GeoPark Ltd has signed a deal to purchase Frontera Power Corp’s oil and fuel exploration and manufacturing belongings in Colombia for as much as $400 million plus assumed debt.
The acquisition consists of 17 blocks within the Llanos and Decrease Magdalena basins, GeoPark mentioned in an internet assertion. GeoPark expects the licenses to right away add 148 million barrels of oil equal (MMboe) to its confirmed and possible (2P) reserves and 99 MMboe to its confirmed reserves.
The Quifa discipline within the Llanos basin has “potential so as to add roughly 16 MMboe of incremental web 2P reserves, for which a improvement plan is already underneath dialogue”, the Latin American firm added.
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The acquisition would consequence within the “consolidation of GeoPark’s core Llanos working hub, including large-scale, long-life belongings together with the Quifa discipline and the CPE-6, Guatiquia and Cubiro blocks, making a extremely synergistic hall with higher scale, infrastructure utilization and working effectivity”, GeoPark mentioned.
The acquisition additionally offers GeoPark “higher publicity to fuel and condensate by means of the VIM-1 and El Dificil blocks, enhancing commodity diversification at a time of rising home fuel costs in Colombia”, GeoPark mentioned.
“Professional forma manufacturing is anticipated to exceed 92,000 boepd [barrels of oil equivalent per day] by 2028, with EBITDA of roughly $950 million, doubling GeoPark’s beforehand introduced 2028 standalone outlook of 44,000-46,000 boepd and $490-520 million of EBITDA”, it mentioned.
“Elevated scale and diversification are anticipated to reinforce money circulate technology, reducing the money breakeven by roughly $8 per barrel at present strip costs.
“The stronger and extra secure money circulate base is anticipated to materially enhance GeoPark’s capability to fund its development plans in [Argentinian shale play] Vaca Muerta, whereas sustaining its disciplined capital allocation”.
“Along with the upstream asset portfolio, the transaction consists of Frontera Power’s built-in water administration and environmental sustainability undertaking, comprised of the SAARA (previously Agrocascada) reverse osmosis water therapy facility and the ProAgrollanos African Palm planting undertaking in Puerto Gaitan which advantages from irrigation from SAARA”, GeoPark mentioned.
“The transaction creates a number one regional unbiased E&P platform throughout Colombia and Argentina”, it mentioned.
The transaction entails the acquisition of Frontera Petroleum Worldwide Holdings BV and excludes the Canadian father or mother firm’s infrastructure belongings.
Frontera Power mentioned individually the divestment would make it a “targeted infrastructure firm anchored by its standalone and rising portfolio of infrastructure belongings, together with ODL [the Oleoducto de los Llanos Orientales SA crude oil pipeline] and Puerto Bahia, whereas additionally retaining its pursuits in Guyana and sure different non‑Colombian belongings”.
“This portfolio represents a strategic asset inside Colombia’s power worth chain and can type the spine of Frontera’s post-transaction enterprise, producing an estimated 2025 distributable money circulate of roughly $77 million”, Frontera Power mentioned.
GeoPark and Frontera Power count on to finish the transaction within the second half of 2026, topic to closing situations together with approval by Frontera Power shareholders.
The worth to be paid by GeoPark consists of $375 million in money and a contingent cost of $25 million, plus the absorption of $310 million in unsecured notes issued by Frontera Power and $79 million excellent underneath a Frontera Power prepayment facility.
“The acquisition will likely be funded by means of a mixture of money available and dedicated sources of financing, together with a prepayment facility with Vitol (as much as $500 million, $330 million dedicated)”, GeoPark mentioned.
On Wednesday GeoPark mentioned it has renewed its offtake and prepayment settlement with Vitol. The settlement commits 100% of GeoPark’s share of crude manufacturing from three Colombian blocks – CPO-5, Llanos 34 and Llanos 123 – to the commodities dealer. The brand new phrases present for deliveries from 2026 to 2028.
“As a part of the renewal, GeoPark may have entry to a prepayment facility from Vitol that gives for a complete of as much as $500 million, consisting of a agency $330 million dedicated availability with an possibility to extend the provision by as much as one other $170 million in pay as you go future oil gross sales over the interval of the offtake contract”, GeoPark mentioned.
To contact the creator, e mail jov.onsat@rigzone.com
