Geopark Holdings Ld GPK Half Yearly Report

  Geopark Holdings Ld (GPK) - Half Yearly Report

RNS Number : 1532N
Geopark Holdings Limited
26 September 2012


                                      



Embargoed for release at 7:00 am 26 September 2012





                           GEOPARK HOLDINGS LIMITED

                                      

                RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2012





GeoPark Holdings Limited ("GeoPark" or the "Company"), the Latin American oil
and gas exploration and production company with operations and producing
properties in Chile, Colombia and Argentina (AIM: GPK), is pleased to announce
its interim results for the six months ended 30 June 2012.





Summary



During the first half of 2012, GeoPark achieved record growth in key
performance measures of oil and gas production, revenues, EBITDA and net
income. Continuous organic expansion, bolstered by new project acquisitions in
Colombia and Chile, are leading GeoPark in 2012 to a projected seventh
consecutive year of overall growth.





New Project Acquisitions Highlights



GeoPark's 1H2012 results have been complemented by key strategic developments
including:



· Colombian Platform Acquisition: GeoPark acquired a solid growth platform
in Colombia consisting of interests in 10 blocks with a balanced mix of
production, development and exploration opportunities, through two
acquisitions closed during 1Q2012, for a total consideration of US$105 million
plus possible contingent payments and working capital adjustments.



· Tierra del Fuego Operations Start-Up: GeoPark initiated works in the
recently acquired Tierra del Fuego Blocks in Chile (consisting of the Isla
Norte, Campanario and Flamenco blocks), through the registration of 289 sq km
of 3D seismic in the Flamenco Block. Preliminary interpretation of processed
data suggests hydrocarbon prospects that could allow drilling to begin in
1Q2013.



· Business Development: Along with its strategic partner, LG
International, GeoPark is continuing its efforts to build a risk-balanced oil
and gas asset portfolio throughout Latin America by acquiring oil and gas
properties and interests in Colombia, Brazil, Argentina, Peru, and Chile.





Operational Highlights



· 87% Oil and Gas Production Increase: Total oil and gas production
increased 87% to 11,930 barrels of oil equivalent per day (boepd) in 1H2012
compared to 6,369 boepd in 1H2011. Crude oil production increased 377% to
7,473 barrels per day (bopd) in 1H2012 compared to 1,566 bopd in 1H2011, which
reflects an improvement in GeoPark's production balance towards oil, as well
as the incorporation of new production from Colombia. Total production for
2012 is now expected to average approximately 11 - 12,000 boepd, representing
an approximate 50% increase compared to 2011 total production. This revised
forecast represents a decrease from previous production estimates in April
2012 and is the result of issues integrating new acquisitions, tie-in delays
and flow rates from discoveries in Colombia being below initial expectations,
as well as lower than expected results from drilling activities in Chile.



· Drilling of 27 Wells: As described in GeoPark's Quarterly Operations
Updates, GeoPark drilled and/or participated in twenty seven new wells in
1H2012, including ten wells in Chile and seventeen wells in Colombia.
Currently, two wells are being drilled in Chile and one well being drilled in
Colombia. GeoPark's 2012 revised work program encompasses drilling 42-46 new
wells (gross) with a capital expenditure budget of approximately US$200-210
million.



· New Oil and Gas Discoveries in Colombia and Chile: From its exploration
drilling program in Colombia and in Chile, GeoPark made the following new
discoveries during 1H2012:



1. Max Oil Field / Block 34, Colombia (45% WI, GeoPark operated): Max 1 well
was GeoPark's first oil discovery in Colombia, and is currently on production
by electrical submersible pump (ESP) from the Guadalupe formation. An
appraisal well on Max will spud during 4Q2012.



2. Tua Oil Field / Block 34, Colombia (45% WI, GeoPark operated): Tua 1 well
was GeoPark's second discovery in Colombia, and is currently on production by
ESP from the Mirador formation. The Tua 2 appraisal well finished drilling
during September and is currently under completion. The Tua 3 development well
is expected to spud in 4Q2012.



3. Maniceño Oil Field / Block 32, Colombia (10% WI, GeoPark non-operated):
Maniceño was tested and put into production from the Mirador formation.



4. Azor Oil Field / Arrendajo Block, Colombia (10% WI, GeoPark
non-operated): Azor was tested and put into production from the Carbonera C5
formation.



