GeoPark Ltd Stock

Ladies and gentlemen, good morning, and welcome to the GeoPark Limited conference call following the announcement of the strategic entry into Venezuela. [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.geo-park.com. A replay of today's call may be accessed through this website in the Invest with Us section of the GeoPark corporate website.

Before we begin, 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 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 Felipe Bayon, Chief Executive Officer; Jaime Caballero, 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 us today. On September 2, we announced our strategic entry into Venezuela through the acquisition of the Bare Block, a large-scale producing asset in the Orinoco Heavy Oil Belt, one of the largest hydrocarbon resource basins in the world. We are very excited about this opportunity, both for what it can mean for GeoPark and for the role we believe we can play in the reactivation of Venezuela's energy sector and for our shareholders.

I want to acknowledge both PDVSA and Grupo Gilinski for the role they have played in bringing this opportunity together and for the confidence placed in GeoPark. Over the last several months, our teams have spent significant time together, including field visits and understanding the asset, the operating environment and the contractual framework. Bare brings together characteristics that are very difficult to find in a single opportunity, exceptional resource scale, a long production history, significant infrastructure already in place and a substantial redevelopment potential. This is a producing brownfield asset, not a greenfield exploration opportunity.

Our role is to bring capital, technology, reservoir management and operating discipline to that existing asset base, progressively restore production and unlock more of its potential. And that plays very directly to what we know how to do at GeoPark. At the same time, we understand very clearly that questions remain around Venezuela. Over the last few months, we have carefully evaluated the execution, capital and infrastructure requirements, sanctions, contractual protections and the broader operating environment. We believe the transaction structure and development plan addresses these concerns and create unique opportunities within a disciplined framework. Our goal today is to explain why we believe Bare can be a game changer for GeoPark and create significant long-term value for our shareholders while contributing to the reactivation of Venezuela's energy sector.

Let me start with the main message that I would like you to take away from today's presentation. The first is the opportunity itself. GeoPark is establishing an early and meaningful position in Venezuela through a 25-year Production Participation Contract with PDVSA. GeoPark will have operating control of the Bare Block. We believe an early entrant position in the Orinoco Heavy Oil Belt with the right contractual framework creates a very significant opportunity for us.

Second, the quality and scale of the asset. Bare has approximately 15.7 billion barrels of oil original in place. It is a producing brownfield asset with decades of operating history. Third is how we intend to develop it. We begin with what is already there, existing wells, reactivations, workovers, artificial lift optimization and critical infrastructure, and progressively moving to larger drilling and thermal recovery phases. The investment plan is phased and support the production ranges we are presenting while maintaining capital discipline.

Fourth, the transaction preserves our financial flexibility. This is an all-stock acquisition with no upfront cash payment. That allows us to retain the cash and financing capacity we need to develop Bare while continuing to invest both in Colombia and Vaca Muerta. And fifth is the value for our shareholders. The transaction recognizes GeoPark equity at $12.22 per share, a premium to recent trading, while the acquisition economics reflect an independently assessed value for Bare. The tender offer committed to by Grupo Gilinski also provides our existing shareholders with an additional liquidity option.

Finally, it is important to highlight that our investment case does not depend on broader normalization of Venezuela. We have evaluated the opportunity based on the asset, the contractual framework and the operating environment that exists today. This slide shows what Bare can mean for GeoPark over time. Under the 25-year CPP, GeoPark will operate Bare and hold a 65% net working interest. Based on the current development plan that represents approximately 400 million barrels of cumulative net production to GeoPark over this 25-year contractual life of the asset. For a company of our current size, that changes the duration and scale of our resource base in a very meaningful way.

The other important point is how Bare fits with what we already have. Colombia remains our foundation and cash flow engine, while Vaca Muerta is our growth engine with world-class unconventional resources and short-cycle development opportunities. Venezuela adds a different and complementary element to our long-duration heavy oil redevelopment platform in the Orinoco Belt. Together, we have conventional production and cash generation in Colombia, and conventional growth in Argentina and a large brownfield redevelopment opportunity in Venezuela with different resources, development cycles and cash flow profiles that create a stronger and more advantaged company.

We produced approximately 28,000 barrels of oil equivalent per day in 2025. With continued growth across the existing portfolio and the development of Bare, we see a pathway towards approximately 75,000 to 85,000 barrels of oil equivalent per day by 2030 and a company capable of generating adjusted EBITDA of around $1.2 billion by 2030. The scale changes, but the strategy does not. We remain a Latin American operator and our objective remains unchanged, protect what we have and return to growth by deploying capital where we can generate attractive risk-adjusted returns.

Now let me spend a little more time on the asset itself. Bare has approximately 15.7 billion barrels of original oil in place, more than 700 million barrels already produced and approximately 1,100 existing wells and a current production of approximately 11,000 barrels of oil per day. For us, that production history matters enormously. Bare has already demonstrated that it can produce at significant scale. With such a significant original oil in place, relatively modest improvements in recovery can translate into a very significant additional production and value. The current recovery factor is only around 4% to 5%, so there is room to grow.

We also have a large installed base of wells and infrastructure that gives us different ways to begin improving performance before we move into the more capital-intensive phases of the development. The size of the resource matters only if it is matched by credible development plan and our approach to Bare is intentionally phased. The first phase from 2026 through 2030 is about restarting and reactivating the existing asset base. We plan approximately 400 to 450 well reactivations, around 100 workovers, approximately 30 horizontal wells, optimizing the artificial lift systems and rehabilitation of critical infrastructure. Under this plan, gross production grows from today's level towards more than 56,000 barrels per day by 2030.

The first phase gives us a very practical way to develop the field with existing wells, understand their integrity and performance, identify infrastructure bottlenecks and learn more about the reservoir as we progressively increase activity. From 2031 onwards, we move into a build phase with additional horizontal drilling, workovers and thermal recovery. Production increases towards approximately 90,000 barrels of oil per day. Later, thermal recovery becomes more important as we seek to increase recovery and sustain the production plateau. Before the asset moves into a long-duration harvest phase focused on reservoir management and maximizing recovery.

The investment plan shown on this slide supports the production ranges we are presenting to you today. This slide is really about how we fund the growth. In 2026 and 2027, the portfolio absorbs the early investment in Bare, while Colombia continues to generate cash and Vaca Muerta continues to grow. From 2028 onwards, as Bare production and EBITDA build, the combined portfolio moves into positive and growing free cash flow. Venezuela CapEx rises from approximately $10 million in 2026 to around $131 million by 2030, but against a much larger EBITDA contribution. The investment plan supports the production ramp without displacing our priorities, both in Colombia and Argentina. We also entered this development period with approximately $700 million of liquidity and committed or negotiated financing sources, including approximately $310 million of cash in hand. That is why the 3 assets are complementary financially and strategically.

By 2030, production has the potential to be nearly 3x our 2025 level and adjusted EBITDA could be approximately 4x larger. Based on preliminary estimates and subject to confirmation from an independent reserves report, our 2P reserve base could increase from approximately 121 million barrels to 240 million to 260 million barrels of oil equivalent. It is important to understand what that reserve indication represents. It is a point-in-time estimate associated with the initial development phase, subject to the appropriate certification processes. It is not a measure of Bare's ultimately reserve potential over the 25-year contract. As the development plan advances and additional activities incorporate into independent evaluations, we expect the reserve estimate to evolve as such.

Equally important, our operational breakeven declines under the plan from approximately $51 per barrel of oil equivalent in 2025 to some $28 per barrel in 2030. In summary, the larger scale and the quality of the underlying barrels that we are capturing with this transaction make GeoPark more resilient, more efficient and financially stronger. Furthermore, a larger production and reserve base also gives us greater relevance to investors, service companies, technology providers and capital markets. Diversification provides more alternatives for capital allocation while a lower breakeven improves resilience across different commodity price environments.

As mentioned earlier, by 2030, GeoPark has the potential to produce approximately 75,000 to 85,000 barrels of oil equivalent per day, generate around $1.2 billion of adjusted EBITDA and hold approximately 240 million to 260 million barrels of oil equivalent in 2P reserves. At that scale, GeoPark would sit in a very different peer group. But while the scale changes, the focus remains on exceptional hydrocarbon systems, the Llanos Basin in Colombia, Vaca Muerta in Argentina and the Orinoco Belt in Venezuela. Together, they give us exposure to conventional, unconventional and heavy oil resources across different development cycles and provide different cash flow characteristics. We remain an operator focused on Latin America, technical excellence and disciplined value creation.

Let me now turn the call over to Jaime to discuss the transaction structure, value equation and path to closing.

Thank you, Felipe. Good morning, everyone. I'll begin with a quick overview of the transaction structure and how the different pieces fit together. GeoPark obtained an initial 5% interest in the CPP signing vehicle for no consideration in recognition for its direct contribution to the asset's technical evaluation and negotiation process with PDVSA. Following execution and effectiveness of the CPP, GeoPark will acquire the remaining 95% interest from Grupo Gilinski. The consideration for the remaining interest will be paid in GeoPark shares. This is an all-stock transaction with no upfront cash acquisition payment.

This funding mechanism is strategic in nature because it preserves our cash and balance sheet capacity to develop Bare while continuing to invest at pace in the growing opportunity set that we have in Colombia and Argentina. Following the share issuance, Grupo Gilinski is expected to become GeoPark's controlling shareholder. The Board considered this change of control carefully alongside the scale and quality of Bare, the valuation framework and the overall terms negotiated for GeoPark shareholders. Given the change of control implications, rigorous management of potential conflicts was exercised. The Gilinski nominated directors were recused from the Board's deliberations and votes, and the transaction was reviewed with independent financial and legal advisers, including a fairness opinion from BTG Pactual. Going forward, GeoPark will continue to operate as a New York Stock Exchange listed company with independent directors and the applicable governance and related party protections.

Let me walk you now through the economics of the transaction. The independently established value of 100% of Bare is approximately $570 million. This fair value was independently assessed by BTG Pactual using established valuation methodologies, including a full discounted cash flow analysis of our development case, cross-checked against relevant operating and transaction benchmarks and reflecting country risk-adjusted discount rates. As mentioned previously, GeoPark obtained an initial 5% interest for no consideration. Therefore, the fair value of the remaining 95% is approximately $541 million. We will acquire that remaining interest for approximately $515 million, representing an acquisition discount of approximately 5%.

Together, the initial interest received for no consideration and the acquisition discount represents approximately $55 million of implied value accretion. At the same time, the new shares are being issued at $12.22 per share, representing a 26% premium to the 30-day VWAP. Combining the acquisition discount with the premium at which we are issuing GeoPark equity results in approximately $160 million or approximately $1.50 per share of implied immediate value accretion.

Grupo Gilinski has also committed to launch within 90 days after closing, a tender offer for up to $100 million at the same price of $12.22 per share. If the offer is oversubscribed, purchases will be made on a pro rata basis. For existing shareholders, this provides direct optionality. Those who prefer liquidity will have a monetization alternative at a premium to the reference trading price, while those who remain invested will continue to participate in the potential long-term value of the enlarged GeoPark platform.

Let's now look at some of the key transaction metrics. The $12.22 per share exchange price is above GeoPark's 52-week undisturbed high of $11.98 and above every month end closing price since February 2023. To put that in further context, it is also approximately 36% above the $9 per share unsolicited takeover proposal received in the fourth quarter of last year. At this price, GeoPark equity is recognized at an implied enterprise value to EBITDA multiple of approximately 4.1x compared with approximately 3.5x at the reference market price. We see the same uplift across the flowing barrel and reserve metrics presented on this slide. Under these conditions, the transaction recognizes a compelling value for GeoPark equity while allowing us to acquire Bare at attractive entry economics relative to the independent valuation.

Let me now conclude with the path to closing. Following the signing of the CPP, we enter an interim period expected to last no more than 120 calendar days. During this period, the key work streams include approval of the business plan, execution of the complementary agreements and receipt of the required permit on authorizations. In parallel, we will prepare the operating organization, including people, systems, supply chain and field readiness for the takeover and transition. The CPP becomes effective once the required conditions have been satisfied. At that point, GeoPark will issue the shares to Grupo Gilinski. There is significant work to complete during the interim period, but the milestones and responsibilities are well defined. Once the CPP becomes effective, our focus will shift from transaction execution to operational and financial delivery.

Felipe, let me turn it back to you.

Thank you, Jaime. We understand that investors will look carefully at the risks of operating in Venezuela. We have assessed those risks in detail, quantified them where possible and structured both the development plan and the contractual framework to mitigate them. First, operating readiness. After years of underinvestment, we need to understand the conditions of the wells, infrastructure, power systems and facilities. That is one reason the development begins with reactivations, workovers and stabilizing before moving into larger investments. Second, heavy oil logistics. Diluent supply, transportation and commercialization are critical for an extra heavy oil operation. The contractual framework addresses the full commercial chain required to monetize production, including direct commercialization rights, procurement of diluent, transportation, reimbursement and related production adjustments.

Third, the regulatory sanctions and contractual framework. The agreements signed were structured under an OFAC-compliant framework. The framework includes defined remedies for material PDVSA or PPSA default, protections in prolonged force majeure situations, international arbitration, economic rebalancing mechanisms for legal or regulatory changes and defined termination and cure provisions. Fourth, governance. A change of control makes governance especially important. GeoPark will continue to have independent directors and appropriate related party protections.

The last point is our people. Members of our leadership and technical teams have different operating experiences in the country and in the Orinoco Belt specifically. Martin Terrado, our COO, led Chevron's Venezuela operations from 2012 to 2018, including Petropiar immediately adjacent to Bare. We also expect approximately 60 members of the existing PDVSA operating team to join GeoPark's operational team. We have people who know the country, people who know heavy oil and people who know the basin.

Let me now close by bringing the main points together. I'm an optimist by nature, but optimism by itself, it's not a strategy. You need a plan, the right people and the discipline to execute. We believe in GeoPark, we have all 3 of them. Bare is a unique opportunity for GeoPark. It gives us early strategic positioning in the reactivation of Venezuela's energy sector through a 25-year contract in one of the largest hydrocarbon basins in the world. Based on the current development plan, it adds approximately 400 million barrels of cumulative net production to GeoPark over the life of the CPP and creates a pathway towards a company that can be approximately 3x larger in production and approximately 4x larger in EBITDA by 2030.

Importantly, the transaction preserves our financial flexibility. We are using equity rather than cash. Our shares are being recognized at a premium to recent trading and the committed tender offer gives the shareholders an additional liquidity option. Colombia remains our cash flow engine. Vaca Muerta remains our short-cycle growth platform and Venezuela has a very large long-duration redevelopment opportunity. Together, they create a more diversified, resilient and robust GeoPark. We're excited about what this opportunity can mean for GeoPark and are already focused on execution and mindful of the responsibility that comes with it to our shareholders, to our partners, to our people and to the communities where we operate.

Thank you again for being today with us. We will now open the floor for questions.

[Operator Instructions] And our first question comes from the line of Daniel Guardiola with BTG.

Congrats for the transaction. I have a series of questions. So perhaps it will be easy if I do one by one, if that's okay with you. And my first question is on Venezuela. And I would like to know your thoughts on how do you assess Venezuela's country risk? And what -- I mean, contractual financial and operational protections are in place to mitigate the risk and protect GeoPark's invested capital. And it would be great to know if you could share with us what is the discount rate at which you are basically discounting the expected free cash flows from Venezuela. So that will be my first question.

Thanks, Daniel, and thanks for being here with us this morning. Yes, I mean, I'll share my view. And obviously, if Jaime wants to chime in, we will do that. But I think the way I view it, the investment decision was based on a very thorough and disciplined review of legal, contractual, regulatory framework under which Bare would be redeveloped and we will operate. And in that sense, the counterparties, both PDVSA and the Ministry are the institutions that are legally responsible for managing the hydrocarbon sector. And we do believe that CPP provides the right contractual framework in terms of rights, obligations, investor protections and the like. So from that point of view, I think we're quite comfortable.

You could always think, Daniel, would you wait? Or would have you waited in terms of the entry. And we do believe that being the first mover, the first mover advantage into Venezuela with our Colombian background, with the long history ties that both countries have, it does provide the right conditions for GeoPark to move in. And the other thing is that, Daniel, we do believe that GeoPark, as we mentioned it, becomes probably the only independent oil and gas company in the region that has access to Venezuela while maintaining our access to unconventional development in Vaca Muerta and our developments in Colombia. So from that point of view, a great addition, and we do believe that protections and everything else in terms of our investment are there.

And probably the last thing I'd say, Daniel, is that our decision was based on the quality of the assets. It's a field that has been in production for a very long time. It reached over 120,000 barrels per day peak. It has a significant number of wells, more than 1,100 wells that we can reactivate. And as we presented today, we have a phased approach to development. So we're -- from that point of view, we're comfortable. On the discount rate, I'm not sure, Jaime, if we're comfortable with disclosing the rate.

Yes, Felipe. So let me chip in on 2 or 3 angles. I think one thing that I'd say on the contractual angle is that the new CPP that is the outcome of the new hydrocarbons law in Venezuela is a CPP that is consistent with industry standards elsewhere. When you look at that contract, it's the sort of contract that you would -- that has the balance of rights and protections that you would expect as an investor in any sense. It has its own idiosyncratic elements. But when you look at it as a whole, it's very clear what are the rights that you have. There are dispute resolution mechanisms that are effective and there are importantly, instances where you can go to if you enter into conflict.

So I think that from a contractual standpoint and given all the time that we spent going through that over the last 3 months, the CPP is a contract that, that is the sort of contract that you would expect in any serious jurisdiction. I think that PDVSA and the Venezuelan government were very receptive to the feedback provided on certain clauses that perhaps were key. Things in Venezuela that are particularly important in the contract are the relationship with PDVSA and ensuring that, that relationship is adequately documented in the contract and particularly where you have dependencies, things like volumetric balances or things like the role -- the access to infrastructure, access to ports, those sort of things are all well documented in the contract.

With regards to the discount rate, and I'm not going to cover the operational protections because I'm sure that later on with Martin, we're going to address a lot of the operational path that we have ahead of us. I think on the discount rate, I think the key message that I can share is that, of course, Venezuela is in a transition period. It has a good direction, but it's not yet in a place that is necessarily comparable to other jurisdictions around LatAm. Therefore, an appropriate risk premium has to be applied, and we applied it. And the process to go around that was through the independent parties that we involved in the process. BTG Pactual provided a fairness opinion. We also involved a separate legal counsel in different aspects, particularly the OFAC-related components associated to this, which all have to do with country risk.

So we -- I'm not going to be specific around the discount rate that we use because, obviously, discount rates are a competitive topic, I'd say. But I would say that it's a discount rate that is appropriately higher than the discount rates that we've used for our capital thresholds in GeoPark, which, as you know, because we've been vocal about this, we test all our investments with a 15% return threshold. And for this particular investment, we are including a higher risk premium associated to it.

My second question is on the economics of the asset. And it would be great to better understand perhaps the waterfall from Brent to Bare EBITDA, perhaps including crude differential, royalties, taxes, government participation, dividend, transportation, lifting costs and other expenses -- operating expenses, sorry, so we can better assess the implied EBITDA netback on a per barrel basis from Bare.

Jaime, you want to take this one?

Absolutely. Absolutely, Felipe. So Daniel on the implied netback, I'd say that we need to first recognize that given the nature of the asset, these netbacks will evolve rapidly over the phases of the project, right? When you look at the logic of the project, as we indicated in the presentation, you have a first phase that it's all about reactivation of the existing well stock. It's all about that. And there is -- I would characterize too that there is this transition phase where we need to deliver the incremental production that puts us at par, if you will, with PDVSA on the 65-35 basis.

So the first 2, 3 years of the contract have its own particularities as we get to a more balanced and sustainable stage. I'd say that in that context, when you think about that first phase that gets us to 2030, and that's the guidance that we provided. When you think about the sort of numbers that you see in the $70 to $80 range, I would provide you 4 or 5 key numbers. Firstly, the Merey discount. The Merey discount is the commercial and quality differential associated to -- that is going to apply to these barrels, right? It includes a transport to port consideration in this because that's where the sales actually take place. And directionally, what we're seeing for that is somewhere in the lines of $14 to $15 per barrel, right? So that's kind of your first number, depending on where you want to sit on Brent, if you want to sit on $70 or you want to sit on $80, that's the first, I'd say, deduction that you need to make.

The second one is around the volumetric compensation associated to the integrated tax and royalty. The way that we've described this is you have a gross production for the field, right? And to that, there's this 35% that belongs to the government of Venezuela that's split into -- it's 25% an integrated tax and royalty, and it's a 10% a PDVSA, if you will, working interest, right? That -- those 2 components together are paid in kind through a volumetric compensation. That volumetric compensation throughout this kind of first phase of the project is in the order of $5 to $6 per barrel.

Then you go to the next key component, which is OpEx/working capital, right? And OpEx/working capital is all the activities that we need to do, which are comparable to lifting cost in our operations elsewhere. What we see leading towards 2030 is that we're going to start with relatively high OpEx that is going to be well into the double-digit area, probably high teens over the first couple of years as we reactivate wells and as we get the production growing. But once we see that volumetric effect, it's going to stabilize around $8 to $10 per barrel. That's what we see as the, if you will, level loaded OpEx and working capital over time around 2030 and beyond.

And then last but not least, there is a G&A component associated to the operations in Venezuela, like specific to the operations in Venezuela, and it captures the incremental overhead associated to running this operation. And that, again, we estimate in the $1 to $2 per barrel once we reach the level production status of the field. So if you run the numbers, this kind of puts us in the range of between $42 to $47 per barrel of operating cash flow. That's the OCF kind of that we are expecting. And then I know you asked about Brent to EBITDA, but I'm going to include a CapEx indication as well on this that takes you to free cash flow.

And what we're seeing is that, that CapEx indication is in the order of $10 to $12 per barrel, which puts us at a free cash flow breakeven of between $32 to $35 per barrel. So that's kind of like the -- directionally, the breakdown that we see for Bare. As I said, the first 18 to 24 months are going to be a bit atypical around these numbers because you are -- we are ramping up. We are having start-up costs and one-off costs and things like that, which we should expect to see. But as we go into 2029 and 2030, these are the sort of numbers that we're going to be gravitating around. Thanks, Daniel.

Thank you, Jaime, very thorough answer. And just the last one, super quick. I saw in the press release, you announced the implicit acquisition multiples for the medium term and the long term, which was 2.1 for the next 3, 4 years, if I'm mistaken. And there for the long run, 0.7x EV to EBITDA. But it seems that, that multiple is only considering the equity consideration against future EBITDA. So I would like to know what would be the effective multiple if we include to the acquisition -- to the equity consideration, sorry, the CapEx behind the development of Bare?

Sure, Daniel. I think there's 2 or 3 things that we need to pound on as we see this deal. I think firstly, it's important to consider that there are no upfront cash payments associated to this deal. So the way that we've communicated the multiple is intentional, and it's consistent with that. There is no upfront cash payment. There is no entry ticket from a cash standpoint. So the way that we've indicated the CapEx to EBITDA over time is consistent with that. It's consistent with that. But if you will, let me give you a little bit more color around how to think about the CapEx to EBITDA relationship over time.

When you think about the 3 or 4 phases of the project that Felipe described in one of his slides, there's this first phase, which is the aggressive reactivation phase, which goes to 2030. What we are anticipating is that phase considers around $300 million to $400 million of EBITDA -- sorry, of CapEx cumulative. And at 2030, we're going to be in an EBITDA that is in excess of $600 million. So that gives you immediately like an indication of that CapEx to EBITDA relationship. The second phase, which is, if you will, the 2030 decade from 2030 to 2039, what we are anticipating is average CapEx deployment over that period of $100 million per year, right?

Again, and I think here, it's important. This is not the full investment. Of course, there's a significant operational investment on these fields that is actually captured in the OpEx side of the equation. But from a CapEx, strictly CapEx standpoint, those are the average that we're seeing. And that $100 million per year compares to an EBITDA consideration that we estimate depending on the price environment between $800 million to $1 billion per annum. Then you go to the third phase, which is the 2039 to 2045 type period where we start to scale down CapEx and it reduces in an important way to what we see probably around $50 million per year with a sustained EBITDA over time. So all this to say, what I'm trying to go here, Daniel, is that actually, once you consider CapEx over time, given these phases and given how EBITDA evolves over the life of the project, as the full-in multiple always stays in that 0.7 to 0.9 type range. That's, of course, at $70 per barrel and above.

And the next question comes from the line of Vicente Falanga with BBI.

Congratulations on the acquisition. I think it gives GeoPark a very unique edge within the LatAm investment horizon. I have 2 questions here. Number one, if you could please provide potential bottlenecks you anticipate you could have to complete your first 5-year phase of well reactivations/workovers, such as equipment availability or even labor availability or anything else that we're not thinking about here? And then my second question, if I'm not mistaken, the Gilinski family, they had a lockup period of 18 months since you purchased GeoPark shares in March. I wanted to understand if this transaction somehow extends this? And if not, what is an official message of the Gilinski Group in terms of its investment horizon in GeoPark? And once again, congratulations.

I'll ask Martin to talk about the bottlenecks and the -- specifically some of the facilities investments and reactivations that are required. And just bear in mind, Vicente, that actually Martin and the team visited the field and we're able to look at extensive information on some of the facilities. And the -- I'll start with the second one. In terms of the investment horizon for the Gilinski's and the conversations that we've had is that they're a long-term investor in the company. And they've described GeoPark as a platform that has regional presence. And I was talking about Colombia, obviously, a cash engine, $120 million of CapEx per year. We've reset the company and stabilized production, which is good.

Vaca Muerta, we're pressing the accelerator on that one. We've drilled our first 5 wells, horizontal wells, and we've done the fracking and production that we received at 1,500 barrels per day back in October of last year is now over 4,000 barrels. So Vaca Muerta in Argentina is going well. And it's public that we've presented ourselves for the bidding round that the province of Neuquen is leading. And then Venezuela provides, as we've shown today in the slides, a very, very long-term view of this regional platform that creates probably the only oil and gas company in the region that has presence in these 3 countries different types of development, different types of hydrocarbons and probably in particular, in Venezuela, the only proxy, if you will, of somebody who wants to invest into Venezuela.

So I'll just reinforce saying their view is a long-term view of the company, and they're long-term investors. And as we've described today, we're multiplying production by 3. We're taking EBITDA and multiplying it by 4 over the next 3 to 4 years, which is transformational for us. So that's their view on the company. And Martin, why don't you take us through some of the reactivations and availability of equipment and people.

