Good morning and welcome to the GeoPark Limited Conference Call following the results announcement for the Fourth Quarter Ended December 31, 2019. After the speakers’ remarks, there will be a question-and-answer session.

[Operator Instructions] If you do not have a copy of the press release, please call Sard Verbinnen & Company in New York at 1(212)687-8080, 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 may be accessed through this webcast in the Investor Support 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 Legislation 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 the forward-looking statements but are not intended to represent a complete list of the Company's business. All financial figures included herein were prepared in accordance with the IFRS and are stated in U.S.

dollars, unless otherwise noted. Reserves figures correspond to PRMS standards. On the call today from GeoPark is James F. Park, Chief Executive Officer; Augusto Zubillaga, Chief Operating Officer; Andrés Ocampo, Chief Financial Officer; and Stacy Steimel, Shareholder Value Director. And now, I'll turn the call over to Mr. James Park. Mr.

Park, you may begin..

Thank you, and welcome everyone. We're joining you this morning with our executive team united as ever in our efforts as currently physically separated and calling in from our respective homes and locations in Bogota, Santiago and Buenos.

At the outset, we would first like to express our profound gratitude and admiration for the GeoPark women and men who are working day and night pushing us through this downturn and continuously making our company perform protecting our shareholders and positioning us for the new world on the other side.

Across six countries, our team moved with quickness and agility to protect the health and safety of our employees, contractors and communities and ensure that our hydrocarbons keep flowing to the market.

With greater logistical support, our office staff could be moved to work from home but our field operations require men and women to be onsite and have their hands on the iron. Our field teams again proved why they are the backbone of our company.

Before opening up to questions, let's please look at four elements of our business during this first quarter. Firstly, our teams continue to drive performance with solid results including record production of 45,700 barrels per day, representing 16% growth compared to last year.

Strong cash generation with an adjusted EBITDA of $78 million and late capital efficiency with $2.3 generated for every $1 invested. On certain higher cost mature projects within our portfolio, we took non-cash accounting impairments of $97.5 million which made us record a net loss of $89.5 million for the quarter.

Secondly, our team moves lightning fast into battle mode for the arrival of the global pandemic, the collapse in the world economy and the flooding of the oil markets with unneeded and unwanted barrels.

In addition to quickly protecting the health and safety of our teams and contractors, we worked with our neighbors and community to keep them informed of operations and risks and provide them with safety medical and food supply particularly for the most vulnerable.

Following our tested business model and track record, our seasoned team simultaneously attacked every component and dimension of our business. So far, more than $280 million of capital and cost savings have been implemented across the board with more coming.

This included reducing our self funded work program by 75% to $45 million to $50 million focusing on our most strategic assets like the Llanos 34 and CPO-5 blocks in Colombia, and other savings such as voluntary salary and bonus and board.

We also temporarily shut in 6500 and 7500 barrels per day at higher cost reductions to preserve cash and shareholder value resulting in higher cash flow with less CapEx. This also helps us minimize activity and the potential spread of the virus in the field and in our surrounding communities.

It is expected that this reduction can be readily brought back on stream without suffering mechanical delays or reservoir damage. Thirdly, the underlying strength of our assets and key characteristics of our company provide a foundation to protect against and endure through this and other crises.

Additional tools in hand include a strong balance sheet with $165.5 million of cash and safety net funding alternatives such as a $75 million oil prepayment with $50 million committed and $130 million in uncommitted credit lines providing us with financial flexibility and liquidity if needed.

GeoPark’s long-term debt profile has no principal payments until September 2024. And Standard & Poor's and Fitch both recently reaffirmed our long-term corporate credit rating at B plus.

We’re also aggressively protecting our base oil price by effectively using hedges, with approximately 26,000 barrels per day and only 70% of our oil production hedged in the second quarter and so far approximately 17,500 barrels per day and the 11,000 barrels per day in the third and fourth quarters respectfully.

As a long-term opportunity driven company working in the most attractive hydrocarbon region today, we’re looking ahead with excitement to the recovery and taking this opportunity to streamline and improve our overall business and more strongly position GeoPark for continued economic growth and success.

As always, we’re protecting critical people tools and capabilities for the short, medium and long-term and our flexible work programs, operational agility, and big inventory of organic projects allow us to quickly expand our investment plan as prices begin to recover with the first step up $35 plus Brent.

We got a head start in this recovery effort by already closing on and integrating into GeoPark the Amerisur Resources acquisition during January.

This gave us additional important low cost production, reserves and high potential acreage adjacent to and on trend with the Llanos 34 block and our new entry into the Putumayo Basin with production reserves, a pipeline attractive exploration acreage, and a new partnership with Oxy.

In addition, we went to the capital markets in January and raised a $350 million bond, which was oversubscribed more than six times by top tier investors and achieved the lowest interest rates ever for a single B rated company in Latin America. Thank you and we would be pleased to answer any questions you may have.

And please be patient as we try to coordinate our question answering with our team located across the continent today..

[Operator Instructions] The first question will come from Robin Haworth with Stifel. Please go ahead..