5. Kosten Gas Field / Fell Block (100% WI, GeoPark operated), Chile: Kosten
1 was tested and put into production from the Springhill formation by natural
flow.



6. Kiuaku Gas Field / Fell Block, Chile (100% WI, GeoPark operated): Kiuaku
1 was tested and put into production from the Springhill formation by natural
flow.



· Seismic Surveys: In Chile, GeoPark carried out 67 km of 2D seismic in
the Otway and Tranquilo Blocks and 289 km^2 of 3D seismic in the Flamenco
Block in Tierra del Fuego. In Colombia, GeoPark carried out 111 km^2 of 3D
seismic work in the Llanos 62 Block.



· Unconventional Resource Potential Assessment: In Chile, GeoPark's
acreage position in the Magallanes Basin contains the Estratos con Favrella
shale formation which has previously tested and produced oil. GeoPark
initiated a program of diagnosticfracture injection tests (DFITs) on a
selection of six to eight wells on the Fell Block to determine the fracability
and reservoir properties of the shale. Preliminary results of this program are
expected in 4Q2012.





Financial Highlights



· Revenues Up 194%: Total revenues increased to US$122.7 million in 1H2012
from US$41.8 million in 1H2011, mainly as a result of a significant increase
in oil production. Oil revenues from Chilean and Argentinean operations
increased by 179% to US$68.9 million and Colombian operations incorporated
additional oil revenues for US$36.7 million. Oil revenues represented 86% of
total revenues.



· Adjusted EBITDA Up 241%: Adjusted EBITDA (adjusted earnings before
interest, tax, depreciation, amortization and certain non-cash items such as
write offs and share based payments) increased to US$72.6 million in 1H2012
compared to US$21.3 million in 1H2011. In addition, cash flow from operating
activities in 1H2012 increased by 329% to US$71.6 million from US$16.7 million
in 1H2011.



· Netbacks Up 113%: Netback per boe produced increased to US$37.2 per boe
in 1H2012 compared to US$17.5 per boe in 1H2011 reflecting a higher weighting
of oil in GeoPark's production mix, as well as the incorporation of Colombian
operations into the portfolio.



· Net Income Up Significantly: Net income for 1H2012 increased to US$16.6
million, compared to nil reported for the 1H2011. The increase in net results
arose from an improvement in operating results which increased to US$38.9
million in 1H2012 (including US$8.3 million from our new Colombian operations)
compared to US$8.8 million in 1H2011.



· Total Equity Up 57%: Total Equity attributable to shareholders increased
to US$242.3 million in 1H2012 compared to US$153.8 million at the end of
1H2011.



· Cash Availability: GeoPark had US$66.3 million in cash and cash
equivalents at the end of 1H2012, with a liquidity ratio of 1.7x (current
assets divided by current liabilities), and total financial debt of US$154.9
million.





Outlook



GeoPark's active 2012 work and investment program of US$200-210 million in
Chile, Colombia and Argentina includes drilling 42-48 wells, with 15 - 21
wells planned for 2H2012 and producing 11,000-12,000 boepd.





Commenting, James F. Park, CEO of GeoPark, said: "GeoPark is on track for a
year of record growth -- both from existing assets and newly acquired
projects. Despite taking over the new Colombian properties within the first
semester, our team has been able to integrate the new companies, rapidly
initiate drilling and production operations and contribute important results
to our bottom-line already in the first half of 2012. We are encouraged by our
new projects and results in Colombia and look forward to further growth and
expansion. Drilling results in Chile did not match our historical track record
and consequently our growth rate in Chile was lower than expected. However, we
are looking forward to further exploration and development drilling results
during 2H2012 - as well as soon being able to begin operations on our new high
potential blocks in Tierra del Fuego".



In accordance with the AIM Rules, the information in this report 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 Holdings Limited
Andres Ocampo (Buenos Aires)                          +54 11 4312 9400

Pablo Ducci (Chile)                                   +56 2 242 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
Jeffrey Auld (London)                                 +44 (0)20 3037 2000
Steve Baldwin (London)













GEOPARK HOLDINGS LIMITED



FIRST HALF 2012

INTERIM CONSOLIDATED FINANCIAL REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2012



