GeoPark to Enter Venezuela Through Bare Block Transaction as Grupo Gilinski Takes Controlling Stake

GeoPark Limited (NYSE:GPRK) announced plans to enter Venezuela through the acquisition of an interest in the Bare Block, a heavy oil asset in the Orinoco Heavy Oil Belt, under a 25-year Production Participation Contract with PDVSA Petróleo S.A.

The transaction will involve the issuance of shares to Grupo Gilinski, which led the origination of the contract. GeoPark will issue 42.1 million shares at US$12.22 per share to a Grupo Gilinski entity.

The issuance price represents a 26% premium to GeoPark’s 30-day volume-weighted average price of US$9.67.

Following completion, Grupo Gilinski is expected to own approximately 56.3% of GeoPark’s outstanding shares, making it the company’s controlling shareholder. An adjustment mechanism could increase the holding to approximately 58.4%.

Grupo Gilinski Plans US$100 Million Tender Offer

Grupo Gilinski is also expected to launch a tender offer for GeoPark shares at US$12.22 per share, with a total size of US$100 million.

The tender offer would provide existing shareholders with an opportunity to sell shares at the specified price.

Bare Block Currently Produces Around 11,000 Barrels Per Day

The Bare Block currently produces approximately 11,000 barrels of oil per day from around 1,100 existing wells and contains approximately 15.7 billion barrels of original oil in place.

GeoPark will hold a 65% net working interest and will fund 100% of capital expenditures under approved work programmes.

The redevelopment plan contemplates cumulative net production attributable to GeoPark of approximately 400 million barrels.

GeoPark projects gross production from the Bare Block of between 18,000 and 20,000 barrels per day in 2027, increasing to between 44,000 and 56,000 barrels per day by 2029-2030.

Including its existing operations in Colombia and Argentina, the company forecasts total production of between 75,000 and 85,000 barrels of oil equivalent per day by 2030.

GeoPark Reports Around US$700 Million of Available Liquidity and Financing

GeoPark reported approximately US$310 million of cash on hand and access to around US$700 million in total liquidity and committed financing sources.

The effective date of the Production Participation Contract remains subject to regulatory approvals and sanctions-related compliance, with an estimated maximum period of 120 days.

BTG Pactual acted as financial adviser and provided a fairness opinion, while PwC served as tax adviser. Cleary Gottlieb and Baker McKenzie acted as legal counsel to GeoPark.

Felipe Bayon, GeoPark’s chief executive, said the Bare Block “offers massive scale, existing infrastructure, production history, and material redevelopment potential in one of the world’s largest hydrocarbon basins.”

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