) (c) GeoPark Magallanes Limitada (Chile) 80% (a) (c) GeoPark TdF S.A. (Chile) 69% (a) (d) GeoPark Colombia S.A. (Chile) 80% (a) (c) 100% (a) GeoPark Luna SAS (Colombia) (e) (f) GeoPark Colombia SAS 100% (a) (Colombia) (e) (f) 100% (a) GeoPark Llanos SAS (Colombia) (e) (f) La Luna Oil Co. Ltd. 100% (a) (Panama) (e) (f) GeoPark Colombia PN S.A. 100% (a) (Panama) (e) (f) GeoPark Cuerva LLC (United 100% (a) States) (e) (f) Sucursal La Luna Oil 100% (a) Co. Ltd. (Colombia) (e) (f) Sucursal GeoPark Colombia 100% (a) PN S.A. (Colombia) (e) (f) Sucursal GeoPark Cuerva 100% (a) LLC (Colombia) (e) (f) GeoPark Brazil S.p.A. 100% (a) (Chile) (b) Raven Pipeline Company LLC (United States) 23.5% (b) GeoPark Colombia Cooperatie U.A. (The Netherlands) 100% (b) GeoPark Brazil Cooperatie U.A. (The Netherlands) 100% (b) Jointly controlled assets Tranquilo Block (Chile) 29% Otway Block (Chile) 100% (g) Flamenco Block (Chile) 50% (h) Isla Norte Block (Chile) 60% (h) Campanario Block (Chile) 50% (h)
(a) Indirectly owned.
(b) Dormant companies.
(c) LG International has 20% interest.
(d) LG International has 20% interest through GeoPark Chile S.A. and a 14% direct interest.
(e) During the first quarter of 2012, the Company entered into a business combination acquiring 100% interest in each entity (see Note 14).
(f) During 2013, the Company has started a merger process by which a sole company will continue the operations related to the referred companies. The Company estimates that the process will be completed by year end.
(g) In April 2013, the Group voluntarily relinquished to the Chilean Government all of our acreage in the Otway Block, except for 49,421 acres. In May 2013, our partners under the joint operating agreement governing the Otway Block decided to withdraw from such joint operating agreement and to apply to withdraw from the Otway Block CEOP, such that, subject to the Chilean Ministry of Energy's approval, the Group will be the sole participant, and have a working interest of 100%, in our two remaining areas in the Otway Block.
(h) GeoPark is the operator in all blocks with a share of 60% for Isla Norte Block and 50% for the other 2 blocks (See Note 16).
Note 2
Net revenue
Nine-months Nine-months period period ended 30 ended 30 Year ended Amounts in US$ September September 31 December '000 2013 2012 2012 Sale of crude oil 235,225 158,309 221,564 Sale of gas 15,305 23,830 28,914 250,530 182,139 250,478
Note 3
Segment Information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the strategic steering committee. This committee is integrated by the CEO, COO, CFO and managers in charge of the Geoscience, Drilling, Operations and SPEED departments. This committee reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports.
The committee considers the business from a geographic perspective.
The strategic steering committee assesses the performance of the operating segments based on a measure of Adjusted EBITDA. Adjusted EBITDA is defined as profit for the period before net finance cost, income tax, depreciation, amortization and certain non-cash items such as impairments and write-offs of unsuccessful exploration and evaluation assets, accrual of stock options and stock awards. Other information provided, except as noted below, to the strategic steering committee is measured in a manner consistent with that in the financial statements.