Yes, absolutely, Felipe. Vicente and again, thanks for the question. Concerning directly the question around bottlenecks, very quickly, I want to go a little bit back but say that since our first visit to Venezuela, we've been getting ready and encountering and discussing with PDVSA and some old friends that many of us had from previous responsibilities. One week after our first visit, we were ready in the field visiting and spent 2 full days with Rodrigo and our team understanding the conditions. Clearly, that's not enough on one visit. But since then, we also had a data package that we acquired. So we've been getting more information from the field.

If we talk about the bottlenecks specifically, the field currently has no bottlenecks. And why we're saying that? The field is producing around 10,000 to 11,000 barrels of oil with 20% water cut. It's a field that has the advantage that has been on production. So it has energy coming into the block. It has diluent coming into the block, and it has diluted crude oil that is going out of the block. Obviously, it has services that are ongoing, and it's around 100-plus wells that are on production. So we will encounter bottlenecks as we go from the current 10,000 barrels of oil per day to approximately the 56,000 barrels of oil per day that we were envisioning and that we got in our plan for 2030.

So specifically, bottlenecks, facilities capacity -- right now, the field has capacity for up to 30,000 barrels. So it will be something that we will be looking into immediately, but we don't need to come in and start doing upgrades. We will be doing maintenance, understanding the condition of the facilities and in the future, doing upgrades and restarting some of the facilities in some pads that were shut in. At the same time, the other condition that we're going to be assessing is the condition of the shut-in wells. We have, like Felipe said, more than 600 wells that are in what's called Category 2 and 3, which are basically the wells that have an ease to be restarted with pulling jobs or Category 3 with workovers.

So we already identified with PDVSA, which are the first batch of wells that we're going to be doing the workover. And from that perspective, the bottleneck could be, okay, on the assessment that we did on how many of those wells were going to restart, we did not have in our plan 100% of restarting the wells. It's much lower than that.

The next bottleneck could be energy, and it is something that, again, from day 1, we are aware, this field currently needs 3 megawatts, just so that you have an idea, Llanos 34 is 70-plus megawatts. So 3 megawatts and much lower energy consumption because there's not that much water. When we take it to 56, our plan is to consume around 3x more. So we will have a consumption of around 10 megawatts and how we're going to go around that. This field comes with associated gas with the production. From day 0, we're going to be in our contracting plan, we're going to be treating the gas and generating energy from the gas.

The third one is diluent. Right now, the field has around 4,000 barrels of diluent coming in. When we get to the 50,000 to 60,000 barrels of oil, we will need in the order of 20,000 to 25,000, 30,000 barrels of diluent. So how we go about that? We will -- we have a contract addendum that specifically describes and rules how diluent is going to be treated between us, the operator and PDVSA, so PDVSA will be supporting and providing the diluent. We also have the availability to purchase the diluent, bring it to Jose Terminal. PDVSA will transport it, deliver it into the field, and then we will get recouped for that amount. So the diluent is something that it's already been discussed throughout these 5 months.

The other bottleneck that everybody talks about is business partners or supply chain, like Jaime was saying, so we already triggered what we call the Phase 1 supply chain bidding process, and we discussed it with PDVSA. In this process, it's basically all the services and goods that we need for reactivation of wells, artificial lift optimization and also some initial facilities that we need such as the LACT unit, which is a measuring unit. For those we're well into the process, including companies that are already in Venezuela, but also a lot of our allies here in Colombia and many of them already are in Venezuela registered.

And the final one is talent. So, how we're going about that. We have a team that it's already defined from our team in GeoPark. That will be part of the team that goes again, and we're actually going tonight, and we're going to spend the next 10 days there. We're going to be understanding and talking with PDVSA to see who are the PDVSA team. Again, PDVSA has been operating this field since the beginning back in 1970. So they know the asset very well, and they have been doing very good technical pilots in the past. And we already identified which are some of the positions that with our people or HR group were filling the position. So just to close, I want to say that all of these fronts have been discussed internally and with PDVSA. We're aware of those bottlenecks, but I shortly try to describe to you, Vicente, what -- how we're going about that.

Thanks, Martin. And Vicente, one thing if I may, just to close on your questions that just to let you know and confirm that the lockup for the PIPE shares and for this transaction will be superseded once the CPPH, which is a contract with PDVSA is made effective and everything is closed on this transaction. So back to the presentation that could be up to 120 days, we're trying to do that faster than that.

If I may, just a follow-up on water. How easy it is to discard water on the Orinoco Belt? I know in Colombia, it could be complicated, but what's the plan there? Would you reinject it in the wells? And -- or what would you do with the water cut once it becomes a problem?

Yes. So for us, water, it's not a problem, something we're used to, right, with Rodrigo. So right now, the field is separating oil from water and being injected in disposal wells in the same block. We basically continue doing that. So again, it's something that we feel very, very confident. And as you know from previous discussions, even in Llanos 123, we have developed a modular water treatment plant. So it's something that we will be injecting per the permits and the permits are already granted.

And our next question comes from the line of Anne Milne with Bank of America.

Thank you, Martin, for the update on what were some of my questions on the technical side, like diluents, electricity, water, et cetera. I have a couple of additional questions. What is the structure -- I mean, you have a CPP. What is the role of PDVSA in this? Do they have an ownership share? I understand that GeoPark is the operator. And what are the expected royalties that the CPP will be paying? That would be my first question. And then I have one other question after this.

Anne, I'll take that briefly, and I'm just cautious on time because we're hitting the 1-hour mark. But in terms of PDVSA, well, they're our partner. And the entitlement that they have, including royalties and taxes is 35%. So it's 25% royalties and taxes and 10% the entitlement for PDVSA. And the role in terms of their being the partner, it's very sort of frequent. It's in terms of operational plans, in terms of investment plans, in terms of how do we best develop the field, how do we actually use some of the resources in country. So over the last 5 to 6 months, there's been a lot of detailed conversations with them. And as Martin was saying, there's a team of us that are flying to Venezuela to continue those conversations in detail. So a very active role from both PDVSA and the Ministry. Go ahead with your second one.

Okay. And just is this under these -- is this governed by the sanctions that apply to operating in Venezuela? And I know you didn't mention this in detail in your press release. Is there a process for getting any sort of special license? Or is that not needed?

Okay. So we're fully compliant with the OFAC, and we're fully compliant with 52B as well. And so in that sense, ultimately, the entity that holds the contract with PDVSA, the CPPH will be owned by a U.S. company. So fully compliant with 52B in terms of OFAC.

Okay. And then I'm going to squeeze in -- I'm going to squeeze in one last one, if that's okay. Many operators in Venezuela who do already have licenses have had problems getting paid for the oil that they're shipping. I know you mentioned that, that is part of your, I guess, contractual agreements that you have in place. Could you tell us a little bit more about that so you can make sure that the project gets paid when it does sell its oil?

Yes, absolutely. And I'll ask Jaime to go into some of the details, but it's part of what's already included in the contract as such in terms of payments and where the funds will be sent in terms of control accounts and the likes. But one of the things and the addendums that we're finalizing with PDVSA is around the marketing of both diluent and how do we get the diluent to the field and the marketing of the crude to which we have a right in terms of our entitlement. But Jaime, anything else that you want to add to Anne's question. Go ahead.

Thanks, Felipe. Just a couple of things. When I was referring to the high standard, if you will, of the CPP nowadays, one of the elements -- one key element of the CPP is that the -- we are the operator and as operator, we actually have a full entitlement of our barrels, right? That's quite important because it has implications in terms of reserves, in terms of production reporting, but particularly, it has implications in terms of sales. So we have a full autonomy and liberty to choose our sales channels under the contract. We have full entitlement of those barrels, which allow us to transact with those barrels with no restriction whatsoever given by the CPP.

In that context, and when you think about OFAC compliance, one of the things that we determine in the contract is that the sales mechanisms for this contract and form of payment for these barrels is fully compliant with OFAC provisions. So that's actually in the contract. We already have a full clarity around the mechanism by which payment for the barrels is going to be received. And one of the elements of this is, of course, that the barrels can be fully monetized in international markets and the funds associated to our working interest is -- remain outside of Venezuela. So those are some of the required protections associated to OFAC. In this process, it's important to mention that we had full consultation with the U.S. authorities through this process, and we are comfortable at this stage that everything that is in the CPP is compliant with OFAC expectations.

And our next question comes from the line of Bruno Amorim with Goldman Sachs.

Congratulations on the transaction. I have 2 follow-ups. The first one on the oil services that will be needed in the diluent. Can you just clarify how much of it is coming from PDVSA vis-a-vis other service providers or suppliers of diluent? And also a second question per your slide on the ramp-up of the project, it seems that your CapEx will be $40 million to $80 million per year until 2028, then after that, $120 million to $140 million. So a meaningful step-up towards the end of the decade. Is this ramp-up a reflection of the higher risk perception now and you intend to accelerate CapEx once you are more comfortable with the regulatory environment? Or is it just a function of your development plan for the asset itself?

Yes, Bruno, and thanks for being in the call today. So I think it's a reflection of the reality of the field, which is a field, and I'm starting with question number 2, a field that has extensive infrastructure, including wells. And as Martin has explained in detail, there's a lot of opportunity in terms of doing workover and maintenance to the wells and getting production back up. And in the meantime, getting ready for drilling activities and the likes of more CapEx-intensive operations going forward. So I think more than that, that being a high-risk perception is a reality of the field, which, again, it's a brownfield development that has a lot of existing infrastructure.

So I think that's what I would say in terms of that. And probably the other thing is that as we gain more knowledge on the field and we work with PDVSA closely -- very closely with them, there could be some other things that we do in terms of developments. And in terms of the first one, the diluent, do you guys want to take it? Jaime or Martin?

Yes, absolutely, Felipe and Bruno, nice to meet you. I'll just add a little bit to what Felipe was saying on the difference on the CapEx. What we did was we look at what's the lowest capital intensity and value accretion first and then we move to the next stages. So reactivation has a cost much lower than drilling wells. So when you get to 2029 and 2030, that increase is mainly due to the fact that we're way into the drilling of the wells that we will start in 2028. And that's the main reason why you see that jump.

Related to diluent, the way diluent works for the Faja is it is managed by PDVSA. There's a group called Comercio y Suministro, which in English is basically supply and commerce. So you plan with them what's going to be your need of diluent and they provide the diluent. If they cannot provide it, then that's when the contract addendum comes in and GeoPark will purchase diluent to bring into the stream, like I said before, bring it to the Jose terminal. And from there, it gets transported by PDVSA. They own the transport of that midstream component, and we basically receive it in the Bare Block.

And we now have a web question from Peter Bowley with Jefferies.

On Venezuela strategy, is the base case plan that this transaction is a one-off in Venezuela? Or does GeoPark see additional opportunities at similar valuation/economics as the recent transaction? Are there additional opportunities nearby to Bare? And I understand Bare produces extra heavy oil. What is GeoPark's plan to access diluent to optimize viscosity and facilitate transportation? Can you discuss any transportation agreements and costs the assets have in place or GeoPark expects to put in place? And is transportation capacity sufficient to reach the target production levels?

Okay. So thanks for the question from Peter. And on the first one, is the one-off and the answer is definitely no. As I think we've demonstrated with our strategy that we laid out to the market last year, which is protect what we have. That's the one pillar. And the second one is get back to growth. And I think with Vaca Muerta and now with Bare, we've demonstrated that we have the ability to access good opportunities that can underpin growth going forward. So Peter, definitely, we will continue to assess opportunities. We will continue to look at each individually in terms of their own merits. And as such, we'll take them forward for consideration. And I'll just add that we're not only looking at opportunities in Venezuela, but we're also looking at opportunities in Colombia and further opportunities in Argentina. So that's that and I'll just close before going into question 2 by saying that we're going to be very focused in terms of how do we allocate capital. We want to be very disciplined and ensure that always we're generating value for shareholders.

And the second question, which is the extra heavy oil, I think we've touched on diluent quite a lot already in the conversation in terms of how do we want to optimize the use of infrastructure, relationship with PDVSA, or right to market the crude. And as I mentioned, we're actually in the midst of working on the amendment for transportation and everything else with PDVSA. And one thing I would say, Peter, if there's anything outstanding after the call, we're ready and our IR team is ready to receive any further questions, not only from you, but from anybody that's actually on the call. So I don't know if we have another question or if that was the last one.

We do have another question from the web from Alejandro Demichelis with Jefferies.

Could you please provide more detail on how the stake in the -- how was the stake in the field valued?

Okay. And Jaime, why don't you take this one? And then if that's the last one, we'll close the call. Go ahead.

Sure, Felipe. Thank you, Alejandro. Thanks for your question. On valuation, I'd say 3, 4 key principles. The first principle is it was all about a DCF basis on this. That is the underlying determination of value. It was on a DCF basis for both Bare as the asset target and for GeoPark as the stock currency, if you will. To that effect, GeoPark provided all the inputs and assumptions to the valuation of both. So the production numbers, the CapEx, the OpEx, the differentials, all of those things are from our own determination, if you will.

We did have a technical, commercial and financial exchange, if you will, with PDVSA on the Bare components, of course, to validate the assumptions. As Martin said, we performed a few visits. We had access to relevant historical data and all of those elements were what informed the evaluation. BTG Pactual played a key role as the external financial adviser. And in the context of their fairness opinion, they provided a view on discount rate, on applicable Brent curves, on industry benchmarks, on multiples, comparable multiples, sorry. And importantly, in that process, there was also due consideration to the U.S. protections to this contract. And it's this notion of OFAC compliance.

For those that might not be aware, OFAC is the entity that governs the sanctions process in the U.S. It's ascribed to the U.S. Department of Treasury. And in that context, we also provided comfort to BTG Pactual and to the external advisers of the process around what kind of U.S. protections were available to this contract, which implied conversations with Department of State, Department of Treasury and Department of Energy. So all of those elements came into the fair valuation of both Bare as a target in Venezuela and of the GeoPark shares.

That concludes our question-and-answer session. I will now turn the conference back over to Mr. Felipe Bayon for closing remarks.

Well, thanks, and thanks for the help with the meeting today. So I want to go back to thanking everyone for being today. We had a lot of interest and a lot of people connected to the call of what is a transformational opportunity for GeoPark going forward. GeoPark will transform itself into a platform that has now presence in Colombia and with more opportunities as the new government in Colombia has given the right signals in terms of supporting the industry and ensuring that we can help it regain part of its supply in terms of hydrocarbons with additional investment, and we're very keen and ready to do that with a very strong presence in Vaca Muerta in Argentina, where, as I've mentioned, we received a production of 1,500 barrels. We're north of 4,000 barrels to date, which is good, and we'll go into factory drilling at the end of the year in December.

And with this massive, very, very transformational opportunity in Venezuela with Bare that provides, I think, to shareholders and investors an opportunity to go into Venezuela through GeoPark. So very happy with the transaction, very, very thrilled in terms of what it can do to the company going forward in terms of growing the company and creating value to shareholders. So thanks again for your interest in GeoPark. And hopefully, we'll be able to share with you in the next results conference call in the future -- foreseeable future. So thanks a lot. Stay safe, and have a great day.

And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.

Good morning, and welcome to the GeoPark Limited Conference Call Following the Results Announcement for the Second Quarter Ended June 30, 2026. [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.geo-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 risks 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 IFRS and are stated in U.S. dollars unless otherwise noted. Reserves figures correspond to PRMS standards.

On the call today from GeoPark is Felipe Bayon, Chief Executive Officer; Jaime Caballero, 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 us for our second quarter 2026 results call. We delivered another quarter of consistent execution, demonstrating the resilience of our core business while continuing to advance in our strategic priorities. Colombia continues to provide resilient production and cash generation, while Argentina is progressing well and becoming an increasingly important contributor to our future growth. During the second quarter, we achieved production on an average of 27,271 barrels of oil equivalent per day, performing within our full year guidance and broadly in line with the first quarter. This consistency reflects disciplined reservoir management and the operational capabilities of our teams.

In Argentina, execution accelerated significantly during the quarter. We completed drilling on PAD-1030 advanced hydraulic fracturing campaign and secured environmental approval for the next phase of drilling in Loma Jarillosa Este. These milestones reinforce our confidence in the quality of the assets and in our ability to deliver the targeted exit production of approximately 5,000 to 6,000 barrels of oil equivalent per day by year-end 2026. Importantly, we also secured a dedicated drilling rig under a 3-year agreement, providing long-term execution certainty for the development of our Vaca Muerta program.

In addition, together with Gas y Petróleo del Neuquén, we applied to Argentina's RIGI investment incentive program, which supports the development of our unconventional oil hub and reinforces our long-term growth strategy. Argentina continues to evolve into a transformational growth platform for GeoPark.

In Colombia, Llanos 34 continued benefiting from disciplined reservoir management and secondary recovery initiatives. CPO-5 remained a very stable contributor despite operational challenges experienced earlier in the year, while Llanos 123 continued to perform well through ongoing development activities. Together, these assets continue to provide stable production and cash generation. Importantly, operations were conducted with strong health and safety performance with no injuries and no major process safety events.

The quarter also benefited from a stronger commodity price environment. Brent averaged approximately $97 per barrel and narrower Vasconia differentials supported higher realized prices, partly offset by hedging costs. This operational and commercial performance translated into solid financial results. Revenue increased 12% sequentially to $143.3 million, supported by stable production and improved realized prices. Adjusted EBITDA reached $73.1 million, representing a 51% margin despite higher energy costs and the strong appreciation of the Colombian and Argentine currencies, which impacted our operating costs.

Operating profit totaled $40.8 million. Compared with the previous quarter, it is important to remember that the first quarter results including a nonrecurring breakup fee associated with the Frontera acquisition. Net income for the quarter was $14 million. Capital allocation remained disciplined throughout the quarter. We invested approximately $76 million with nearly 2/3 directed to Argentina as we continue executing the Vaca Muerta development plan while maintaining a 19% return on average capital employed.

Our balance sheet remains one of GeoPark's key competitive advantages. During the quarter, our cash position increased to $316 million, and we reduced net leverage to 1.2x EBITDA. We also renewed and extended a committed contingent credit facility throughout 2028, providing additional financial flexibility as we execute our investment program. Our disciplined risk management approach also remains unchanged.

We continue protecting cash flows through 3-way collars covering approximately 19,000 barrels per day during 2026, while approximately 19,000 barrels per day of expected 2027 production has already been perfected under similar structures. This approach provides downside protection while preserving upside participation.

The Board declared a quarterly dividend of $0.023 per share, representing the final payment under the dividend framework announced last year. As previously communicated, our capital allocation priorities are now on completing this peak investment phase while preserving balance sheet strength and positioning the company for the next stage of the free cash flow generation.

Overall, we believe GeoPark is very well positioned. Our Colombian portfolio continues generating resilient cash flows. Argentina is advancing, and our balance sheet provides the financial flexibility to continue with the disciplined pursuit of material inorganic options in Colombia, Argentina and Venezuela. I would like to recognize the continued commitment of our employees and contractors and their focus on safety, operational excellence and efficiency to deliver these results.

Before closing, I would like to take a moment to thank our shareholders for their continued support reflected in the successful outcome of our Annual General Meeting, where all resolutions were approved by more than 99% of votes cast. Following the strengthening of our long-term shareholder base earlier this year with a strategic investment from Grupo Gilinski, we have been glad to welcome a number of other long-term shareholders to our company.

The AGM approved the appointment of new members to our Board of Directors. To this effect, I would like to sincerely thank Sylvia Escovar and Marcela Vaca for their dedication and valuable contributions to GeoPark over the years and welcome Dorita Gilinski and Camilo Martinez to our Board. We look forward to their contributions.

Thank you again for joining us. And with that, let's open the floor to your questions.

[Operator Instructions] Our first question comes from Alejandro Demichelis from Jefferies.

Congratulations on the results. Just a couple of questions, if I may, please. First one is with the new Colombian administration kind of coming in very shortly, what kind of changes on policies for the sector can you expect? And how do you see those benefiting GeoPark? And then the second question is you just mentioned some opportunities in Venezuela. Maybe you can give us some kind of indication of what are those kind of size and quality of the opportunities that you see in Venezuela, please?

Thanks, Alejandro, and thanks for joining the call, and thanks for your congratulations on the results. First thing, in terms of Colombia, and I'll start there. We're very pleased with the incoming government. The government -- the incoming administration has been very vocal in terms of their support to oil and gas and mining and infrastructure and overall private investment and creating good conditions for that investment to be received by Colombia.

So I think from that point of view, we're very, very pleased, especially Alejandro with the backdrop of the current government that has been against industry quite publicly in terms of no new licensing for oil and gas. and absolutely very, very little support for industry. So from that point of view, I think we're very pleased. We've already had discussions with the incoming administration. And as you know, GeoPark is a long-term investor in Colombia. Colombia is the source of our cash generation is where we're actually supporting the growth that we're seeing in Vaca Muerta in particular. So we're very, very pleased with that.

And I'd say, Alejandro, one thing is we do see some good opportunity set, a good opportunity set in Colombia, both in the conventional and the unconventional hydrocarbons and also in oil and gas or liquids and gas. As you very well know, Colombia has a structural shortage of gas where the country is importing 30% to 35% of the gas it uses on a daily basis.

And Alejandro, I'd like to create a bridge to Argentina, which I think is very relevant. As you well know, and I know it was not in the question, but I think it's relevant for context. We acquired the areas from Pluspetrol September of last year. In October, we actually started operating. And today, we've already drilled our 5 initial horizontal wells, and we fracked those wells. So in 9 months, we've gone from entering into an area to fracking the wells. And as a matter of fact, Alejandro, the first well started flowing yesterday, and it will take some time for the cleanup and everything else and stabilizing that production.

And the bridge I want to make is we've discussed this before in other calls, how do we bring that expertise from Argentina into Colombia. And when I've spoken to some of the new members of Congress and new members of the incoming government, I'm saying, look, GeoPark is a company that has actually fracked and we've had experience in fracking. So I think that sort of a differentiator as a company is something that can play very well in terms of Colombia and opportunities. And there's a massive, massive opportunity set in unconventionals in Colombia. So that's something that we're assessing, Alejandro.

And so in terms of changes because that's part of your question is, I think in terms of new licensing rounds, both conventional and unconventional oil and gas, there's a lot of discussion around environmental permitting [indiscernible], sort of the public audiences with the communities and everything else. So I do sense that there will be some changes. But I would like to highlight, Alejandro, that having said all of that, it's not immediate.

Inauguration is in a couple of days. It's not going to happen on the next day or August 8. It will take some time, but I do see a lot of the right signals from government. And GeoPark is ready to do its part. We're willing to invest. We're willing to grow in Colombia should there be opportunities. And as you know, the technical teams have been looking at this and assessing opportunities. So that's the first part.

And you asked about Venezuela. Opportunities in Venezuela. And the first thing I'd say is that our thoughts and prayers and support goes to the people that suffered or have suffered and are suffering after the earthquakes of June 24. So over the last months, 4 to 5 months, myself, the team, we visited Venezuela numerous occasions. There's a lot of opportunities. I mean, the potential in terms of the oil in place in different licenses in different basins is very, very large. We're assessing several opportunities.

I will not go into details, but we're very pleased in terms of the technical aspects of the licenses, some of the terms that are being discussed, the quality of the people in PDVSA. I would like to highlight that. So there's some very good conversations going on. And hopefully, we can get some of those opportunities across the finish line. And Alejandro lastly, we'll obviously inform the markets and share with the markets any updates when those happen. Thanks, Alejandro.

Our next question comes from the web. Andres Pautasso from Argentaria asks, what is the estimated CapEx for the remainder of 2026 in Vaca Muerta? Could you provide a breakdown by quarter, along with the main activities driving the spend?

Andres, this is Martin Terrado. Thanks again for your interest in GeoPark. We are very, very proud of the accomplishments we had in Vaca Muerta. I'll go straight to your question, and then I want to expand a little bit on the comments from Felipe. But basically, for the second half of the year, we expect in the order of $40 million to $50 million of capital investment. That is pretty much aligned with what we've done in the first half of the year, which was, like Felipe said, 2/3 of our capital program for the first half, around $55 million.

So what we've done in the first half on CapEx is mainly workovers, drilling and completion and a little bit of facilities upgrade. As we go into the second half of the year, it's going to switch and it's going to go mainly to finishing the facility upgrades, finishing a connection to a neighboring operator that has spare capacity and also the completion of a water disposal well.

On top of that, we're going to be building the pad that will be the first pad to be drilled early next year, starting in December of this year with the rig that Felipe mentioned that has been awarded for our factory mode. So that's a high level how the split you can think about it is going to be around 70% to 80% of those 40% to 50% in the third quarter and the remaining on the fourth quarter.

And I do want to reiterate one more time how proud we are of our team accomplishments in Vaca Muerta during the past months, 9 months that have been full of activity, drilling, completing, doing facilities work. We have fracked 180 stages incident-free and the efficiencies that we have seen with our team during the frac stages are amongst the top quartile. And some of those metrics, I mean, number of fracs per day, we have done several days with 9 fracs per day. That's a benchmark. And our number of hours per day where the frac sets were working, again, several days with 20 days -- 20 hours per day fully operational. So that's a little bit of flavor of Vaca Muerta and the answer to your question.

Our next question also comes from the web. It comes from Alvaro Leyva from BTG Pactual. They ask, given the currently favorable oil market outlook and the fact that it generated USD 41 million in hedging losses, why would you increase your hedging position in 2027? And secondly, they ask, are the wells you are planning to tie in, in Argentina in 2H '26 within the RIGI proposal? If so, will you only tie in the wells until the RIGI application is approved?

Alvaro, this is Felipe. And I'll start with the second question, and then I'll ask Jaime to take the first one, if that's all right. Just to continue with the conversation around Vaca Muerta. So as I was mentioning earlier, the wells that we've drilled are being put into production as we speak. So we're not going to wait. Actually, the first well started flowing yesterday. And we have some facilities that we need to start in the pad of the wells. So we will be seeing some increase in production, Vaca Muerta and at the end of the year from around 5,000 to 6,000 barrels per day.

We're expecting, I mean, a statement from the government around RIGI. We've had some very good discussions over the last few months, but we will wait for that approval on the RIGI when it comes. And that will eventually and if it's granted, we will cover everything else, our factory drilling and the big investments on the completion of one portion of the pipeline, full processing facilities and the factory mode drilling. So the wells that we've drilled will be connected or in the next and put into production in the next few days and weeks. Jaime?

Sure. Alvaro, everybody. In the matter of hedging, I think we need to start first with what is the purpose of hedging, right? And our goal at GeoPark is to deliver strong double-digits risk-adjusted returns under any market period. And in that context, having the possibility of delivering predictable cash flow in a period where we're going to be having increased investment and where we have persistent volatility is key. And that's what we're seeing.