Hello, thank you very much for taking my question. And just a couple of questions, if I may, and just on the CapEx budget - and I should be interested to know what was the last thing that came out of the capital budget that was to say - what is the highest returning opportunity in your portfolio that you're not able to do in the current environment.

And secondly on the - I guess capital budget implies that you see kind of pretty much all drilling programs from now on given that you spent a large proportion of the 2020 budget? And so, when should we start expecting to see underlying declines in the portfolio, ignoring the shut-in barrels obviously.

And then thirdly and finally and a bit more strategically, and in terms of taking advantage of this downturn, and - do you have a wide footprint, would you be expecting to use this downturn to add to the footprint or would you be expecting to use it to kind of slim down to your core Colombia asset base? Thank you..

Thanks very much, Robin. Thanks for the question. Can you hear me okay? This is Andrés..

I can hear you fine. Yes thanks, yes right..

So the first question about CapEx, not sure if I got it right. But we are estimating roughly our CapEx now for the year to be more or less $45 million to $50 million and that you saw in our release most of that - as you pointed out, most of that has already been invested. So really what is remaining is very limited around $5 million per quarter.

Maybe in some quarters we may go up to $8 million. But in this context of high volatility in some cases we're not even lifting some wells that goes down because of either a pump failure or things like that, which are pretty common and day-to-day business.

So I would say our CapEx has been - compressed down to below what we would call a maintenance CapEx. We're not - it was just [one work on a reading down] the report are working today, putting back one well on stream. And we'll release that rig even after that job is done particularly or mainly because of the high volatility oil prices.

I mean Brent was probably in the 20s - some days ago today it’s up 30. So the swings are pretty significant. So it is uncertain how fast or how well we could achieve any returns on any of those investments. So to when we could be thinking of starting to invest again, luckily we don't need level over 40 or anything like that.

I think we mentioned in the introduction with oil prices firmly about at $35 or higher, we're ready to go back to work. So hopefully, as soon as that happens or there is some clarity in the market that will be at - that that will happen and will be the same, then we're ready to start putting or adding back investments into our portfolio.

I don’t know if that answers your question about CapEx..

Yes, it does. Just I guess to clarify, and I was also asking about the difference between your old CapEx guidance of 70 and now sort of 45, 50, that $20 million or $25 million.

What was it that's come out there and - what was the first thing that you do in the event of a slightly high OpEx?.

So some of those were - some activities that we have like facilities - building facilities, some workovers we have planned. We have around 6 or 7 workovers that we postponed or delayed. There were some seismic works that were still on the budget. We also had some other activities for licensing things like that.

No work, I mean the previous budget or $70 million budget already having [nobody shares our promise] only maybe one or two wells in CPO-5. So in this case, we're just having no new wells and also some activity in Platanillo.

Those are the type of things, most of them with the exception of the workovers, most of them have no immediate production associated to them..

Okay, thanks..

With respect to the declines [indiscernible] we are shutting production and we expect that shutting production to counter balance the impact of potential declines. So really, the production we're - seeing in more or less flat throughout the year. But it will depend on oil pricing.

So if you assume a $30 Brent for the year, the production will remain with the exception of the second quarter will remain more or less in the levels of 40,000 barrels a day per quarter. So you shouldn't be seeing declines because the shutting wells would compensate for that.

In the second quarter in particular is when we have - today we have more or less 6,500 to 7,500 barrels a day shutting. And the guidance we gave in our release, we're estimating that those are put back in July at the beginning of July. So that means that those barrels are out for the full quarter, but that is not what we expect.

Hopefully, we will be able to bring those wells back on. Actually at today prices, it is very economic to put those wells back.

And by that I mean this 30 Brent with a $6 dollar differential on Vasconia that means $24 effective price in Colombia most of those barrels that are shut-in, generate quite some cash flow on those levels, more than - let me see almost $10 per barrels could be generated from those.

So at these prices we would consider bringing them back, but as you probably know, it's not so easy to put I mean, you cannot be shutting in and shutting down wells every day.

We would need some more clarity on how sustainable these budgets are, and it could be comfortable that both will remain, be sure that we'll bring those barrels back on production. So if we assume that those barrels are not back on stream until the end of June.

Then production for the second quarter will be in the levels of 35,000, 36,000 barrels a day. If you assume that they are put back on production at the beginning of June, it would be more closer to 38. And then for the rest of the year it would be around 40,000 barrels a day per quarter probably flat.

And I don’t know if that covers your decline point and then..

That’s very clear..

From a strategic aspect obviously, the most profitable and the most - the biggest cash flow generation for the company is even - particularly in this market is Colombia. We're concentrating our mill activity in Colombia particularly in Llanos - mainly in Llanos 34 and CPO-5, and we expect that to be the case.

We are significantly reducing or basically not investing in Peru as you saw in the interim in this environment is not economic. In particular in Chile and Argentina we also did some internals related to the oil asset because of the scenario. We still believe it is the right time to be looking for opportunities.

