James F Park - CEO Augusto Zubillaga - COO Andrés Ocampo - CFO.

Diego Mendes - Itau Securities Gustavo Gattass - BTG Pactual Filipe Dos Santos - JP Morgan.

[Operator Instructions]. Good morning and welcome to the GeoPark Limited's Conference Call following the results announcement of the Fourth Quarter and Full year Ended December 31, 2014. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder this conference is being recorded. I you do not have a copy of the press release, please call Grayling in New York at +1646-284-9400 and we will have one sent to you. Alternatively you may obtain a copy of the release at the Investor Support section on the company's corporate website at www.geo-park.com.

A replay of today's call maybe accessed by dialing in on the numbers provided in the press release or by accessing the webcast in the Investor Support section of the GeoPark corporate website.

Before we continue please note that certain statements contained in the results 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 protection 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 risks are intended to identify certain principle factors that could cause actual results to differ materially from those described in the forward-looking statements, but are not intended to represent a complete risk of the company’s business. All financial figures included herein were prepared in accordance with IFRS and are stated in U.S.

dollars unless otherwise noted. Reserves for years correspond to PRMS standards. Joining the call today from GeoPark is James F. Park, Chief Executive Officer; Augusto Zubillaga, Chief Operating Officer; and Andrés Ocampo, Chief Financial Officer and Pablo Ducci, Capital Markets Director. And now I would like to turn the call over to James Park. Mr.

Park you may begin..

Thank you and good morning everyone. A year ago GeoPark joined the New York Stock Exchange with our IPO and since that time we have done what we said we would do with record operational, financial and strategic accomplishments in 2014.

Bolstered by the discovery and development of the Tigana and Tua oil fields in Colombia, GeoPark’s total production increased by 20%, 2P reserves are up 74% and our EBITDA is up 32%. These numbers include our new move into Peru, our 5th country platform with the acquisition of the high potential Morona Block.

Importantly and despite a more than 50% drop in oil prices our net present value per share also continued to increase. We salute our team in GeoPark for extending our growth record for the 9th consecutive year.

This track record of results, coupled with our conservative risk managed history and our large diversified asset portfolio has successfully positioned GeoPark to manage through the current turbulence in our industry.

We began 2015 with $130 million of cash, 20,000 barrels per day of production, a 2P reserve base of over 120 million barrels, valued at $1.7 billion, a big upside exploration resources potential approaching 1 billion barrels, a long-term maturing debt profile, and a large number of attractive and largely discretional projects, both oil and gas in multiple countries.

This foundation, scale and diversification allow us to protect our balance sheet and preserve capital during the current oil price downturn by adjusting investment activity and selectively allocating capital to the optimal projects.

With the same discipline, agility and creativity that has built our company up from scratch we have quickly responded to the new pricing environment with decisive and necessary cuts in our work programs, operating and administrative cost structures and workforce, including shutting underperforming fields and renegotiating obligations and by pivoting and focusing on the lower risk, higher net back, quicker cash flow producing projects within our portfolio.

As a result our company is prepared to successfully work through the new lower oil price environment and to show we can still continue on our steady upward growth path.

Before turning the call over to Zubillaga for operational highlights, as also announced this morning regarding corporate matters we express our sincere thanks to Steve Quamme, who has stepped down from the GeoPark Board of Directors after five years of valuable service.

We know we can continue to rely on Steve’s strong support of GeoPark in the future. We are also pleased to announce that Mr. Robert Bedingfield of Washington DC, a respected senior former Partner of Ernst & Young and recognized SEC financial professional has joined GeoPark’s Board of Directors and become our Chairman of our Audit Committee. Thank you..

Thanks, James, and good morning to everyone. GeoPark’s 2014 operational performance has five key milestones. One, oil and gas production; two, reserves; three, upside potential; four, operational safety; and five, new project acquisitions.

