25-WELL DRILLING PROGRAM

Colombia 2020 | ENERGY | VIP INTERVIEW

TBY talks to Marcela Vaca Torres, General Director of GeoPark, on recent growth, good practice, and reducing operational costs.

To what do you attribute your recent growth?

We recently released our results for 3Q2019. Our consolidated oil and gas production grew by 6% to 39,619 boepd. We are getting closer and closer to our goal of increasing production in Colombia by around 15%. We have improved our revenue and increased our production on the back of our drilling program, which includes 25 wells. We have increased production with our work-over program and with our new discovery and development wells.

How will the new oil discovery open up new operations in the country?

We are still testing, so we cannot anticipate anything beyond the limits of our block. As with any new discovery, we aim to get as much information as we can. This is the case with every exploration well we drill. Guaco may or may not open new areas of exploration within Llanos 34 block but will certainly provide new information regarding how our structure works. That is a day-to-day operation. We will probably drill the last well 20 years from now and will still be obtaining information. The industry is interested in increasing exploration activities in the new blocks awarded by the ANH and, accordingly, GeoPark expects to lead new discoveries in the Llanos basin.

What added value does GeoPark bring to the consortium it is involved in?

We are good partners for a number of reasons. Particularly in Colombia, it was Ecopetrol that decided to share with us our competitive advantages. It has designated Hocol to grow and operate in the Llanos basin. In order to grow, Hocol decided to look for operationally efficient partners. We have been talking with them for a while. The success of Llanos 34 is evident, not only in geological terms, but in terms of the speed at which it was developed, the cost at which it is being produced, and the social management of above-ground risks. When we started working with Hocol we realized that we have similarities, despite the fact that Ecopetrol is a national oil company. Hocol is also an agile operator, is knowledgeable about the above-ground risks, and has an excellent geological team. It was the right fit. At Geopark we are constantly looking for new projects and Ecuador's Oriente Basin, one of the most prolific in Latin America, is a good example of that. Ecuador is a great opportunity for us to expand our operations and continue working towards our long-term goal of becoming the leading independent Latin American oil and gas company.

How have you seen good practice in the industry rise over the years?

We still have a lot to do. After the 2015 crisis, companies learned a lot. We learned to manage our costs and be cautious with our investments. This is the only thing that is going to keep us alive in the long term. Because of the nature of our business, companies like us have a long-term view. We have all learned that the world is changing, and the industry needs to focus more on ESG practices. If we want to be sustainable and think of future generations, the industry can be a great contributor to that purpose. The industry learned and is willing to contribute more.

What has positively impacted GeoPark in terms of reducing operational costs and improving its operations throughout the country?

We do a number of things. Operational efficiency is important, as is cost control and the speed at which we do things. The decision-making process is pretty agile, helping us become even better operators. We are in Colombia and five more countries with the idea of staying for the long term. We do not have the vision of a fund or explorer. We are explorers, operators, consolidators, and good risk managers, all of which is embedded in our culture and business model. In Llanos 34 we have been working very hard on our commercial strategy to improve our commercial netbacks. That has been proving very efficient. We have been reducing and will further improve our costs. The flowline that connect our Jacana field with the Oleoducto de los Llanos (ODL) will be converted into a pipeline soon so we will be able to transport more types of crude. We are also working on the way we manage risk economically, as well as our social strategy and our ESG strategy. There is a lot to do, but it all comes together in the way we do things and it really makes a difference.