Nine-months period ended 30 September 2013
Amounts in US$ '000 Total Argentina Chile Brazil Colombia Corporate NET REVENUE 250,530 1,118 119,359 - 130,053 - GROSS PROFIT 120,696 936 69,546 - 50,214 - OPERATING PROFIT / (LOSS) 64,663 (2,643) 47,971 (2,323) 29,390 (7,732) Adjusted EBITDA 125,894 (1,361) 73,570 (2,278) 60,852 (4,889)
Nine-months period ended 30 September 2012
Amounts in US$ '000 Total Argentina Chile Brazil Colombia Corporate NET REVENUE 182,139 972 117,244 - 63,923 - GROSS PROFIT 93,483 302 68,314 - 24,867 - OPERATING PROFIT / (LOSS) 35,862 (5,628) 41,767 - 5,230 (5,507) Adjusted EBITDA 94,793 (808) 76,721 - 24,265 (5,385) Total Assets Total Argentina Chile Brazil Colombia Corporate 30 September 2013 820,763 4,934 449,695 29,964 270,703 65,467 31 December 2012 628,017 6,108 405,674 - 213,202 3,033 30 September 2012 621,927 8,619 411,354 - 200,567 1,387
A reconciliation of total Adjusted EBITDA to total profit before income tax is provided as follows:
Nine-months Nine-months period ended period ended 30 September 30 September 2013 2012 Adjusted EBITDA for reportable segments 125,894 94,793 Depreciation (49,546) (36,228) Accrual of stock awards (5,946) (3,664) Write-off of unsuccessful exploration and evaluation assets (11,955) (20,298) Others (a) 6,216 1,259 Operating profit 64,663 35,862 Financial results (27,200) (13,598) Bargain purchase gain on acquisition of subsidiaries - 8,401 Profit before tax 37,463 30,665
(a) Includes internally capitalised costs, fees earned from co-venturers and other costs recovery.
Note 4
Production costs
Nine-months Nine-months Year period period ended ended ended 31 December 30 September 30 September 2012 Amounts in US$ '000 2013 2012 Depreciation 48,423 35,529 52,307 Royalties 13,010 9,900 11,424 Staff costs 12,195 6,102 14,171 Transportation costs 8,494 5,112 7,211 Well and facilities maintenance 13,423 5,749 9,385 Consumables 11,636 7,639 9,884 Equipment rental 5,562 5,504 5,936 Other costs 17,091 13,121 18,917 129,834 88,656 129,235
Note 5
Exploration costs
Amounts in US$ '000 Nine-months Nine-months Year ended period period 31 December ended 30 ended 30 2012 September September 2013 2012 Staff costs 5,681 2,449 4,418 Allocation to capitalised project (1,608) (1,669) (1,849) Write-off of unsuccessful exploration and evaluation assets 11,955 20,298 25,552 Amortisation of other long-term liabilities related to unsuccessful efforts (600) (1,500) (1,500) Recovery of abandonments costs (759) - - Other services 1,343 2,164 1,269 16,012 21,742 27,890
Note 6
Administrative costs
Nine-months Nine-months period period ended 30 ended 30 Year ended September September 31 December Amounts in US$ '000 2013 2012 2012 Staff costs 15,251 9,072 9,575 Consultant fees 4,396 4,119 5,122 New projects 1,741 710 2,927 Office expenses 1,880 1,196 3,293 Director fees and allowance 1,263 1,356 1,516 Travel expenses 1,640 973 1,563 Depreciation 1,123 699 1,010 Other administrative expenses 4,756 2,785 3,792 32,050 20,910 28,798
Note 7
Financial income
Nine-months Nine-months Year ended period period 31 December ended 30 ended 30 2012 Amounts in US$ September September '000 2013 2012 Exchange difference 722 17 348 Interest received 840 347 544 1,562 364 892
Note 8
Financial expenses
Nine-months Nine-months period period ended 30 ended 30 Year ended September September 31 December Amounts in US$ '000 2013 2012 2012 Bank charges and other financial costs 2,774 815 1,764 Bond GeoPark Fell SpA 8,603 - - cancellation costs (Note 11) Exchange difference 870 2,994 2,429 Unwinding of long-term liabilities 1,049 630 1,262 Interest and amortisation of debt issue costs 16,774 10,520 13,114 Less: amounts capitalised on qualifying assets (1,308) (997) (1,369) 28,762 13,962 17,200
Note 9
Property, plant and equipment
