GeoPark Ltd (GPRK) 2025 Q3 法說會逐字稿

(video playing) Good morning and welcome to the Geopark Limited conference call following the results announcement for the third quarter ended September 30th, 2025.

(Operator Instructions)

If you do not have a copy of the press release, it is available at the Invest with Us section on the company's corporate website at www.go-park.com.

A replay of today's call may be accessed through this webcast in the Invest with Us section of the Geopark corporate website.

Before we continue, please note that certain statements contained in the results press release and on this conference call are forward-looking statements rather than historical facts and are subject to risks and uncertainties that could cause actual results to differ materially from those described. With respect to such forward-looking statements, the company seeks protections afforded by the Private Securities Litigation Reform Act of 1995.

These risks include a variety of factors, including competitive developments and risk factors listed from time to time in the company's SEC reports and public releases.

Those lists are intended to identify certain principal factors that could cause actual results to differ materially from those described in forward-looking statements but are not intended to represent a complete list of the company's business.

All financial figures included here were prepared in accordance with the IFRS and are stated in the US dollar unless otherwise noted.

Reserve figures correspond to PRMS standards.

On the call today from Geo Park is Felipe Bayon, Chief Executive Officer, Jaime Caballero Uribe, Chief Financial Officer, Martin Terrado, Chief Operating Officer, Rodrigo Dalle Fiore, Chief Exploration and Development Officer, and Maria Catalina Escobar, shareholder value and Capital Markets Director.

And now I'll turn the call over to Mr. Felipe Bayon. Mr. Bayon, you may begin.

Good morning, everyone and thank you for joining Geopark's third quarter 225 results call.

We are at a pivotal moment in Geopark's journey towards strengthening our foundation and advancing our long-term growth strategy.

On October 16th, we successfully closed the acquisition of two high-quality blocks in Vaca Muerta Neuquen, securing full operational control of Loma Jarillosa Este and Puesto Silva Oeste.

With this move, we have entered one of the world's most promising unconventional basins and opened a new chapter of long-term growth and diversification.

In parallel, we launch our new strategic plan and capital allocation framework during our Investor day on October 21st. The plan is built around two clear priorities. First, sustaining a resilient and high margin base in Colombia. And second, rapidly scaling a transformational platform in Argentina.

In our base case 2030, we are targeting consolidated production of 42,000 to 46,000 barrels of oil equivalent per day, an adjusted EBITDA of $520 million to $550 million US dollars, and a net leverage ratio of 0.8 to 1.0. Oil.

All while maintaining capital discipline, financial strength, and our commitment to ESG.

Beyond this firm plan, our vision for the business entails materializing further significant upsides in our existing high-quality asset base, along with a creative inorganic growth.

To support this strategy, the board of directors approved a revised dividend program totaling approximately $6 million US dollars over the next four quarters, or the equivalent of $0.03 per share per quarter, starting with the third quarter of 2025 payout. As of the third quarter 2026, dividends will be suspended as investments in Argentina peak.

Dividend levels will be reviewed as we progress through the investment cycle and return to positive free cash flow.

This reflects our ongoing commitment to strong shareholder returns, investment in growth, and financial flexibility.

Turning now to our third quarter 2025 results on the operational front, we had a solid third quarter.

We delivered average consolidated production of 28,136 barrels of oil equivalent per day, which is exceeding 2025 guidance and up nearly 3% quarter over quarter, and this is driven by strong performance in our core operated and non-operated assets in Colombia.

Llanos 34, which we operate, we made a key engine with continued efficiency gains across drilling and workover operations and stable base management.

In Llanos 123, we advanced drilling operations at Toritos Norte 3, and we made progress on infrastructure in Puerto Gaitan preparing for the next campaign in Llanos 104.

Our team continued to improve efficiency and cost management across the board. Operating cost averaged $12.5 per barrel, fully in line with our 2025 guidance. By the end of the third quarter, we had captured more than $15 million US dollars in efficiencies, equivalent to about $19.5 million in annual structured savings.

A clear sign of a leaner and more agile operating motor underway.

On the financial front, adjusted EBITDA reached $71.4 million US dollars with a 57% margin, broadly stable versus the second quarter, supported by higher volumes and steady realized prices.

Net income was $15.9 million US dollars compared to the net loss in the previous quarter. Excluding a non-recurrent exploration write-off in the Putumayo Basin, net profit would have been $23.4 million US dollars, consistent with our strong EBITDA performance.

We invested $17.5 million US dollars during the quarter, mainly to sustain and enhance production in Llanos 34 and progress exploration across Colombia. We ended the quarter with $197 million US dollars in cash.