CONSOLIDATED STATEMENT OF INCOME



                               Six-months period Six-months period Year ended
                               ended 30 June     ended 30 June     31 December
Amounts in US$ ´000      Note 2012              2011              2011
NET REVENUE               2              122,688            41,765     111,580
Production costs                        (51,670)          (22,294)    (54,513)
GROSS PROFIT                              71,018            19,471      57,067
Exploration costs                       (10,199)           (1,872)    (10,066)
Administrative costs                    (13,562)           (7,816)    (18,169)
Selling expenses                         (7,981)             (848)     (2,546)
Other operating loss                       (413)             (165)       (502)
OPERATING PROFIT                          38,863             8,770      25,784
Financial income          4                  318                84         162
Financial expenses        5              (7,662)           (6,727)    (13,678)
PROFIT BEFORE TAX                         31,519             2,127      12,268
Income tax                               (9,487)           (1,749)     (7,206)
PROFIT FOR THE                            22,032               378       5,062
PERIOD/YEAR
Attributable to:
Owners of the parent                      16,574                10          54
Non-controlling interest                   5,458               368       5,008
Earnings per share (in
US$) for profit
attributable                              0.3902            0.0002      0.0013

to owners of the
Company. Basic
Earnings per share (in
US$) for profit
attributable                              0.3669            0.0002      0.0012

to owners of the
Company. Diluted



STATEMENT OF COMPREHENSIVE INCOME



                               Six-months period Six-months period Year ended
                               ended 30 June     ended 30 June     31 December
Amounts in US$ ´000           2012              2011              2011
Profit for the period / year              22,032               378       5,062
Other comprehensive income                    -                 -           -
Total comprehensive Income                22,032               378       5,062
for the period / year
Attributable to:
Owners of the parent                      16,574                10          54
Non-controlling interest                   5,458               368       5,008



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                           At 30 June At 30 June Year ended 31
Amounts in US$ ´000                  Note 2012      2011      December 2011
ASSETS
NON CURRENT ASSETS
Property, plant and equipment         6       381,334    184,249       224,635
Prepaid taxes                                   5,504      2,922         2,957
Other financial assets                          6,738      5,287         5,226
Deferred income tax                             6,932        394           450
Prepayments and other receivables                 609        544           707
TOTAL NON CURRENT ASSETS                      401,117    193,396       233,975
CURRENT ASSETS
Other financial assets                              -          -         3,000
Inventories                                    11,134      2,656           584
Trade receivables                              22,569     15,898        15,929
Prepayments and other receivables              41,244      6,286        24,984
Prepaid taxes                                   5,466      3,683           147
Cash and cash equivalents                      66,347    143,961       193,650
TOTAL CURRENT ASSETS                          146,760    172,484       238,294
TOTAL ASSETS                                  547,877    365,880       472,269
EQUITY
Equity attributable to owners of the
Company
Share capital                         7            43         42            43
Share premium                         7       118,821    108,554       112,231
Reserves                                      123,006     62,416       115,164
Retained earnings (losses)                        440   (17,153)      (18,549)
Non-controlling interest                       54,355     11,625        41,763
TOTAL EQUITY                                  296,665    165,484       250,652
LIABILITIES
NON CURRENT LIABILITIES
Borrowings                            8       127,404    134,725       134,643
Provisions for other long-term
liabilities                                    14,994      6,795         9,412
Trade and other payables                        1,018          -             -
Deferred income tax                            19,726      7,783        13,109
TOTAL NON CURRENT LIABILITIES                 163,142    149,303       157,164
CURRENT LIABILITIES
Borrowings                            8        27,488     31,435        30,613
Current income tax                              3,419          -           187
Trade and other payables                       49,961     17,482        28,535
Provisions for other liabilities                7,202      2,176         5,118
TOTAL CURRENT LIABILITIES                      88,070     51,093        64,453
TOTAL LIABILITIES                             251,212    200,396       221,617
TOTAL EQUITY AND LIABILITIES                  547,877    365,880       472,269







CONSOLIDATED STATEMENT OF CHANGES IN EQUITY



              Attributable to owners of the Company                  
                                                             
                                                    Retained Non -
Amount in      Share   Share   Other   Translation Earnings controlling
US$ '000        Capital Premium Reserve Reserve     (Losses) Interest    Total
Equity at 1          42 107,858   3,025         894 (19,527)           -  92,292
January 2011
Profit for the
first half of         -       -       -           -       10         368     378
the year
Total
comprehensive
income for the        -       -       -           -       10         368     378
period ended 30
June 2011
Proceeds from
transaction
with                  -       -  58,497           -        -      11,257  69,754
Non-controlling
interest
Shared-based          -     696       -           -    2,364           -   3,060
payment
                                                                