In terms of production in 2014 we grew 20% with average production over 20,000 barrel of oil per day and a total of 7.5 million barrel of oil produced. Much of our new growth came from continuous production of Tigana and Tua oil fields discovered and operated by GeoPark in the Llanos 34 Block in Colombia.

Tigana is one of the most significant discoveries in the Llanos Basin in recent years and which may open up similar play type in the region. In January 2015 we successfully tested the Tilo well, our 16th discovery in the Llanos 34 Block, with a production [ph] rate at 1,000 barrel oil per day.

For further technical evaluation we will be undertaking to determine if the Tilo field is potentially a Northeast extension of the larger Tigana Field. Our reserves were certified by DeGolyer and MacNaughton at the D&M for year end 2014 [end] [ph]. Total net 1P reserve increased by 116% to 62.9 million barrels.

Total net 2P reserves increased by 74% to 122.3 million barrels and the reserve life index is 16.3 years under 2P basis. The DeGolyer and MacNaughton report also confirms the underlying value of our assets with a 2P [indiscernible] net written value of $1.7 billion and a 3P NPV of $3.3 billion.

This represents increases of 32% despite the big oil price drop. Now talking about upside exploration resources, those were assessed by our team in our 31 blocks across five countries to be 600 million barrels to 1.3 billion barrels of oil and which are being audited by an independent firm.

This represents a tremendous resources platform consisting of multiple projects and lease of different risks and sizes to support growth in the short, middle and long term.

Also our solid track record in term of safety, environmental protection and respect for our neighbors represent a key performance measurement and point of differentiation in the regions we operate.

In terms of new projects we acquired in Peru with the Morona Block which has discovered oil filed and high exploration potential; in Colombia with an attracting block on trend with our Colombian [general] [ph] play and exploration block in the lower Magdalena Valley; and in Argentina with two blocks in an underexplored region of the Neuquen Basin.

So let's now look at 2015 and our future. But the focus today is our cost and we have responded quickly to the new low oil price environment.

Five key actions includes, first, reducing our [indiscernible] capital investment program by 75%; second, reducing operation, production and selling cost by 30 plus percent; third, reducing workforce by 33%; fourth, shutting in marginally economic fields; and finally, renegotiation of commercial agreements and obligations.

This is an ongoing process and we see the opportunities for doing more and finding more cost savings. Our plan for 2015 is based on oil price assumption of $45 to $50 per barrel and represents a fully funded $60 million to $70 million work and investment program with a pledge to fund [ph] production growth over 2014 production levels.

The bulk of this 2015 work program is targeted to further develop and produce GeoPark Tigana to our fields in Colombia, which currently provides a lower risk production and with growth opportunities with attractive operation net backs, which are $15 to $20 per barrel at $45 to $50 oil prices.

The 2015 work program breakdown approximately as follows; Colombia is $35 million to $40 million in new drilling and facility construction; Chile with $5 million to $8 million in well workovers and facility constructions; Brazil with $6 million to $7 million in the Manati compression plant installation and seismic processing; Peru, $8 million to $9 million mainly in environmental studies and facilities; and in Argentina with $3 million to $4 million in seismic studies.

We are quickly taking the steps necessary to manage through the new oil price environment and concentrate on the projects that will sustain our growth throughout the year. So now I will turn the call over to Andres..

Thank you Zubi and good morning everyone. As mentioned we have closed another record year in all of our key indicators, thanks to our continued strong operational performance.

In 2014 we completed a work program that included drilling of 51 wells for a total CapEx of $238 million, which led our production to grow over 20,000 barrels a day as Zubi described.

As a result of the increased production base our revenues increased by 27% to $429 million and adjusted EBITDA increased by 32% to $220 million, which allowed us to self-fund our CapEx for the year.

Net profits amounted to approximately $16 million after $100 million of depreciation charge, this is around $13 per BOE similar to 2013; $30 million of exploration write-offs, $9.4 million of non-financial assets impairments, related to the impact of the oil price decrease in La Cuerva field in Colombia.