From June to October, we repurchased $108 million US dollars of our 2030 notes below par, generating $9.5 million US dollars in annual cash savings and further optimizing our capital structure.

With no principal maturities until 2027 and a net leverage ratio of 1.2 times, we remain in a strong balance sheet position to manage our liabilities proactively.

Our hedging program remains a key element of our financial resilience.

As of early November, approximately 62% of the expected 2026 production is already projected through three-way colors with a first floor at $65 per barrel, a second floor at $50 per barrel, and an average ceilings at $73 per barrel.

In summary, this was a quarter of disciplined execution and strategic performance. Looking ahead We are on track to release our 2026 work program and investment guidelines before year end.

This plan will provide further granularity on our renewed strategic direction.

Again, focus on building and maximizing value delivery from a high margin base in Colombia on our new operated assets in Vaca Muerta, Argentina. In particular, we are preparing to scale up operations in Loma Jarillosa Este and Puesto Silva Oeste blocks where we've already begun implementing productivity enhancements.

Our priorities remain clear. Operate safely and efficiently, maintain financial discipline and maximize shareholder value.

Before we take your questions, we also wanted to briefly discuss the proposal we received from Parex Resources.

As we said in our press release on October 29th, our board is always open to opportunities that fairly reflect the company's value, strategy, and long-term potential.

Following a robust process, our board unanimously determined that the unsolicited non-binding proposal of $9 per share that was submitted by par on September 4, 2025, prior to our announcement of Geo Park's transformative Vaca Muerta acquisition undervalues Geopark fails to reflect our growth prospects and our diversified portfolio and is not in the best interest of our shareholders.

Following Parex's public reiteration of its $9 per share offer, the board unanimously authorized me to further engage with parex and provide additional information to help parex improve its offer.

In addition, Geopark's board of directors has formed a special committee of independent directors, including Sylvia Escovar Gomez, Constantin Papadimitriou, Somit Varma and Brian Maxted to evaluate any potential revised offer from Paris and other value maximizing alternatives for the company.

We are not going to make any further comments regarding parex or the process unless and until we determine that further disclosure is appropriate.

We'd appreciate if you keep your question focused on the quarter.

With that, let's open the floor to your questions.

(Operator Instructions)

Joaquin Robet, Balanz Capital.

Hey, Can you hear me?

Yes, Joaquin, morning. How are you? Go ahead, please.

Good morning.

Thank you for your presentation. My question is regarding the 2026 Vaca Muerta Work Program, could you provide more color on the upcoming studies on permits, their timing, and whether the associated CapEX and commitments are fully funded?

Absolutely, Joaquin, and I'll give you a bit of context and then I'll ask Martin to take it into more detail, but one thing I'd say is that, having started as operator in Vaca Muerta, I mean 21 days ago, to be exact, we've already started conducting, interventions on the wells and we're fully, I mean. Engage with the operations and the and the program going forward. So, Martin, if you can give us a bit more color, that would be great.

Absolutely, Felipe and good morning, Joaquin. Thanks for your question. So, I'll start by saying that our first priority on October 16th was to safely and seamlessly receive the operations, including 11 plus petrol employees that are now Geopark employees. And the production right now in both blocks is around 1,100 barrels of oil equivalent per day, and what we've done the day that we basically took over the operations was immediately we started shutting in three wells from one pad.

This operation has a total of 6 wells on production in Lomarioeste.

So we shut in 3 words from one pad so that we could go and install artificial lift and just to share with everybody, I mean, in how we operate and and how quick we are learning we've done all three of the operations already and the the first of the activities was done in 7.8 days. The last one we did it in less than 3 days. So actually, when you add up all the days that we had in the program, we've done it in around 10% less than that was planned. In addition to that, as we go from the approximately 1,500 to 2000 barrels of oil per day that those six wells can be delivering, and we go to the 20,000 barrels, we know that the OpEx is key and we looked at what are the things that we could do, so we already reduced around $200,000 per month for trucking.

So that's where we are, next, within the next 10 days we will be putting on production those three wells. So that will put us on a total production for Vaca Muerta in the order of 1,600 to 1,700 barrels of oil per day.

Now, as we commented in our investor day, we're going to a 20,000 barrel of oil per day from both logs with one rig that will be starting operations by the end of next year and with an original plan to have a central processing facility for 20,000 barrels of oil per day also that we will be ready by early 2027.

