The company obtained a credit rating of “AA+(arg)” from Fitch Ratings’ local affiliate, FIX.
GeoPark Argentina SA received regulatory approval from the National Securities Commission to issue up to $500 million in debt securities over the next five years. Additionally, it obtained a credit rating of “AA+(arg)” from Fitch Ratings’ local subsidiary, FIX.
The company is a wholly controlled subsidiary of GeoPark Limited, a leading independent Latin American company in oil and gas exploration, operation and consolidation, listed on the New York Stock Exchange under the acronym GPRK.
At the beginning of this year the company completed the acquisition of four unconventional blocks in Vaca Muerta. And the transaction is expected to close in the fourth quarter of 2024, subject to customary regulatory approvals.
Regarding the rating assigned by FIX to GeoPark Argentina, in addition to the purchase of the blocks in Vaca Muerta, there were other key factors that contributed to the strength of the note: its existing reserves, production and cash flow generation, along with a solid production plan in the Mata Mora Norte Block.
Additional competitive advantages include low operating costs, conservative leverage and strong support by GeoPark.
The Mata Mora Norte Block currently produces more than 12,500 gross boepd (barrels of oil per day) and is expected to generate between US$90 and US$100 million in Adjusted EBITDA for GeoPark throughout 2024 on a pro forma basis.
By 2028-2030, the block is projected to reach a production plateau of around 40,000 gross boepd, contributing approximately $300 million net per year to GeoPark in Adjusted EBITDA (based on a Brent price of $70 per barrel). This does not include the exploratory potential of the Confluencia Norte and Confluencia Sur blocks, the company highlighted in a statement.
To support the expected production growth, GeoPark Argentina plans to finance its capital expenditures through the generation of continuous cash flow of the Mata Mora North Block and debt obtained in the local capital market, where currently Attractive rates and conditions are available.
GeoPark Argentina also highlighted that currently More than US$100 million in local credit lines has been secured in Argentina, and no amount has been withdrawn from said lines of credit.
Source: Ambito
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