Exploration Oil & Furniture, Production Buildings and Amounts in gas equipment facilities and Construction evaluation US$'000 properties and vehicles and machinery improve-ments in progress assets TOTAL Cost at 1 January 2012 171,956 2,175 47,102 2,437 32,896 42,140 298,706 Additions 12,034 627 19,397 - 52,769 62,781 147,608 Disposals (438) - (17) - - - (455) Write-off and impairment (1) - - - - - (20,298) (20,298) Transfers 73,024 - 7,623 595 (37,266) (43,976) - Acquisitions of subsidiaries 63,942 482 10,865 - 9,359 29,729 114,377 Cost at 30 September 2012 320,518 3,284 84,970 3,032 57,758 70,376 539,938 Cost at 1 January 2013 344,371 3,576 86,949 3,198 54,025 93,106 585,225 Additions 3,313 1,456 273 - 75,167 111,287 191,496 Disposals (2) (546) (22) (15,870) - - - (16,438) Write-off and impairment (1) - - - - - (11,955) (11,955) Transfers 97,140 117 16,889 4,019 (69,807) (48,358) - Cost at 30 September 2013 444,278 5,127 88,241 7,217 59,385 144,080 748,328 Depreciation and write-down at 1 January 2012 (53,604) (1,123) (18,628) (716) - - (74,071) Depreciation (29,631) (495) (5,866) (236) - - (36,228) Depreciation and write-down at 30 September 2012 (83,235) (1,618) (24,494) (952) - - (110,299) Depreciation and write-down at 1 January 2013 (98,156) (1,836) (26,336) (1,060) - - (127,388) Depreciation (42,016) (660) (6,404) (466) - - (49,546) Depreciation and write-down at 30 September 2013 (140,172) (2,496) (32,740) (1,526) - - (176,934) Carrying amount at 30 September 2012 237,283 1,666 60,476 2,080 57,758 70,376 429,639 Carrying amount at 30 September 2013 304,106 2,631 55,501 5,691 59,385 144,080 571,394
(1) Corresponds to write-off of Exploration and evaluation assets in Colombia US$ 3,244,000 (US$ 4,727,000 in 2012), Chile US$ 8,711,000 (US$ 13,627,000 in 2012) and Argentina nil (US$ 1,944,000 in 2012).
(2) During 2013, the Company entered into a finance lease for which it has transferred a substantial portion of the risk and rewards of some assets which had a book value of US$ 14.1 million. As of 30 September 2013 prepayments and other receivables include receivables under finance leases for amount of US$ 7.8 million, which US$ 6.3 million are maturity no later than one year and US$ 1.5 million between one and five years. Total unearned interest income amounts to US$ 1.5 million .
Note 10
Share capital
Nine-months Nine-months period period ended 30 ended 30 Year ended September September 31 December Issued share capital 2013 2012 2012 Common stock (US$ '000) 43 43 43 The share capital is distributed as follows: Common shares, of nominal US$ 0.001 43,495,585 42,474,274 43,495,585 Total common shares in issue 43,495,585 42,474,274 43,495,585 Authorised share capital US$ per share 0.001 0.001 0.001 Number of common shares (US$ 0.001 each) 5,171,949,000 5,171,949,000 5,171,949,000 Amount in US$ 5,171,949 5,171,949 5,171,949
Note 11
Borrowings
The outstanding amounts are as follows:
At At Year ended Amounts in US$ 30 September 30 September 31 December '000 2013 2012 2012 Bond GeoPark Latin 294,037 - - America Agencia en Chile (a) Bond GeoPark Fell SpA (b) - 131,720 129,452 Methanex Corporation (c) - 8,036 8,036 Banco de Crédito e Inversiones (d) 2,178 7,881 7,859 Overdrafts (e) 10 10,627 10,000 Banco Itaú (f) - 37,500 37,685 296,225 195,764 193,032
Classified as follows:
Current 5,735 30,873 27,986 Non-Current 290,490 164,891 165,046
(a) During February 2013, the Company successfully placed US$ 300 million notes which were offered under Rule 144A and Regulation S exemptions of the United States Securities laws.
The Notes, issued by the Company's wholly-owned subsidiary GeoPark Latin America Limited Agencia en Chile ("the Issuer"), were priced at 99.332% and will carry a coupon of 7.50% per annum to yield 7.625% per annum. Final maturity of the notes will be 11 February 2020. The Notes are guaranteed by GeoPark Limited and GeoPark Latin America Chilean Branch and are secured with a pledge of all of the equity interests of the Issuer in GeoPark Chile S.A. and GeoPark Colombia S.A. and a pledge of certain intercompany loans. Notes were rated single B by both Standard & Poor's and Fitch Ratings.