So, what are we doing in the meantime? And the number one thing is we're talking with the neighboring operators and there's very open collaboration in a sense that many of them have spare capacity already installed, so we're looking at options so that between now and whether or not we decide to go with the central processing facility.

We can optimize and maximize our margins, in a sense of basically connecting to those operating, neighbors and sending the production to them. We're also looking at opportunities that we have upgrading Loma Jarillosa and like you were asking Joaquin on studying on permits, we already started those, and our plan is to submit them by the first quarter of 2026.

And I think you had the other question you had was around commitments. I'll say that on commitments, drilling commitments is only one for Puerto Silvaa Oeste, and it's due by 2028. 1 world order of magnitude, you can think about $15 million.

And then in within Lomaharriosa, there was a commitment to do the work covers in the block and we've already done them. So from a perspective of commitments, you can see that they're very low.

Thanks Martin. Great, and I think on the funding side, Jaime, if you can give us a bit more color.

Yes, of course, Felipe. Hi, Joaquin.

On funding, the program that Martin has described. When you, bring it down to numbers, we're talking about a CapEx range that is somewhere between $50 million to $70 million next year on the base case, of course, if these options that Martin referred to associated to using third-party capacity go through, we will be looking at a lower number, most likely, so there are opportunities to optimize that, but in our base case that $50 million to $70 million is fully funded. We already have existing credit lines in Argentina with local banks in Argentina that go up to $100 million. So there's no stretch. In this, furthermore, we are also looking and this more in the long-term, beyond 2026, our financing is characterized by a broad toolbox, that you've heard me talk about this before. We are in discussions with with. Other parties around the possibility of oil repayments. There's a lot of interest in the market associated to that. We're also in our base case contemplating the possibility of debt issuance in Argentina. There is also a lot of appetite for that. And so all this to say that that we don't have any concerns around the funding of this program.

Thank you.

Thanks, Jaime, and thanks, Joaquin.

Thank you very much for your answers.

Eduardo Muniz, Santander.

His question is, in Colombia, could you comment on the lower CapEx for this quarter and give us an update regarding production and the stage of exploratory campaigning in Yanos Basin?

Also, can you update on how the infill campaign is progressing relative to cost slash performance targets and timeline? In CPO 5, could you provide more detail to us about the commercial agreement with BP that started in August? How did this impact oil discounts and transportation costs?

Regarding reserves, we will see major changes given divestments, VM acquisition and positive results from exploratory wells. So how do you view your reserves and reserve life?

What increment should we see in reserves in Argentina, could you comment on the current phase you're at in terms of operations? How complex and the timing for getting regulatory permits to start building your own infrastructure?

You close the transaction in VM has the cash disbursement been done? What was the final?

Well, thanks Eduardo and thanks for submitting your questions through the website. So, thanks for that and thanks for your interest in the company and obviously there's quite a few questions here we'll try to address them through different.

Some of us that are here in the room today, and I'll start with the first one and then hand it over to, Martin and Rodrigo, but I would say that the quarter, the CapEx that you've seen and the CapEx deployment over the year, reflects the plan that we had for the year, so it's in line with the plan that we had and reflects the level of activity, but I'll ask Martin.

To go into some more detail and then Rodrigo if you can talk about some of the exploratory campaign in Llanos and you guys can talk about the infill campaign as well and then we'll take the other questions.

Absolutely so again.

Thank you Eduardo for your questions. I'll cover the more operational ones and then we, we'll continue with Rodrigo. So if we talk about CapEx, you're absolutely right. Our third quarter CapEx was around $17.5 million and that reflects the execution of our planned and agreed drilling program. Most of our capital is drilling. And if you look at the previous two quarters we were spending around $25 million to $27 million and that was with two rigs in the third quarter we had one rig, so that's the main reason. Now looking forward into the fourth quarter we're going to be ramping up and we already have.

Two rigs already operating in Llanos 123 and a third rig coming for the exploration that Felipe mentioned in block 104. So with that you're going to see that the fourth quarter would be increased from the third quarter. And another point mentioning there is that ramp up, it's also an agreed decision with our partners based on the first half of the year results. We had very good results in Llanos 123 and very successful infield drilling program in Llanos 34. So let me go to that one, to the how we did in the infield drilling program in Llanos 34. That was a program that we planned for the first half of the year.

Six wells infill means that you know they're within the pads that are already drilled and we're exceeding plan on production, delivering 2,600 barrels of oil per day, which is above what we had on the on the plan for those six wells, and the cost of the wells have been exceptional. We're drilling the wells and we drill those wells at $2.9 million each one.