Balance at 30        42 108,554  61,522         894 (17,153)      11,625 165,484
June 2011
Profit for the
second half of        -       -       -           -       44       4,640   4,684
the year
Total
comprehensive
income for the        -       -       -           -       44       4,640   4,684
second half of
the year 2011
Proceeds from
transaction
with                  -       -  52,748           -        -      25,498  78,246
Non-controlling
interest
Share-based           1   3,677       -           -  (1,440)           -   2,238
payment
                                                           
Balance at 31        43 112,231 114,270         894 (18,549)      41,763 250,652
December 2011
Profit for the
first half of         -       -       -           -   16,574       5,458  22,032
the year
Total
comprehensive
income for the        -       -       -           -   16,574       5,458  22,032
period ended 30
June 2012
Proceeds from
transaction
with                  -       -  14,432           -        -       7,134  21,566
Non-controlling
interest
Share-based           -       -       -           -    2,415           -   2,415
payment
                                                           
Balance at 30        43 112,231 128,702         894      440      54,355 296,665
June 2012

CONSOLIDATED STATEMENT OF CASH FLOW



                                               Six-months period Year ended
                            Six-months period  ended 30 June     31 December,
Amounts in US$ '000         ended 30 June 2012 2011              2011
Cash flows from operating
activities
Profit for the period/year              22,032               378         5,062
Adjustments for:
Income tax for the                       9,487             1,749         7,206
period/year
Depreciation of the                     22,013            10,040        26,408
period/year
Loss on disposal of
property, plant and                        125               414         2,010
equipment
Write-off of unsuccessful                8,564                 -         5,919
efforts
Impairment loss                              -                 -         1,344
Accrual of borrowing's                   5,796             5,465        11,130
interests
Unwinding of discount                      298               166           350
Accrual of stock awards                  2,415             3,060         5,298
Exchange difference                         20                24          (15)
generated by borrowings
Changes in working capital                 795           (4,615)            89
Cash flows from operating               71,545            16,681        63,763
activities - net
Cash flows from investing
activities
Purchase of property, plant           (88,056)          (33,728)      (98,651)
and equipment
Acquisitions of
subsidiaries, net of cash            (104,965)                 -             -
acquired (Note 9)
Purchase of financial                        -                 -       (2,625)
assets
Deferred income                          2,850                 -         5,000
Sale of financial assets                     -               314             -
Cash flows used in                   (190,171)          (33,414)      (96,276)
investing activities - net
Cash flows from financing
activities
Proceeds from borrowings                 3,923             1,237         9,668
Proceeds from transaction
with Non-controlling                     8,869            70,000       142,000
interest
Principal paid                        (16,297)           (8,850)       (9,150)
Interest paid                          (5,259)           (5,575)      (10,779)
Cash flows (used in) from              (8,764)            56,812       131,739
financing activities - net
Net (decrease) increase in           (127,390)            40,079        99,226
cash and cash equivalents
Cash and cash equivalents              183,622            84,396        84,396
at 1 January
Cash and cash equivalents
at the end of the                       56,232           124,475       183,622
period/year
Ending Cash and cash
equivalents are specified
as follows:
Cash in banks                           66,324           143,958       193,642
Cash in hand                                22                 3             8
Bank overdrafts                       (10,114)          (19,486)      (10,028)
Cash and cash equivalents               56,232           124,475       183,622

SELECTED EXPLANATORY NOTES



Note 1



General information



GeoPark Holdings 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.



This consolidated interim financial report has neither been audited nor
reviewed by the Company's auditors. It was authorised for issue by the Board
of Directors on 24 September 2012.



The consolidated interim financial report of GeoPark Holdings 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 year ended 31 December 2011, 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 Holdings Limited's
consolidated financial statements for the year ended 31 December 2011.