The net proceeds of the notes were partially used to repay debt of approximately US$ 170 million, including the existing Reg S Notes due 2015 and the Itaú loan. The remaining proceeds will be used to finance the Company's expansion plans in the region. The transaction extends GeoPark's debt maturity significantly, allowing the Company to allocate more resources to its investment and inorganic growth programs in the coming years.
(b) Private placement of US$ 133,000,000 of Reg S Notes on 2 December 2010. The Notes carried a coupon of 7.75% per annum and mature on 15 December 2015. These Notes were fully repaid in March 2013.
(c) The financing obtained in 2007, for development and investing activities on the Fell Block, was structured as a gas pre-sale agreement with a six year pay-back period and an interest rate of LIBOR flat. The loan has been fully repaid during 2013.
In addition on 30 October 2009 another financing agreement was signed with Methanex Corporation under which Methanex have funded GeoPark's portions of cash calls for the Otway Joint Venture for US$ 3,100,000. This financing did not bear interest. The loan was fully repaid during 2012.
(d) Facility to establish the operational base in the Fell Block. This facility was acquired through a mortgage loan granted by the Banco de Crédito e Inversiones (BCI), a Chilean private bank. The loan was granted in Chilean pesos and is repayable over a period of 8 years. The interest rate applicable to this loan is 6.6%. The outstanding amount at 30 September 2013 is US$ 247,000.
During the last quarter of 2011, GeoPark TdF obtained short-term financing from BCI. This financing is structured as letter of credit with a pledge of the seismic equipment acquired to start the operations in the new blocks. The maturity is February 2014 and the applicable interest rate ranging from 4.45% to 5.45%. The outstanding amount at 30 September 2013 is US$ 1,931,000.
(e) At 30 September 2013, the Group has credit lines availables with several banks for approximately US$ 77,000,000.
(f) GeoPark Limited executed a loan agreement with Banco Itaú BBA S.A., Nassau Branch for US$ 37,500,000. GeoPark used the proceeds to finance the acquisition and development of the La Cuerva and Llanos 62 blocks. This loan was fully repaid in February 2013.
Note 12
Provision for other long-term liabilities
The outstanding amounts are as follows:
At At Year ended Amounts in US$ 30 September 30 September 31 December '000 2013 2012 2012 Assets retirement obligation and other environmental liabilities 19,590 14,663 16,213 Deferred income 6,010 7,518 7,369 Cash awards (Note 260 - - 17) Other 759 5,516 2,409 26,619 27,697 25,991
Note 13
Trade and other payables
The outstanding amounts are as follows:
At At Year ended Amounts in US$ 30 September 30 September 31 December '000 2013 2012 2012 Trade payables 78,736 53,291 54,890 Payables to related 8,516 - - parties (1) Staff costs to be paid 6,038 4,716 5,867 Royalties to be paid 4,892 4,553 3,909 Taxes and other debts to be paid 6,812 7,846 5,418 To be paid to co-venturers 3,533 436 2,007 108,527 70,842 72,091
Classified as follows:
Current 100,183 70,842 72,091 Non-Current 8,344 - -
(1) In December 2012, LGI entered into GeoPark's operations in Colombia through the acquisition of a 20% of interest in GeoPark Colombia S.A. As part of the transaction, LGI committed to fund the operations in Colombia through loans (See Note 35 to the audited Consolidated Financial Statements as of 31 December 2012). The maturity of these loans is December 2015 and the applicable interest rate is 8% per annum.
Note 14
Acquisitions in Colombia
In February 2012, GeoPark acquired two privately-held exploration and production companies operating in Colombia, Winchester Oil and Gas S.A. and La Luna Oil Company Limited S.A. ("Winchester Luna").
In March 2012, a second acquisition occurred with the purchase of Hupecol Cuerva LLC ("Hupecol"), a privately-held company with two exploration and production blocks in Colombia.