If you want to put color on that, we're going through a phase in the company where as we are growing our exposure to Vaca Muerta, there is increased capital deployment. And as you all know, those who have been following us, we also have an inorganic ambition that would also require that. So that's why we believe that hedging needs to be part of the equation, and it will continue to be part of the equation.

In that context, when we look at 2027, currently, we see that there's -- we're under market conditions that allow us to obtain some very attractive floors for our pricing. To give you an example, over the last few weeks, we have been able to attain positions where we're accessing floors of $75 per barrel and ceilings of $85, $86 per barrel. In that price environment of $75 to $86, the company can deliver very, very, very attractive cash flow, very attractive returns, and that's good. And it also gives us the comfortable position that we know as we engage in more investments in Vaca Muerta or elsewhere that the balance sheet of the company is not going to be compromised. So that's the rationale, Alvaro.

And our next question comes from Gustavo Sadka from Bradesco.

So I have a couple of questions here. My first one is about cost. We saw a strong uptick in cost this quarter. It seems to be driven by the Colombian peso and Argentina peso appreciation in energy costs. Based on how these variables evolve recently, it is reasonable to expect a normalization in the second half of the year? Or we should expect costs to remain at this level?

And my second question is a follow-up on the Colombia question. This unconventional potential in Colombia seems to be now a possibility with this new government. Is conventional development is something that we could see in already all GeoPark blocks or this would for GeoPark conventional in Colombia, it would require new biddings? And also on conventional oil in Colombia, are new biddings something that could attract interest for GeoPark? This is my questions.

Thanks, Gustavo, and thanks for being in the call today. And yes, as you've mentioned and we've reported, there's upward pressure on the -- our operating cost from both Colombian and Argentine currencies appreciation versus the dollar. And Martin will give us a bit of flavor in terms of magnitude and everything else. And I think also because of energy. And don't -- I mean, we need to be sure that we've factored something that is upcoming, which is El Nino, the phenomenal El Nino with droughts and very little rain that will eventually take energy prices higher up.

We've done a lot of work in terms of getting ready for that, and Martin will take us through that. But we do see Gustavo that from the initial guidance that was $13 to $15 per barrel, we're outside of the guidance, and we're moving north, if you will. We'll be higher up in terms of where we end up the year. So Martin, why don't you give us a bit more details around that? And then I'll take the other question.

Yes, Felipe. Gustavo, thanks again for your question. So the increase in operating cost, as was stated by Felipe during the first half of the year reflects basically the combination of the FX impacts and the higher energy demand and prices in Llanos 34. So it's demand and prices for Llanos 34. When we look at a unit basis, the lifting cost increased in the first quarter of this year from $14.7 to the quarter we just finished $17.8. So the average that we had for the first half was $16.2 and our guidance has been $13 to $15. So it's outside of the guidance.

For the full year, we currently expect the lifting cost to pretty much stay within where they are. So our guidance for the second half and finishing the year is in the order of $17 to $19 per barrel now. This is mainly, again, if you look at each of the effects, the FX of exchange rate is in the order of $2.1 to $2.5 per barrel in our OpEx and the impact on the energy costs that are rising is about $1.5.

So what we're doing on this matter, we have some long-term initiatives, which is connections to the electric grid. We are already connected, but we have 2 initiatives, which are already ongoing to have greater flexibility. Those will be coming next year and the year after. We have already signed a contract on biomass energy. But for short term, our focus is on getting the lower energy cost, looking at instead of spot, what we can do on fixed contracts and also on different sources. So we're looking at different sources that could be available, such as fuel and others.

And then we look inside and what is it that we can do to improve our efficiency -- energy efficiency. And I will give you one example so that I don't extend that much. But one example is in the past year, we have captured all of our gas, and we're generating out of that gas around 1.5 megawatts, and our field consumes in the order of 65 megawatts. So those are things that we're looking, working internally and with our contractors to see can we reduce the energy consumption of our pumps and so forth.

And finally, one of the numbers that we've done so that you get a sense for -- we've done some sensitivity for each [ COP 100 ] per U.S. dollar that the exchange rate changes for the remaining of the year, it will mean around $2.5 million, either above or below in our OpEx. So it is considerable. And like I said, we're working on all those fronts.

Thanks, Martin. I would just add, Gustavo, that obviously, we're doing everything in terms of our own remit of responsibilities in terms of ensuring that our operations are safe and efficient and reliable. And we'll see where the exchange rate will go. Last week, the Central Bank intervened with the purchasing of dollars. Dollar has gone up a bit, but we'll need to operate efficiently and reliably, and we'll continue to do what is within our own hands in terms of our operations.

I'll move on to your question on Colombia, and I don't want to repeat myself, but we're very excited with the incoming government. They've been supportive of industry overall of investment, of rule of law, and they're very keen on trying to do things quickly. And that's why I was mentioning our experience in Vaca Muerta from receiving the operation to fracking in 9 months with drilling wells in the middle of that. So we can be very agile, we can be very nimble and we can operate safely. And we're definitely interested, definitely interested in the unconventional potential in Colombia, Absolutely.

So I mean, a lot of our team members have a lot of experience in unconventionals. And one of the strategic reasons behind Vaca Muerta, which is a great investment for the company and even better with the RIGI opportunity or possibility is to bring some of that expertise and know-how back to Colombia. So doing the fracking and doing the unconventional development and bringing some of that experience back to Colombia. So if there's no bidding in unconventionals and conventionals, we'll obviously look at that. We have a strong foothold in Colombia. We like operating here. We're committed to the country. So we will definitely look at the opportunities as they come and be very proactive in terms of capturing some of those opportunities.

And our next question comes from the web. It's from Joaquin Robet from Balanz. The first question reads, waterflooding has helped support production at LLA-34. How do you plan to keep output stable going forward? And secondly, with a strong hedge position in place for 2H '26, how should we think about expected hedging results over the next 2 quarters?

Thanks, Joaquin. And I'll ask Rodrigo to take the first one, and Jaime, if you can take the second one. Rodrigo?

Joaquin, thank you for your question. Actually, waterflooding is key, not only in production that represents 25% of the production of the Llanos 34 today. It's also key in the development plan. But waterflooding is not the only thing that we are executing and doing in the fields. We are executing an infill development -- infill drilling program with very successful last year with 6 wells. We started this year with all the 7, and we are moving to the north of the field with another 7 wells in that area.

Actually, we are executing a work program where we execute -- we expect to finish the year with more than 25 workovers in the field, and we have 4 wells injecting polymer today. We expect to finish the year in 9 injectors. And for next year, for the beginning of next year, we want to add another 9 wells for a total of 18 wells in polymer flow. So we are doing a lot of things to keep production stable. This is impossible to do it if we are not very detailed in the civilian discipline operation and also have a very strong alignment with our partner. So that's key also in this relationship that we have.

If you ask about the future, what we are thinking about the future, most of the activity in waterflooding and polymer are located in the southwest of the field. What we expect is to move to the northwest -- northeast of the field with new injector wells. So the waterflooding is not there yet. So that's the plan for the rest of this year and next year with more infill drilling wells, injector wells in terms of the water and polymer as well. So that's the plan that we have to keep production stable in Llanos 34.

Jaime?

Yes. Joaquin, moving on to the question around hedging. Basically, our 2026 position has remained unchanged since the last call that we had. There was a position that was acquired probably at the back end of last year, early first Q of this year. To do a quick recap on that, essentially, what we're seeing is we are at around 20,000 barrels a day of barrels that we have hedged currently. And we are -- we have a growing set of volumes in 3Q and 4Q that can get to about 25,000 barrels a day as the Vaca Muerta production ramps up. So that's remained unchanged since the last call.

The floors and ceilings associated to that production are $65 per barrel on the floor end and ceilings of about $72, $73 per barrel. And that position provides price support for a full year EBITDA that is in excess of $250 million despite the cost escalation that we have been talking about today. So even in these scenarios of -- when you think about the ranges that Martin spoke about $17 to $19 per barrel potentially of OpEx cost escalation, we are expecting to have an EBITDA that is strong and competitive.

Our next question comes from the web as well. It comes from Isabella Pacheco from Bank of America. It reads, what are your expectations on social unrest under the new administration in Colombia? Can GeoPark do anything to work around it?

Thanks, Isabella, and thanks for the question. And one of the things that in GeoPark, we value as part of our core values is the long-term relationships with the communities and the overall environment in which we operate. And I'll probably share something with you, Isabella. I joined just over a year ago, the company. And one of the key reasons why I joined GeoPark is the way in which GeoPark conducted its businesses in terms of being a safe operator, a reliable operator and an operator that in terms of the -- both the environment and the communities did things very well. So I think -- I mean, in its history, GeoPark has built very strong relationships with the local communities in terms of some of them providing goods and words and actually working in some of our fields with the authorities and the likes. And that's not going to change with the incoming administration.

I think we'll just continue to strengthen how we do things in terms of our activities, working with those communities, our social investment and a long-term view and a long-term view. So we'll be watchful. We'll be very, very proactive. -- and always sort of approaching this in a manner that's respectful and that actually has this long-term view in mind. Thanks, Isabella.

And our last question from the web comes from Peter Bowley from Jefferies. On inorganic growth opportunities, is GeoPark considering only oil-focused assets or gas assets a possibility as well, particularly in Colombia, where natural gas looks to be experiencing a multiyear supply-demand imbalance?

Thanks, Peter. Thanks for the question. Yes, I mean, we have been indeed focused on oil. We are -- I mean, we produce some gas and we do some self power generation in the field. But gas and gas plays and gas opportunities is something that we've looked throughout the years. So we are not closed to gas opportunities. As you rightly point out, there's a deficit in terms of demand of gas in Colombia. And I would probably just add that there's -- we firmly believe there's opportunities -- gas opportunities in Colombia. Some of them associated with unconventionals that we've already mentioned in the call.

So if through fracking of unconventionals and developing the unconventionals, we can get some gas to the market, that's something that we're ready to pursue. There's bigger opportunities around gas, but those are outside of the remit of the company, things like the offshore. And for the other thing, and I'll tie back to a question that was made earlier is there could be some opportunities, cross-border opportunities with Venezuela around gas. So that's something else that we've looked at, and we're not close to that. So definitely, gas is something that we -- should the right opportunity come, we want to be involved, and we will continue to be proactive in that space. Thanks, Peter.

And we have no further questions. I would like to turn the call back over to the company's CEO, Felipe Bayon, for closing remarks.

Thank you. Thanks a lot. And again, thanks for participating this morning and this afternoon in this call for our 2Q results, very, very thrilled with what's going on in terms of how we've managed to implement strategy, which is absolutely, as we've discussed before, 2 main things: protecting what we have, and we have some good operating results in Colombia, adding in Argentina and Vaca Muerta and going back to a path of growth with Vaca Muerta has actually delivered to us so far, and we're very happy with that.

And going forward, we've talked about opportunities in Colombia. So we will continue to work on those opportunities in Venezuela. And I just want to highlight that there's some potential opportunities in Argentina as well. There's an upcoming round before the end of the month and we should be participating in that round as we want to grow our presence in Argentina.

And one last thing I'd say, given where we are with the current environment, the incoming government, before we've said that we wanted to be probably around $190 million to $220 million of CapEx, we see an opportunity of accelerating some activities that are accretive in value. And we see that the CapEx number could go all the way to $250 million. So I think that just reinforces our commitment to the geographies and countries in which we operate and our willingness to continue to provide value to shareholders.

So thanks again for your interest in the company and for joining today's call. Have a great day and stay safe.

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Good morning, everyone, and welcome to the GeoPark Limited conference call following the results announcement for the first quarter ended March 31, 2026.

[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.geo-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 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 the U.S. dollars unless otherwise noted. Reserves figures correspond to PRMS standards.

On the call today from GeoPark is Felipe Bayon, Chief Executive Officer; Jaime Caballero, 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 us for our first quarter 2026 results call. We delivered a strong start to the year with results that reflect consistent operational execution, improved benchmark pricing and the financial discipline we have been reinforcing across the businesses, all this while advancing our strategic priorities.

During the quarter, we achieved average production of 27,249 barrels of oil equivalent per day from both our operations in Colombia and Argentina, performing within our 2026 guidance and higher than our fourth quarter of 2025. This performance confirms the inflection point we accomplished at the end of 2025 and reflects stable base production, solid execution, and continued progress across our portfolio.

During the quarter, our operational focus was not only on maintaining the strength of our core assets, but also on advancing our growth initiatives, particularly in Vaca Muerta, Argentina. In Vaca Muerta, we successfully initiated drilling activities in the Loma Jarillosa Este block while continuing to progress key infrastructure, marking an important step forward in the development of these assets.

These milestones reflect a disciplined transition into execution as we continue to position Argentina as a key contributor to our future growth. We expect production to increase from 1,430 barrels of oil equivalent per day as of the first quarter 2026 to 5,000 to 6,000 barrels of oil equivalent per day by December 2026.

In Colombia, performance across the portfolio demonstrated the resilience and quality of our asset base. In Llanos 34, secondary recovery, particularly water flooding, played a critical role in supporting production and mitigating the effects of natural decline and temporary operational factors during the quarter. CPO-5 delivered production above plan, highlighting its underlying strength despite social disruptions.

In Llanos 123, production increased by 13% versus the prior quarter, supported by strong base performance and continued progress in the Bisbita waterflooding project, reinforcing the positive momentum of the asset. Importantly, all operations were conducted with strong health and safety performance and with zero injuries and no major process safety events.

The quarter benefited from a constructive pricing environment with Brent averaging $77.9 per barrel. This translated into a combined realized price of $60.4 per barrel compared to $54.8 per barrel in the prior quarter. While wider differentials and our hedging program moderated the upside, we were still able to capture a meaningful improvement through disciplined commercial execution and active risk management. This operational and pricing performance translated into strong financial results.

Revenues reached $128.4 million. This is up 16% compared to the fourth quarter, supported by an 8% increase in sales volumes, including the commercialization of deferred volumes from the last year. Adjusted EBITDA was $71.3 million, representing a 56% margin and a 54% increase versus the prior quarter, reflecting both higher revenues and improved cost performance.

Operating profit increased to $58 million from $20.6 million in the fourth quarter and net income for the period was $20.2 million, even after the impact of nonrecurring items and a higher tax charge associated with the increased profitability and the oil price-related surcharge in Colombia.

Cost performance remained very strong with operating costs decreasing to $14.7 per barrel from $15.8 per barrel in the fourth quarter of 2025 within our full year guidance. Structure costs have a trajectory from $5.6 per barrel in the fourth quarter of 2025 to $4 per barrel in the first quarter of this year, which also confirms the positive impact of all the interventions we initiated last year and the organizational focus on efficiency and cost control.

We invested $22 million during the quarter, primarily resulting in a 3.4x EBITDA to CapEx ratio and a return on average capital employed of 19%, underscoring our disciplined returns-based capital allocation.

Our balance sheet remains strong. We generated operating cash flows of $32.9 million, fully funding our investment program. In addition, we enhanced our liquidity position through several strategic actions, including $65 million in local debt raised to pursue the Frontera acquisition, $100.3 million from escrow recovery and breakup fee of the unconsummated Frontera deal, and a $107 million equity investment from the Grupo Gilinski, who joined as a new long-term strategic partner.

As a result, we ended the quarter with a robust cash position of $274.9 million, giving us flexibility and optionality to pursue value-accretive growth opportunities. Net debt stood at $333.1 million with a leverage ratio of 1.3x, reflecting a solid and flexible capital structure with no principal debt maturities, until January 2027.

This positions us well to navigate volatility while maintaining the flexibility to execute our plans. In terms of risk management, we have secured oil price protection covering approximately 19,000 barrels of production per day for 2026 through three white collars with downside protection and retained upside participation. For 2027, we have already hedged approximately 11,000 barrels per day under similar structures, reinforcing visibility and stability in our cash flows.

Overall, we are delivering consistent operational execution and strengthening our financial position, supported by a high-quality asset base and disciplined capital management. With all this in the backdrop, the Board declared a quarterly dividend of $0.023 per share.

Finally, the entry of Grupo Gilinski as a strategic investor represents a very significant milestone, strengthening our shareholder base and aligning the company with a long-term partner that enhances our financial flexibility to pursue growth opportunities in a disciplined way. Our strategy remains clear and unchanged. Protecting and maximizing the value of our core assets in Colombia while advancing Argentina as a key driver of transformational growth.

At the same time, we remain committed to identifying and evaluating value-accretive opportunities that fit our capabilities and our disciplined approach to capital allocation. This includes opportunities both in Colombia and Argentina and also a careful and structured effort to understand potential in other parts of the region, including Venezuela.

Before closing, I would like to recognize the continued commitment of our teams. Their focus on safety, operational excellence and efficiency is what allows us to consistently deliver these results.

Thank you again for joining us. And with that, let's open the floor to your questions.

[Operator Instructions] Up first is Daniel Guardiola from BTG.

I have actually a lot of questions, but I'm going to keep it down to two to three, so my colleagues can actually also ask. My first one is on the development of the Argentina story. And I wanted to ask you personally, Felipe, what concrete evidence do you think investors should be looking at over the next 6 to 12 months to really validate the Argentina equity story for you? That's my first. Perhaps we can go one by one, if that's okay with you guys.

Thanks for being here. Thanks for joining the call. And thanks for the question on Argentina. And where I start, Daniel, is, and you'll recall that we've referenced this in prior calls. September of last year, we signed a deal with Pluspetrol in the office of the Governor of Neuquen. And only 21 days after signing, we took over the operation from Pluspetrol. So, a lot of support, a lot of help and a lot of good work with people in the ecosystem of Vaca Muerta in Neuquen.

And we've done workovers, and Martin can go into some of the details and specifics. But we've done workovers on the wells. We've started upgrading facilities. And probably the most important thing, Daniel, we've already drilled three horizontal sections that range between 2,200, 2,300 meters to 3,000 meters within or as specified with our time prognosis and budget. So that's very good news.

And you'll recall, Daniel, that we actually took advantage of a window of opportunity of a rig that was working. And remember, this is a Nabors rig, the same company that we used to drill our wells in Colombia. So, we have long-standing relationship. And those wells, those three horizontal sections have been drilled successfully.

What's coming up in the next 6 to 12 months, fracking the wells. So, there will be these three wells with a couple of additional wells. So that should happen in June. We will be drilling some additional wells to manage water, for example, which is a key component. As I've mentioned, we're upgrading facilities. And the other thing, Daniel, which I think is fundamental, in the next few weeks, we will be signing the contract for the factory drilling rig that should start in December.

So, I want to, one, say, look, we've actually delivered on the commitments and promises we've made. And we're building on that track record going forward to ensure that we can continue to grow our operations in Argentina. So, we're very, very, very confident. We're very comfortable with the team. There's already 45 people working in the operations in Argentina with close to four to five additional people indirectly working for us.

And for the last thing, Daniel, that I've mentioned, as you well know, RIGI and a very important part of what companies, not only in oil and gas are looking to do in Argentina, we should be applying for RIGI in the next few weeks or so. So, lots of things happening, but we're very thrilled with how the operations and the results are going.

My second question is on hedging, especially considering that you have a very significant portion of your next 12 months, actually 18 months already hedged at lower prices when you compare against spot prices. And I wanted to ask you actually two things. I mean, if oil prices were to remain around, I don't know, $90 per barrel, what will be the estimated hedging losses you will have to account for this year? And if there is any way for you to unwind the current structure of hedging contracts that you have in place at this point?

Daniel, thanks for your question. This is Jaime here, of course. So, on hedging, as you know, Daniel, and everybody who has been following us for a while knows that we've had a long-standing strategy in the company where we seek cash flow stability, and that is particularly important in a context of where we're going to have increasing capital commitments associated to Vaca Muerta.

So, the way that we think about the finance structure of the company is we need to make sure that we can support our growth agenda and that we have the cash flow predictability to do so. Prices will come and go, but it's the volumes that we can deliver and it's the growth trajectory that we can deliver what's actually going to end up creating value for our shareholders over the long run.

So, in that context, we've covered 19,000 barrels a day of our production for this year on average. We see things that are in the $72 or $73 range. And if current market conditions continue over the next months, we will indeed materialize some hedge losses if those price dynamics continue, which is uncertain, as you well know. And to take your scenario, if you will, the way that I would characterize it is if we have average Brent prices in the $80 to $90 kind of band on a full year basis this year, we will indeed have losses in the derivatives, which are going to be in the $60 million to $120 million range.

This is not a surprise. This is something that we model continuously. Obviously, the exact numbers are going to depend in exactly what is the price trajectory that occurs on a month-by-month basis.

Now the flip side of this story is that at the same time, whilst you're seeing those losses in derivatives, we are capturing the benefit of the healing of the hedges, which are well above our plan, and we're also capturing improved price differentials as well associated to those Brent prices if they remain high. So, our EBITDA is going to be also in the very high end of our guidance, too. So, there is a loss in derivative, but our EBITDA is going to be significantly higher than the one that we projected earlier in the year.

With all that in mind, we are not contemplating unwinding our existing positions for 2026. There are all sorts of mechanisms in place to do that. As we reflected on it, our conclusion is that, that would be a distraction and that would put us in a territory of speculating on how prices are going to evolve over the coming months. So, to that end, the focus of our strategy now is actually on taking advantage of the positive market outlook to secure our 2027 hedging program, and that's where we're focusing our attention now.

Thanks, Jaime, very thorough answer. And just the last one, very quick one on royalties. Can you share with us what percentage of royalties paid in cash and at what price is the settlement established? And the reason why I'm asking this is to try to better understand whether cash royalty payments are further limiting the company's upside in the current high oil price environment.

Sure, Daniel. So, the quick answer is very little. So only about 16%, 17% of our royalties are paid in cash. Everything else is paid in kind. The formula, as you know, has multiple elements to it. But if I were to simplify, essentially what you're seeing is you take the Brent headline price and you apply to that a holistic discount from wellhead to an analog FOB export. So that is about a $13 discount more or less. And on that basis, we calculate it.

The next question today comes from Alejandro Demichelis from Jefferies.

Just one quick question. Felipe, you talked about your strategy not changing. You have a stronger balance sheet. Now you have a new reference shareholder. So, could you please give us a little bit more detail on what are those opportunities that you're seeing kind of in Argentina, maybe looking at Venezuela, maybe something else in Colombia or somewhere else?

Alejandro, and thanks for being here. Thanks for your question. Always good talking to you. Yes. So, the strategy has not changed, which is what I was referring to in my remarks earlier. So, we've basically done a reset of the business in Colombia. We've stabilized production, and we're very happy with that. So, things like waterflooding, infill drilling in the fields are actually working very well. So we're pleased with that. So that's point number one. And I've referred to this as protecting what we have and maximizing value.

The second thing is around growing. And Vaca Muerta, and I did share some of the highlights or milestones with Daniel earlier in terms of some of the things we're looking at, and that's great. We're very pleased. We're very, very pleased with how Argentina is going. And in terms of the growth angle, I'll refer to Venezuela, which is one of the things that we've mentioned, and I particularly mentioned in my remarks earlier today.

There's the new shareholder, a reference shareholder, as you've described it, which has been great for the company in terms of long-term alignment and the view of further growing GeoPark, which is great. And in that sense, it's been quite direct and open that both from the shareholder point of view and our company, we said, yes, we're looking at Venezuela.

This is basically a very comprehensive assessment of opportunities around different basins; there's different types of opportunities in Venezuela. These are world-class resources in Venezuela. There's been the new hydrocarbon law, which is promulgated back in January, which is very, very good. There's different sort of mechanisms through which one could actually enter into Venezuela in terms of CEPP or Empresas Mixtas or better mixture. Good progress on sanctions as well.

And our teams have actually visited the country now talking to key players, stakeholders, and we will continue with that, with these assessments and basically screening in detail potential opportunities at some stage. But again, we want to be always very aligned with strategy. This is an opportunity as a country entry that would eventually support this growth side of the strategy. So that's how we are addressing it, Andres. But let me just finish by saying very pleased with a very strong quarter. Strategy is unchanged, delivering on strategy and some potential upsides that we're assessing.

And next, we will take questions from the web. The first question is from Andres Peltaso, 'can you provide more detail on activity in Vaca Muerta for the remainder of 2026 and '27? You already started drilling some wells left by Pluspetrol. Any other pads wells expected to be drilled for the remainder of 2026 that will deliver production this year? And can you walk me through the fracking put on production, water encroachment sequence expected in 2026?'

Thanks, Andres. And I'll ask Martin to take this in a lot more detail. I just want to go back, Alejandro, and apologise as I missed up your name in the last answer. So, thanks, Andres. And Martin, can you take us through some of the details, please?

Absolutely, Felipe. And Andres, again, thanks for your interest in GeoPark. I'll start by saying that when we took over Vaca Muerta in our presentation in New York, we had five swing lanes in our strategy, production optimization, environmental, facilities, evacuation and drilling. And we're making progress as planned or even better than planned in all of those fronts.

I will touch on each of your questions. I do want to recognize and again, mention what Felipe was saying, what we have accomplished since October 16. So, what we've done so far is, and this all has been incident-free, which is one of our values. We've done six workovers in two campaigns.

The first campaign started the day that we were taking over the assets. The second campaign happened early this year. And we, in the second campaign, did it in shorter time than the first campaign. We have also brought a rig like Felipe was saying, in our Loma Jarillosa Este, we have already finished drilling the three horizontal wells.

Again, this is in a pad that has five wells, two wells were fully drilled by the previous operator. So, our task was to drill like Felipe was saying, in the order of average of 2,600 meters within 10 meters of thickness, these three horizontals. We've done it in 14.7 days.

And when you benchmark to the two wells that were already drilled horizontal, it's a very drastic reduction in time. So very proud of our drilling and completion and logistics team. We have also awarded and started the Loma Jarillosa Este upgrade. This is where the fluids are going today, and we need that upgraded. We knew that we needed that upgraded and it was part of our plan so that we can manage the production for all of that pad and also connections so that tracking of water and oil is not necessary.

We have also optimized our OpEx, specifically around fracking. So, although the production has been about the same order of when we got the block, OpEx have come down. And we have also submitted the environmental permits, and we had a successful public hearing about 10 days ago. So very proud of that.

When we look at, okay, what else, it's coming in 2026. I'll say that the first one is about fracking. The five wells that are in the pad that is fully drilled. That is already awarded and the frac set will move in June. So that will be around 30 to 45 days, that we will be doing more than 200 fracs stages in all the five wells. Following the frac, as you're aware, Andres, when you start putting the wells on production, you do it in a protocol way so that you are opening the plugs and water will be coming.

So, we expect initially about order of 2,000 to 3,000 barrels of water in the initial stages. And then when we start putting everything on production, which will be around September, we will be having 6,000 to 8,000 barrels of water with the production of oil that will be coming. This is something that always happens in unconventionals is the flash water production from the stimulation and then the wells go to very low water cuts.