Subsidiary undertakings



The following chart illustrates the Group structure:





Details of the subsidiaries and jointly controlled assets of the Company are
set out below:



                          Name and registered office        Ownership interest
                          GeoPark Argentina Ltd. -
Subsidiaries              Bermuda                           100%
                          GeoPark Argentina Ltd. -
                          Argentine Branch                  100% (a)
                          Servicios Southern Cross
                          Limitada (Chile)                  100% (b)
                          GeoPark Chile Ltd. - Bermuda      100%
                          GeoPark Chile Ltd. - Chilean
                          Branch                            100% (a)
                          GeoPark S.A. (Chile)              100% (a) (b)
                          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.p.A. (Chile)   100% (a) (e)
                          GeoPark Luna SAS (Colombia)       100% (a) (e)
                          GeoPark Colombia SAS (Colombia)   100% (a) (e)
                          GeoPark Llanos SAS (Colombia)     100% (a) (e)
                          La Luna Oil Co. Ltd. (Panama)     100% (a) (e)
                          Winchester Oil and Gas S.A.
                          (Panama)                          100% (a) (e)
                          GeoPark Cuerva LLC (United
                          States)                           100% (a) (e)
                          Sucursal La Luna Oil Co. Ltd.
                          (Colombia)                        100% (a) (e)
                          Sucursal Winchester Oil and Gas
                          S.A. (Colombia)                   100% (a) (e)
                          Sucursal GeoPark Cuerva LLC
                          (Colombia)                        100% (a) (e)
                          GeoPark Brazil S.p.A. (Chile)     100% (a) (b)
Jointly controlled assets Tranquilo Block (Chile)           29% (f)
                          Otway Block (Chile)               25%
                          Flamenco (Chile)                  50% (g)
                          Isla Norte (Chile)                60% (g)
                          Campanario (Chile)                50% (g)



(a)Indirectly owned.

(b)Dormant companies.

(c)Since 20 May 2011, LG International acquired 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 10).

(f)On 14 April 2011 following Governmental approval the new ownership of the
Tranquilo Block was confirmed. The other partners in the JVs are Pluspetrol
(29%), Methanex (17%) and Wintershall (25%).

(g)After participating in a farm-in process organized by ENAP, GeoPark was
awarded
 3 blocks in Tierra del Fuego, Chile (Isla Norte Block, Flamenco Block and
Campanario Block). GeoPark will be the operator in all blocks with a share
of
 60% for Isla Norte Block and 50% for the other 2 blocks.





Note 2



Net revenue



                                                                   Year ended
Amounts in US$    Six-months period ended  Six-months period ended 31 December
'000              30 June 2012             30 June 2011            2011
Sale of crude oil                  105,590                  24,656      73,508
Sale of gas                         17,098                  17,109      38,072
                                   122,688                  41,765     111,580





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, Managing
Director, 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 earnings before interest, tax,
depreciation, amortisation and certain non cash items such as write offs and
share based payments (Adjusted EBITDA). This measurement basis excludes the
effects of non-recurring expenditure from the operating segments, such as
impairments when it is result of an isolated, non-recurring event. Interest
income and expenditure are not included in the result for each operating
segment that is reviewed by the strategic steering committee. Other
information provided, except as noted below, to the strategic steering
committee is measured in a manner consistent with that in the financial
statements.



Six-months period ended 30 June 2012



Amounts in US$ '000           Total    Argentina Chile Colombia  Corporate
NET REVENUE                122,688        664        85,320 36,704       -
GROSS PROFIT                71,018        146        52,135 18,583     154
OPERATING PROFIT / (LOSS)   38,863    (2,714)        36,572  8,320 (3,315)
Adjusted EBITDA             72,586      (808)        59,028 17,622 (3,256)





Six-months period ended 30 June 2011



Amounts in US$ '000       Total  Argentina Chile  Colombia Corporate
NET REVENUE               41,765       725 41,040        -         -
GROSS PROFIT              19,471       884 18,587        -         -
OPERATING PROFIT / (LOSS)  8,770   (1,991) 14,977        -   (4,216)
Adjusted EBITDA          21,287     (453) 25,580        -   (3,840)





Total Assets     Total   Argentina Chile   Colombia Corporate
30 June 2012     547,877    10,448 377,165  157,923     2,341
31 December 2011 472,269    10,895 453,384        -     7,990
30 June 2011     365,880    10,287 351,724        -     3,869





A reconciliation of total Adjusted EBITDA to total profit before income tax is
provided as follows:

                               Six-months period ended Six-months period ended
                               30 June 2012            30 June 2011
Adjusted EBITDA for reportable                  72,586                  21,287
segments
Depreciation                                  (22,013)                (10,040)
Accrual of stock awards                        (2,415)                 (3,060)
Write-off of unsuccessful                      (8,564)                       -
efforts
Others                                           (731)                     583
Operating profit                                38,863                   8,770
Financial results                              (7,344)                 (6,643)
Profit before tax                               31,519                   2,127