And as a comparison, those same wells last year they were costing us 30% more, so it's a 30% reduction. And that's going back to what I mentioned before. By doing this, having good results is that we are confident to bring back the rig and start drilling again infill wells in Llanos 34, which we're doing by the last part of December and into 2026. So, this is a clear example of how we're maximizing value through CapEx and in our core assets.

I think the next question you had was more around production.

I'm probably going to reiterate most of the things that Felipe mentioned, but third quarter production was 28,136 barrels of oil equivalent per day that's around 3% increase.

We had strong performance across all assets, and we also had manatee coming in.

But if we look at the core assets that we have CPO 5, no blockages, so delivering above plan Llanos 34 on plan, even though we did have some assets on electrical reliability that are already fixed.

And Llanos 123, which is our blog that has been growing continuously, we started the year at 3,700 barrels of oil per day, and right now we're above 5,000 barrels of oil per day. So we feel that strong around delivering within our range of production guidance, which is 26,000 to 28,000. We expect to be on the high range of that. As we finish the year.

I think with that, I'll turn it to you, Rodrigo.

Thank you.

Thank you, Martin. Hi, Eduardo. This is Rodrigo. I'm going to share where we are in terms of exploration in Los Janos. The activity was concentrated in two assets or two blocks. The first one is Llanos 123 and the other one is Llanos 104. Let's talk about the Llanos 123 where we concentrate most of the activity. It's good to remember that we started the discoveries here a couple of years ago with Toritos. So what we are doing is near field exploration. Actually we are testing the north part of the block, the north part of Toritos extension in a different structure. The name of the well was Curtu, so we drilled that in the second quarter of this year and we are Producing 400 barrels per day in a very stable way from that well, so that allows us to drill a new well to delimitate TRY to understand how big is the structure there with the new well. So, we are drilling that well actually right now. So we expect some results by the end of this year for the northern part of Toritos area.

After that, what we did is TRY to deri the eastern part. We went with a new well to the right side of the of the main fault that we see there, Torito Esteo is the name of the well. We are starting the testing today, so we are going to have some results maybe in a couple of weeks. So we are very anxious. The logs looks very promising, and the last activity that we have for this year is Vista.

What we are trying to do there, actually we are drilling this well in this moment, is TRY to prove the extension of the Bisvita area to the south. So that is the main activity that we have in terms of exploration in Llanos 123. All of them have a very interesting result at the end of the day it's the base for the growth of this field and the development plan that we have for the near future. In the January 104, what we have done is Matraquero. We have just finished that well. It's under evaluation right now. We are discussing with our partner what is next for this prospect. But we are planning to build the second well in the block by the end of this year. Penjo is the name of that prospect, and we are going to have some results late this year or maybe early next year. So that's the news that we have related with exploration coming from Los Janos. It's a very interesting place for us. It's a growth driver, so that's why we are continue doing that in the next years and coming years.

Thanks, Rodrigo. And Jaime, can you tell us a bit about the commercial agreements with BP, the CPO 5?

Sure.

Thanks Eduardo for the question. So CPO 5 commercial agreement, it's been quite a landmark for us because, I, I'm going to talk a little bit about, the optionality that it creates, right? So let's put some facts on the table first, the scope of the deal with BP covers about 6,500 barrels a day of our production. It's mainly CPO 5. But there's also Janos exploration, crude involved in that deal that can fall within the scope. The duration of that, of the deal that we signed with BP is 12 months starting back in August. And let me take you a bit through the intent, what we really want to do is we want to maximize the value of CPO 5 crude.

In the context of of changing domestic demand, right, CPO 5 crude, the bulk of it is actually quite special crude because it's light oil, and there's an opportunity there to capture maximum value relative to other crudes in the Colombian marketplace and blends in the international marketplace. And and that was the problem that we wanted to solve. So we engaged in this conversation with with a number of players around how could we create export optionality through Covena. This is something that we hadn't done before at your Park, and we'd open up that door. Basically the deal allows us this avenue to export directly at Covenas, right, FOB, and in doing so it allows us to capture the best possible terms. That you can get and basically create arbitrage between the domestic prices that you can get which which are, a portrayal if you will of the of the reduced domestic marketplace that we have versus the broader international market. It also gives us blending optionality so in the contract with DP we can also blend these crudes with other crudes and therefore improve the overall differentials that we get.