So, what we expect is in this quarter, we're going to be doing the fracs. While we're doing the fracs, you will see in future calls that part of the production will be temporarily coming down because we want to avoid any frac hits with the existing wells that have been drilled and are on production.

But then after that, starting in September, we will be ramping up and putting all the wells on production to a peak like Felipe was saying, in the order of 5,000 to 6,000 barrels of oil per day for all of our operations in Vaca Muerta.

The other thing that we're doing is we're already doing the engineering for the central processing facility that as we ramp up from the current levels and the 6,000 by the end of the year to 20,000 by 2028, we will need that central processing facility, and that's already on the works. The other thing that we're doing right now is going back to the water production to be efficient instead of fracking that water, we're already drilling. The rig that drilled the horizontals is now drilling water injection disposal well and also an observatory well that is part of the regulation that is required for water disposal.

So, we will have that in place by the time we start putting the pad with the five wells on production. The other thing that we're looking at is RIGI. So that's something that we're considering and shortly, we will communicate. That is part of our strategy. And the other component to have a successful 2027, which we have been working and we're finalizing the signature of the contract is the factory mode drilling, which is with a company that is in country and the rig that will be assigned to us as a rig that is in country.

So that eliminates any type of mobilization from overseas. And we feel very good about that. We will be signing that contract, like Felipe said, in the next coming weeks. If you think about 2027, okay, what are we going to be doing in 2027? So, the key milestones and our priorities are basically around with the factory drilling that will start in December. In 2027, we will be fully drilling and completing two pads with ten wells put on production. And we will finish 2027 starting the drilling on the third pad.

We will also be constructing the central processing facility, and it should be on stream by the end of 2027. So high level, I think I'll cover most of the questions that you have, Andres, but if there are any follow-ups, we will be glad to answer.

And he does have a follow-up. On the barrels you have not hedges, are you realizing full Brent upside or you realize them below Brent spot prices?

Yes, Andres. So, the barrels that are not hedged are at market conditions. So, they float, if you will, with market conditions. And currently, they are absolutely benefiting from the Brent upside.

And the next web question is from Joaquin Robet from Balanz.

Given the current Brent environment, are you considering revising 2026 CapEx guidance upward? If so, where would incremental drilling be allocated? And what production response should we expect?

Thanks, Joaquin. And just to go back to the guidance, we've talked about $190 million to $220 million for the year. And that's Vaca Muerta, as Martin was explaining, a lot of activity going on there and a lot of activity going on in Colombia. So, what are we looking at as we taking into account the current market conditions is year-end activities in Colombia. And I mentioned earlier that we're very, very happy and we're very, I mean, enthused by the water flooding response by the infill drilling.

So, there's opportunities that we're assessing as we speak, but these would be year-end activities. So probably the impact they'll have is more towards 2027 in terms of production. But it's something that we're working with the teams, and we'll communicate when we're ready in terms of putting those down as CapEx for the year. And the other thing that even though there's a lot of things happening in Vaca Muerta, the drilling getting the factory drilling rig, upgrading the facilities and basically contracting or signing the contract for the CPF, we may consider accelerating some of the activities in Vaca Muerta.

Remember that the guidance has been, over the period, it's $1 billion, $600 million for '26, '27, '28. But within that frame, there may be some things from '27 that we accelerate and bring into '26. But just a sort of heads up, but it's something that we are assessing. And once we finish all the work and we'll be ready to communicate, we'll let you guys know.

Your next web question is from Vicente Falanga from Bradesco. How is priority in terms of capital allocation? Is M&A still a priority? Any potential conversations?

Thanks, Vicente. And I'll give you some thoughts and then Jaime can go into more detail. But the priorities for allocating CapEx have not changed. I go back to the protecting what we have, which is working in the assets in Colombia, stabilizing production and generating more value. And again, reducing the lifting costs, being very efficient and ensuring that we arrest decline and reset the businesses.

So that's not changed. And there will be CapEx allocated to that. And then growth, and there's CapEx allocated to that growth.

But M&A is a priority for the company, but we will do it in a way that's very thoughtful, that's very disciplined, that's actually a result of being very comprehensive in terms of assessing opportunities and ensuring that these opportunities create value and as such, fully [Break]

Ladies and gentleman, please remain on the line while we reconnect the speaker.

Okay. Inorganic growth absolutely continues to be a priority for the company. And the context for that is a recognition, I'd say, of two fundamentals. The first one is that the energy sector continues to offer massive value creation opportunities for our shareholders. And the second one is that in that context, reserves growth is, therefore, in the long-term interest of our shareholders.

So, we need to make sure that we expand our reserves offer, that we have a long-term inventory of opportunities that we can drill and that we can use to increase production. So that's the context by which we are pursuing inorganic. The other important consideration is that we believe that the company is very well positioned to capture these opportunities and probably now more than ever in the recent past, given the performance that we are delivering and given the financial condition in which we are in, thanks to the actions that we've taken over the last number of months.

So, as we tested this with our shareholders, there is a broad consensus that inorganic growth is a priority and that we should pursue that. And we have the balance sheet and capabilities to do so. So where are we focusing on? No surprise here. Colombia is our backyard. We will continue to monitor all opportunities that Colombia provides very selectively as we have been doing in the past. And we'll see where that takes us.

The upcoming elections could perhaps change the landscape too and create new opportunities that are probably now more difficult to assess. So that's something that we're monitoring. Argentina, our focus is in Vaca Muerta and particularly in the oil window, we have a narrow focus to that extent. That's where we think that we can bring our capabilities and particularly around the hubs that we have already created with Loma Jarillosa Este and Puesto Silva Oeste. So, anything that complements that is going to be of interest for us.

And last but not least, as Felipe mentioned, Venezuela is an emerging priority for us, where we're actually seeing that the mix of positive political developments, regulatory environment increasingly tells us that sort of conditions that we can see there are competitive in the context of international benchmarks. So that's what we're working on. And we will continue to have a lens of capital discipline of value accretion for shareholders. That's unchanged.

Thank you Jaime. And we do have a follow-up from Vicente. How are you seeing the development of oil regulation in Venezuela so far? Do you like it?

Thanks, Vicente. I think I referred to some of this earlier. But clearly, there's lots of changes happening very recently in terms of the hydrocarbon law initially, then all the progress that has been made around sanctions, which is very, very relevant as well. And as I've mentioned, our teams have engaged with stakeholders in this very comprehensive review of opportunities and screening opportunities in different basins.

And clearly, it's a world-class petroleum and gas resource in terms of what Venezuela has to offer. And I'd say that, yes, the regulations do work. Jaime was saying, that these are competitive. And when we come to the time to assess some specifics on those, this will need to compete with some other opportunities that we have and maintain and remain very disciplined in terms of allocating CapEx. But yes, we're, I think we're very comfortable, and we're being very, very disciplined and thorough.

And at this time, there are no further questions. I'd like to hand the call back to Felipe Bayon for any additional or closing remarks.

Thank you, Lisa, and thanks for your help today. And thanks, everyone, for being here today, for joining the call. Thanks for your interest in the company and your questions and your feedback because it does help us in terms of what the markets are seeing with everything going on with the uncertainty, volatility, all the geopolitical changes that are almost daily in terms of what's going on.

So, thanks for that. We had a very strong quarter in terms of our results from a safety standpoint of view and from ensuring that all the people that work with us go back home or to the headquarters in the same condition as they arrive, to their working stations.

We delivered on production. We had a very good financial delivery as well. And our shareholder base has shifted towards a longer-term view, shareholder base, which is very good in terms of the alignment it brings with the strategy that we had relayed and shared with the market some months ago. So very pleased with how things are going. And once again, thanks for joining today, and have a great day.

And once again, everyone, that does conclude today's conference. We would like to thank you all for your participation. You may now disconnect.

Good morning, and welcome to the GeoPark Limited conference call following the results announcement for the fourth quarter ended December 31, 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.geo_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 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 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. Reserve figures correspond to PMRS standards.

On the call today from GeoPark is Felipe Bayon, Chief Executive Officer; Jaime Caballero, 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 Fourth Quarter and Full Year 2025 Results Call. 2025 marked a turning point for GeoPark, defined by strategic clarity, operational discipline, and a decisive portfolio reset well underway.

We strengthened our foundation through an anticipated inflection point in production and continued financial discipline, repositioning the company for long-term value creation. Importantly, we delivered or exceeded our full year guidance across all key metrics despite a materially lower oil price environment.

Production averaged 28,233 barrels of oil equivalent per day for the full year 2025, above the upper end of our guidance, reflecting a platform in both Colombia and Argentina that is executing and evolving while staying grounded in operational discipline.

In Colombia, we achieved an earlier-than-anticipated production stabilization supported by resilient base production in Llanos 34, sustained contribution from CPO-5 and successful drilling in Llanos 123. We also launched a polymer injection recovery project in Llanos 34 that delivered solid results.

Argentina began contributing production ahead of plan and assets were integrated safely to our operations.

Fourth quarter volumes averaged 28,351 barrels of oil equivalent per day, broadly in line with the prior quarter and reflecting the fresh production of our Vaca Muerta assets. Full year financial results primarily reflect lower realized prices, which averaged $58.1 per boe in 2025 versus $65.6 per boe in 2024.

Adjusted EBITDA reached $277 million within our guidance range, while margins remained resilient. Fourth quarter adjusted EBITDA was USD 46 million, reflecting lower realized prices and the impact of specific nonrecurring items, including deferred sales volumes, logistics-related adjustments and start-up costs in Vaca Muerta. These are timing-related effects, some of which will be reversed in our first quarter 2026 results.

Even in a lower price environment and with temporary quarterly impacts, our operational platform remained resilient and capital allocation disciplined. We invested $98 million during the year, in line with our plan and delivered a 2.8x adjusted EBITDA to CapEx ratio and achieved an 18% ROACE, underscoring disciplined returns-based capital allocation. We delivered meaningful structural efficiencies in 2025.

Operating costs averaged $13.4 per barrel for the year and G&A stood at an average of $4.8 per barrel, both within guidance. We also achieved $32 million in structural cash savings, setting a lower cost base expected to generate a run rate of some $45 million in annualized savings in 2026 and beyond.

Our balance sheet and risk management remain strong. Cash stood at over $100 million and net leverage closed at 1.6x, and we have no material debt maturities until 2027.

During the year, we repurchased over $100 million of our 2030 notes below par, capturing a $10 million gain and a $9.5 million annual interest saving. Over 84% of our 2026 production is now hedged through 3-way collars and hedging has already started for our 2027 production, ensuring continued cash flow protection.

Our portfolio reset is well underway, reinforcing our Colombian foundation while establishing a new unconventional growth platform in Argentina. In October, we successfully closed the acquisition of Loma Jarillosa Este, Puesto Silva Oeste blocks in Vaca Muerta, securing full operational control of 2 high-quality blocks in one of the most attractive unconventional plays in the world.

Production is already online and development is underway with a clear path towards the 20,000 barrels of oil equivalent per day plateau production by 2028 that we have shared with the market.

In January 2026, we announced the agreed acquisition of Frontera Energy's Colombian upstream assets, a transaction that more than doubles our resource base and that brings an expected pro forma production of approximately 40,000 barrels of oil equivalent per day net to GeoPark, which significantly expands our scale, diversification, and operating leverage. This is a transformative deal that consolidates our position as the leading private operator in Colombia and strengthens our platform for disciplined long-term growth.

On a pro forma basis, this acquisition can take production to exceed 90,000 barrels of oil equivalent per day by 2028 and adjusted EBITDA of approximately USD 950 million, doubling our previously communicated stand-alone outlook. Together, these 2 transactions reshape the company, materially increasing production, improving cash flow durability, and enhancing our ability to reinvest efficiently across the cycle.

Our strategy remains clear, protecting and maximizing our cash-generating base in Colombia and scaling a transformational unconventional platform in Argentina.

By year 2028, we're targeting 44,000 to 46,000 barrels of oil equivalent per day and an adjusted EBITDA of $490 million to $520 million with additional upside as the Frontera acquisition is integrated. In line with this road map, we reached a production inflection point in Colombia earlier than expected, anticipating the time we had originally outlined to the market. Execution remains disciplined and focused as we balance financial strength with long-term growth.

To support the strategy, the Board declared a quarterly dividend of $0.03 per share. As previously communicated, the Board will reassess shareholder distributions following the normalization of free cash flow after peak investments in Vaca Muerta.

Before closing, I would like to briefly address the recent announcement by Parex regarding directors' nominations to GeoPark's Board. Our Board remains fully committed to strong governance, disciplined capital allocation, and long-term value creation. All nominations will be reviewed through our established governance processes as we remain focused on executing our strategy and delivering results for all shareholders. GeoPark shareholders do not need to take any action at this time.

Regarding Parex's proposal to acquire Frontera's upstream assets, GeoPark remains fully committed to our agreement, which we believe creates a leading independent E&P platform across Colombia and Argentina. We have a strong conviction in the merits of the transaction and believe that, amongst other reasons, our strong operating expertise, deep local presence, and longstanding relationships in Colombia make us the strongest strategic fit for Frontera's assets.

Our agreement follows more than a year of detailed evaluation, technical diligence, and structure discussions with Frontera, supported by comprehensive operational, financial and contractual analysis. This depth of preparation underpins our confidence in the integration plan and value creation roadmap.

We believe the transaction delivers immediate and certain value to Frontera shareholders, while enhancing long-term value for GeoPark shareholders through greater scale, reserve debt and cash flow durability.

Our full field development approach is also expected to sustain production and investment in Colombia, supporting royalties, taxes and employment while strengthening the country's energy platform.

In summary, 2025 was a pivotal year for GeoPark. We protected and optimized what we have while continuing to deliver results with consistency and focus. In parallel, we launched a new growth engine in Argentina and secured a transformational acquisition in Colombia that will improve scale, competitiveness, long-term optionality, and value for the company and our shareholders.

We have entered 2026 with momentum. We have a stronger, more diversified portfolio that has a leaner cost base and a clearer path forward to continue building long-term value for all of our shareholders.

With that, let me open the floor for your questions.

[Operator Instructions] Our first question will be from the line of Alejandro Demichelis with Jefferies.

I have a couple of questions, if I may, please. The first one is on your cost base. Obviously, we have seen, and you mentioned one-offs in the fourth quarter. So can you give us some indication of how do you expect costs for the whole of the year to develop? What kind of range we can expect? That's the first question.

And then the second question is, you mentioned the bid -- the offer for Frontera. There is a competing offer now on the table. So how do you see that situation? And maybe you can comment on any kind of more recent discussions you have had with Frontera and how you see that situation, please.

Alejandro, good morning, and thanks for being here today. We always value your interest in the company. And let me start in terms of giving some context around the cost evolution. And then I'll hand over to both Jaime and Martin to give us a bit more color. But one thing I would say, the first thing is that we met or exceeded all of the guidelines that we had given to the market, which I think is very, very important.

Remember that -- and you would probably acknowledge this, I think it's only my third results call in the company. It's been 8 months, intense 8 months with the reset that I mentioned in my intro words, and this sort of stabilization of the operation inflection point that we reached in 2025, we've managed to work on define through activity and all of the technical work that has been done by the team. And from that point of view, Alejandro, very, very, very excited with the performance of the company, very thrilled. Kudos to the team, to the operations and the technical teams and the people that support those operational teams.

And in terms of the cost specifically, if you recall, we had given a guidance of $12 to $14 per barrel. In terms of lifting, we're in the midpoint of that, $13.2 with an increase in 4Q. But those -- most of those one-offs have been reversed or will not be present in 1Q, and we've managed to bring the cost back down, which is great news, which is great news. And some of those had to do with some very, very specific activities that we were conducting.

So with that, Alejandro, I'll ask Jaime and Martin to give us a bit more color, which I think is warranted.

Good morning, Alejandro, and thanks Felipe. So basically, a few data points that are relevant. When we think about the one-offs, essentially, we can split them in 2 categories, and they have an effect both on OpEx per barrel and on G&A. On one hand, we had a very particular start-up costs associated to the reinitiation of the Platanillo operation in Putumayo and the Vaca Muerta operations in Argentina.

When you look at them on a full basis, the impact of that is in the order of $7 million in the quarter, which are not recurrent, right? They're not recurrent. They're split broadly. 2/3 of that is seen in the OpEx, 1/3 of that is seen in G&A roughly. But it's something that we don't expect to see. And obviously, the important component of that is that, these costs are going to be -- are going to see production down the road, right? So Platanillo -- we are reactivating Platanillo in a context of production. And clearly, Vaca Muerta is the same case. So it's a bit of a -- it's a cost, but at the same time, it's an investment that we're making to be able to mobilize production in those 2 areas.

The other component is pure typical seasonality, right? So we had a seasonal effects in 4Q in the order of $2 million to $3 million. These are very specific to labor-related provisions that we decided to take in the context of what we were anticipating labor effects that were retracted to 2025. So there's an element of that. And there's also an element of the typical year-end projects like, for instance, reserve certification costs associated to that and that type of element.

On a relative scale, they're not particularly material, but they do affect the per barrel metrics. We're talking about $2 million to $3 million that in the context of the numbers that we're looking for. The OpEx once normalized would probably be at the $13 per barrel. The G&A would be at the $4.5 per barrel, which is kind of what we signaled in our announcement.

As we look to 2026, our guidance is unchanged, Alejandro. Basically, what we're seeing is lifting costs that are going to be in the $13 to $15 per barrel area and a G&A that we expect to deliver in the area of $4 per barrel.

Martin?

Yes. Thank you, Jaime. And good morning, Alejandro. Just a few additional data points. I want to stress again what Felipe was mentioning, our guideline for 2025 was $12 to $14 per barrel, and we finished the year at $13.4. So very proud of the team, all the efforts that have been done. And we got things that were already identified last year, and we're already underway, and I'll share a little bit of that in -- and for 2026, just reiterate what Jaime was saying that our guideline for OpEx 2026 is $13 to $15 per barrel, and we feel confident around those values. And the fact around that is we already have January and February numbers, like Felipe was mentioning, part of those things that hit us in the fourth quarter are gone. So we feel good about that. So I'll touch on a few items.

I'll start with Argentina. When we took over the operation in Argentina, the OpEx were $32 per barrel. We now brought it down to the order of $22 to $27 per barrel, and that's just by doing the workovers on the 6 wells and working with the teams on things like transportation optimization, activities and others. We expect to be by the end of the year, and that's part of our guideline around $10 to $12 per barrel. And that's going to be because we are incrementing production by bringing a rig that is about to start moving very shortly and increase production.

The second one is, like Jaime mentioned, Putumayo, we started in the last quarter of the year, that [ field ] back again. As we were starting, the OpEx were in the order of $45 per barrel. We're looking at that, and now we're lower than $40 per barrel. And with the recent announcement from the Ecuador government, we're looking at it since we're not transporting crude through Ecuador anymore. So we will decide in the next weeks the future of Putumayo.

And finally, in Llanos 34, the OpEx in Llanos 34 went up in the last quarter. We had well interventions. And also, we're always looking at reliability of the energy. So we had some activities to make sure that we were entering 2026 with as good energy reliability in the field as in the past, and we confirm we're already back at the levels that we had on the third quarter.

There are some things that we know are risk or challenges, especially around the exchange rate, and we're working on additional things that with the team we can implement. Some of them are around -- more ideas around the rigs for doing workovers and well services. So we have some pilots and some ideas that we're about to start implementing. We're bringing a fourth rig, workover rig, in March in Llanos 34, and we're already working in Llanos 123 to eliminate most of the rentals on facilities that we have. That's part of the plan as we move from temporary facilities to the final facilities in this block.

Thanks, Martin. And Alejandro, I'll go back to your second question in terms of how the Frontera situation is evolving. And first thing -- and just let me step back and just highlight some of the things that I already mentioned in my remarks.

So in January, when we announced a month ago, the acquisition of Frontera's assets in Colombia, clearly, a transformational transaction in which reserves double, brings additional production, helps us in terms of delivering more value, and actually provides the opportunity of a long-term commitment to the country, which is fundamental in terms of ensuring that deployment of technology and activity can be done in those blocks. All this in the context that we will always keep in mind, which is ensuring that value accretion and protection of our shareholders is present in every situation and every decision that we make.

And in terms of where we are in the process right now, so first of all, I want to acknowledge Frontera's team. The work that we've done so far, it's exceptional in terms of all the integration and all the process and everything that has to do with getting us ready for closing of the deal.

And you'll remember, Alejandro, that we've mentioned this is something that as part of our valuation framework with some conservative price assumptions, a very detailed operation plan, we've looked -- we've been looking at this opportunity for some years now with some more detailed conversations with Frontera over the last year, over the last 12 months or so. And we are fully convinced that it's not only in terms of Frontera's capability, the people, the teams they have, but it's a very, very complementary portfolio to the operations that we already have. And in that sense, in terms of the process itself, we're progressing with Frontera in our conversations.

One data point that I'll share with you today in the call, a couple of days back, we received approval, formal approval from SIC, Superintendencia de Industria y Comercio. It's like the antitrust body in Colombia, the antitrust agency, which is great. It was a major milestone in terms of the Colombian approvals. The AGM for Frontera, they scheduled that for April 10. So we're progressing in that sense.

And I'll just reiterate something that, with the news of the offer from Parex that came in this week -- and I mentioned that in my remarks. First of all, I'd say that as a Board, the Board will continue to assess, study, analyze, and pursue any and all options that seek and are directed at creating long-term value for our shareholders. And we will always evaluate the opportunities within the frame of financial discipline and the best interest of our shareholders. So we're very pleased, very, very pleased, Alejandro. These are great assets with opportunity. I mean, actually, the fact that there's a new offer from a different company demonstrates that our strategy is sound, is solid, that the deal is actually increasingly accretive deal for us and shareholders. So we're very pleased. We're very, very happy, Alejandro. Thanks for the questions.

The next question today will be from the line of Stephane Foucaud with Auctus Advisors.

I've got 3. So the first one back on Frontera. What are the various steps until closing? And are there things increasing your offer that you could do to prevent Frontera to go with Parex thinking about break fees or things like that?

Second, on the nomination by Parex of a Director for GeoPark. I was thinking they are making an offer on the Frontera asset. They are nominating Director. I was wondering whether there would not be any conflict of interest. I would be interested in your thoughts on that.

And lastly, where are we on Argentina with regard to [ production ]?

Stephane, thanks, and great to have you here on the call. So I'll expand a bit in terms of Frontera. And the first thing is that it's in Frontera's camp to assess the new offer that they've received. So it's up to Frontera to decide what they want to do with that offer.

In the meantime, as I've mentioned, our arrangement agreement is in place. I just talked about the local approvals, one which is very, very important that we received a couple of days ago, but it's down to Frontera to actually look at the offer.

One thing I would say, and I want to be very explicit on this, in the context of GeoPark and its Board and reviewing all of the options that are available to us -- and there's always multiple options in terms of things that we can do -- this needs to create long-term value for shareholders. And one of the things, Stephane, that we need to be very, very careful and mindful is that we don't lose that discipline in pursue of something specific. It could be a deal, it could be an operation. But we always, as the high ground, ensure that we remind ourselves that we are here to ensure that we create value for shareholders. And I think that's very, very important. So more to come, I guess, it's in Frontera's camp to decide if they want to fully consider and then take next steps on the new offer that came in.

And again, in terms of the arrangement agreement that's in place, that we're pursuing, that we're diligently working between our team and Frontera's team, we have options going forward. And those options, as I've mentioned, will be assessed by management and our Board.

In terms of the nominations by Parex, and you mentioned specifically conflict of interest. So the first thing is I'd say that I do believe there's a conflict of interest, absolutely. If you think about the nomination, which, in essence, is nominating a control slate for the Board. And this, without any additional context or even an offer that appropriately values GeoPark, I think it only serves to benefit Parex by providing Parex with optionality at the expense of GeoPark's shareholders. And in that context, I think it just demonstrates from Parex that there's been a deliberate and hostile strategy directed at GeoPark. So that's what I would comment on the nomination by Parex.

And in terms of Argentina, I think Martin provided a bit of context, but I'll give you the high-level one. We're extremely pleased with our entry and returning to Argentina this time to do unconventionals in Vaca Muerta. As you know, we received the keys to the operation October 16 of last year. We've done already 2 workover campaigns. And one thing that it's very, very -- I mean, it's very thrilling, Stephane, is, next week, as early as next week, we will start mobilizing a neighbor's rig that has an open window from a third-party operation from another company, another operator. We will mobilize the rig to start drilling a limited campaign, it's 5 wells, plus some ancillary works that need to be done. But that means that we will start drilling in Vaca Muerta, and we will start fracking operations in Vaca Muerta. I think that's a massive milestone for the company.

Remember that we've given market -- the market the signal that we will see an uplift in production by the end of the year. So with these wells and some of the activities that Martin was referring to in terms of facilities and commercial agreements and operational agreements with neighbors, we will see that uplift in production by the end of the year. So very, very exciting. There's additional opportunities that are being assessed in Argentina as well. And we're very pleased.

And the last thing, which I've mentioned in prior calls is that there will be an opportunity, I'm convinced, to bring some of the expertise that we reinforce and further deepen in Argentina to bring that expertise back to Colombia and look at unconventionals in Colombia.

Martin, if you want to give us a bit more color around Argentina?

Absolutely, Felipe. And good morning, Stephane, thanks for your question. I will reiterate that Vaca Muerta is going very well, and we're advancing on the key milestones. We think about it, 2025 was around taking over, finalizing the team, putting together contracts, and then 2026, as we've shown when we were in New York in the last quarter of last year, in fact it was about 4 things, and I'll go through all 4 of them. But I want to -- before we move into those 4 things; 2025, also everything we've done have been incident-free with no recordables. And that's one of our values and going into a new area. Again, it shows how we operate.

And again, when we went into New York, we said 4 things. First one, production optimization. So like Felipe mentioned, we did 2 campaigns of workovers. The first one was actually starting the day that we took over. The second one we did in January. And between those 2 campaigns, we continue to optimize. The second campaign was 37% cheaper than the first one.

Second thing that we mentioned was environmental permits. We know that there are critical environmental permits, and we have submitted those permits in middle of January. So they're way under the brand that we have. Specifically, the one that is important is for the pipeline that we're going to construct. We do not need any environmental permit for doing the drilling activity or doing any upscale or upgrade in our existing facilities, which is part of the work that we're doing.

The third one is around facilities, and I will mention that we have already awarded the contract for the Loma Jarillosa Este upgrade, actually a little bit lower than what we had in plan for $16 million. We have already finalize an agreement with a neighbor operator so that we can put together a pipeline and connect to a spare capacity that, that operator has. And that way, we will continue to optimize as we will not be having to track oil and water into the production that we have.