The following table summarises the combined consideration paid for Winchester Luna and Hupecol, the fair value of assets acquired and liabilities assumed for these transactions:
Amounts in US$ Winchester '000 Hupecol Luna Total Cash (including working capital adjustments) 79,630 32,243 111,873 Total consideration 79,630 32,243 111,873 Cash and cash equivalents 976 5,594 6,570 Property, plant and equipment (including mineral interest) 73,791 37,182 110,973 Trade receivables 4,402 4,098 8,500 Prepayments and other receivables 5,640 2,983 8,623 Deferred income tax assets 10,344 5,262 15,606 Inventories 10,596 1,612 12,208 Trade payables and other debt (20,487) (11,981) (32,468) Borrowings - (1,368) (1,368) Provision for other long-term liabilities (5,632) (2,738) (8,370) Total identifiable net assets 79,630 40,644 120,274 Bargain purchase gain on acquisition of subsidiaries - 8,401 8,401
In 2012, the results of the operations corresponding to Winchester Luna and Hupecol were consolidated since the acquisition date, February and April, respectively.
See Note 35 to the audited Consolidated Financial Statements as of 31 December 2012.
Note 15
Entry in Brazil
Proposed acquisition in Brazil
GeoPark entered into Brazil with the proposed acquisition of a ten percent working interest in the offshore Manati gas field ("Manati Field"), the largest natural gas producing field in Brazil. On May 14, 2013, GeoPark executed a stock purchase agreement ("SPA") with Panoro Energy do Brazil Ltda., the subsidiary of Panoro Energy ASA, ("Panoro"), a Norwegian listed company with assets in Brazil and Africa, to acquire all of the issued and outstanding shares of its wholly-owned Brazilian subsidiary, Rio das Contas Produtora de Petróleo Ltda ("Rio das Contas"), the direct owner of 10% of the BCAM-40 block (the "Block"), which includes the shallow-depth offshore Manati Field in the Camamu-Almada basin.
The Manati Field is a strategically important, profitable upstream asset in Brazil and currently provides approximately 50% of the gas supplied to the northeastern region of Brazil and more than 75% of the gas supplied to Salvador, the largest city and capital of the northeastern state of Bahia. The field is largely developed with existing producing wells and an extensive pipeline, treatment and delivery infrastructure and is not expected to require significant future capital expenditures to meet current production estimates. Additional reserve development may be possible.
The Manati Field is operated by Petrobras (35% working interest), the Brazilian national company, largest oil and gas operator in Brazil and internationally-respected offshore operator. Other partners in the block include Queiroz Galvao Exploracao e Producao (45% working interest) and Brasoil Manati Exploracao Petrolifera S.A. (10% working interest).
GeoPark has agreed to pay a cash consideration of US$140 million at closing, which will be adjusted for working capital with an effective date of April 30, 2013. The agreement also provides for possible future contingent payments by GeoPark over the next five years, depending on the economic performance and cash generation of the Block. The closing of the acquisition is subject to certain conditions, including approval by the Brazilian National Petroleum, Natural Gas and Biofuels Agency ("ANP") and the Brazilian antitrust authorities.
The Manati Field acquisition provides GeoPark with:
- A solid foundational platform in Brazil to support future growth and expansion in Brazil - one of the world's most attractive hydrocarbon regions.
- Participation in an economically-attractive and strategic asset representing the largest non-associated gas producing field in Brazil, with a gross production of over 200 million cubic feet per day of gas and a secure attractively-priced long term off take contract that covers 75% of proven reserves (100% of proven developed reserves).
- A low-risk and fully-developed producing gas field with no significant drilling or capital expenditure investments expected.
- A valuable partnership with Petrobras, the largest operator in Brazil.
- An established geoscience and administrative team to manage the assets - and seek new growth opportunities.
New operations in Brazil
On 14 May 2013, the Company has been awarded seven new licenses in the Brazilian Round 11 of which two are in the Reconcavo Basin in the State of Bahia and five are in the Potiguar Basin in the State of Rio Grande do Norte.
The licensing round was organized by the ANP and all proceedings and bids have been made public. On 17 September 2013, the winning bids were approved by the ANP.
For its winning bids on the seven blocks, GeoPark has committed to invest a minimum of US$15.3 million (including bonus and work program commitment) during the first 3 years of the exploratory period. The new blocks cover an area of approximately 54,850 acres.