La Cuerva is a field that is located in a more remote area and requires higher transportation and logistic expenses; then $51 million of financial costs, which include $29 million of interest expenses, $19 million of foreign exchange difference charges, that are related our dollar denominated debt under our Brazilian subsidiary; and finally $13 million in income taxes and other expenses.

With respect to the fourth quarter results the net revenues and adjusted EBITDA were impacted by the decrease in international oil prices, despite the strong production increase, and amounted to $81 million and $27 million respectively.

In terms of net profits we recorded a net loss for the quarter of $34 million as a result of the lower EBITDA, which was also impacted by non-cash expenses such as depreciation charges for $28 million, exploration write-offs for $22 million; the impairment related to La Cuerva and financial results of $19 million.

With respect to our balance sheet, at the end of the fourth quarter we had a total cash position of approximately $128 million. Our total assets amounted to $1 billion, while our total financial debt was of $370 million, including the $300 million bond that is due in 2020 and the $70 million credit facility with the Itau Bank in Brazil.

We have recently reached preliminary agreement with Itau to extend the $15 million maturities that were due in 2015. The final documentation for this is expected to be signed very soon. Our equity reached $479 million, primarily related to profits recorded in the year and the net proceeds from the New York Stock Exchange IPO in February 2014.

And finally as of December last year, the company's gross leverage ratio continues to decrease, reaching a level of 1.7 times or 1.6 times considering pro forma figures. Additionally our interest coverage ratio for the year reached 7.5 times.

Looking now ahead into 2015, and following our risk management approach, there are four main elements that allow us to succeed in these new tougher oil price environment.

First, and as we mentioned, we have a strong balance sheet with high liquidity, a $128 million of cash in the bank and our unused credit facilities for approximately $60 million, financial discipline and a track record of raising new capital through -diverse some resources.

Second, we have a long-term maturing debt with 80% of our debt maturing in 2020 and no material short term principal payments that are coming due, that is subject to in cash covenants that is coming in the high yield bond indentures which as opposed maintenance covenants means that in the event that financial ratios are not met it would not trigger an event of default.

Third, our high production base as Zubi mentioned, from which around 25% represents cash derived from our intensive drilling activity allows us to continue generating cash flows even with reduced CapEx activity and with lower oil prices.

And finally with our flexible and self-funded work program, our 2015 budget was designed to protect our cash and liquidity and maximize optionality to have CapEx matching our EBITDA generation. GeoPark’s business units in Colombia, Chile, Brazil, Peru and Argentina generated over 85 attractive projects to be considered for this work program.

Those projects were evaluated and ranked on a company wide basis in accordance with economic, technical and strategic considerations. Having this wide and diversified project inventory allows us to add or delete new projects in accordance with the movements in the oil price.

So finally we were able to allocate $60 million to $70 million to the lowest risk and highest reward projects, reducing our CapEx by 75% from nearly $240 million in 2014. So thank you and I would like now to please ask the operator to open the call for questions..

Certainly. [Operator Instructions]. Your first question comes from the line of Diego Mendes with Itau. Please proceed with your question..

Yes, guys. Good morning. So I have three questions. The first one is that you mentioned you are working to lower the cost. So I would like to know when are we going to see these on the results.

If you also could tell us how much the cost are going to drop and how open are the suppliers to reduce their cost? The second question is regarding the impairments, what was the oil used to impair like [indiscernible] and also you mentioned that you shut down some oil fields because of the lower oil prices.

So I would like to know what part of the field that you shut down? And the last one is how confident based of course on the data that you have so far, that Tilo is connected to Tigana, if you could give us, let’s say some probability, given the data that you currently have?.

Thank you, Diego, this is Andrés. The first question you asked with respect to our cost reductions. Most of, we started implemented all the measures starting in last quarter and this first quarter. So you will start showing or you will start seeing impact of those reductions probably on the second quarter of this year, throughout the rest of the year.