The third -- the last one is around drilling. We said we were going to start drilling. And like Felipe said, we worked with the existing operators in a collaboratory way, and we got a rig that is a neighbor's rig, very efficient rig, hot rig. And hot in the sense that the crews are already working, maintenance has been done by a known operator in Argentina, and we are mobilizing that rig in the month of early March, like it's next week. And the activity there will be -- there's a pad that has 5 wells, out of which 2 are fully drilled and the remaining 3 wells, we need to just drill the horizontal branches. It's 2 branches of 2,100 meters and 1 branch of 3,000 meters. That will take us around 45 days. And then we're already locking the frac set so that we will go and frac all 5 wells in that pad. It's around 220 fracs in all the wells for around 60 days.

So very excited on how we finish 2025 in Vaca Muerta and most importantly, how we're advancing on the key milestones. We have a team that is fully in place, integrated and our exit rate for the year in Vaca Muerta is, like we've been saying in the past, 5,000 to 6,000 barrels of oil per day, within our guidance. And that's again showing how we deliver production and value in Argentina.

Next question will be from the line of Oriana Covault with Balanz Capital.

This is Oriana Covault with Balanz. I have one brief one regarding your 2026 work program. What is the status of the negotiations with your Llanos partners? I believe there was a discrepancy between the guidance that you had provided and your partners in the area. And should we expect any changes in activities versus the previously shared plan?

Oriana, thanks, and thanks for being here, and thanks for the opportunity to comment. So I mean, with most of the partners, we already have agreement in terms of the work programs and budgets and everything else, which basically support and underpin the guidance that we have given to the market. Specifically with regards to Llanos 34 -- and probably I'll give you a bit more detail and some data points. But we have 21 workovers that have been approved, both technically and from a budget perspective, which is great. Some facilities, upgrades and works that have been approved.

And in terms of the wells themselves, so from a technical point of view, there's 14 wells that have been approved by both teams, by both companies, but our partner has only approved 8 of those wells. So we continue to diligently work with them to ensure that they have all the data to ensure that they understand that these are value-accretive operations. Remember, these are wells in Llanos 34 that provide value to not only the companies, but it's -- their shareholders, which is great, which is very, very relevant.

But the one thing I'd say, Oriana, is that, we'll very constructively continue with this dialogue to ensure that the partner can ensure that they have the funds to fully support the budget. And I know they have probably some other commitments as well in terms of their own operations. But if we don't get it into an agreement with them, we have optionality. And we can always put this rig into other areas and do some other things that will be beneficial for GeoPark and its shareholders. Thanks, Oriana.

We will now move to text questions submitted from the webcast, first question being from Eduardo Muniz with Santander, who asks, "If the Frontera deal does not close, how does that change your Colombia growth outlook?" And second part, "Could you give us an update on the polymer injection project, which started in December, including incremental production impact, if any? And how this project could influence 2026 output and recovery factors?"

Eduardo, good morning, and thanks for being here today. So we'll start with question number 2, and I'll ask Rodrigo to give us an update on the polymer injection. But I'd say, we're very, very satisfied. We're thrilled. Things are progressing well in terms of the different milestones and increasing concentrations of the polymer and everything else. But I'll ask Rodrigo to give us a bit more color. Go ahead, Rodri.

Thank you, Felipe. Good morning, Eduardo. Polymer fluid is an important element in our development plan for Llanos 34. We started last year in December with 2 initial wells. The expectation that we have is incorporate another 2 wells next month or in April. What we have seen until now is a very good performance in terms of operation. We are waiting for results in the second part of this year. So we are not expecting some results in these early times. But actually, operationally and the concentration that we are incorporating in the polymer in the water are working very, very good.

The plan that we have is not stay there for long. So we are going to add 5 more wells by the rest -- by the second part of the year. So that's the plan that we have. But actually, at the same time, we are monitoring. We are expecting to anticipate that 5 wells by the half of this year. So that's the intention that we have in order to be more proactive. And also it's something that we are at least aiming is to accelerate expansion in the north of the block. We are seeing very good interesting results in the simulation that we are doing in the north of the block in Tigana block. So that's the next step. So that's why we are not going to keep here. We are also going beyond that. So that's where we are right now.

The expectation that we have in terms of -- you asked about the recovery factor. So in the simulation that we have is between 3% in the pessimistic scenario and 7% in the optimistic scenario that we expect in the areas where we are injecting. So that's the expectation that we have.

The results according to our own experience in all the blocks and obviously, the neighborhood is about 5% as an average, the expectation that we have in terms of recovery factors.

Thanks, Rodri. And Eduardo, in terms of the outlook and the deal, so I probably -- first thing I'd say is that where we are, we have this -- the arrangement agreement in place. And as I've mentioned before, we're pursuing very diligently with Frontera and both teams, the work to closing. So I think that's the first thing I would say.

The second thing is obviously that -- and I'll go back to the discipline, financial discipline comments that I've made. The Board will assess all options, opportunities that are available to us and always within this frame of financial discipline. And I think that's very important. We will not and should not lose sight of what's priority for us, which is ensuring that there's value creation, and it's always in the best interest of our shareholders. So that will be the frame in which we will think about it.

And again, as we've done with guidance and updates to the market, we'll continue to keep you appraised. So thanks, Eduardo.

The next question has been submitted by Isabella Pacheco with Bank of America, who asks, "When does the limited duration shareholders' rights plan expire? And is the Board discussing to renew it?"

Thanks, Isabella, and thanks for being here. It's great to have you on today's call. Yes, the rights plan, the shareholders' rights plan has a duration of a year, and it expires on June 3. That's the date in which we -- the rights plan will expire. And the Board, as with many other matters, will discuss in due time the nature, the conditions and the specifics around the shareholders' rights plan. So when those discussions are final and when the company is ready to announce a decision or directionally where we want to go with that, we will communicate that promptly to the markets. Thanks, Isabella.

The next question has been submitted by Vicente Falanga with Bradesco, who asks, "Have you seen any impacts on your business from the formalization of the Venezuelan market?"

Thanks, Vicente. And I'll ask Jaime to take on the sort of the market conditions, volumes and how that's impacting us. But before I do that, there's -- at least the way in which I understand the question, there's 2 things. There's obviously volumes and dips and stuff like that. But there's always, or there's also a window that's opening in terms of opportunities in Venezuela. And that's one of the things. As I've mentioned before, the company and the Board will continue to assess optionality and opportunities going forward that we're reviewing as well, because we do believe that given our track record as prudent, safe, efficient, reliable operator, there's always opportunities in that camp. But Jaime, if you can take the one on the volumes?

Yes, sure, absolutely. So Vicente, when we think about Venezuela, I think the most immediate impact that we've seen is, of course, around the heavy oil markets as such, and particularly as it relates to the Vasconia and the Castilla references in Colombia. The Vasconia reference is relevant to us because it's probably the most relevant benchmark that we use both for Llanos 34 and CPO-5 crudes generally. Our crudes are not exactly the Vasconia reference. Actually, our crudes have improved quality and less sulfur content than Vasconia from a purity standpoint, if you will, if you think about the specs. But as a benchmark of commercial differentiation, we are, to some degree, connected to that.

What has happened with Vasconia has been, we've seen a widening differential. If you look at probably 3Q or 2Q of last year, in the middle of last year, we were seeing differentials which -- in other words, commercial discounts, which were in the order of $3 to $4. Those commercial discounts are today probably in the $7 to $8 amount, right? And it's actually, to a large degree, being influenced by what's been happening in Venezuela.

So what is happening in Venezuela? Basically, you are seeing about 1 million or so of new barrels from Venezuela going into the market, particularly to the U.S. market, the Gulf Coast refinery and area. And what we're seeing there is actually a combination of 2 things. You have new supply from Venezuela, but at the same time, we are at that part of the season, first Q of the year, typically in the refining sector, you see relatively lowish demand. It's a quarter where typically maintenance work is going on, refinery runs are lower typically.

So therefore, you have this combination of supply coming in -- new supply coming in from Venezuela and from Mexico and lower demand typically from the refineries. We think this is temporary. What we believe is that the market will adapt to absorb the new Venezuelan crude, and demand generally with the refinery runs will increase around summer. Summer is the typical high demand season in the U.S. because there's massive consumption associated to people on vacation, traveling, extended days and long hours and all of that. So we are expecting stabilization, if you will, of that supply and demand. And particularly, what we see is that the Vasconia and the Colombian references, relatively speaking, provide better quality than that Venezuelan offer that you have currently.

Now having said that, we are obviously moving on all fronts to look at ways to further mitigate that. One of our strategies is around decoupling ourselves to the Vasconia reference by doing FOB exports. That's what we're doing with CPO-5. So basically, the bulk of the CPO-5 volumes that we have, which are in the order of 6,000 barrels a day, are actually being sold in Covenas for export, and that deal helps us reduce that effect. So we're more tied to Brent rather than to Vasconia on that particular reference, and that helps. But basically, that's what you're seeing in that particular market.

I think the other, of course, angle around your question of impacts on your business is, of course, that from a new business standpoint, Venezuela is opening up, right? Venezuela is opening up. We're starting to see inbound interest in that area, looking for operating capabilities that can help restart production in a number of fields, improve production in a number of fields. As you're probably aware, the dimension and scale of the Venezuelan industry is massive. So there could be opportunities in that front, and that is something that we are actively evaluating.

Thanks, Jaime, and thanks, Vicente.

Thank you. We will now close Q&A, and I would like to hand the call back to Mr. Felipe Bayon for closing remarks.

Thanks, Harry. Thanks for the help. And again, thanks, everyone, for being here in the call today. Very, very briefly, just a few remarks from myself.

First one, 2025 closed in a very strong point. Operationally, as I've mentioned, we met or beat the guidelines that we had given the market with some specifics around the inflection point and stabilizing operations and production in Colombia and entering Vaca Muerta. And as I've mentioned, very, very pleased with [Technical Difficulty] of those major milestones.

Strategy is in place, and we're executing and deploying capital in a very disciplined way in terms of protecting the assets and the operations and the value that we have, and pursuing the avenue of growth, which both Vaca Muerta and the deal with Frontera underpin very, very, very nicely and directly. So we're very happy with the start of 2026, and we've shared some of the highlights as well. And we will continue to work with Frontera on the arrangement agreement and working towards closing.

Again, very thankful to the team in Frontera and to our team in terms of how diligent they've been in keeping us on track. Having the SIC approval, I think it's a major milestone for us as well. And we will remain disciplined in terms of our decisions and the financial framework that we use at the management level and with the Board to continue to assess all and any options that are available to the company.

So with that, I again thank everyone who has been present at today's call. Thanks for the interest in GeoPark. Thanks for the great questions. I think it allowed us the opportunity to share some of our views. And please stay safe. Have a great day.

This concludes the GeoPark 4Q 2025 Results Conference Call. You may now disconnect your lines.

Good morning and welcome to the GeoPark Limited conference call following the results announcement for the third quarter ended September 30, 2025. [Operator Instructions] If you do not have a copy of the press release, it is available at the Investors 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 Investors 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 U.S. dollar unless otherwise noted. Reserve figures correspond to PRMS standards. On the call today from GeoPark is Felipe Bayon, Chief Executive Officer; Jaime Caballero, 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 2025 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 16, we successfully closed the acquisition of 2 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 launched our new strategic plan and capital allocation framework during our Investor Day on October 21. The plan is built around 2 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 USD 520 million to USD 550 million and a net leverage ratio of 0.8 to 1.0; 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 accretive inorganic growth. To support this strategy, the Board of Directors approved a revised dividend program totaling approximately USD 6 million over the next 4 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 3Q 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 nonoperated assets in Colombia. Llanos 34, which we operate, remained 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 costs averaged $12.5 per barrel, fully in line with our 2025 guidance. By the end of the third quarter, we had captured more than USD 15 million in efficiencies, equivalent to about $19.5 million in annual structured savings, a clear sign of a leaner and more agile operating model underway.

On the financial front, adjusted EBITDA reached USD 71.4 million with a 57% margin, broadly stable versus the second quarter supported by high volumes and steady realized prices. Net income was USD 15.9 million compared to the net loss in the previous quarter. Excluding a nonrecurrent exploration write-off in the Putumayo Basin, net profit would have been USD 23.4 million, consistent with our strong EBITDA performance. We invested USD 17.5 million during the quarter mainly to sustain and enhance production in Llanos 34 and progress exploration across Colombia. We ended the quarter with USD 197 million in cash.

From June to October, we repurchased USD 108 million of our 2030 notes below par generating USD 9.5 million in annual cash savings and further optimizing our capital structure. With no principal maturities until 2027 and a net leverage ratio of 1.2x, 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 protected through 3-way collars with a first floor at $65 per barrel, a second floor at $50 per barrel and an average ceiling 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 guidance before year end. This plan will provide further granularity on our renewed strategic direction, again focused on building and maximizing value delivery from a high margin base in Colombia and 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 29, 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 nonbinding proposal of $9 per share that was submitted by Parex on September 4, 2025 prior to our announcement of GeoPark'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, Constantin Papadimitriou, Somit Varma and Brian Maxted to evaluate any potential revised offer from Parex 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 would appreciate if you keep your questions focused on the quarter.

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

[Operator Instructions] Our first question comes from Joaquin Robet from Balanz Capital.

My question is regarding the 2026 Vaca Muerta work program. Could you provide more color on the upcoming studies and 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 21 days ago to be exact, we've already started conducting interventions on the wells and we're fully engaged with the operations and the program going forward.

So Martin, if you can give us a bit more color, that would be great.

Absolutely, Felipe. Joaquin, thanks for your question. So I'll start by saying that our first priority on October 16 was to safely and seamlessly receive the operations, including 11 Pluspetrol employees that are now GeoPark employees. 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 3 wells from 1 pad. This operation has a total of 6 wells on production in Loma Jarillosa Este. So we shut in 3 wells from 1 pad so that we could go and install artificial lift.

And just to share with everybody how we operate and how quick we are learning. We've done all 3 of the operations already and 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 barrels of oil per day to 2,000 barrels of oil per day that those 6 wells can be delivering and we go to the 20,000 barrels, we know that the OpEx is key and we look 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.

Within the next 10 days, we will be putting on production those 3 wells. So that will put us on a total production for Vaca Muerta in the order of 1,600 barrels of oil per day to 1,700 barrels of oil per day. Now as we commented in our Investor Day, we're going to a 20,000 barrel oil per day on both blocks with 1 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 will be ready by early 2027. So what are we doing in the meantime?

And the #1 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 a 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 starting and permits, we already started those and our plan is to submit them by the first quarter of 2026. And I think the other question you had was around commitments. I'll say that on commitments, drilling commitments is only 1 for Puesto Silva Oeste and it's due by 2028. 1 well order of magnitude, you can think about $15 million. And then within Loma Jarillosa, there was a commitment to do the workovers in the block and we've already done them. So from a perspective of commitments, you can see that they're very low.

And I think on the funding side, Jaime, if you can give us a bit more color?

Yes, of course, Felipe. 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 other parties around the possibility of oil prepayments. 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. So all this to say that we don't have any concerns around the funding of this program.

Our next question comes from Eduardo Muniz from 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 Llanos Basin? Also, can you update on how the infill campaign is progressing relative to cost/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 cost? 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 closed the transaction in VM, has the cash disbursement been done? What was the final?

Eduardo, thanks for submitting your questions through the website and thanks for your interest in the company. Obviously there's quite a few questions here, we'll try to address them through 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 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 will 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 2 quarters, we were spending around $25 million to $27 million and that was with 2 rigs. In the third quarter, we had 1 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 2 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 an increase 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 infill drilling program in Llanos 34.

So let me go to that one to how we did in the infill drilling program in Llanos 34. That was a program that we planned for the first half of the year, 6 wells. Infill means that they are 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 plan for those 6 wells and the cost of the wells have been exceptional. We are drilling the wells and we drilled 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 Manati 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 upsets on electrical reliability that are already fixed. And Llanos 123, which is our block 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 barrels of oil per day to 28,000 barrels of oil per day. We expect to be on the high range of that as we finish the year.

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

Eduardo, this is Rodrigo. I'm going to share where we are in terms of exploration in Llanos. The activity was concentrated in 2 assets or 2 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 Currucutu.

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's allowed us to drill a new well to try to understand the detail there, 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 derisk the eastern part. We went with a new well to the right side of the main that we see there, Toritos Este 1 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 lot looks pretty promising. And the last activity that we have for this year is Visvita south, what we are trying to do there. Actually, we are drilling this well in this moment is try to prove the extension of the Visvita area to the south. So that is the main activity that we have in terms of exploration in 123. All of them has very interesting results. At the end of the day, it is the base for the growth of this field and the development plan that we have for the near future.

In the Llanos 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 drill the second well in the block by the end of this year. Vencejo 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 Llanos ]. It s a very interesting play for us. It's a growth driver. So that's why we are continue doing that in the next years and coming years.

And if I may, 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'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 Danos exploration crude involved in that deal that can fall within the scope. The duration 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 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 that was the problem that we wanted to solve. So we engaged in this conversation with a number of players around how could we create export optionality through Covenas.

This is something that we hadn't done before at GeoPark and we 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 are a portrayal, if you will, of the reduced domestic marketplace that we have versus the broader international market. It also gives us blending optionality. So in the contract with BP, 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 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. 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, 2 characteristics what I would say is the commercial discount in aggregate of these crudes is in the $4 to $5 versus Brent 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 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 offtake 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 Covenas when we do exports, but that's offset by a better price capture. So that's the movement that you're seeing there.

I hope this helps.

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, very positive in terms of the acquisition.

As you recall, we've said that our 1P numbers would go from 5 to 7 years, 2P 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 think it builds on what Martin was talking about in terms of operational excellence and conducting things like drilling and workovers and water shut-offs with sort of lower cost and less time that we used to. So a lot of efficiency going 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 reserves. But as you can probably imagine, we can't talk any more without -- 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 infrastructure and optionality that we have around that.

And on the last part of your question, which is the transaction. Yes, the transaction has 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 pads, 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 is an option and chances that we could leverage from collaborative 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 to submit them. Usually, in Oakland, it takes between 3 to 6 months for approval once they are submitted due to the public consultations and all the requirements. But high level, that's where we are on permitting.

And can we have the next question?

Our next question comes from Stephane Foucaud from Auctus Advisors.

I had a question around regulation. I know you can't talk about Parex, so it's more general than that. So in Colombia, I was wondering whether there will be any anti-competition restriction from the regulator, the government, with regards to when a player becomes too large or perhaps too much in a certain region?

Thanks, Stephane, and great question. And thanks for respecting and acknowledging the fact that we won't talk in detail around our engagement with Parex. And I won't speculate, obviously, around a potential deal. But 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, Stephane, 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, Stephane, thanks for respecting the fact that we won't talk in detail around our engagement with Parex. Thanks a lot.

Can we have the next question, please?

Our next question comes from Daniel Guardiola from BTG.

I have a couple of questions. I'm going 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-accretive growth opportunities between both countries? So that would be my first question.

And my second question, very briefly, I'm just curious, considering that the current environment with the proposal from Parex, et cetera. And I know you're not going to comment on that, and I don't want to push 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 the plan? So that will be my 2 questions.

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 transformative and it's strategic for us. And if you remember from the Investor Day and the Investor Week, we said this is an opportunity, these 2 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 accretive.

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 haulage 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 one.

The other thing is that we've disclosed some numbers around Vaca Muerta and especially around the volumes. And we said that the 1P for the company, it would go from 5 to 7 years, 2P all the way to 10 years. And I'll share with you, Daniel, 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, we can't disclose.

But where we are with the existing data, 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 have positive numbers in terms of reserves going forward for Vaca Muerta. So that would be accretive 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 talked about Argentina. And in addition to what we have in Vaca Muerta already in the 2 concessions, I mentioned we're talking to operators in the region constantly, Martin and Tommy on the ground, [ Ignacio ] 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, 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 unconventionals. So that's that.

And in terms of Colombia, 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, Daniel, only 30% of Llanos 34 is covered with waterflooding. We've increased the level of water floods. We've been very successful with shut-offs 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 upside in that sense. And I'll just say, it's -- that's why, Daniel, and I know you were very respectful of not talking about Parex. 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 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 optionality. 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, very well. We have a great relationship with ONGC. They're doing -- they're conducting their operations very, very well and it's actually performing above plan. So I'd say, Daniel, that in that sense, having a portfolio that is in the 2 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.

Well, perhaps 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 at the Investor Day probably will recall our capital allocation matrix, right? And if you remember, that capital allocation process basically is all geared towards driving value maximization, right?

We consider aspects such as NPV, breakevens, capital efficiency. But to your question, Daniel, 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. 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 Brent price.

So if you use those parameters of a 15% discount rate, $60 Brent price, delivering double-digit returns that kind of gives you an indication of the sort of strength of the portfolio that we have at GeoPark 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.

And Daniel, before I turn it over to the next question, I just want to highlight, and first, thanks for the question. 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 and very focused in terms of how we conduct our operations. And 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 continued to bring accretive opportunities and we continue to provide value to shareholders.

Our next question comes from Vicente Falanga from Bradesco. What are the risks related to your polymer injection project in Llanos 34? What could go wrong? What are the key operational milestones in terms of well results for the GeoPark to derisk its Argentina operations?

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

Vicente, thank you for the question. As you know, polymer fluorine is a proven EUR technology with a solid track record not only here in Colombia, but also globally. So particularly in Los Llanos. So in the neighborhood, we have some good examples. So it's a proven technology is the firm 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 subsurface uncertainties, operational execution, economic sensitivities, but all of them are considering in the plan that we have.

So that's why there are, I think, 2 key elements in order to face those risks. The first one is related to 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 kind of phases. So we are going to start this year, at the end of this year with 2 wells. We expect 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 Jacana, 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 experienced -- we hired -- last year, we hired experienced people coming from other parts of Colombia. They have been injecting water in the Llanos Basin for the last 10 years, 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 success 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.

And in terms of operational milestones of results for derisking operations in Argentina, Martin?

Yes. 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 2 blocks that we acquired in Loma Jarillosa and in Puesto Silva Oeste. We're surrounded by active Vaca Muerta development. And within the blocks, as I mentioned before, Loma Jarillosa Este has 6 wells that are already drilled and on production. And so from a subsurface, the risk that we see low.

When we look at the activity that is coming and the drilling risk and operational risk, let me mention these 2 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 #1030 has 5 wells that have been drilled, out of which 2 wells are fully drilled. They're just waiting on the completion. And the remaining 3 only need the last section, which is the horizontal, which would be around 2,500 meters of the horizontal drilling. So we will start with the drilling operations that are now going full on one pad from 0.

And then the second comment is one way to make sure that we're derisking 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 blocks were already being part of the previous deal that we had as secondees. And so 1 year, fully engaged as secondees 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 U.S. So with that team, we feel that we can go about derisking the operations properly.

Yes, I would add something related with the subsurface 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 Loma Jarillosa drilled 6 wells. So we have a lot of information coming from that subsurface database.

Then we have -- we built a technical understanding and we consider with all this information, at least for the North block, we have a very robust development plan with that information. At the same time, in Argentina, the production per well 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 well. So that's plenty in line with the neighborhood. So that's another topic or at least 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 supports our understanding of Puesto Silva Oeste, 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 subsurface.

Do we have any more questions on the line?

Our next question is from Isabella Pacheco from Bank of America.

Just a quick one. How much do you expect the Vaca Muerta acquisition will add to your 4Q '25 production?

Martin?

Yes. So Isabella, quick answer. For the 75 days that we will have 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.

Do we have anymore

Our next question is from Alejandro Demichelis from Jefferies.

Just I know you're not going to be talking about Parex and so on, but maybe you can give us some indication of the rationale for keeping the poison pill still in place at this moment.

Thanks, Alejandro, and good to have you on the call today. And yes, 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 1. And if you look at this from a shareholders' 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 the 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.

Yes. I guess what I would add, Felipe, to this is if we look at the recent events, we've had a shareholder accumulating a position that has been basically capped in the market conditions, right? And I would argue that it's actually enabling the conversation that we're having now, 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.

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, very solid set of results 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, very thrilled with that. Very, very happy with how the results are coming out and that we've presented to the market.

And the last thing is we had the roadshow 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 2 in conjunction provide a very, 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 lines.

So good morning, everyone, and welcome to GeoPark's 2025 Investor Day. We are delighted to have many of you here in_person and many more joining via webcast. My name is Maria Catalina Escobar, and I am the Director of Shareholder Value and Capital Markets at GeoPark. Thank you for the interest and for taking the time to be part of this very important day for our company.

GeoPark is entering a new phase of discipline and sustainable growth, built on our strong base in Colombia, our structural efficiency transformation and the expansion of our platform in Argentina, particularly in Vaca Muerta.

Over the next few hours, you will hear from our leadership team about how we are protecting our foundation, strengthening our balance sheet and continuing to grow responsibly. They will walk you through the strategy behind this transformation and how we're simplifying, strengthening and scaling the business to continue delivering value across cycles.

We are also pleased to be joined today by members of our management team and our Board of Directors. Representing the Board, we are honored to have with us Robert Bedingfield, an independent director. From the management team, you will hear from Felipe Bayon, our Chief Executive Officer; Rodrigo Dalle Fiore, our Chief Development and Exploration Officer; Martin Terrado, our Chief Operating Officer; and Jaime Caballero, our Chief Financial Officer.

Throughout the morning, our leadership team will take you through the key elements of GeoPark's strategy and execution. Felipe will share our strategic priorities and vision for the next stage of growth. Rodrigo will follow with how we are unlocking value through exploration and development. Martin will then highlight our operational excellence and reliability across assets. Finally, Jaime will close the presentation covering our financial discipline, capital allocation and value-creation strategy.

In-person attendees can access today's presentation by scanning the QR code that you have on your table or at the back of your badges. After the management presentations, we will have a 5-minute break to be followed by a Q&A session. We will first address the questions that we have here in the room and then the questions that we receive through the webcast.

For webcast participants, you can submit your questions using the Type Your Question text box below your broadcast screen at the time during the presentation. If the text box is not visible, please click the question mark icon on the left side panel to access it.

We also value your feedback on today's event. For webcast participants, a brief survey can be accessed via the survey link in the Resources tab on your screen. In-person attendees may fill out the survey online by scanning the QR code on your table [ tent ] card or by completing the printed handout.

Finally, let me briefly share for your attention our safe harbor and mention a couple of considerations. Today's management presentations include forward-looking statements reflecting our management's current beliefs and expectations about GeoPark's plans, strategies, goals and results.