Furthermore, the other characteristic of this contract is that it came in with a financing optionality, so we actually got a credit line associated to oil prepayments of $50 million. It's an option we haven't pulled it, but it's something that we can use at any given time. And at very competitive terms, that if you think about, the commitment fees and if you think about the interest associated to these lines, it's probably 200 basis points, below marketplace. So, we're all very happy with this, when you do the numbers, two characteristics of what I would say is the commercial discount in. Of these crudes is in the $4 to $5 versus rent range. It's a very competitive discount relative to our other crudes, and it's well on the plan that we've had for this year.

From a, from an accounting standpoint, if you look at our balance sheet, you will see that the. Selling expenses have come up because now in the past we had an off-peak agreement where we didn't incur on the selling expenses but we were getting a lower price. Now we incur on the selling expense associated to the transport to Coenas when we do exports, but that's offset by a better price capture. So that's the movements that you're seeing there. I hope this helps.

Thanks, Jaime, thanks a lot, and I'll take the reserves one.

Which was your third question, Eduardo, and it's around, do we see major changes from divestments? The answer is no. It's on the margins. Vaca Muerta definitely very positive, in terms of the acquisition, as you recall, we've said that our 1P numbers would go from 5 years to 7 years, 2% to 10 years. And what I'd say is that we're going through the certification process right now, as we speak, so that's part of ongoing work that the team is going with the certifiers, but directionally I say we aim to be over 100% of reserves replacement for the year. Which is very good news. It's very good news and I I think it builds on what Martin was talking about, in terms of operational excellence and conducting things like drilling and and work covers and and wire shutoffs with sort of lower cost and less time than we used to, so a lot of efficiency going into the into the program.

And what Rodrigo was talking about some of the not only exploration but appraisal opportunities that we have so all of that will be brought into the conversation around the reserves, but as as you can probably imagine we we. We can't talk anymore or without more or with more detail around an ongoing process, but again, we aim to be over 100% organically in terms of replacing our reserves. And your third question was around Argentina and I think Martin has already talked on where we are in terms of operations with a lot of detail.

I'll ask him to talk about some of the regulatory permits and and infrastructure and optionality that we have around that. And on the last part of your question, which is the transaction, yeah, the transaction's been closed.

Cash has been disbursed. We've paid $115 million and that's the number that was announced to the market, and that's the final number for the deal. So, Martin, if you want to talk about some of the permits and infrastructure, yes, absolutely.

So the permits are basically around. Roads and, the permits for the new paths and finally for the location of the CPF, as I mentioned before, we will be submitting those by the first quarter of 2026, and we are looking at opportunities again on whether or not we will fully.

Use those permits. There's an option and chances that we could leverage from a collaboratory infrastructure from neighbors, and that would help us again create value in a sense of not having to fully use those permits, but our plan is submit them usually now can takes between 3 to 6 months for approval once they're submitted. Due to, the public consultations and all the requirements, but in high level, that's where we are on permitting.

Thanks, Martin, and can we have the next question?

Stefan Foucault, Optus Advisors.

Good morning, guys. I had a question around regulation. I know you can't talk, about bikes, so it, it's more general than that.

So, in Colombia, I was wondering whether there would be any, anti-competition restriction, from the regulator, the government with regards to when, a player, becomes too large or operates too much in a certain region.

Thanks Stefan, and great question, and thanks for, respecting and acknowledging the fact that we won't talk in detail around our engagement with Padex, and, I won't speculate obviously around a potential deal, but I'll, I can tell you that. In Colombia there are obviously, competition rulings that need to be taken into account, for any, deal, not necessarily this one, as I said, we're not speculating, but I'd say Stefan. That there's additional things in terms of local requirements that need to be or would need to be considered in a deal that entails something like this or would entail something like this and again Stefan, thanks, and for respecting the fact that we won't talk in detail around our engagement with Rx thanks a lot. Can we have the next question please?

Daniel Guardiola, BTG.

Thank you and good morning, Felipe, Jaime, Miguel Marecata, and all the team.

I have a couple of questions. I want to keep it brief so all my colleagues can actually ask questions. Considering that you guys talked about opportunities in Argentina, in Colombia, I wanted to ask you, Felipe, how would you rank on a risk adjusted basis your value at creative growth opportunities between both countries? So that will be my first question.

And my second question very briefly, I'm just curious, considering that the current environment with the proposal from Paris, etc. And I know you're not going to comment on that, and I don't want to push you to comment on that, but I was just wondering if you can provide any sort of indication. Of what is the expected NPV of the recently acquired assets of Argentina, assuming of course that everything goes in line with with the plan, so that will be my two questions and thank you very much.

