30% PRODUCTION INCREASE 2018

Colombia 2019 | ENERGY | VIP INTERVIEW

TBY talks to Marcela Vaca, General Director of GeoPark Colombia, on a successful year, a 30% production increase, and solar alternative energy development.

How have things changed in the past year and to what do you attribute the remarkable success of this year?

The increase in our revenue and production, and the rise of the company to become one of the largest operators in Colombia can be attributed to several factors. First, the increase in the price of oil which obviously benefited all the actors in the industry. Second, our exploratory success which contributed to an important increase in our production: during 2017 we had two discoveries and so far in 2018, we have made another two discoveries that are currently being tested, in addition of the continued extension of the Tigana-Jacana play concept in Llanos 34. And lastly, our ability to reduce operational costs, successfully test our new discoveries and manage our surface risks with special attention to our engagement with stakeholders.

What can you tell us about the development of the Llanos 34 project over the past year?

At present, 98% of our gross production comes from Llanos 34; it is the heart of our Colombian operation and definitely the most important asset of the whole company. Equally significant, around 80% of the company's EBITDA comes from Llanos 34. During 2017 our production increased in 36% and 30% during 2018 (November), mostly coming from Llanos 34. This asset has largely contributed to GeoPark's overall growth and continues to have enormous potential.

What role does Colombian operations play in GeoPark's global portfolio?

Other than providing an important share of the production, Colombia has a strategic location not only for allocating teams and support for other projects, but also for the company's managerial headquarters. Colombia continues to be a highly desired location for investment and having a solid presence is an important asset to continue to grow in an active market. Colombia is probably one of the countries in Latin America that has the most qualified professionals, legal stability, and steady economy. On top of that, GeoPark's Colombia operations contribute a high percentage of the EBITDA and production.

What initiatives helped you to earn the Good Neighbor Award and what ways do you plan to work with local communities in the future?

We are extremely proud of receiving that award because resolving conflicts with our neighbors is something that we have very worked hard on. When GeoPark started in 2012, we faced often blockades and permanent conflict for nearly two years. That led us to structure a whole different approach to how we handle relationships with our neighbors. We worked hard in strengthening one-to-one relationships while training our neighbors in conflict resolution and leadership. We also established “Cúentame” a solid program to record and resolve our neighbors complains and expectations, and also got all our staff, including operational and administrative teams, sincerely and decidedly involved in resolving our neighbor's requests and sharing with them, on a quarterly basis, the results of our operations which allow us to keep them informed about the evolution of our business and prevent some risks related to it. The goal was getting to know each other and above all, creating trust through a regular dialogue where we anticipated alerts, strengthened community leaders, and resolved conflicts. Our initiatives have made a significant difference and for the last four years, we have not had any blockades affecting our production. GeoPark arrived in Colombia six years ago in an area that had no oil activity, and the company has grown from zero wells to over 30, nine fields, and more than 65,000 operated barrels. Indeed, there still multiple challenges, but we remained committed to creating value and giving back.

How has GeoPark's commitment to responsible extraction and taking care of the environment evolved?

Our integrated system of values is called SPEED, which stands for safety, people, environment, employees, and development. Based on this we have a commitment to nature and our operations are structured around this promise. In Colombia, we have also been certified with ISO 14000. Moreover, we are engaging in environmental investments and trainings as well as participating in studies with local or regional NGOs. We constantly strive to being better and to create programs to make our operation more sustainable. For example, we are working on a solar alternative energy project, with the pilot project providing solar energy for one of our fields and councils in 2019. On a larger scale, we are also transitioning from diesel to natural gas, not only for cost reduction but also because we are committed to the reduction of emissions. In fact, we expect to be certified in carbon footprint very soon. Other than that, we are reutilizing our water and have so far reduced our water consumption by 40% through reserve osmosis. Notably, we recently got approval to use a special oven to dehydrate our drilling cuts, which is something we have been investigating for the last two years. It will allow reuse the cuts either to build bricks or mix it for construction material. The oven is currently being tested so that it can be used for future contractors. By utilizing the drilling cuts, we will avoid any possibility of pollution, reduce costs, and make bricks to build the local infrastructure.

What can we expect from GeoPark in 2019 and beyond?

Of course, we will continue to explore and develop Llanos 34, but we will also continue to look for organic and inorganic growth opportunities to achieve our goal of being a leader independent Latin American oil and gas explorer, operator and consolidator.