Note 16
Drilling operations start-up in Tierra del Fuego
In April 2013, the Company has started the exploration drilling in Tierra del Fuego in Chile in its partnership with Empresa Nacional de Petroleo de Chile ("ENAP") with the spudding of the Chercán 1 well on the Flamenco Block. Chercán 1 is the first of 21 exploratory wells on the Flamenco, Campanario and Isla Norte Blocks in Tierra del Fuego as part of an estimated US$ 100 million investment commitment during the First Exploration Period. As of the date of this interim consolidated financial report 3 wells have been drilled and more than 1,200 sq km of 3D seismic have been carried out over the three blocks; out of a total 3D seismic program of approximately 1,500 sq km.
Note 17
Share-based payment
During the third quarter of 2013, as part of its Long-term Incentive Plan, the Company approved two new share-based compensation programmes: i.) a stock awards plan oriented to Managers (non Top Management) and key employees which qualifies as an equity-settled plan and ii.) a phantom awards plan, oriented to all non-management employees which qualifies as a cash-settled plan.
Main characteristics of both plans are:
- Exercise price: US$ 0.001 - Grant date: July 2013 - Grant price: GBP 5.8 - Vesting date: 31 December 2015 - Conditions to be able to exercise: -- Continue to be an employee
-- Obtain the Company minimum Production, Adjusted EBITDA and Reserves target for the year of vesting
-- The stock market price at the date of vesting should be higher than the share price at the price of grant
- Estimated amount of shares for both plans: 1,000,000
In addition, the Company also approved a plan named Value creation plan ("VCP") oriented to Top Management. The VCP establishes awards payables in a variable number of shares with some limitation, subject to certain market conditions, among others, reach certain stock market price for the Company share at vesting date. VCP has been classified as an equity-settled plan.
For the measure and recognition of the three new plans the Company has applied IFRS 2.
Note 18
Strategic alliance with Tecpetrol in Brazil
On 30 September 2013, the Company and Tecpetrol S.A. ("Tecpetrol") announced the formation of a new strategic alliance to jointly identify, study and potentially acquire upstream oil and gas opportunities in Brazil, with a specific focus on the Parnaiba, Sao Francisco, Reconcavo, Potiguar and Sergipe-Alagoas basins.
Tecpetrol is the oil and gas subsidiary of the Techint Group (a multinational oilfield and steel conglomerate) with an extensive track-record as an oil and gas explorer and operator with its portfolio of assets currently in Argentina, Peru, Colombia, Ecuador, Mexico, Bolivia, Venezuela and the United States, and with a current net production of over 85,000 barrels of oil equivalent per day.
At 30 September 2013, there is no accounting impact of the creation of the alliance.
Note 19
Initial Public Offering in Progress with the United States Securities and Exchange Commission (SEC)
On 10 September 2013, the Company announced a listing on the New York Stock Exchange (NYSE) in order to create a public market for its common shares in the United States and to facilitate future access to international equity markets, as well as to obtain additional capital and financial flexibility.
A registration statement relating to the common shares has been filed with the SEC but has not yet become effective. The common shares may not be sold, nor may offers to buy be accepted, in the United States prior to the time the registration statement becomes effective.
As of the date of these financial statements, the Company is evaluating the optimum timing for its proposed listing and common shares offering on the NYSE, which is expected to be in the first half of 2014.
Note 20
Subsequent events
On 29 October 2013, the Company put into place an irrevocable, non-discretionary share purchase program for the purchase up to 400,000 of our common shares, or the Purchase Program, for the account of our Employee Benefit Trust, or EBT.
The Purchase Program will last from 29 October 2013 through 31 December 2013, and will be managed by Banco BTG Pactual S.A. - Cayman Branch and Oriel Securities Limited. The common shares purchased under the program will be used to satisfy future awards under the incentive schemes. Under the program, the Company may procure the purchase in any one day of not more than 25% of the average daily volume over the preceding 20 business days.
The Company has made the following purchases pursuant to the program: i) on 5 November 2013, 10,000 common shares at a purchase price of GBP 5.45; and ii) on 14 November 2013, 10,000 common shares at a purchase price of GBP 5.40.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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