Thanks Daniel and thanks for being in the call this morning. It's always good to hear from you. So, I'll start with the second question, and then I'll build on the first question, and I know Jaime, can provide a bit more color, but the first thing I'd say is that there's, already, I mean, when we did the deal in Vaca Muerta. Which is transform transformative and its strategic for us and if you remember from the investor day and the investor week we said this is an opportunity, these two concessions that we have that can bring some $300 million to $350 million of additional EBITDA in the next 3 to 4 years. And 20,000 barrels, as Martin was explaining earlier in the call, so in that sense, it's clearly accreted, and I would also highlight something that Martin was saying we're conducting all the required activities to ensure that we have designs and permits in place, but in addition, we've talked to the operators in the region to look at.

Spare and knowledge capacity, in pipelines in processing facilities, always with the mindset of maximizing value for shareholders, and this is very important. So, we have a plan. We have a plan for Vaca Muerta, but we're looking at ways of, optimizing, and looking at, optionality if you will. So I think that's point number 1.

The other thing is that.

We've disclosed some numbers around, Vaca Muerta and especially around the volumes, and we said that the 1% for the company, it would go from 5 to 7 years, 2% all the way to 10 years, and I'll share with you, Daniella and everybody in the call, we're undergoing the review of reserves in Vaca Muerta.

Remember that there's some, information, that's public that was the reserve certification at the end of last year.

That we won't disclose, but where we are, with the existing data, it's some of that is public data, we have the luxury of having the province of Neuquen as our partner in this deal.

All of that, we expect to.

To have positive numbers in terms of reserves going forward for Vaca Muerta, so that would be a critic in terms of where we initially saw we were on the deal. So I think that's very relevant, we've obviously gathered a lot more data. We're on the ground right now and that's great.

And in terms of risk adjusted basis for both countries, Colombia and Argentina, I've talked about Argentina and in addition to what we have in Vaca Muerto already in the two concessions. I mentioned we're talking to operators in the region, constantly, Martin and Tommy on the ground and Nacho and myself, we hold, frequent conversations with operators to optimize, but we also, hold, conversations on potential opportunities going forward, and we mentioned this at the, investor day.

We're focused on what we have right now. We will remain very disciplined in terms of allocating capital and ensuring that everything that we bring into the portfolio has value with it. But there's a lot of opportunity, when you think that only 10% of the basin in Vaca Muerta has been developed, it's, I think, clearly a world class basin for.

Or unconventionals, so that's that. And in terms of Colombia, I, I'd say and I highlight a few things and Martin and Rodrigo gave us some of the good news around performance today, which is great, as operator of Llanos 34, we're performing very well, but again, for example, Danielle, only 30% of Llanos 34 is covered with water flooding. We've increased the level of water floods. We've been very successful with shutoffs and redirecting the water. And even with a newly updated model of the field, we have a lot more data in terms of where to put the water and what are the expected results.

So Llanos 34, I think, provides a lot of additional optionality. And an upside in that sense, and I'll just say, it's, that's why Danielle and I know you were very respectful of not talking about politics, but I think that's why unanimously the board rejected the offer of $9 per share because it failed to reflect, growth prospects, our portfolio that's diverse. And it's not in the best interest of shareholders, but clearly Llanos 34 has a lot of legs still in it. That's the point I'm making. And then if you look at Llanos 123, and I mean great news, a field that's producing 5,000 barrels in just 24 months, it's great, it's a great story. And guess what? There's a lot of functionality, and we're doing exploration and appraisal activity and there's full alignment with our partner, which is great.

From a technical point of view, from the intent to conduct more activities in that sense, CPO 5 is doing very well, very well.

We have a great relationship with ONGC. They're doing, they're conducting their operations very well, and it's actually performing above plan. So I, I'd say, Danielle, that in that sense, having a portfolio that is in the two countries, Colombia and Argentina, and it's diversified in terms of conventionals and unconventionals is great.

And again, we see that in the upcoming year or so with some potential changes in government as well, a government that's more prone to activity that can only help our long-term plan be more robust or even more robust than it is today.

I don't know, Jaime, if you want to add something.

Thanks, Felipe. Well, perhaps the, I, I'll just delve a little bit deeper on the technical aspects of how we, go about capital allocation. Those of you that have, been following us, and saw our presentation and the investor, they probably will recall, our capital allocation matrix, right?

And if you remember that capital allocation process basically it's all geared to. Towards driving value maximization, right, we consider aspects such as NPV, break even, capital efficiency, but to your question, Danielle, we of course consider risk and time to market, and we do it in a very intentional way, right, to make sure that things compete. And this is probably not the right time to give you a specific indication of the expected NPV of Vaca Muerta and of our other assets, but what I would say is that our portfolio allocation process is designed to deliver competitive returns, double-digit returns at a 15% discount rate, okay, and at a $60 brand price. So, if you use those parameters of a 15% discount rate, $60 brand price.