These forward-looking statements are based on current information, and actual results will depend upon known and unknown risks and uncertainties that could cause actual performance to differ materially from what we currently expect. Therefore, you should not rely on these forward-looking statements as an assurance of the company's future performance. Please take a moment to read this slide.

And now I would like to introduce our Chief Executive Officer, Felipe Pardo. Welcome, Felipe.

Thanks, Maria Catalina, and good morning, everyone. Thanks for being here. It's great to be at the New York Stock Exchange today. And thanks not only to the guys and persons that are here, but also to the people that are following us on the webcast.

I'll go swiftly through this. And this is what Maria Catalina was talking about in terms of the flow for the day. I'll be talking about how we're built to perform and how we're ready to scale.

But I want to point the attention to the picture here. And this was taken on Thursday. Martin, actually there, our Chief Operating Officer; and this is when we started operating in Vaca Muerta. It's a key milestone for the company, and this is why we chose to put the picture here on the slide.

We have a twofold strategy. It's about protecting what we have, and I'll talk about that in a second, and returning to growth.

And in terms of protecting what we have is to build on what has made GeoPark what it is today. Safe, reliable, profitable, ethical and transparent operations. And I'll take you through the journey of the company for the last 23 years. And we have a business that's very solid, produces good cash. It's very efficient and has a lot of legs.

I'll also be talking about what we're doing in terms of production and keeping production flat going forward, very important as we think about building a very strong foundation upon which we can actually start to grow again.

And in terms of returning to growth, and I'll go into some detail on the recent acquisition of the two blocks in Vaca Muerta in [ Neuquén ], Argentina and what it means for the company going forward. Twofold strategy, and you see that throughout the presentation, we'll be talking about these two things.

Journey, and this is what the company has done over the last 23 years or so, a company that was actually created in Argentina. It's a company that started operations in the province of Santa Cruz in Patagonia, in southern part of Argentina. And I would describe the first stage as exploration, having success and being in multiple countries, so besides from Argentina, also being present in Chile, later on, Peru and Ecuador.

Our second phase or second stage in which we scaled up, and this was about growth and generating cash. And you see on the boxes, probably they're not easily seen from the back of the room, but initial stage, $400 million of EBITDA; second stage $1.7 billion; third stage, profitability. And this goes from '19 to 2025, so the year we're in, where those saw the value generation through EBITDA, it's $3.9 billion.

And what's going on going forward? And I want to highlight this. If you look at the light-gray area, that would have been the profile of our production if we didn't do anything else. Production decline of 23% was expected for this year. That's if you didn't do anything else. We had given guidance that, that production decline was reduced to 17% in that range, 17% to 20%. Today, we're telling you it's actually at 14%.

So a lot of work has been done in terms of water flooding, water shutoffs, understanding and modeling with 3D technology, AI, including all the subsurface models and ensuring that we have the best understanding of a field that's very, very large, especially in Llanos 34, and that we operate.

And remember that, and Martin will take us through some of that, we produce for every barrel of oil 10 barrels of water. Water injection is fundamental. We'll be going through EOR, enhanced EOR through polymers as well. So that would have been the production profile.

Recently, we did the long-term plan. So I should share that it's my fourth month in the company. So we've been very active doing lots of things. We reviewed the opportunities in the company and again, trying to bring the decline rate to a level that's at 14%. Going forward, we want to keep production flat. And that's probably one of the key messages we want to leave you with you guys today.

In addition to that, so the long-term plan that we confirm, which is this darker area, we'll take the company, and I'll show the details to around 42,000-46,000 barrels per day.

As important in terms of value creation, we are thinking of at least recreating the EBITDA that we had for the last 6 years in the next 5 years and even taking that to 1.5x. So growth, we're, as I said, protecting what we have, which means taking care and maintaining and being very responsible with the assets that we operate on returning to growth.

What are the core strength that the company has? Start with safety. GeoPark has world-class safety indicators, both what we call leading indicators and lagging indicators. So in terms of personal safety, process safety, vehicle safety, Martin will take us through some of those numbers.

But I want to talk about a few things on safety, so for example, using AI technology and visual recognition to prevent accidents. Year-to-date, we've prevented more than 800 unsafe conditions in our drilling operations in our rigs. That's great, using technology and powering it with our operations. Efficiency, best-in-class performance, Martin will take us through where we are in lifting cost.

But it's also things like using nanotechnology for our drilling fluids is things like having smaller footprint water treatment plants, remember, the amount of water I was mentioning; and ensuring that we have a smaller footprint, less time to install those facilities, lower CapEx. It's all important and things that are modular and that we can actually replicate in some of the other operations.

Resilience, there's a lot of volatility, not only in terms of price, and Jaime will talk about some of our outlooks on price, but also in terms of where we operate. There's a lot of tension in terms of the relationship between U.S. and Colombia right now, and that's been in the news. And there's a lot of discussion around Argentina. And I think GeoPark brings to that our experience of being operators for a very long time, we've been very resilient, and we've been able to navigate.

Stability, we have access to the capital markets, and we're proving in terms of our creditworthiness focus. And I want to stress this point, we want to ensure that we invest in things that make sense, create value, are resilient. And we'll go through some of the logic with Jaime on how we actually allocate capital. And the right people. On average, the people at GeoPark has -- they have 15 years of experience. Our employees were some 350 people in the company.

And one of the things that we've done this year recently was we had to go through a reorganization of the company, and around 25% of the staff had to leave the organization. And this was getting back into shape, streamlining and ensuring that we're set up for the future.

And the last thing, in terms of the overall framework for sustainability, how we describe it, it's something we call speed. Some of you may have heard about it, but it's about safety, prosperity, employees, our environment and community development, and that's how we make decisions.

In terms -- now drilling down on where we are in terms of production. So I was talking about some of the decline. And bear in mind that in some of those numbers, we also had some operations that we've let go, that we've sold through M&A. We announced Ecuador and Brazil this year.

And on average for the next 5 years, '26, '30, we see a volume going to [ 32, 36 ]. So we're going back to where we were in terms of production volumes. And then '29,'30, reaching 42,000, 46,000 barrels. So at least in a ballpark number, we're saying we're almost getting to 1.5, 2x production of the company.

And in terms of EBITDA, and I just want to mention and you see this in the footnote, but our view on prices is $68 for the next few years, 3, 4 years, and then $70. And again, Jaime will take us through some more detail on that.

We've announced 2025 an EBITDA of $300 million, which includes the benefit of Vaca Muerta. And I'll share with you the benefits from Vaca Muerta that are actually hitting us in a positive way this year.

And if you look at the end of the decade, it's getting to over $500 million, $520 million to $550 million. So it's basically almost doubling the size of the company, if you look at the EBITDA, and you could probably have some other metrics. But that's the shape of what we see in our firm plan.

And then if you look at the -- I'll just go back. If you look at that vision, which is the dotted area on top of the firm, is can we go to 60,000 barrels a day and can we multiply, as I've mentioned before, the EBITDA by 1.5x.

We're talking about resetting, strategic reset. So there's three things that are fundamental, that are pillars to what we need to do. Disciplined execution, and that's in terms -- so in terms of disciplined execution, which is how we actually do our projects, how we plan our projects, how we do our long-lead items, our supply chain and everything else and optimize recovery.

Rodrigo will take us through where we are in terms of EOR, how much water we're injecting, how much production is actually coming from EOR and how much -- and what we're going to be doing in terms of enhanced EOR and polymers. So the first 9 patterns on polymers will be deployed '25 and 2026.

Reshape cost base, efficiencies, and I've talked about some of the efficiencies that Martin and the team are doing in the operations. We aimed earlier in the summer when I arrived, probably back end of June, to have at least $14 million of savings this year and efficiency. We've crossed the $30 million mark. So a lot of effort in terms of getting back to shape and actually ensuring that we can transform from a structure and ensuring that we're leaner moving forward.

And in terms of cash and our flexibility, so liquidity, Jaime will take us through that and where we are on hedging. North of 80% of our production is hedged today. And there's a lot of inroads, good inroads and progress that we've made in terms of hedging next year and then very, very disciplined in terms of how we manage the balance sheet.

Vaca Muerta, twofold strategy. So the first one is protecting what we have and then returning to growth. And Vaca Muerta is all about returning to growth. It's an area most of you actually follow, Argentina and some of the companies there that has multiplied its production by 5x since 2019. Vaca Muerta is producing north of 500,000 barrels a day from unconventionals from fracking, and it's producing some 3.5 Bcf in terms of gas.

There has a lot of room, a lot of [ legs ]. Less than 10% of the area has been developed. There's infrastructure in place, and there is a lot of activity in terms of having more CPFs and processing facilities, both oil and gas pipelines and routes to the exports and the terminals. And it has a proven ecosystem in terms of companies that operate there in terms of service providers as well.

And if you look at the map, and Rodrigo will go into a lot more detail, Loma Jarillosa Este and Puesto Silva Oeste, some people would say, we're in the right ZIP code. That's how you would think about it in the U.S. We're surrounded by a lot of very good operators with a lot of experience, a lot of data and where we could actually be seeing a lot of synergies. And the team, the guys have conducted good conversations with them in terms of moving forward.

Going into the detail of the transaction that we announced recently, one, it's transformational, it's strategic for the long term. 12,000 acres. We have some producing wells. The team has already gone in and -- to transform these wells from surging wells into wells that have lifting systems. We have some 2,000 barrels of production per day. We want to take that to 20,000 barrels in the next 3 years.

One license goes to 2057, the other one to 2060. Puesto Silva Oeste is a license that we renegotiated. It didn't have a [indiscernible], which is an unconventional license attached to it, and where we brought [indiscernible], the company of the province, into the fold with a 5% equity participation. Some 60 million barrels of resources that we can recover, and I mentioned the 20,000 barrels.

And in terms of some of the consolidated things, and this is at the end of this year, the $300 million that I mentioned, it's there on the table, production already for GeoPark going to 30,000 barrels a day, with a 2,000 barrels from Vaca Muerta, reserves from [ A4 ], which is the end of 2024 to [ 110 ] million barrels on our reserve life index growing to 7 years. If we can please roll the video.

[Presentation]

Thank you. And I'm probably going to share some insight baseball with you here, and it's about speed, and it's about intent.

So I joined the company June 1 this year. On June 5, I was sitting with [ Pluspetrol ] in Buenos Aires, telling them and sharing with their management that we're very interested in getting these two blocks.

June 6, I go to Neuquen. I didn't have an appointment, but I made it clear that I -- if it was possible, I wanted to meet with the governor. And he actually opened up his agenda. So I saw him on June 6. And he said, "Felipe, I wanted to meet you." I said, "Why, Mr. Governor?" "Because you're different." And that was June 6.

July 25, we present the updated offer to [ Pluspetrol ], 25th of July. September 25, we signed with [ Pluspetrol ] in the province, 2 months. On September 25 to October 16, we closed and we take over the operation.

Just wanted to share the dates to make the point that we're very focused in terms of ensuring that we do things in a disciplined way, in a way that creates value, but in a way that's extremely determined. And one of the things that I'll say is that as a company, we need to basically deliver on our promises.

One of the things that we've heard from the market is "You shared with us some visions and those visions may not have materialized in the past." Some of the deals that didn't come through, and again, as I said, when I came in, we need to ensure that we deliver, we need to ensure that as part of this twofold strategy, we'll return to growth. And this is what the two blocks, initial blocks in Vaca Muerta can allow us to do.

And one thing before I close and I hand it over to Rodrigo is that the other thing we've experienced is that a lot of people have reached out to us saying, "We want to do things with you guys. We want to do joint developments. There's opportunity." We will always remain very disciplined and focused, but we will continue to assess opportunities. And should they be the right opportunities, rightsized in terms of their conditions, we will assess them in detail.

And as I was mentioning, we're in the right neighborhood, or the good ZIP code, it's the black oil window in Vaca Muerta, is the sweet spot. And I think we have a lot of optionality and opportunity.

So from my part, key takeaways, and this is some of the things that we've talked about, first one is cost reset. And this is not only about lifting cost, this is about G&A and a very, very disciplined and determined view on keeping those costs where they need to be, and being a very competitive operator.

Production stability, and I've mentioned some of the numbers around decline, how do we go with the 23 -- or from the 23% natural decline, not to the guidance of 17% to 20%, but to 14% going forward, keeping that flat in terms of our production, financial discipline? And Jaime, won't steal your thunder on that.

Sustainability. How do we ensure that we're good neighbors and that we build long and during trustful relationships with the communities, with the contractors, with our partners that it's fundamental?

And in terms of returning to growth, we can still grow in Colombia. There's some exploration activity. We have some legs. Rodrigo will take us through that. There are some great experiences that the company has delivered upon like Llanos, [ Ciento ] and [ Titreso ] 123. Good news on that front. And as we've just demonstrated with Vaca Muerta, there is a lot of opportunity in the inorganic growth.

Again, will there be uncertainty going forward? And somebody would say, "Felipe, you showed us this vision of the EBITDA growing by 1 to 1.5x." There will always be uncertainty around prices, geopolitics, supply and demand. But I think as a company, we'll be ready to address them.

One thing I'll mention is of the firm plan that I showed you guys, 99% of our production has a breakeven lower than $60 per barrel. Could that change? Absolutely. Could we see inflation in the oil field? Absolutely. Will be -- will we be ready to react and deal and take that upfront? Absolutely.

Thank you, Rodrigo?

Thank you, Felipe. Welcome, everybody. It's a pleasure to be here. Rodrigo Dalle Fiore is my name. I have been working for the company for the last 2 years. I started this new role as a Chief Exploration and Development Officer since February this year. [ I've ] started in Argentina, long time ago more, than 22 years with Pan American Energy. And I moved to Colombia in 2014. So we -- have been working in Colombia for Ecopetrol as a VP of Development for the last 10 years -- more than 10 years in there.

So continuing the messages that Felipe has been delivering here, we have to talk about what taking care of protecting what we have. My role here is to explain why we have been taking care of what we have to protect. And to do that, we are going to start talking about the asset that we have in Colombia, going to talk about where we are.

We are in Llanos Basin. So that region of the country is responsible for more than 60% of the production of the entire country. So it's a proof and giant petroleum system with a lot of opportunities because if you see the recovery factor that you can find in most of the fields that are located there, less than 20%, and you can easily recognize there is still room to improve the recovery factor of those fields.

And in the other side is this basin has been delivered in production for the last decades, so full of infrastructure in place allow us to produce on the low cost or low-cost operation mode. So that's the play where we are.

If you see the map, in the top side is Colombia. The basin is in the center of Colombia. And the red area represents where we are, we are in the heart of that basin. We have 7 E&P blocks. We have 1.4 million acreage in the area, most of it covered by 3D seismic, and we are consolidated in a single place.

One of the things that I want to point it out, if you see here, you can see Rubiales, Caño Limon, Quifa, then Akacias, Chichimene and the Castilla field and Cusiana in the North. So the neighborhood is very interesting. Our core producing assets are located in the heart of our area.

Here is the Llanos 34, 123 is this green spot here. And Indico field, we are going to talk about that field, it is right next to our core operation. So very well located in this interesting in place of Colombia.

I had this slide because we are producing 40,000 barrels per day from Llanos 34 where we operate, and we are in the top 10. We have two positions in the top 10 fields of the basin.

Another thing that I want to highlight here is, why are you seeing two different gray there. The dark gray represent extra-heavy oil. And when you are producing extra heavy oil, and I know those fields because [ Ecopetrol ] is the operator and I used to work for them, they need diluent to produce those fields.

In our case, we produce a lighter oil. It's not light, but it's lighter than compared with the other ones, allow us to produce without any diluent. So that represent a competitive advantage for us in terms of efficiency and cost.

And we allocated in Indico, where we are partnered with ONGC. We produce 25,000 barrels of light oil, incredible, but is in the middle of the heavy oil area. We are producing 25,000 of light oil. So this is our position in the top basin of Colombia.

Our strategy in Llanos Basin is simple. First one, try to protect the base. Second one, improve the recovery factor of our fields and then grow through exploration. And we are doing that today in our 3 core producing assets.

Let's start talking about Llanos 34, where we -- the name of the game there is maximize the recovery factor. What we are doing today is drilling infill wells. We are having a very interesting result this year with the 6 wells that we drilled in the area. We are producing more than 2,000 barrels per day in those 6 wells. So interesting results that allow us to think that we can do more.

Water flooding only 30 -- you will see that in a moment, but only 30% of the field is covered by water flooding. So there is plenty of room to grow and maximize the injection of the water there.

Then we are carrying out an intensive workover plan. There are a lot of small and not too small opportunities that we are discovering with the workover activities, and we are reducing the water that we are producing in order to be more efficient. So you will see that there are a lot of activities related to workovers.

And Llanos 34 is extensive area. So there are some areas where we believe that we can move the wells to the north, for example, in certain areas and develop areas that they have no wells at the moment.

And of course, next step or next stage of the EOR is a polymer flood. Our partners are doing that since last year or 2 years ago, in [ Cabestro ]. So we are ready to start this year with two patterns. For next year, we expect to finish the year between 7 and 9 new patterns of polymer flood, where we are very -- we're very excited about the results that we can obtain from there, but it's absolutely part of the plan that we have for that field.

Then we have CPO-5. CPO-5 is a huge block where Indico field it is. So that's a unique case of light oil. The name of the game there is production stability. We already finished the development there. So the strategy that we have tried to keep production as stable as we can and control the water intake there -- the water production. And there is a lot of room for exploration in the east part of the block. So we will see that in detail in a moment.

And the last one is the Llanos 123. This is our -- exploratory successful. We are very happy with these results. The field is brand new. We are producing 5,000 barrels from there, and there is still room to make more wells and also to incorporate some near-field exploration project there.

So let's start to talk about our flagship, our flagship field where we operate. So we are talking about a field that has more than 1 billion barrels as originally in place. We have already produced 200 million of oil. So that means that we have less than 20% of recovery factor. So as soon as I get this position in February, and I started -- or spent more than 3 months with a new team because we bring some talent with experience in Llanos to understand what we can do. And there is a lot of things that we can do here.

The first thing that we are doing is try to understand these high-quality reservoirs. So we are adding technology, artificial intelligence, as Felipe mentioned. So we are trying to 3D modeling with new tools in order to understand the subsurface, first thing that we did.

Second one, as I mentioned, 30% covered with water flooding. We need to expand that technology. Very good result at the moment, but we need to cover full field with that water injection.

Third, we can do well, yes, you will see. We have plenty of room to do new wells, but not everywhere, not all the places. So we are trying to select specifically where we need the wells in order to be sure that the water flooding project that we see for the future is well represented in the partner that we are selling from the new wells.

And there are certain areas of the field that have just a few wells. Can you see these areas? For example, here, here. So there are just a couple of wells that good performance, and we believe there is still room to incorporate new areas to the main structure.

So that's the plan that we have. You will see in the next slide that the EOR with polymer flood has an important role here. And here is what we are planning or we incorporated in our development plan.

So we are thinking about 3x of the injection that we are doing today. We are going to drill new wells, but also we are going to convert some producer well to injector wells, manage the water flooding, and that's the key here, that's the message.

And the areas that you -- we only have some injectors here today. The idea is to try and to expand to the north and obviously go to the north and obviously go to the north in this part of [ Tiggy ] field that is part of Llanos 34.

The purple area represent areas that I have mentioned. There are just a few wells, and we can add some wells there. That's our key target for next year in the development plan. These wells over here will open this area, the same thing here and the extension where we had a workover recently, where very good results is the next stage for the development.

We are seeing about [ 600 ] wells -- new 100 wells for this field, distributed all around the field. But also, what we have seen is that Parex is doing a very good job in the south injecting polymers. We see the result is very good. So we are starting this year with 2 pilots or 2 injectors here in the South, and the idea is trying to finish next year with at least between 7 and 9 new patterns with polymer injection. So that represents the next stage of the recovery that we are looking for.

The final message for Llanos 34, what we are trying to do with all this activity that we were able to identify is try to keep production stable for the next couple of years, try to have a robust plan and deliver the production that we have in the plan.

A short comment about CPO-5 or Indico field. Just to let you know, we have already produced 35 million barrels from this field with only 7 wells. So you can do the math there. It's not only a beauty from the subsurface point of view, it's also a beauty for the business perspective.

So there is a unique case of light oil in the middle of those channels. We already finished the development, as I mentioned, with 7 wells. What we are doing right now is try to keep production is stable as we can. We are adding some workover activity here and manage the water. So that's the activity that we see for this field. It's very predictable, very high-value oil because it's a light oil there. So that's the plan that we have for this field.

And this is something that we are very proud because it's our recent exploratory success, is Llanos 123, where we are producing 5,000 barrels in less than 2 years, and we still have room to do more things.

Secondary recovery starting this year, a couple of months ago with very promising results. We started injecting one well. And we have in the development plan for this field about 40 wells. We are talking about exploratory and development well to complete the development.

One of the things that we are planning to do next year is try to derisk while is an exploratory well in the [ spin ] spot that you see there. It is in the middle of producing corridor here. The ideas is try to make this near-field because we are producing from Toritos here and incorporate this to the platform that we have there.

With that in mind, what we expect is to double the production that we have today. And if we succeed with the exploration plan that we have, we can achieve from this field in the order of 15,000 barrels per day. So that's the vision that we have for this very interesting block that we have here.

So this is the moment when I have to play the video in order to see what we are doing there in this block.

[Presentation]

As you saw in the video, the exploration is in our DNA. So we are very active, and we have been very active and successfully doing exploration in Llanos. Actually, this year, with drilled 4 wells. We started with Currucutu.

That well is producing more than 3,000 barrels per -- 300 barrels per day today, and we are planning to do an appraisal for next -- for this year -- for the end of this year in order to tackle the same structure and see how big is the structure that we are producing there. That well is in the 123.

After that, we drilled Toritos Sur-3 with the intention to test Mirador formation in the 123 as well. And we are producing 1,000 barrels per day with no water since we started with the well, so we are talking about 3, almost 4 months ago. Very happy with that result.

We went to the East part to the block to drill Matraquero, is under study. We find oil, but we are trying to identify the volume to make the next step and to define the next step.

And also, we are drilling today. We have a drilling rig doing the Toritos East or Toritos [ Este Uno ], trying to [ lease ] as a main target, Mirador [indiscernible] right next to the main falls in Llanos 123. So we are very active. We expect to drill 2 well before this year -- before the end of this year in terms of exploration, and that's what we are doing.

The messages that we want to deliver here is we are going to continue to do exploration, but very focused. So Llanos Basin is over in today, is where we are focused. We have a clear understanding with a lot of experience in the area. We believe that we have a competitive advantage in that way, not only in the areas where we operate, but also a regional understanding the subsurface.

We are consolidated in one position here. So synergy between blocks are very important for us. As Martin is going to show us, we designed specific facilities for this kind of projects. So allow us to process the oil and reinject the water in the same path that helps a lot in order to make money because it's very cheap and efficient. And always, when we evaluate exploration, we are trying to monetize as soon as we can. So reduce the time to market is key in order to generate value with the exploration.

We have a couple of wells for next year. It's important wells that we have is [indiscernible]. What we are going to try here is derisk this yellow spot that you see here in CPO-5. We have 2 wells in this East part of the block, try to identify a new structure in this part where we are partnered with Hocol. And we have a near field, the well that I have already mentioned next to our Toritos field in 123. So that's the place where we are and what we see for the exploration coming up.

So we have been talking about exploration as a part of returning to the growth strategy. Now we are going to talk about Vaca Muerta. That is the main at least lever that we have in order to recover the growth trajectory.

And two reasons why we wanted to be there. The first one, if you see Latin America, there are only two basins that are growing. Brazil offshore is one of them. The other one is Vaca Muerta. And if you see here, for example, this table or this graph here, is not new for much of you, but Vaca Muerta has shown the potential from the subsurface. If you compare the productivity of the wells in Vaca Muerta with Permian Basin, for example, we are talking about 30% and 40% even better than the Permian Delaware. So that's why we wanted to be there.

And I remember 2 years ago, when we started the discussion with the Board members, so we're defining to go to Vaca Muerta, we say, "Well, okay, where in Vaca Muerta?"We said black oil window, we said close to infrastructure. And if you can something -- you can find something in the sweet spot, will be better. That's exactly what we have today, and Felipe showed you.

So the deal that we have just announced is located in a very interesting neighborhood with a lot of good operators just next to our door. So we are very, very happy and enthusiastic with the opportunity here.

We were talking about why Vaca Muerta, we were talking about the place that we selected for Vaca Muerta. Now we are going to talk about how are we projecting our performance in our fields.

We did two methods, we can say. First of all, [ Pluspetrol ] did a great job derisking the area. So we have 6 wells producing there. So there are a lot of information coming from the block itself. And the information show us that productivity looks pretty good. We are talking about Loma Jarillosa and the 6 wells that we have there.

But at the same time, in Argentina, the information coming from the well is public. So you can take all the public information, also contrast your understanding with the performance that the neighborhoods are having.

And you see that in the left side of the screen, our well type, in terms of cumulative production and time, is in the average of the real data that we have in this area, the same as the behavior that we are expecting from the well. So we are confident that we can deliver the well that we are expecting there.

And also, there is a good message here. You see the new wells that companies are doing in the east part of the block because we are completely derisked because there are wells in the East part, in the north, in the South and of course, in the West, where everything starts in Vaca Muerta.

So there are a lot of good evidence that wells can achieve more than 2 million barrels per day. We are not using 2 million, we will see that in a moment. But definitely, we are in the right neighborhood.

We are [ off course ], we need to think about how it's going to be the future. Something that we have to take care of is the financial effect. So that's why we adopt a more conservative position in order to project or do the forecast for all our wells.

Now we are going to talk about a little bit about how are we going to develop these blocks. Starting with Loma Jarillosa. This is the northern block that we have according to the configuration, we are talking about 6,000 acreage that allow us to think between 35 and 40 new wells to develop this 40 million barrels as we see as resources in the subsurface. We are thinking to drill horizontal wells, we -- at an average of 2,400 meters each well.

One of the things that we want to highlight is we have two landing zones here. The first one is [ La Cocina ], very interesting results we see from the wells in the blocks. This is about 35, 40 meters thick. And then we had lower organic in the upper part of the well with about 25 and 30-meter effects.

The idea is to develop this -- in this scheme, you can see how we imagine the development for these blocks. And the well type that we are expecting, when you normalize to 3,000 meters of lateral length, is 1.3 million. That 1.3 million means the cumulative oil that we well can achieve during the internal life. And we can expect a peak of production in 1,500 barrels per day in the beginning of the production.

So this is Loma Jarillosa Este. Now we are going to see the older block in the south part, which is Puesto Silva Oeste. The configuration of the block and the size of the block is almost the same, but you can see that we are able to drill less wells just because we have just one landing zone here.

