Geopark reports strong Q1 2026 results as Argentina growth drives production and hedging discipline

GeoPark (NYSE: GPRK) reported what CEO Felipe Bayón called a “strong start to the year,” citing stable production, improved oil pricing, cost reductions and progress on the company’s growth plans in Argentina during its first-quarter 2026 earnings call.

Production and earnings snapshot

For the quarter ended March 31, 2026, GeoPark produced an average of 27,249 barrels of oil equivalent per day from operations in Colombia and Argentina. Bayón said production was within 2026 guidance and above the fourth quarter of 2025, reflecting “stable base production, solid execution, and continued progress across our portfolio.”

Revenue rose 16% quarter over quarter to $128.4 million, supported by an 8% increase in sales volumes, including commercialization of deferred volumes from 2025. Adjusted EBITDA increased 54% sequentially to $71.3 million, representing a 56% margin.

Operating profit rose to $58 million from $20.6 million in the fourth quarter, while net income was $20.2 million.

Argentina growth remains central to strategy

GeoPark said it continued to advance its Vaca Muerta plans in Argentina, including drilling activity in the Loma Jarillosa Este block and ongoing infrastructure work. Bayón said Argentina is expected to become a key contributor to future growth, with production projected to rise from 1,430 barrels of oil equivalent per day in the first quarter to 5,000 to 6,000 barrels of oil equivalent per day by December 2026.

During the Q&A session, Bayón said the company drilled three horizontal sections ranging from about 2,200 to 3,000 meters, on time and on budget. He added that GeoPark expects to begin fracking the wells in June and plans to sign a contract in the coming weeks for a “factory drilling rig” expected to start in December.

COO Martín Terrado said GeoPark has completed six workovers since taking over the assets and has made progress across production optimization, environmental work, facilities, evacuation and drilling. He said the five-well pad at Loma Jarillosa Este is fully drilled and that more than 200 frac stages are expected over a 30- to 45-day period.

Terrado said production from the pad is expected to begin ramping around September after initial water flowback, with the company preparing water disposal infrastructure and an observatory well required by regulation. For 2027, he said GeoPark expects to drill and complete two pads with 10 wells put on production, begin drilling a third pad and bring a central processing facility online by year-end.

Colombia assets support base production

In Colombia, Bayón said the portfolio showed resilience. At Llanos 34, secondary recovery—particularly water flooding—supported production and helped mitigate natural decline and temporary operational factors. He said CPO-5 produced above plan despite social disruptions, while Llanos 123 production rose 13% from the prior quarter, supported by base performance and continued progress on the Bisvita water flooding project.

Pricing, costs and balance sheet

GeoPark benefited from Brent crude averaging $77.90 per barrel during the quarter. The company’s combined realized price was $60.40 per barrel, up from $54.80 in the fourth quarter.

Operating costs declined to $14.70 per barrel from $15.80 in the fourth quarter of 2025, remaining within full-year guidance. Bayón said structural costs fell to $4 per barrel from $5.60 per barrel in the prior quarter, reflecting efficiency and cost-control initiatives launched last year.

GeoPark invested $22 million during the quarter. The company generated $32.9 million in operating cash flow, fully funding the investment program. Cash at quarter-end totaled $274.9 million, after actions including $65 million in local debt raised to pursue the Frontera acquisition, $100.3 million from escrow recovery and a breakup fee tied to the unconsummated Frontera deal, and a $107 million equity investment from Grupo Gilinski.

Net debt stood at $333.1 million, with leverage of 1.3 times and no principal debt maturities until January 2027. The board declared a quarterly dividend of $0.023 per share.

Hedging strategy and capital allocation

CFO Jaime Caballero said GeoPark has hedged about 19,000 barrels per day of 2026 production through three-way collars with downside protection and retained upside participation. For 2027, the company has hedged about 11,000 barrels per day under similar structures.

Caballero said the company is not considering unwinding its 2026 hedge positions. He added that if average Brent prices fall in the $80 to $90 range for the full year, derivative losses could be in the $60 million to $120 million range, depending on monthly price movements, while EBITDA would be expected to be at the high end of guidance under that scenario.

Bayón said 2026 capital expenditure guidance remains $190 million to $220 million, though the company is evaluating potential year-end activity in Colombia and could consider accelerating some Vaca Muerta work into 2026. He said any production impact from additional Colombia activity would likely be more visible in 2027.

M&A and Venezuela under review

Management said GeoPark’s strategy remains focused on protecting and maximizing core assets in Colombia while advancing Argentina as a growth driver. Bayón said the company is evaluating value-accretive opportunities in Colombia, Argentina and elsewhere in the region, including Venezuela.

Caballero said inorganic growth remains a priority because reserves growth is in shareholders’ long-term interest, adding that Colombia remains GeoPark’s “backyard,” while Argentina opportunities would be focused on Vaca Muerta’s oil window, particularly around the company’s existing hub.

Bayón said GeoPark is conducting a comprehensive assessment of opportunities in Venezuela, citing world-class oil and gas resources, recent hydrocarbon law changes, progress on sanctions and discussions with stakeholders. He said the company would remain disciplined and compare any Venezuela opportunity against other uses of capital.