Delivering double-digit returns that kind of gives you an indication of the sort of strength of the portfolio that we have at your Park and that we are building in Argentina. I think the other important point of note to mention is, of course, that given the recent elections in Argentina and the outcome of the recent elections in Argentina. Clearly the 15% discount rate seems quite stringent, given how, the risk in Argentina is evolving.

So we are very comfortable around the value accretion of the assets, given the rigor that we've had in the capital allocation and in the recent developments that we've had there.

Thank you. Thanks, Jaime, and Daniel, before I turn it over to the next question, just want to highlight and first thanks for the question that, as we've mentioned in the, recent, investor day and everything else, we have a plan that's robust. We have a strategy that's robust in terms of, building in Colombia, and I've mentioned, a few of the. Additional things that we're looking at and I'd just like to go back to being very efficient you know and very focused in terms of how we conduct our our operations and the the fact that that long-term plan.

Includes Vaca Muerta, the concessions, and that's accretive as well, and it builds on what Jaime was talking about and Daniel, in the next few weeks we'll be presenting the work program and budget for next year that will reflect this view on our strategy and how we deploy capital to ensure that we continue to bring a creative opportunities and we continue to provide value to shareholders. Thanks, Daniel Guardiola.

Thank you.

Vicente Falanga Neto, Bradesco.

What are the risks related to your polymera injection project in Llanos 34?

What could go wrong? What are the key operational milestones in terms of well, results for the Geopark to de-risk its Argentina operations?

Thanks Vicente and I'll ask Rodrigo to talk about some of the aspects around polymer injection.

Vicente Falanga, thank you.

For the question. As polymer flooring is a proven technology with a solid track record, not only here in Colombia but also globally. So, in particularly in Llanos. So, in the neighborhood, we have some good examples. So, it's a proven technology. It's the first message I want to deliver here. But obviously, there are certain risks that we have to manage during the implementation of this technology. The risks are related with sub-surface uncertainties, operational execution, economic sensitivities, but all of them are considered in the plan that we have. So that's why there are, I think, 22 key elements in order to face this, those risks. The first one is related, how are you going to implement the project. What we think for the near future, actually for the present because we are working on it, is phase the implementation in different kinds of phases. So, we are going to start this year, at the end of this year with 2 wells. We expect to finish next year with 9 wells in terms of polymer injection in Tigana field, and we see about 30 patterns for the full development for Tigana, for Haka, sorry.

Actually, we are working in something that is new for the development plan. It is in Tigana because at the moment we have no injection, polymer injection in the north as well, and we are designing that project to include in the development plan as soon as possible. The other thing that I consider as critical is the talent and the people. So, we hire experience, we hired, the last year, we hired experienced people coming from other parts of Colombia. They have been injecting water in the Janus Basin for the last 10 years. That's the same with polymer. So, we consider we have the expertise in place. We're working very seriously because polymer fraud is one of the key elements. In the development plan for the field, it's not the only one. It's one of those elements that we have in terms of maintaining the production of this big field. So that's why we are very excited about the project. We believe that we have the capabilities to implement in the right and successful way, and that's what we are doing right now because we expect in a couple of months to have the first well injecting polymers in the area.

Thanks Rodrigo. And in terms of operational milestones of what results for de-risking operations in Argentina, Martin, yeah.

So, Vicente, thanks for your question and let me start by saying that, in terms of the milestones on well results, if we look at the two blocks that we acquired in Lomajariosa, and in Puesto Siro este, we're surrounded by active tacamorta development.

And within the blocks, as I mentioned before, Lomajarioeste has 6 wells that are already drilled and on production, and so from a sub surface, the risk that we see is low.

And when we look at the activity that is coming and the drilling risk and operational risk, let me mention these two things. First one is when we start drilling, we have the advantage that we will start with a pad that has been partially drilled. The pad number 10,030 has 5 wells that have been drilled. Out of which two wells are fully drilled, they're just waiting on the completion, and the remaining three only need the last section, which is the horizontal, which would be around 2,500 m of the horizontal drilling. So we will start with with the drilling operations that are not going full on one path from zero. And then the second comment is, one way to make sure that we're de-risking is our team, and we have a very solid team, that we had in place and we have completed, and let me give you a little more flavor of what I mean. We have some of the folks that are now, in Argentina operating these blogs. We're already being part of the previous deal that we had as Seis and so one year fully engaged as a secondee in different roles.