The good news is the landing zone is thicker than the other one. We are talking about 60 meters of thickness here and the very high quality of the reservoir. The plan that we have, at least intend or pursuit, 20 million barrels of recoverable at the end of the development for this field.

The well type that we are thinking here, as I mentioned before, normalizing at 3,000 meter of lateral length, is about 1.1 million barrels in the internal life, and a peak of 1,250 barrels per day.

What we see here is that the information coming from the neighborhood, we see a potential upside in this quality of the well time that we have. But we have to be cautious, we have to start drilling well, see the production, how it's coming and see how it performs.

Before I leave, I want to leave two important takeaways. We started talking about protecting what we have. We were talking about what we really have in Llanos in Colombia. And the name of the game is develop these mature fields. We need to be conscious that we need to be very detailed in the surveillance, understand the subsurface, implement in a very disciplined way all the development and be efficient. So that's the take what we have.

And of course, we have been talking about growing in terms of exploration, very focused in Llanos, doing what we know how to do it and try to find another 123. So that's the target that we have. And also, the big platform that we have in Argentina is great because you know that the oil is there, the rock is a high-quality rock. We need to bring those volumes to the surface.

And now we'll pass to Martin, because Martin is going to explain us how to bring those volumes to the surface. Thank you very much.

Thank you, Rodrigo, and good morning again to all of you. We really appreciate your time this morning. My name is Martin Terrado. I'm responsible of operations in GeoPark. I've been in the company for a little over 7 years. Before that, I worked for Chevron for about 21 years, a little bit over that. And we're happy to share amongst other things that were back to unconventionals.

One of my assignments in Midland, Texas was putting together the Wolfcamp program, in -- which went from 0 to 6 rigs. By that time, we were drilling vertical wells, not horizontals, but I'm bringing back some of those memories from unconventionals.

Operational excellence is fundamental for the two paths that Felipe is tending us to drive, which one is protecting what we have and the other one is returning to growth. And from operations, the way we do it is keeping focus on these things. And we'll go through detail in the next slide, but I want to give you a flavor of what's coming in about 10 slides how we got.

So the first one is safety. And we'll show you how we are comparing and when we talk about safety metrics, where we are. Second one is around making sure that we deliver on production and we have the highest production efficiency, and we work along with all the plans that Rodrigo and his team come together, then we execute, so that we arrest that decline in the existing fields. And then the discoveries would put that production on the tank as quickly as possible. So that's part of the protecting.

The next component is we want to make sure that Jaime can have enough funds and money. So we need to make sure that our cost are disciplined, the lowest that we have. So we'll show you where we are, how we compare and what we've been doing. And the other component is we want to do more things with the same amount of capital that we have. So we'll show you how innovation is part of our DNA and what we're doing, and how we're saving money and drilling more wells with less money.

So let's start with safety. And that's the #1 thing, right? If we're going to be protecting, we need to protect first, our people, we need to be protecting our contractors. We're only 370 employees. And in the field on a shift is less than 50 of us, but we got 1,200 employees from other contracting companies that are ones doing the work. They are the ones that can be getting hurt. So it's not only us and them, also our communities. And then safety encompasses also environment.

And what you see here is we benchmark. We like benchmarks, and you're going to see on the next slide how we benchmark on different things. But we benchmark against an association of oil and gas producers, is around 70 companies, big companies, regional companies, and we're part of that as well.

And our performance is the one that is in the solid blue line. And then what you can see in red is the worldwide, all the companies that are operating worldwide. And then in gray is the companies that are operating only in South America.

And what you can see there is, when we talk about, "Okay, we are industry leaders in safety," that's the proof. And the other thing that we're very proud is when you look at the history of the 5 years, we've been continuously bringing down our safety metrics.

On top of that is those graphs, the ones on the left is -- so lost time, basically somebody that gets hurt and cannot come back to work the next day. And the other one is, it doesn't matter if he came back or not, it's still an incident, okay? So again, the metrics are there.

And then other things that we've been doing well is what we call the zeros, right? So you can see there that process safety, which is basically making sure that all the liquids stay in the vessel. So we have no incidents. We are working daily with high pressure, high temperature.

And process safety Tier 1 are those that if they happen, somebody could get hurt to the level of a fatality, the level of fluids that are being disposed could be big enough to hurt the company in as much as a 10% value. So you can see there we've been 1 year without any process safety incidents.

We go to the next one, we've been 2 years without any moving vehicle crashes. So that you get an idea, we have around 1,000 kilometers -- 1 million kilometers per month that our folks drive. So 2 years on that and then 3 years without any oil spills. So when we talk about protecting and going back to the speed that Felipe was mentioning, we feel very proud of this.

The next thing we got to protect is the production. So let's talk a little bit about that. And Rodrigo went over, okay, what is our plan, which are our key 3 assets? So we'll talk a little bit in the details of that. On the right, you see a pie chart, and that's how much we're going to be spending and how we're going to be allocating the capital for the main 3 assets going forward for the next 5 years.

You can see Llanos 34 takes roughly around 45%. What we're going to be doing is mainly drilling wells. There's not much facilities needed. We have the facilities in place, minor facilities. And we will be doing workovers, which we'll talk a little bit about it. But in general, one rig is going to be drilling in Llanos 34. We will be doing workovers. We had been successful with workover activity for the past 2 years, and it has twofold.

When we do workovers, one of the results is as the field is getting more mature, we can open some layers that in the past, we decided not to open because they had higher risk, and we open them and we start producing oil. Again, why we didn't do it in the past is because we had a much thicker layer. And in some cases, even the national agency won't let you commingle. So we go and open those layers, and we increase production.

And the other component is we go and when we see a well that has high water cut, we shut in one of those zones. So at the end of the workover, we have a couple of things. One is we could have more oil or less water or both. And having less water is very important when you're in more mature ages of the production of the field.

So that you get an idea, back in 2021, Llanos 34 was producing only 300,000 barrels of water. Today, we're producing 500,000 barrels of water. That's 70% more water. And that water at the end of the day is OpEx, okay? So the workovers, we spend capital, but they help us to increase production and also they help us to manage our OpEx.

So I'll talk a lot -- I did talk a lot about Llanos 34. CPO-5, we're going to be drilling some exploration wells. And we have some follow-ups from some discoveries that we have in the neighborhood, north part of the block. So we're going to have a rig drilling there through our partner. And finally, in Llanos exploration, we're going to be doing more drilling. It's exploration, it's appraisal and upgrading some of the facilities that we have.

So overall, those are the numbers on how we are producing. And like Felipe said, when we went from 2024 into 2025, we said, "Okay, our decline rate, if we do nothing, is going to be around 23%." With our work program, we said 17% to 20% overall.

And with results from water flooding, workovers, the infill campaign, which was very successful in both production, but also on the numbers and on the capital that we spend; we've been able to maintain the plateau of GeoPark around 14%. And as you can see there, for the next year, we're envisioning 11%, and then we will continue working to maintain that as flat as possible with this type of activity.

So now we want to show you a little bit about, "Okay. we talk about safety, we talked about production. Show me the numbers when you guys say that you're efficient in capital, okay?" And this is it. Through technology and innovation, we have been able to reduce the drilling of the 2-phase vertical wells in the last year by 30%.

What you see there on the left, the red line is the number of days that it takes to drill and complete the wells. And then on the bars is the cost, okay? So what have we done? And the key here has been we brought and contracted a new-generation rig. These are the rigs that are the most automated and the highest technology in the world. And we were lucky that they were in Colombia. So we grabbed two of those.

And what those rigs have is a couple of things. One is smaller footprint, and they move like a robot. And we'll show you in a film coming up. And what that means is by having a smaller footprint, you don't need to do civil works and extend the path. So you're saving money on civil work, you're doing it quicker because you don't need to wait on that activity to happen.

The second one is it can move -- by having those like robot legs, it can move in hours instead of days. So the same rig can drill more wells in less time, okay? And that's, at the end of the day, cost.

And it's a rig that is fully automated with artificial intelligence in a sense that the rig -- if you go to the rig, it has a joystick and is drilling by exception. So as long as the machine learning and the computer is within parameters, the guy in the rig is not doing anything. It only activates when it goes out of the parameters.

And what the artificial lift does, basically, it's forecasting what's going to be coming, and therefore, it can adjust the rate of penetration and other parameters. So there's a video where you're going to hear from the guys themselves how we do it.

The other thing that we've done is not only about drilling or completion guys because you drill the well, but then you complete it. And on the completion, one of the things that we were doing is having a completion rig all the time. And we said, well, let's cut how much time we have with the completion rig and we're doing some things rigless. And rigless means, you put a crane instead of having the rig. And by that, we're also saving money.

And to the right, you see the same example is time of drilling horizontal wells and the cost. We had a very successful campaign back in 2021, where we started drilling horizontal wells in a formation called Mirador, which with vertical wells, recovery factor was going to be very small. And we got into the upper part of that formation to avoid the water encroachment.

Today, that 11-well program is posing around 10% of the total production of the field. They were initially declining steeper. It's the normal thing, behavior that you see on horizontal wells, and that's -- now they're declining at much closer to a 10% decline. And again, you can see when we talk about capital-efficient real examples.

So let's move now to OpEx. And one more time, it's our Can Do Better mindset in the operations team hand in hand with a logistics supply chain on how we can improve our uplifting costs.

On the left plot, what you see is when we compare it to 4 operators in Colombia that our peers have same assets, similar kind of assets like we do their lifting costs and where we stand. And as you can see for the past 5 years, we've been either the second one or the best one. And in the past 2 years, we have had the lowest operating cost in Colombia.

And again, how we do that? We have very clear understanding of where our OpEx are. And I'll go very brief. Energy is a key one. Like I said, our total production has gone up on water. And we are very, very specific on what can we do first to avoid the water production. And then what are the things that we can do so that the energy costs are lower?

So for example, we have a solar farm we have connected to the national grid. And by connecting to the national grid, our energy, is much cheaper than generating through gas or diesel.

And the other thing that we do, we did a benchmark back at the end of last year to see where we have opportunities to improve. We have some that were working mainly around maintenance. But on well services, which is basically when the pump breaks, we have seen that we do that 30% cheaper than our peers. So that doesn't mean that, okay, we stay and celebrate. We're continuously looking at what else to do. But again, that's part of how we protect our cash.

And as a result of many of the things that we do in capital and OpEx, we also have improvements in sustainability. And one of the things we did back in 2021, we've communicated to the market that we had clear goals on reducing our emissions, not only in 2050, but in 5 years and in 10 years.

And what you see on the left is our emissions in total volumes and also in intensity. And since we put that focus, we are around 40% emissions reduction. So we feel very comfortable to share with you that we're going to deliver on the missions that we committed to.

And the same thing happens when we look at our water use, and we talk about fresh water use. We use freshwater mainly for drilling and some of the other operations in separating oil from water.

You can see there basically how with the drilling, one of the things that we've done, and Felipe was with us in the field about 2 weeks ago, we put osmosis plants. And by doing that, all that water that was being trucked out, and we were bringing new water, now it's a circle inside the field, and we don't need to do it. So that's just one example of how we do it.

So at this point, I want to share instead of me talking so much, I want you guys to hear our guys in the field with some more details on the things that I mentioned. So if you can please put the film.

[Presentation]

So as you can imagine, very proud of our guys in the field. And every time somebody comes to visit us to say, "Okay, how can we do business together?" First thing we say is, "Okay, what do you want to try?" And we're a company of a size that we're agile to implement. And those were a lot of examples of how we do it.

And with that in mind, okay, we shared, okay, about how we protect what we have, and let's talk about how we are returning to growth and how we are ready for that. So very, very excited to have this new challenge to go from 2,000 barrels to 20,000 barrels of oil per day in 2 blocks in which as new business, and Felipe was signing the documents weeks prior, we were working, okay. We need to make sure that boots on the ground immediately deliver.

And one of the things that we already did that day that we were arriving and pretty much getting the keys of the block where we're shutting down the first well out of 3 wells that already shut in, so we can go from natural flow to artificial lift. There are 6 wells in that Loma Jarillosa that are on production. So we'll do the first three. And then the last three, we will do it at the end of the year, most likely early 2026.

And in the meantime, we're working like the lines, their environmental permits. And those are permits so that we can build roads, we can build paths, build connections. We are collaboratory working with the neighboring operators to see if maybe we do some connections so that we can share spare capacity.

We will be doing an upgrade on most of the facilities that you saw. We will be upgrading them, and then we're going to put a central processing facility in Puesto Silva Oeste, which will be pretty much copy, paste from some of the plans that we've been familiar and we know. So we're not going to be creating a new engineering or design, but just copy, paste that so that we can be agile and put -- have the facilities.

And in the meantime, we're working the contracts to bring one rig. One rig will stay with us so that we drill 50 to 55 wells, so that on top of the 6 that we have, we will get into that 20,000 barrels of oil per day.

Last thing we want to share is, "Okay, so do you have the skills?" Very proud to say that yes, we do because many of the team members from GeoPark worked in the past in Argentina and in Permian. So we have guys that have each of them more than 10 years in unconventionals, working for big companies like Chevron. We have companies like Pan American Energy. We now have Pluspetrol, and we're ready to take this task very happily.

And with that, closing. If we go back to our two main streams, protecting what we have, again, safety is the #1 thing we want to protect. Then we want to make sure that we deliver on production, we protect the one we have, and then we bring the new one safely.

Next one is we are very aware that the more capital efficiency and the better margins that we can provide from operations, more we can do to grow. And Jaime will talk more about that.

And at the base of that, and like Felipe said, performance come from people. And we are very proud on the talent that we have in the existing operations in Colombia, and the team that is already in place in Argentina will deliver the production goals that we have.

With that, I will pass it on to Jaime. Thank you.

Thank you, Martin. Good morning, everybody. Pleasure to be here. And I am very happy to take on the presentation now because my reflection upon listening to the presentation is that Felipe spoke about the clarity of our strategy and the clarity of our leadership tone, which I think he exemplifies very well.

Rodrigo spoke about the quality of our assets. Martin spoke about the quality of our execution. So my job is actually quite simple. It's simply about sharing with you how that actually translates into enduring value. And that's what I'm going to try to do over the next -- a few minutes.

My name -- I know many people here, but a few of you, I don't know, and I know that there are some people connected. My name is Jaime Caballero. I am the Chief Financial Officer of the company. I've been in the energy and oil and gas sector for over 25 years. And I've been in GeoPark since early 2024. And what I'm going to speak about in this chapter of interim value, I'd say, it's fundamentally about five pillars to enduring value.

First one is our approach to the uncertainty that we have; secondly, our approach to capital allocation, right, which we believe is pivotal in making this a reality; third, our balance sheet resiliency; fourth, how we approach the commercial aspects of the business because there's a lot of value to be captured there; and last but not least, how does that translate to returns to shareholders?

So this is -- let's start with uncertainty. And I want to tackle that head-on because you look at the press today, and Felipe spoke about the politics, some of us look at the politics, some of us look at the Brent price, and some of us look at everything, kind of thing. And when you look at that, it's -- we're at $61 Brent. There's all sorts of noise in the macro environment about where Brent can go.

And the point that we made very intentional in GeoPark as a company is actually facing that head on, right? It's not something that we put under the rug or it's something that where we want to have an aspirational view around it. It's actually something that we want to have a robust methodology to approach and that we want to embed in everything that we do.

So this gives us a little bit of a view around that. And if you look at the chart on the left, essentially, it's an aggregation of all the forecasts that are out there, which we regularly monitor, right, and that basically speak about the wide variants that we have of a forecast, right?

But I think that it turns down to two key messages. One is they tend to gravitate towards that $70 barrel line, right? That's one thing. And the second thing is that in the short term, we are significantly below it. And that's important. And I think we need to recognize both things.

We need to recognize that on one hand, in the medium and long term, fundamental support, a price that it's in $70 and perhaps above $70 when you think about the degree of underinvestment in the industry that we have and when you think about the breakevens of the big producers and all that sort of things.

But in the near term, in the very near term, the next 12 months, possibly the next 18 months, the market is of the view that prices could be below that. So we are conscious of that. And when we speak about that plan, that's where all our intentional efforts come in. And I'm going to give you a lot of color around that.

Ultimately, the message here is that being disciplined and innovative around how do you approach the tackle today, it's what actually translates into resiliency in the future.

So let's start then with capital allocation, right? And capital allocation is really the name of the game, right? It's where you're putting the money. And this actually gives you a bit of that inside baseball around how we do it at GeoPark, right? This is an actual slide that we've used, it aggregates a number of assets here. I'll give you a view.

But essentially, when we do our portfolio at GeoPark, we're evaluating at any moment in time around 80 to 100 projects. That's the hopper of portfolios that we have, right? We -- for the purposes of this presentation, you've seen essentially 4, 5 assets, like asset groups. But when you think about the bottoms-up feed of that, when you think about the number of wells, all the project investments are made in the company, it's about 80 to 100.

And this is how we approach them. We do a bottoms-up feed of this with a standard economic and technical methodology that is peer assisted and that it allows comparability across the board, and we end up with this outcome.

And what this outcome tries to do is give us a view around how projects compete and rank on the basis of value, it's the axis that you have there on the left, and on the basis of strategic fit, right, which is -- and what's behind that? It's how do those projects contribute to the goals that we've set ourselves for the company, right?

And you can see some of the dimensions on value creation. We look as a standard and disciplined form things like net present value, breakevens of each and every one of the projects, capital efficiency; capital efficiencies, how quickly the capital deployed translates into returns.

And on the strategic fit side, we look at things like time to market, we look at things like risk, chance of success, particularly, it's something that we spend a lot of time looking into; and of course, scale. And scale is an important one because, of course, you want to invest your capital in things that move the needle, right, that really move the needle, that make a difference. So you want to kind of bias your portfolio towards those sort of investments that are going to best respond to these sort of approach.

And the outcome of that is basically three tiers, right? We have a Tier 1, which is that stuff on the top that you see, which is the investments that you want to go full on. You want to make sure that the bulk of your capital goes to those investments in every sense, people, focus of the company, all those sort of things. And I think what we've been talking about today clearly reflects what those top-tier assets are.

We also have some assets in Tier 2, which are the hold and optimized, which are assets that essentially, what we're doing is we believe there's a lot of value there. It's -- they are delivering value, but we need to make more fine-tuning and optimization to make sure that they consistently return value over time, right? So that's kind of the second one.

And then you have Tier 3, which is fix or divest. I want to put that transparently upfront. We do have assets that are in that category. And we wanted to be very transparent because what we try to do is we need to act. It's simply there's not a problem with having us this in those categories. The problem is continuing to invest in them as if nothing were happening or just ignoring that reality.

And if you look at what we've done over the last in 9 months, right, we've announced three divestments. So our decision around [ Ecuador ], response to that, our decision around Llanos 32, response to that. Our decision around Brazil, Manati, response to that, right? So this is portfolio management in action, right, and enhancing capital deployment across the board.

So Felipe already advanced around this or gave us a preview around this, but this is something that is a very important characteristic of our portfolio, which is its resiliency, right? And I'd say that a big component of the resiliency is the quality of the assets, right? We -- Rodrigo I think, gave us a really good view around how competitively advantaged we are simply because of the subsurface characteristics that we have in some of our assets.

At the same time, our team gave us a strong view around the competitive advantage associated to our low-cost base and our quality of execution. Those things come together into these kind of breakeven conversation, right? It comes together there. It's an ongoing conversation, and it's dynamic.

When we do our portfolio, we rank it deliberately. And as you can see here on the left, reserves -- from a reserves and resources standpoint, so this is going beyond 2P and aggregating everything, the hopper of opportunities. And about 140 million barrels of the totality of that hopper are actually economic at less than 60, right? So these are -- and when I mean economic, is they fund themselves and deliver positive cash flow when deployed at less than 60. So it's quite robust, right?

Now it doesn't mean that it's a free ride and an easy ride. You constantly need to be doing these optimizations and effort. But what this does is that it drives the performance conversation where it needs to go. So when projects start to deviate from that, and on a relative basis, I'd say that typically around 10% of this is in that zone of intervention required to make sure that it's delivering. But it really focuses the conversation into that. So that's -- I think that's an important characteristic.

And importantly, everything that we've shown today around the plan and the ranges that Felipe presented earlier on, are actually supported by this breakeven view. So we've only included in our plan production levels that have breakevens under 60. We're not including volumes. I don't know, there's a 1%, which is the little grade that you see on the very top, but the exposure to barrels that are not economic over 60 is minimal in this plan.

Hopefully, we're going to be able to bring some other projects that we have that currently might be at the 70 or 75. We're going to make them economic. Some of the exploration projects that we're looking at are in that category. And that's part of the optionality and vision that we have of bringing them onboard.

So we had a good exposition around the [ Llanos ] engine and the Vaca Muerta engine. How does that actually translate into returns, right? And in -- this slide gives you a very quick snapshot. And essentially, I'm going to start with the value component, which is -- the EBITDA returns, and Felipe touched on it in his introduction.

But essentially, what we're seeing is that this portfolio can almost double our EBITDA over a 4-year period, right? So it's important, it's transformational in terms of EBITDA for the company. You're going to see a more diversified distribution between Colombia and Argentina. I think that's also a characteristic of the portfolio that we are anticipating.

And in order to get here, obviously, capital intensity will grow. And I think that's an important message, which is that, that capital profile of the company is changing with Vaca Muerta, right? This is not a surprise, it's a necessity, and we're conscious of that.

We're going to be moving from a company that over a 4-year period was focused on cash generation, but with a declining production profile to a company that is going to have a higher capital deployment, but it's going to be translated into growing volumes and growing returns.

So it is a change, and we are conscious of that, right? But it is a change that has much more payback associated to it in the medium term, and it provides longevity in the long term. And we think that is a strong value proposition.

The other important point here is when you look at the metrics, if you look at the metrics, right, the metrics comparable to where we are today to where we're going to be in the future, the metrics do not deteriorate. Despite the capital intensity, the growing capital intensity, metrics are either the same or actually improved over time. And that's what makes it for us a very attractive proposition.

I particularly I'm a fanatic of [ ROCE ]. The one that you see in the bottom, return some capital employed. I know it's controversial. Many different investors see many different things, and that's why we cater kind of -- we give visibility to those metrics. But to me, return on capital employed is kind of the ultimate measure of how really well you're deploying your capital. And if you see, we're actually improving our [ ROCE ] with this plan.

So cash, why give visibility to cash? I mean because I could have basically skipped this slide and just stay at the EBITDA level and stayed at CapEx and everything. But cash, again, is what actually pays the bills, right? EBITDA doesn't pay the bills, cash does.

So -- and we wanted to give you full transparency of how we see the cash trajectory for the company with this plan, right? And what you're seeing here is that, that ramp-up translating into cash, right?

We are going to have a spot, and it's going to be 2027 in particular, right, where we're going to be in a situation where free cash flow is going to be negative in 2027, right?

And the reason for that is basically that it's the moment where you have the highest capital intensity associated to Vaca Muerta with a number of upfront investments of the facilities required to produce, right? And you have a slight lag. You also had the drilling rig coming in, drilling wells, and you have a lag until you reach plateau.

Once you reach plateau, the free cash flow kicks in and you go into positive free cash flow again. And if you see at that cumulative free cash flow over time, it's a massive number, and it's transformational for the company. And -- good. There you go.

So with a negative free cash flow in 2027, so how are we going to go about that? And there is a financing component to this plan, right? There is a financing component to this plan. Basically, if you look at the big picture from here to 2030, we're talking about deploying about $1 billion of CapEx between Colombia and Argentina. Of that, 70% is fully funded by our own cash flow. There's a 30% that needs financing.

So basically, we're looking at financing between $300 million to $400 million probably over the next 12 months or so. There's no immediate pressure to do that. It's basically to prepare ourselves for that 2027 peak, and it's what you see here. It's what you see here reflected in this uptick in the bar for leverage.

If you look at our ratios for leverage, they stay very healthy, they stay below 2x right? This is, again, at an average of 68%. I can give you a little bit more details. As a matter of fact, our average for next year, we're thinking about 65%. So it's a pretty good number to base the plan on.

And importantly, once you go through that temporary uptick, you have a quick and rapid slide to leverage ratios that are under onetime EBITDA. So this is something that we're comfortable with. When we speak to our credit rating agencies, what they tell us is basically, look, if you stay below 3x in a stress test environment you're in good shape. We stress tested this plan. And actually, if you look at this little bullet at the bottom at $55 per barrel, we stayed under 3x, at $55. So that's been part of the philosophy around building this.

So let me switch gears now and talk about commercial a bit. And commercially, it has two or three angles to it. I'm going to start with an angle that is very central and very, I'd say, distinctive to our strategy. Certainly relative to some of our peers, which is our -- I'd say, aggressive stance around hedging, right? And I mean aggressive in terms of proactive intentional because we believe it's fundamental for a company like ours to have hedging involved, right?

We believe that in that trade-off of exposing yourself to the upside of the market, but at the same time, the impact on balance sheet, we need to be on the very conservative side. And we've been, as Felipe said, 90% of 2025 production was hedged with floors of about 68%. We're benefiting from that right now. We've had quarter-to-quarter wins due to hedging throughout this year.

And next year, 2026 is already 63% of next year's production is already hedged -- already hedged with floors of 65%, right? So when you think about those forecasts or when you think about today, where we're at 61%, we already know that we are navigating more generous prices for our production next year, right?

And that's systematic. We do it all the time. There's a lot of detail on this slide, but essentially, what we try to do, and this is the key point, we want to make sure that we hedge sufficient volumes to fully fund our anticipated CapEx and debt service for the next rolling 12 to 15 months. That's what we do, right?

Now let's talk a bit about the other two aspects of commercial, which are basically the differentials and how differential netbacks are going to behave. This has to do with midstream. It has to do with the discounts associated to our barrels. For those that have been following us for a while, the Colombia story has not fundamentally changed. It's pretty similar. Llanos continues to use Vasconia as the key reference. Vasconia is doing well in the market, right? If you think about relative historical discounts, Vasconia is doing quite well and we're benefiting from that.

The change that we've had is that we made a conscious effort to rebalance a bit domestic sales versus export. Historically, we've always been a domestic seller really. We've been selling to off-takers who most of them had strategies to sell to refineries in Colombia. Typically, that's been the history that we've had. And what we've done over the last year is taking into account the quality of the Indico oil, which is very light, relative to the market in Colombia, we've identified an opportunity to export those volumes, and we're doing that, right? So nowadays, about 80% of our production in Colombia is sold domestically. It goes to the -- it's blended and goes to the refineries, mostly 20% is exported directly by GeoPark at going up north.