In terms of general idea on the site, first this is an ongoing process and we continue to work on making our operations more efficient and reducing cost all across the company. So we are targeting generally between 20% to 30% improvement in our cost structure across the company. And the last part of your question was with respect to suppliers.

It’s been a diverse feedback, I would say, but in general suppliers are being -- recognizing the new environment in the industry and we have not, I mean of course we have many renegotiation of contracts and discussions but we haven’t had -- we have been able to succeed in renegotiating all of those.

So suppliers have been accepting the new environment and have been able to continue operating under new conditions with improved tariffs. The prices, your second question with respect to what prices we used to impair our assets, the curve, the exact price curve is in our financial statements.

We used three different curves, one more optimistic, one medium and one more pessimistic. We assigned a percentage to each one of those curves and they go from roughly $55 for the first year and increasing out for the following years.

We are also including in our financial statements some sensitivities to changes in that price curve and how it would impact our impairment tests going forward. So you can have a sense on how the impairments could change depending on changes in the oil prices. And your last question was with respect of Tilo. I will let Zubi answer this question. .

Okay, thanks. Well you asked about how confident we are with Tilo that’s connected to Tigana, we tested in January and right now we are waiting for the NAH [ph] revision to [indiscernible] long term test at that well on production. So we did -- our team feels pretty confident that Tilo is connected to Tigana.

Anyway we need more production [indiscernible] and technical evaluation to determine if it’s potentially connected to the big Tigana field. .

Okay. Thank you very much. .

I am sorry you asked also about the fields that we had temporary shut in. That is basically La Cuerva is currently shut in, in Colombia and Del Mosquito in Argentina which is, you may remember it's a very small field that was producing 50 barrels a day, that is also temporary shut in. .

Okay. Thank you very much. .

Thank you. Your next question comes from the line of Daniel Samson [ph] with JPMorgan. Please go ahead with your question. .

Yes. Hi guys. Good morning. I have a couple of questions. First can you repeat again what are your maturities for 2015? I think that you mentioned that you already refinanced some of the short term debt.

And then the second question just as a reference, when you look at your different businesses which businesses should we compare with Brent prices and which business to WTI? Thank you. .

Okay. Thanks very much. So the maturities in 2015 were $15 million relating to the $70 million term loan with Itau Bank. Those were refinanced and the documentation as I said is being, is finalized actually and is expected signature within the next few weeks, that's $15 million.

And then all of our business can be related -- all of our oil sales can be related to Brent because we sell oil in Colombia, that is the [marker] [ph] is Vasconia, that generally follows Brent and we sell the oil in Chile at prices that are following Brent as well, Brent minus discounts. .

Thank you. .

Thank you. And our next question comes from the line of Gustavo Gattass of BTG. Please go ahead with your question. .

Hi guys. I had a couple of questions here.

The first one with regards to the Peruvian assets, could you give us an idea of how the work program and potential for production fit into the revised CapEx program? Should we see anything at all this year or not and basically when we might be seeing some action on that front? I also wanted to just check with you guys if there is a chance that LG will join the project or not and whether or not that could turn out to be one of your more creative financing schemes that you mentioned on the call.

The second thing that I just want to check with you, was with regards to Tigana and Tilo, when you mentioned that you have the possibility of the connection and the conviction of the connection and between the two, I was wondering if you could just put it into perspective for us how much do you believe you can actually grow the production there in the event that they are separate and what does the consolidation of the two assets potentially mean for your potential for low cost production growth? So that's the second question.

And just with regards to the third point, you mentioned the ramp up in CapEx and potential ramp up in production that you see as a possibility. I was just wondering how quickly can the company implement that.

So if three months from now oil prices look very different, is it something that can only happen later on in the second half or is it quick to implement in the event that conditions improve. Thank you. .

Okay, thank you and good morning Gus. So first going to your Peru question, well, we are still working on closing on the transaction. As you know this acquisition has been signed, we haven't closed yet. So once that happens, which is probably going to happen in around mid this year or the second half of this year, we will start operating.