So we will keep our eyes open, and we look at the market. Obviously raising capital in this market is very tough as well. So you know, we were probably concentrating more in Colombia at this time, but never closes or to any opportunities that may show up in such an attractive market for us exactly.

So, and I don't know if that's the point you were referring to..

[Operator Instructions] The next question will come from Stephane Foucaud with Auctus Advisors. Please go ahead..

Two questions from me, one the supply and the clarification. So from what you said - I think you said oil price remained at $30 a barrel until the end of the year. There won't be really any additional exploration well in Colombia at CPO-8.

My second question is around, I was surprised by the netback which is basically your total netback - it’s basically production is lower, its operating netback is basically unchanged or even a bit up? So my question really is where - what has changed, the G&A have come down this is probably not increasing your present impact.

So is that you are forecasting, lower OpEx, lower transport costs, or is it simply because you're seeing better differential? Thank you..

Good morning Stephane, could you please repeat the first question, I have the second clear, but can you repeat the first one? I did not understand the line is a little noisy..

It was just a clarification that at $30 a barrel we should not expect any further exploration drilling, which I think was the question following I just make sure I got that clear, no more exploration during a $30 barrel until the end of the year is that correct?.

Yes, that is correct. We now have - its $30 case, we're not anticipating any exploration drilling, but maybe something in CPO-5 but and it wouldn't be significant amount of capital. For CPO-5 we're keeping maybe one operator well on the total well to increase production.

And maybe one exploration well, but all those together would account for more than $3 million net to the impact, until it's unlikely that we will do it. So I wouldn't consider those, unfortunately unless until the end of the year. And then to your second question, your point is right. Yes the netback - your point is right.

Basically, even in a scenario where we're shutting in production although the production is lower, the netback is higher. Mainly there - and also if you take the actual operating cash flow if you factor in the CapEx that is also lower than the actual operating free cash flow is also much higher still.

The main impact there is the OpEx, it's a reduction on OpEx. Where not only our G&A has been cut down by almost 40% and also you need to include the fact in that analysis as we - we also took over a new company with its own G&A.

So if you factor in - that we are comparing to 2019 numbers where we didn't have that company then the cut pretty much higher. But in any case in the operating netback as you pointed out, the G&A is not included. But the main item there is OpEx, so we're cutting down our OpEx significantly.

In the new office we acquired for example in [indiscernible] or in CPO-5 consolidated Amerisur was reporting $18 to $20 of our OpEx we're cutting those down to $10 per barrel in those group of others. In Argentina, in Chile, our office is down 50%. We're targeting around $9.5 per barrel and last year I think we reported something closer to $20.

In Argentina we’re cutting down around 40% of OpEx and then in Colombia - in the other assets in Colombia it is down by around 20% to 25%. So although reductions are generating the better impact of the - on the networks..

And as a follow on, did you say some of those OpEx reduction as being structural or would you see that coming back as soon as the price come back?.

Some of them are just pulling jobs and things like that, but most of them are structural changes. Either renegotiating contracts or redesigning operations or things that are thinking in that sense. But most of the reactions are permanent, efficiencies that we achieved..

[Operator Instructions] We do have a question from Ian Macqueen with Eight Capital. Please go ahead. Ian, your line is open..

So I'm just wanting to know about shut-ins and where they're occurring. I know you have 100% operated production in Chile and Argentina, but you have partners in Brazil and Colombia.

Can you give us an idea of the Boe's per day that are going to be shut-in in Brazil, Chile, Argentina, and then in Colombia where they would be shut-ins, whether it would be Llanos 34, CPO-5 or Putumayo? Thank you..

Absolutely, so the shut-ins more or less the breakdown of those roughly 7,000 or so barrels a day. In two days, around 500 barrels a day related mainly to the oil production. The gas wells are still flowing with some small competency that comes along with that. In Argentina it’s roughly 200 barrels a day related to also the oil assets.

In Brazil, on the oil is 150 barrels a day, which is the one oil field that we have there and some small oil that is produced by Manati. And then in Colombia is more or less a thousand barrels a day or so related to Platanillo and Putumayo production, and then Llanos 34 net of GeoPark is something around 5,000 to 6,000 barrels a day, more or less.

And that is related to mainly the smaller fields. The higher worker fields like [indiscernible] and those type of fields. And then the most recent ones, which we did this quarter were related [indiscernible]. So those are mainly the words that are shut-ins right now in [indiscernible] 5,000 to 6000 barrels a day..

And to give you an idea of things [indiscernible] 10,000 barrels a day or so, and what are that represent almost a 100,000 barrels a day of water. That's why the impact of these wells on the net bucket is much better. Is almost an average shut-in production with a 90% water..

At this time, I would like to turn the conference back over to James Park for any closing comments..

Thank you everybody for your interest in GeoPark and your continued support of our company. Once the world's borders begin to open again, we encourage you to please visit us at our operations in each country and call us at any time for more information or comments. Thank you. And please stay healthy and strong..

Ladies and gentlemen, thank you for participating. You may all disconnect..