That gives us a bit of diversification. It gives us a bit of flexibility. It allows us to capture better margins on export if those are available. But at the same time, it gives us protection when you have things like tariffs that are a possibility for Colombia. We don't have tariffs, but there's a lot of talk that there could be tariffs. The exposure that we have is very limited given this configuration.

And if we move on then to Argentina, which is kind of the new piece on midstream, a lot to talk about over here. I don't intend to cover all the elements, but I'll give you like two or three big headlines around how we think about midstream and commercial in Argentina. I think the topics that you see up above have been our priorities. Firstly, evacuation security. The neighborhood that we are in provides that, right? If you look at the map and if we spend a little bit of time on there, essentially, we are surrounded with neighbors that are already invested in infrastructure where you basically just need to connect to that, right?

Then -- so from an evacuation standpoint, that's not really the concern. The real conversation is around how competitive can you get and can you improve it from where it is today, right? Currently, what we -- if you will acquire it from Pluspetrol has some inefficiencies right now? It was a marginal project for them because it was already to be sold, right? So they haven't spent a lot of focus on optimizing the assets.

So there's a lot of trucking involved currently, and a lot of quick wins to be done. Essentially, we have a 3-stage process. We will continue producing those volumes under the current stage. We're going to optimize the trucking in the very near term. And what we're looking at is we're working with our neighbors to understand what are the possibilities around shared facilities on one end, and around using existing allotments in the midstream capacity that they've already purchased, right?

Ultimately, there's a third phase, which is that we could end up buying our own capacity in the midstream. It's not something that we see today as our base case, but it's a possibility. Bottom line, we have options. We have options. There's multiple options associated to this. Vaca Muerta is in a very different stage to where it was 3 years ago from an infrastructure standpoint.

You now have Oldelval, you have Duplicar, you have VMOS sanctioned. It's a very different ecosystem. And it's an ecosystem that I'm happy to say that we feel welcome. All these players have approached us with these opportunities. Everybody in Vaca Muerta, particularly at this price environment is thinking about synergies, efficiencies, how can we work together. The days of stand-alone facilities in Vaca Muerta I think, are a thing of the past.

So last but not least, shareholder returns, of course. And you probably saw this morning, our statement around the change in our dividend approach that we anticipate for the next few years. I think what I want to highlight here, it's essentially the fact that we need to start with saying that we have a strong track record around shareholder commitment, right? So before announcing, if you will, or before, considering a dividend change, that was the start of the conversation. What is our shareholder commitment? And we walk the talk.

If you look at the last 7, 8 years, we distributed more than $300 million back to our shareholders. So it's something that I say to use Rodrigo's language, is in our DNA. Having said that, the method of shareholder return should change. And it should change because we have a new reality. The company now has a renewed growth trajectory, which we didn't have in the past. It's a growth trajectory that it's predictable. It's a growth trajectory that is lower risk than what we had in the past, given the nature of unconventional. But at the same time, it's a growth trajectory that has heightened investment needs, right?

And in order to fund those heightened investment needs, where value is going to come from, we need to manage cash in a very responsible way and in a very measured way. So we're going to be prioritizing that capital deployment rather than dividend distributions. And that's the essence of what was announced today around reducing the dividend over the -- over the -- starting this quarter and the next three quarters after that. So we're going to have four quarters with a reduced dividend and then suspending that dividend as the capital intensity of Vaca Muerta, it grows.

So to summarize -- to summarize, when we think about enduring value, we think about what we're all about. This company is about delivering value, right? And what we're trying to do, I'd say, in essence, is translating that commitment that we have as a leadership team, the quality of the assets, the quality of our execution into sustainable value that we can share with communities, with shareholders and with the people around us. Thank you.

In closing and before we go into Q&A, and again, thanks for being here, and thanks to those connected on the webcast. There's probably 170 people connected, so thanks for that.

Why GeoPark? And this is where I want to close. A twofold strategy, protecting what we have and returning to growth. First, we have a proven presence and foothold in Colombia, in the Llanos. The guys have taken us through some of the things we've done to ensure that we can provide value through that. Now we've added to that the Vaca Muerta opportunity and our opportunity to grow.

We have a growth trajectory that's cleared. I've shared with you the firm plan, and we've showed you the vision as well to 2030. We have a proven track record of being able to actually maneuver dial back if we need, be very disciplined in terms of how we allocate CapEx and how we look at investments and distributions.

We have a proven track record to our shareholders, which is what Jaime was just explaining, and we have a great team. I've joined the company, as I said, not even 5 months ago. Great people from many different operators and with a lot of experience that allow us to think that we have the opportunity to basically deliver on the strategy. And one thing that I've mentioned that I will mention again, which is we need to deliver.

In the past, we may have failed on some of our commitments. But right now, as a senior team and with the organization, we're committed to delivering on what we've presented to you today. So thanks for being here. I think there won't be a break. We're probably 5 or 7 minutes past and we're very conscious and respectful of your time. So we're getting ready for some Q&A. Should there be questions. And why don't we start with Maria Catalina. And thanks again for coming.

So thank you very much, Felipe, and thank you to the rest of our management team, as Felipe mentioned in a while the team is making their way to their chairs that we have here on front.

Let me remind you that we will be taking first the questions that the live audience of the event may have and then we will proceed with the questions that we have already received through our webcast. I ask please the people that are here in the room to state the name and the question that they have. So let's begin. Please go ahead.

My name is David Herzberg from Barclays. First of all, thank you very much, all of you for the great presentation, today and, for hosting us. It was very helpful. I have two questions.

The first is, is it possible to provide a bit more specificity around the cadence of CapEx from 2026 through '28? I know that you have a number per annum, but is it linear? Is it upward sloping or at least help us sort of understand how to think about that? And the second question has to do with a potential scenario in Venezuela with respect to perhaps a regime change, or maybe not. But if we were to assume that production in Venezuela increases significantly, and by significantly maybe the delta is maybe 1 million barrels a day over the next, I don't know, let's say, 3 years. Could you talk about how that might affect GeoPark with respect to Vasconia discounts and other issues?

I'll let Jaime take on the CapEx profile. And we broadly mentioned the $500 million to $600 million in the next few years. And I'll start with question number two in Venezuela.

So again, lots of uncertainty in terms of what will happen with Venezuela. But I do know that the state condition of some of the infrastructure, the facilities, the fields, the wells is not optimal. It's not where it needs to be in terms of actually being able to ramp up production quickly.

They've come back to 850,000 barrels roughly. I think that's where they are. And there eventually will be -- again, in the scenario that you were talking about, which is having a change, political -- dramatical political change in Venezuela, should there be opportunity and you see I'm mentioning opportunity. I'm not talking about only the downside and risk.

But I think back to what Jaime was saying, we have flexibility in terms of where we put our barrels, do we keep them in country, do we send them out and export? And there may be opportunity in Venezuela as well. But I'll reinforce that we want to remain focused. We've divested some assets, Ecuador, Brazil. We're concentrating in Colombia, and now we're concentrating in Argentina.

Jaime, do you want to talk about CapEx?

Yes, absolutely. So David, let me share with you a little bit of color around the CapEx profile. So underlying capital, it's activity, right? So what to expect on the two fronts? If you think about Colombia, the plan that Rodrigo mentioned is a plan that basically take us from where we are today, which we're going to end the year in at about $110 million of CapEx broadly. And there's going to be an uptick on that capital intensity to probably $130 million, I'd say, $140 million of Colombia, right?

Why? Because we are reinitiating development drilling. We are doing a couple of exploration wells in next year. Those two things and the water flooding, there's some CapEx associated to that. So basically, Colombia is going to go up, I'd say, a couple of years to that level of about $140 million, and then it's going to go down again, right? As that -- those activities are not intensified anymore.

When you think about Argentina, Argentina is going to slowly ramp up. What we are anticipating is that Argentina will require next year, about $60 million to $70 million of CapEx in 2026. And then in 2027 is when you get the big ramp up. Obviously, that number is going to depend on when the development drilling actually begins, right? If it begins in 4Q, which is kind of what we are assuming for the purposes of this conversation, the bulk is in 2027, and you're starting to see a number which is about $240 million to $250 million in 2027 and in 2028, right?

Then it stabilizes down to about $220 million per annum, and that's ongoing, which is basically the capital deployment associated to keeping the rig going. So that's kind of roughly the shape of the curve.

Anne Milne from Bank of America Securities. I'm excited to see your evolution in Argentina, so good luck there. Could you give us a little bit of a breakdown of what you expect, let's say, your steady state breakeven to be Argentina, Vaca Muerta versus what you have in Colombia?

And let's say, 2 or 3 years from now, you are successful in Argentina, Vaca Muerta has a very lucrative returns and it's much more profitable. Would you consider selling your Colombian operations? Or if there is a change in regime going into non-conventional, which we're hearing is more of a possibility down the road in Colombia, which I know Felipe in the past, you've been a strong promoter of.

So good to see you, Anne to see you again. So thanks for being here. And I'll let you talk about the breakeven. So there's a few things that probably we didn't mention that I think are relevant.

One, we've streamlined with basically strengthened our operation in Colombia. And as I tell my guys in the field two weeks ago, as I was telling them, look, the reason we can pay the ticket in Vaca Muerta, is because of what you do everyday, and create cash and create something that has an operation that's profitable, it's reliable and it's safe, and that's very good.

So we see that going forward. And actually, there's a lot of activity in terms of what Rodrigo was talking about the [ legs ]. How do we view our waterflood that has 30% coverage in the field to something that's different? How do we ensure that we can manage water differently and bring recovery factors up? So that's, I think, the main focus.

On the unconventionals in Colombia, I have been a big proponent and defendant of that. The current government doesn't like it, doesn't like oil and gas. And our view is that if we go to Argentina, and we strengthen our competence we create much more experience. And again, Martin was saying, the guys have in excess of 10 years' experience on a personal basis. On unconventionals, I have some experience with the Permian as well. And we can bring that expertise back to Colombia in the midterm.

And the other thing you guys will know, but there's presidential elections next year in Colombia. First round in May, second round in June. And almost all -- not all, but almost all of the candidates or pre candidates are talking about fracking in Colombia. And the support, the latest public poll shows that support for unconventional development in Colombia has gone up. So I think there could be opportunity going forward in that sense. Breakevens, Jaime?

Yes, absolutely. Yes. So basically, the way to think about steady state breakeven is Colombia steady-state breakevens are at $45 a barrel. Argentina steady-state breakevens are at $55 a barrel. That's considering a full CapEx deployment on a steady-state level.

$45 and $55?

Yes, $45 and $55.

Alejandra from, JPMorgan. Just wanted to get your thoughts on the security situation in Colombia. If there's anything that you're seeing that the situation has deteriorated. If your forecasts assume worse conditions as we approach the elections, maybe a downside for your production or for costs. So how do you think about that as you share your EBITDA projections and whatnot?

Sure, Alejandra, and thanks for being here. So in terms of security, something that we follow, we monitor. We're very closely working with the authorities at a national level, regional level. And as you can imagine, it's something that we take very seriously.

And when I was describing at the end, why GeoPark? We've built very strong, very long-term relationships with the communities that are based on trust. And we track something, which is very interesting, something that I had never seen in the industry before and it's a first for me, and GeoPark does it very well. We -- as we track downtime in our operations. So Martin was talking about an ESP submersible pump that breaks. We have downtime or whatever. We also measure social downtime. What are the stoppages, blockages, security things that we have that could impact the operation? And those are very, very, very low, less than 0.5% in our operations.

So we continue or we believe we can continue to manage that going forward. But you're right, security overall in Colombia could deteriorate. We see some parts of the country not necessarily where we operate, but some parts of the country where security is not in good shape. So it's something that we will continue to monitor going forward.

Felipe, if I may, I want to add -- in Llanos 34, which is like you're all aware, we have a very competitive advantage is we're connected to the national grid. We're connected to oil pipelines. So and other assets, they are not. So when we do get a blockage social unrest, we can't keep on going for quite some time. And that's something that we have built over the years. We're doing similar activities for Llanos 123. But right now, Llanos 123 is trucked. But on the main asset that we have, that gives us an advantage.

And we learned the lesson. For those of you that follow us in 2024, our -- we did miss part of our guidelines because the blockages were getting a lot harsher, so we have incorporated that now into our forecast. So we have, like Felipe was saying, not only downtime due to operations -- pure operations, but we have incorporated downtime due to social.

Francisco Barbosa from Jefferies working with Alejandro Demichelis. Thank you very much for your presentation today. My question is on the Vaca Muerta assets. Could you please discuss how you see your costs evolving on drilling and completion, lifting and transportation costs?

Francisco, right? Yes. So talk about OpEx. So we're getting in a block that like Felipe was saying, the OpEx for 6 wells, trucking, the crude, it's out of specifications on salt. They are north of $25 per barrel. And they're objective, and we have plans to take it to somewhere in the order of [indiscernible], and it's something that with fresh production connections to existing facilities and then finally, our own facilities, that's where we are planning to be. So that's from an OpEx perspective.

When we think about the capital and the cost per well, we got a range, which is from around $13 million to $15.5 million per well. Obviously, we're going to be starting on the higher end of that. And in some cases, the pads are less wells and in other cases, are 5 wells, but that's kind of a range so that you get an idea.

Do we have any other questions in the room? Okay. Apparently not. So -- but we have some 3 to 4 questions that have come through our webcast. So the first question comes from Josh Roberton from Peters & Co. And the question is, what is the production profile for Llanos 34 over the next 5 years? Is polymer expected to keep production flat or just reduce the decline rates?

I'll take that one, yes. So thanks for the question, Josh. And Rodrigo complement if I miss anything. But like we were saying overall, Llanos 34, if you do nothing, is a field that declines at 23% or higher. And with the activity that we have been implementing and confirming that it works, we're arresting that decline. And we will share it again, but waterflooding is clearly one. Doing workovers is the other one that it's clearly the second one.

In 2025, the infill drilling program has given us a new one. And why we didn't drill infill wells before was what we were -- we did not have as much insights and review of the geology itself. But even then, if we were going to drill the wells at $4.1 million, they were not economic. And now we've proven that we can drill those wells 30% cheaper. So it opens -- in addition to waterflooding and workovers, it opens that window of doing infill drilling. And on top of that comes the polymer.

So with those things, we are declining at 14% this year, and we expect to be declining at around 11%, maybe less. Polymer is something that we know as we have some information from our partner in the South, but we have to see what the results are, and they need to be economic also, right? We need to make sure that we're not going to do it just to arrest the decline. Order of magnitude for the next 5 years, that polymer flood, when you add the capital and the cost of the polymer, again, order of magnitude, it's going to be around $15 million to $20 million.

Around 40% of that is the cost of the product itself. We feel that with what we learned from doing a proper waterflood -- for those that are not familiar, if you're going to do polymer flood, you got to make sure that you do a good waterflood. Otherwise, you're going to waste your money. So we got a good waterflood in place. We are talking with our partner, which is the one that's executing the polymer in the South. So -- but how much of that is going to rest the decline? I mean, I don't know if you want to add anything, Rodrigo, but we got an idea of what it could be. But again, it's -- we need to test it and pilot it.

Yes. I want to add something because the question is about the profile that we expect for the assets. And it's a combination of things. It's not just the polymer flood that we are applying there. We were talking about waterflooding new wells in the area. There are certain areas that have been developed in the next couple of years. So what we're expecting for this combination of balanced development plan is try to keep stable for the next couple of years, at least 3 years in the same level.

Actually, we are doing some activities in the field during this year, and we learned a lot. So we are drilling new wells, very good results. We are doing workovers, good results. We are managing the waterflooding in a very detailed way. So that's allowed us to think that we can keep stable with a certain level of investment for the next at least 3 years and then start declining again. The polymer flow has a key role here. We started with a very conservative position in terms of projection because we have to test the technology.

But according to the results that we are seeing from our partner in the South, so we are able to apply -- we're going to start this year. Next year, we're going to finish the year between 7 and 9 patterns and the DI is just trying to maximize the implementation of polymer flood. As Martin mentioned, polymer flood is something that is going to move forward. But in order to be success, you have to apply a very successful waterflooding project at the very beginning. So we are in that page today, and we are doing our best effort to keep the production stable for the next couple of years.

So our next question comes from Matthew Woods at Fidelity. And the question is whether we will be suspending dividends.

So Matthew, thanks for the question. And I think that Jaime referred to that in his presentation, and we had a release that went out this morning. And we're going to be keeping our dividends at roughly $1.5 million per quarter for the next 4 quarters. So this quarter, 3Q, 4Q, 1Q, 2Q of next year, and then we will be suspending dividends. And obviously, there can be more information if you need more clarifications with the IR team that you will know, but that has been messaged today and informed to the market. Thanks.

Perfect. The next question comes from Andrew De Luca from T. Rowe. Jaime, you discussed the funding gap for the $1 billion CapEx program, roughly $300 million to $400 million in new financing needed in the next 12 months. Can you discuss the different financing alternatives?

So thanks, Andrew. So on financing, we -- I'm happy to say that we have quite a toolkit, right? Because we put a lot of -- in that same mindset of be prepared for the uncertain. I think we moved from a place of the obvious answer to let's have multiple alternatives that allows us flexibility depending on how markets evolve. So I'm going to take you a little bit through them because I want to make sure that we share that -- and you get that same sense that there's a toolkit in place.

I think the first component when we think about financing this gap is -- are actually the local markets in Argentina. That's been -- historically, I'd say, as we've approached Vaca Muerta over the last 18 months, that's been our base case. And the reason why it's been our base case, it's because the macro in Argentina is still offering an attractive market for debt placement that is U.S. dollar-based and particularly where oil and gas issuers are very well appreciated. And that was happening last year.

And for a while, there was a bit of a hiatus with the economics moving in Argentina. And actually, over the last month, we saw it again, which is oil and gas companies are very successful placing debt in Argentina. We are prepared for that. We already have a standing authorization from la Comisión Nacional de Valores in Argentina to issue debt. We can issue debt up to $500 million or so, not that we intend to do it, but the allotment, if you will, is already there. And it comes at very competitive tenors and cost of debt.

We're looking at cost of debt that is actually more competitive than the one that we will get in international markets. So relatively, you're looking at, say, debt coming in at 7% type interest rates versus 9% or so that is what you see in the international markets these days. So I'd say that, that, if you will, has been our base case, but it's one of many other options. And what are the other options?

The other options are things like, for instance, oil prepayments. Oil prepayments have a role to play. We've used them in the past successfully in Colombia several times. In the recent past last year, we had a big prepayment issued of around $300 million. We know the mechanism. It's extremely competitive in terms of commitment fees, cost of debt, flexibility. We can actually make them rotating. Last month, we actually created another one in Colombia for $50 million for the CPO-5 oil with BP.

So we have a lot of experience on that, and it could play a role in this strategy. Why? Because it's immediate. It gives you lots of flexibility around when to draw the line. So it's not so conditioned, if you will, to market windows, right, as issuing debt is. So I'd say that's kind of the point number two. I think the other component to add on prepayments is that there are a lot of synergies with the commercial strategy as well. You can actually capture a very good commercial discount if you do a deal with a prepayment facility associated. So that's another consideration.

The third, I think, element of the toolkit, Andrew, that we have is credit lines that we have locally in Argentina. We already have approved credit lines for around $100 million in Argentina. They are all good to go and ready to be pulled with local banks there. That's something that we can use, if you will, as a working capital facility with shorter tenures, which is also good in the sense that the way that we look at the CapEx in Vaca Muerta is exactly that. It's actually working capital related. It's filling a free cash flow gap over a short period of time. That's, I'd say, it's kind of the third component of the toolkit.

And last but not least, there's always the alternative around the funding that you can have at a corporate level. It's not our base case, but it's an alternative where you tap in on international markets and you capitalize Argentina if required. I'm being very intentional about stating that this is all about Argentina because the plan in Colombia is fully self-funded and doesn't require any financing. So long answer, but I wanted to make sure that you had all the flavor around how we're thinking about the financing toolkit.

Thanks, Jaime. Let's see if we maybe can squeeze a couple of questions more. So we have one here on Vaca Muerta. And the question is, do you see upside potential in Vaca Muerta landing zones, specifically in Puesto Silva Oeste?

I can take that. The upside that we are seeing there -- we are familiar with the area because we have been working with Phoenix for 1 year, and we drilled Confluencia Sur just next to Puesto Silva, and the result was very good at the very beginning. So there are a couple of expectations that could be an upside for the future because the rock there is more frackable, so more carbonate, more hard and the result of the fracking effect is even better when it's flexible in other places.

So could be some upside coming from that perspective, very technical, but it's something real. But at the same time, we are using 1.1 million barrels as a well type to estimate production. And the reality in the area looks a little bit promising. So we prefer to be conservative at the very beginning. The quality of the rock is there. As I mentioned, the resources are there, and we expect to achieve at least the target that we have, but some upside is absolutely possible.

We have another question from [indiscernible]. The question is, you're projecting a significant increase in EBITDA and production between 2026 and 2030, largely driven by the expansion into Vaca Muerta. How confident are you that the Colombian base, especially Llanos 34 and CPO-5, can sustain stable production and free cash flow to fund that growth, particularly in a lower bent price scenario?

Thanks, [indiscernible]. And I think there's a lot of considerations there. One, I was sharing with you earlier the work that we did at a technical level, very detailed around our assets, understanding the subsurface in detail. And some of the things that we've done, we've advanced our 3D modeling using new technology, including AI, and that's proving very helpful in terms of better landing our wells, understanding where we have optionality.

So I think even though we've produced 200 million barrels, we're still learning from these fields, especially Llanos 34. We've been successful with 123 in terms of expanding production and creating more opportunity. And I think from an operational point of view, things like having two rigs running right now in the operation can help us in terms of sustaining that. So I'm quite confident that we can. And you saw the -- if you remember the light gray that I showed in one of the slides, which was the do nothing case on decline, we've basically turned that around.

And the good news, we're seeing that impact already this year from 23 to 14, we're maybe going to somewhere around the 9, 10 to 11 range and bring more fresh production. And the other thing was what Jaime was talking about when he took us through the hedging. 90% of our production is hedged today. 63% of our 2026 production is hedged. We will continue to look at opportunities in that space, but we have a floor of $65 per barrel next year.

And we will continue to do that forward. We've been very successful, and I think that provides confidence that we can do investments that are profitable, that makes sense, that return on the capital and that can help us keep our base production in Colombia, not only as flat as we can, but also generating value and generating cash. Thanks, Maria Catalina.

Thanks, Felipe. We have another question from Emre Peksen from Impera Capital. Thank you very much for the presentation. My question is regarding the potential on unconventional fields in Colombia. If the government's approach to oil and gas changes following the elections next year, how should we think of the potential contribution of unconventional fields in Colombia to GeoPark? It would be great to have more color on that. Thank you.

Thanks, and we could spend another hour here, and I'm very conscious on time, but there's a lot of potential in Colombia. There's at least 7 or 8 basins that have been identified for unconventionals, not only [indiscernible], but there are some other formations as well. Colombia right now has a 15% to 20% deficit on the gas production. That's going to grow to probably 30% deficit by next year. Colombia is importing gas, which is more expensive.

The quickest way to solve that issue would be through developing the unconventionals, doing fracking, just underneath some of the existing infrastructure. But as you well mentioned, current government has said no to that. Most of the candidates that are in the race have said that they're willing to consider unconventionals. And I think that would be the easiest thing in terms of Colombia, turning that page and basically regaining control of energy security and energy sovereignty.

And on the oil front, production in Colombia has been going down in most of the large fields. And I think there's also a lot of opportunity in terms of oil. So again, we're having a foot in Vaca Muerta provides us the opportunity to leverage on that expertise when the time comes. But we're very agile in terms of assessing opportunities. We have our radar basically turning around and looking at opportunities, but I'll just reinforce without losing focus. We will remain very focused on the investments that we do, but I agree with you, there could be an opportunity going forward with unconventionals in country. We'll cross that bridge when we get there. Thanks.

Okay. [ Nicolas Noa ] is asking what are GeoPark's outlook and plans for investment and growth in Ecuador?

So I think -- and Jaime was talking about this, we've divested our position in Ecuador. We're in the process of finalizing that and handing that operation over to Gran Tierra, who is the buyer. And we will remain focused in Colombia and Argentina. For the time being, there's no plans in Ecuador, and we want to be very focused. We had a presence as a company in many different countries. We've scaled back in terms of the number of countries, but I think we've provided a more profitable and sort of exciting portfolio going forward in terms of the opportunity it provides.

Good. And the last question comes from Jose Romero from BlackRock. Felipe, many of our investors have followed GeoPark for years. What message would you like to leave with them today about the company's future and why now is the right moment to be confident in GeoPark?

Thanks, Jose -- and thanks for the question. I mean one thing, and I'll share with you why I joined GeoPark and also -- I had other opportunities. I had other things I was considering back then, but when they knocked on my door, I said, GeoPark is a company that I've respected for a very long time in terms of how they operate, how they conduct their business, safe, ethical, reliable, compliant and profitable. And the way in which they actually deal with the relationship with communities and the environment. It's a company that I've always admired.

And I think it has the opportunity to significantly grow -- when I think of a company that can, as I said, deliver on the promises we've made in the next 3 to 4 years, double its size in terms of value, generate cash, increase production, and then on top of that, we can see the vision. That's why I joined the company. And we streamlined. It was tough, very quickly, reorganization, 25% of the people were let go. We're being more efficient. We're -- again, going back to the gym and getting fit again.

And the other thing is we're delivering on our promises. I shared with you the dates on the closing of Vaca Muerta. And some of you guys have reported and say, wow, this is very quick. 2 months between the day that you signed -- sorry, 21 days between the day that you signed and the day that you closed, paid for the assets and took the operation -- or took over the operation. So that's what we want to do going forward.

I think we're presenting today to you here at the New York Stock Exchange, a vision that's appealing, that's compelling in terms of building on our strengths, a lot of the good things we've done in the past and moving forward very responsibly, very disciplined to growth. And that's what we want to offer. And I'll repeat this, and we want to ensure that we deliver on our promises. I know there's been a lot of things in the past.

We're not using any rearview mirrors here, but we're saying, going forward, this is what we're trying or we're sharing with you, and this is what we want to do. So I'll tell you guys, and thanks for the question. We're a company that has a simple, twofold strategy that's based on not promises, but realities of the assets that we have and the positions that we have more recently in Vaca Muerta. So thanks for the question.

Thank you, Felipe, and thank you all again for the interest in GeoPark and for being here with us today. You will find the presentation that we shared today posted on our corporate website, and we will always be there to answer any follow-up questions that you may have. Feel free to reach out, and have a wonderful rest of the day. Thank you, everyone.

Thanks Maria Catalina.