And prior to that, some of these guys and these men and women were working in companies like Chevron, like YPF, like Pan American Energy. So our leaders in the ground in Argentina, they have each of them in the order of 10 years of unconventional experience both in Argentina and in the US. So with that team we feel that, we can go about de-risking the operations.

Properly.

Thanks, Martin.

I will add something. Yes, I would add something related with the sub-surface perspective. The blocks are geologically proven, so the reservoir and the oil is down there. So, there are a couple of elements that support our confidence there. First of all, the previous operator in Lomajarillosa drilled 6 wells, so we have a lot of information coming from that, subsurface database. Then we have, we build a technical.

Understanding and and we can share it with all this information, at least for the no blog we have a very robust development plan with that information. At the same time, in Argentina, the production farewell is public, so we can analyze all the neighborhoods. Actually, we did that. And the expectation that we have in terms of well type is 1.1 million and 1.3 million barrels per well for the full life of the wells. So that's plenty in line with the neighborhood. So that's another topic, or at this point that adds confidence to our analysis.

The third point is we have been for a year working with phoenix in the south of this area and we have the experience in Confluencia Norte. So Confluencia Norte support our understanding of Puerto Silvia Ete Oeste and Ete, sorry, and that's why we believe that in terms of risk and manage the milestone for coming, we are very solid with the development plan. So that's my contribution related with the soft surface. Thanks.

Rodrigo. Thanks, Vicente.

Do we have any more questions on the line?

Isabella Pacheco, Bank of America.

Hi team.

Thank you for taking my question. It's just a quick one.

How much do you expect the Vaca Muerta acquisition will add to your 4Q25 production?

Thank you.

Martin,

yeah, so the, Isabella, quick answer for the 75 days that we will have a Vaca Muerta on production, it's going to be in the order of 1,400 to 1,600 barrels of oil per day for the quarter.

Thanks Martin. Great, thanks Isabella.

Do we have any more.

Thanks.

Alejandro Demichelis, Jefferies.

Yes, thank you very much for taking my question. Just, I know you, you're not going to be talking about products and so on, but maybe you can give us some indication of the rationale for keeping the poison pills still in place at this moment.

Thanks Alejandro and good to have you on the call today and yeah, I'll give you my view on the poison pill, and this is something that We discussed at the board very early on. Remember, I joined earlier in the year June 1st.

And if you look at this from a shareholder's perspective, and this is part of the conversations we had at the board, we want to ensure that anybody who wants to acquire equities of a company or shares of the company and wants to build a position it fully reflects a premium in terms of the purchase of those shares.

When the acquisition and at the end of the day, Alejandro, what we're looking for is for the right value, the right premium to be acknowledged, and at the end of the day it's something that would benefit all of the shareholders across the board.

Yeah, I guess what what I would add Felipe to to this is if we look at the at the recent events, we've had, a shareholder accumulating a position that has been basically capped in in the market conditions, right? And I would argue that it's actually enabling the conversation that we're having now which which is in the benefit of all shareholders, which is, what is the premium over market price that's going to be recognized.

So now more than ever the poison pill makes sense and that's why we are supportive of keeping it.

Thanks Jaime. Thanks, Alejandro.

Thank you.

Very much. Thank you.

Thank you. We currently have no further questions, so I'll hand back to Felipe Bayon for closing remarks.

Thank you so much and again, thanks everybody for being here in the call today, and for your interest in the company. Very thrilled with the performance we've had in 3Q.

It's a very solid set of results. You know that we've presented to the market in terms of our operations, our cost efficiencies, dealing with the reservoirs and ensuring that we maximize value. So I'd like to acknowledge the teams, that day in and day out are actually supporting these results.

So very thrilled with that, very happy with how the results are coming out and that we've presented to the market and the last thing is.

We had a, the road show and the, investor day a couple of weeks back where we looked at our strategy going forward, and then maximizing value in Colombia through a very robust plan that's in place, with, incorporating all of those efficiencies and technology and innovation and also the work that Rodrigo was mentioning around. Exploration and appraisal and looking not only around new technologies and enhancing operations but also around new opportunities in country and on top of that a value accretive transformational strategic acquisition in Vaca Muerta. And those two in conjunction provide a very solid outlook in terms of value creation and maximizing value for shareholders. So thanks again everyone for being here on the call today. And again I'd like just to thank the team, the Geopark team, for everything that they do. Have a good day.

This concludes today's call.

Thank you for joining. You may now disconnect your line.