Note 4



Financial income



               Six-months period ended 30     Six-months period  Year ended 31
Amounts in US$ June 2012                      ended 30 June 2011 December
'000
                                                                 2011
Exchange                                   70                  -            32
difference
Bank interest                             248                 84           130
                                          318                 84           162





Note 5



Financial expenses



                                                                 Year ended 31
                           Six-months period  Six-months period  December
Amounts in US$ '000       ended 30 June 2012 ended 30 June 2011 2011
Bank charges and other                    838                471         1,856
financial costs
Exchange difference                     1,045                280           496
Unwinding of long-term                    298                166           350
liabilities
Interest and amortisation               6,132              5,919        11,573
of debt issue costs
Less: amounts capitalised               (651)              (109)         (597)
on qualifying assets
                                        7,662              6,727        13,678





Note 6



Property, plant and equipment



                        Furniture, Production                            Exploration
                        equipment  facilities Buildings                  and
Amounts in   Oil & gas  and        and        and           Construction evaluation
US$'000      properties vehicles   machinery  improve-ments in progress  assets      TOTAL
Cost at 1       140,908      1,600     42,192         2,281       18,622      36,627  242,230
July 2011
Additions         1,287        648        955           156       43,389      19,178   65,613
Disposals         (227)      (155)    (1,220)             -        (272)           -  (1,874)
Write-off
and                   -          -          -             -            -     (7,263)  (7,263)
impairment
Transfers        29,988         82      5,175             -     (28,843)     (6,402)        -
Cost at 31
December        171,956      2,175     47,102         2,437       32,896      42,140  298,706
2011
Additions           675        548        645             -       31,040      55,556   88,464
Disposals          (48)       (60)       (17)             -            -           -    (125)
Write-off             -          -          -             -            -     (8,564)  (8,564)
Transfers        51,679          -      5,482           466     (35,795)    (21,832)        -
Acquisitions
of               62,842        481     15,404             -        6,976      13,234   98,937
subsidiaries
Cost at 30      287,104      3,144     68,616         2,903       35,117      80,534  477,418
June 2012
                                                                
Depreciation
and
write-down     (41,036)      (958)   (15,394)         (593)            -           - (57,981)
at 1 July
2011
Depreciation   (12,568)      (221)    (3,456)         (123)            -           - (16,368)
Disposals             -         56        222             -            -           -      278
Depreciation
and
write-down     (53,604)    (1,123)   (18,628)         (716)            -           - (74,071)
at 31
December
2011
Depreciation   (17,859)      (319)    (3,698)         (137)            -           - (22,013)
Depreciation
and
write-down     (71,463)    (1,442)   (22,326)         (853)            -           - (96,084)
at 30 June
2012
                                                                
Carrying
amount at 31    118,352      1,052     28,474         1,721       32,896      42,140  224,635
December
2011
Carrying
amount at 30    215,641      1,702     46,290         2,050       35,117      80,534  381,334
June 2012



Note 7



Share capital



                                                               Year ended
                         Six-months period  Six-months period  31 December   
Issued share capital     ended 30 June 2012 ended 30 June 2011 2011
Common stock                             43                 42            43 
The share capital is                                                
distributed as follows:
Common shares, of                42,474,274         41,765,559    42,474,274 
nominal US$ 0.001
Total common shares in           42,474,274         41,765,559    42,474,274 
issue
                                                                 
Authorised share capital                                            
US$ per share                         0.001              0.001         0.001 
                                                                 
Number of common shares       5,171,969,000      5,171,969,000 5,171,969,000 
(US$ 0.001 each)
Amount in US$                     5,171,969          5,171,969     5,171,969 





Note 8



Borrowings



The outstanding amounts are as follows:

                               Six-months period Six-months period Year ended
                               ended             ended
                                                                   31 December
Amounts in US$ '000            30 June 2012      30 June 2011      2011
Bond (a)                                 128,838           127,859     128,315
Methanex Corporation (b)                   8,041            18,316      18,068
Banco de Crédito e Inversiones             7,899               499       8,845
(c)
Overdrafts (d)                            10,114            19,486      10,028
                                         154,892           166,160     165,256



Classified as follows:



Current      27,488  31,435  30,613
Non Current 127,404 134,725 134,643





(a) Private placement of US$ 133,000,000 of Reg S Notes on 2 December 2010.
The Notes carry a coupon of 7.75% per annum and mature on 15 December 2015.
The Notes are guaranteed by the Company and secured with the pledge of 51% of
the shares of GeoPark Fell. In addition, the Note agreement allows for the
placement of up to an additional US$ 27,000,000 of Notes under the same
indenture, subject to the maintenance of certain financial ratios.