Currently the work program there is given this delay, we are going to be seeing probably the more active or more CapEx in Peru next year and probably the second half of this year. So in terms of production this is a long-term project but production is likely going to start coming in, after, probably I would say in early 2017.

We're really finding the projects in terms of the timing, even that there have been these delays in terms of the closing. So that's pretty much to be the idea. LG is analyzing its potential participation. It hasn't made a decision yet. It is a possibility that they could join us there. We are also looking to bring other partners.

We are also looking to other companies that may also join us there. But as we said before the idea for that project is to have partners. And your last question with respect to CapEx, it's fairly -- if the environment changes it’s fairly quickly that we can increase our activity.

Remember that the work program that we have designed includes drilling wells in the second half of the year, mostly in Colombia. So having a rig available and pulling back those investments back to work, it wouldn't take us very long time.

So in the event that both the prices go back to higher levels both the prices and the outlook of the prices, we could plug in more projects and increase our CapEx program. So your second question about Tigana and Tilo I would Zubi respond that. .

Hi, Gustavo, Zubi over here. So just to put in particularly [ph] we discovered Tigana oil field in December 2013, so in that time we have drilled eight wells there and they are in production right now. So their 2P reserve in just Tigana, and as mentioned gross reserves are 52 million barrels.

So you can see we have development opportunity to drill here 40 wells or more. And at Tigana I mentioned before we have to take some technical charges and put in production and see they are connected or not. So just Tigana the gross production right now is well is 12,000 barrel of oil per day.

So you want, your question was about how much we can produce from there. So I -- we can assume that we can produce more than 80,000 barrel of oil per day just in the Tigana field. .

Okay. Let me just do a quick follow up here.

Is it possible for you guys to tell us how many wells you're planning to drill in Tigana this year or is that something that you would rather, let's say not disclose?.

It is around four or five wells in the second half of the year. And remember this is, I mean this could change. This year we're doing is we're managing these decisions more frequently.

So this could go up or down, but currently that plan that we are showing and the numbers that you see the $60 million to $70 million program includes four or five wells in Tigana and Tua..

Perfect, thank you, guys. .

Thank you. [Operator Instructions]. Our next question comes from the line of Filipe Santos with JP Morgan. Please go ahead with your questions. .

Hey gentlemen, good morning. Just a [indiscernible]. Do you intend to return the blocks in Chile to the government after writing off some assets? And the second question is it's not very clear for me, the reason for the cost increased on the Colombia operations, if you could provide any additional data, that would be really helpful. Thanks so much. .

Thank you Filipe, right. So thank you. So in Chile we are continuing to operate there and this year we have a program that doesn't include -- so far doesn't include drilling but we have two gas projects that we are putting on-stream during the second half of the year. And we continue to operate there.

We're not planning to return those to the government. We are -- we seek our licenses there and continue to have plans to grow in the future. The blocks that maybe you may made reference are the Tranquilo, and Otway blocks which are the ones closer to the [indiscernible] that we drilled couple of years ago.

We just announced, I mean part of the write offs with this include $9 million related to those. Those blocks where we have no production or CapEx activity we may return back to the government. With respect to the rest we remain clear the Fell Block and Tierra del Fuego blocks we are not planning to return those.

And your second question was with respect to our cost increase. That is mostly related to the increasing production that will had a strong free capital production between last year and this year and that is, as we have been increasing our production base, so our cost base. On a per barrel basis you will find that our costs have come down. .

Okay thanks so much. .

[Operator Instructions]. And it seems that we have no further questions. I would like to turn the floor back to Jim Park for closing remarks. .

Well thank you all again for joining us today to discuss GeoPark's 2014 results and the changes and moves we've made to successfully operate through 2015. Please do not hesitate to contact us if you have any questions. Thank you and good bye. .

Thank you. This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation..