GeoPark to expand in Colombia with $530m acquisition of Repsol oil and gas assets

GeoPark Limited, an independent energy company with over two decades of operational success across Latin America, has announced plans to acquire key upstream oil and gas assets from Repsol Exploración S.A. and Repsol E&P S.A.R.L. The Sale and Purchase Agreements (SPAs), valued at $530 million, are poised to bolster GeoPark’s footprint in Colombia’s oil-rich Llanos Basin, a region where the company has demonstrated consistent success.

The transaction involves the acquisition of Repsol Colombian assets, including Repsol Colombia O&G Limited, which holds a 45% non-operated working interest in the CPO-9 Block located in Meta Department. The block is operated by Ecopetrol, Colombia’s state-run energy company, which retains a 55% interest. GeoPark will also acquire a 25% stake in SierraCol Energy Arauca LLC, which oversees the Llanos Norte assets in Arauca Department. Combined, these assets have a production capacity of approximately 16,000 barrels of oil equivalent per day (boepd) as of September 2024, offering immediate operational and revenue gains for GeoPark.

GeoPark highlighted that the acquisition aligns seamlessly with its “North Star” growth strategy, aimed at securing high-quality assets in proven oil basins. These Repsol Colombian assets not only provide immediate production and cash flow but also offer long-term growth opportunities with minimal capital expenditure. By incorporating Repsol’s portfolio, GeoPark will further diversify its asset base across Latin America, complementing its recent entry into Argentina’s Vaca Muerta shale play. This diversification strengthens GeoPark’s position in the Colombian energy sector while expanding its reach into other major oil and gas markets.

The acquisition will be funded through a combination of GeoPark’s cash resources and debt. A significant portion of the financing, approximately $345 million, will come from a non-recourse amortising debt facility led by Macquarie Bank Limited. GeoPark has implemented a hedging strategy to mitigate price risks and ensure stable debt servicing.

The inclusion of Llanos Basin oil assets reinforces GeoPark’s commitment to sustainable oil production. These resources come with significant growth potential, low capital investment requirements, and exploration upside, making them a strategic addition to GeoPark’s growing portfolio of oil and gas holdings.

However, the deal remains subject to several conditions, including regulatory approvals and the resolution of preemptive rights held by Repsol’s existing partners. GeoPark clarified that the transaction’s completion is uncertain at this stage, and no additional details will be disclosed until it is finalised or terminated.

This GeoPark energy acquisition underscores the company’s commitment to leveraging competitive opportunities to build a sustainable and profitable oil and gas portfolio. Industry analysts suggest that this acquisition of Repsol Colombian assets reflects GeoPark’s confidence in the Llanos Basin oil region’s potential and its ability to execute large-scale deals in the Colombian energy sector effectively.