(b) The financing obtained in 2007, for development and investing activities
on the Fell Block, is structured as a gas pre-sale agreement with a six year
pay-back period and an interest rate of LIBOR flat. In each year, the Group
will repay principal up to an amount equal to the loan amount multiplied by a
specified percentage. Subject to that annual maximum principal repayment
amount, the Group will repay principal and interest in an amount equal to the
amount of gas specified in the contract at the effective selling price.

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. The loan has been
fully repaid during the current period. The purpose was to finance the
exploration, development and production of natural gas from the Otway Block.
This financing did not bear interest.



(c) 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 June 2012 is US$ 378,000.



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 May 2013 and the applicable interest rate ranging from 4.45% to
5.45%. The outstanding amount at 30 June 2012 is US$ 7,521,000.



(d) The Group has been granted with credit lines for approximately US$
28,000,000.



Note 9



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 combined Hupecol and Winchester Luna purchases (acquired for a total
consideration of US$ 105,000,000, adjusted for working capital, plus certain
possible contingent payments) provide GeoPark with the following in Colombia:



Interests in 10 blocks (ranging from 5% to 100%), with license operations in
four of them, located in the Llanos, Magdalena and Catatumbo Basins, covering
an area of approximately 220,000 gross acres.

Risk-balanced asset portfolio of existing reserves, low risk development
potential and attractive exploration upside.

2P oil reserves of approximately 10 million barrels and prospective oil
resources (unrisked) of 25+ million barrels (Company estimates).

Successful Colombian operating and administrative team to support a smooth
transition and start-up in Colombia together with Associations and JVs with
principal Colombian operators.



The purchase price allocation performed is preliminary as we have not had
sufficient time to complete the valuation process. There will be adjustments
to the estimated fair values as the valuation work is finalised, which we
expect to complete by the end of 2012.



In accordance with the acquisition method of accounting, the acquisition cost
was allocated to the underlying assets acquired and liabilities assumed based
primarily upon their estimated fair values at the date of acquisition. We used
an income approach (being the net present value of expected future cash flows)
to determine the fair values of the mineral interest. Estimates of expected
future cash flows reflect estimates of projected future revenues, production
costs and capital expenditures based on our business model. The excess of
acquisition cost, if any, over the net identifiable assets acquired represents
goodwill.



The following table summarises the combined consideration paid for Winchester
Luna and Hupecol, the preliminary fair value of assets acquired and
liabilities assumed for these transactions:



Amounts in US$ '000                                        Total
Cash (including working capital adjustments)                111,584
Total consideration                                         111,584
Cash and cash equivalents                                     6,619
Property, plant and equipment (including mineral interest)   98,872
Trade receivables                                             9,981
Prepayments and other receivables                            10,904
Deferred income tax assets                                    6,893
Inventories                                                   8,838
Trade payables                                             (16,003)
Borrowings                                                  (1,368)
Provision for other long-term liabilities                  (13,152)
Total identifiable net assets                               111,584





Note 10



Agreement with Methanex





In March 2012, the Company and Methanex signed a third addendum and amendment
to the Gas Supply Agreement to incentivise the development of gas reserves.
Through this new agreement, the Company is undertaking a programme consisting
of drilling a minimum of five new gas wells during 2012. Methanex will
contribute to the cost of drilling the wells in order to improve the project
economics. As of 30 June, the Company has already fulfilled the minimum
drilling commitment for 2012.



Nota 11



Subsequent events



GeoPark Holdings Limited has executed a loan agreement with Banco Itaú BBA
S.A., Nassau Branch for US$ 37,500,000. GeoPark will use the proceeds to
finance the acquisition and development of the La Cuerva and Llanos 62 blocks.
These blocks represent two of the ten production, development and exploration
blocks, which GeoPark currently owns in Colombia (see Note 9).



The loan, which will have a maturity of five years, amortising from month 21
in 14 equal quarterly instalments, is ring-fenced by and secured against 100%
of the capital of GeoPark Llanos SAS, the owner of the La Cuerva and Llanos 62
blocks. Interest on the loan is accrued at market rates.



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR KMGZLMKKGZZZ -0- Sep/26/2012 06:01 GMT
 
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