6-K 1 dp48900_6k.htm FORM 6-K


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934


For the month of August, 2014

Commission File Number: 001-36298

GeoPark Limited
(Exact name of registrant as specified in its charter)

Nuestra Señora de los Ángeles 179
Las Condes, Santiago, Chile
(Address of principal executive office)


Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F
X
 
Form 40-F
 


Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes
   
No
X


Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes
   
No
X




 
 
 
 
 
GEOPARK LIMITED


TABLE OF CONTENTS


ITEM
 
   
1.
Interim Condensed Consolidated Financial Statements for the six-months period ended 30 June 2013 and 2014
 
 
 
 
 

 
 
Item 1
 


 

GEOPARK LIMITED




INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

For the six-months period ended 30 June 2013 and 2014







 
 

 
GEOPARK LIMITED
30 JUNE 2014

CONTENTS

Page
 
   
3
Consolidated Statement of Income and Statement of Comprehensive Income
4
Consolidated Statement of Financial Position
5
Consolidated Statement of Changes in Equity
6
Consolidated Statement of Cash Flow
7
Selected explanatory notes

 
 

 
GEOPARK LIMITED
30 JUNE 2014
 
CONSOLIDATED STATEMENT OF INCOME

Amounts in US$  ´000
 
Note
   
Three-months period ended 30 June 2014 (Unaudited)
   
Three-months period ended 30 June 2013 (Unaudited)
   
Six-months period ended 30 June 2014 (Unaudited)
   
Six-months period ended 30 June 2013  (Unaudited)
 
NET REVENUE
    2       131,449       72,871       216,180       160,806  
Production costs
    4       (64,327 )     (42,834 )     (102,001 )     (81,147 )
GROSS PROFIT
            67,122       30,037       114,179       79,659  
Selling expenses
            (5,999 )     (1,591 )     (12,317 )     (7,658 )
Exploration costs
    5       (7,437 )     (6,282 )     (14,243 )     (13,587 )
Administrative costs
    6       (11,833 )     (11,124 )     (22,962 )     (20,730 )
Other operating income
            361       4,359       974       4,205  
OPERATING PROFIT
            42,214       15,399       65,631       41,889  
Financial income
    7       5,019       298       5,767       604  
Financial expenses
    8       (8,566 )     (8,248 )     (16,896 )     (21,166 )
PROFIT BEFORE TAX
            38,667       7,449       54,502       21,327  
Income tax
            (11,321 )     (2,659 )     (16,832 )     (7,092 )
PROFIT FOR THE PERIOD
            27,346       4,790       37,670       14,235  
Attributable to:
                                       
Owners of the parent
            21,756       2,136       28,458       8,616  
Non-controlling interest
            5,590       2,654       9,212       5,619  
Earnings per share (in US$) for profit attributable
 to owners of the Company. Basic
            0.39       0.05       0.52       0.20  
Earnings per share (in US$) for profit attributable
 to owners of the Company. Diluted
            0.35       0.05       0.45       0.19  

STATEMENT OF COMPREHENSIVE INCOME

Amounts in US$  ´000
 
Three-months period ended 30 June 2014 (Unaudited)
   
Three-months period ended 30 June 2013 (Unaudited)
   
Six-months period ended 30 June 2014 (Unaudited)
   
Six-months period ended 30 June 2013 (Unaudited)
 
Profit for the period
    27,346       4,790       37,670       14,235  
Other comprehensive income
                               
Currency translation differences
    1,413       -       2,344       (363 )
Total comprehensive Income for the period
    28,759       4,790       40,014       13,872  
Attributable to:
                               
Owners of the parent
    23,169       2,136       30,802       8,253  
Non-controlling interest
    5,590       2,654       9,212       5,619  

 
3

 
GEOPARK LIMITED
30 JUNE 2014
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Amounts in US$  ´000
 
Note
   
At 30 June
 2014 (Unaudited)
   
Year ended 31 December 2013
 
ASSETS
                 
NON CURRENT ASSETS
                 
Property, plant and equipment
    9       785,388       595,446  
Prepaid taxes
            13,934       11,454  
Other financial assets
            6,857       5,168  
Deferred income tax
            18,371       13,358  
Prepayments and other receivables
            465       6,361  
TOTAL NON CURRENT ASSETS
            825,015       631,787  
CURRENT ASSETS
                       
Inventories
            16,373       8,122  
Trade receivables
            61,336       42,628  
Prepayments and other receivables
            37,717       35,764  
Prepaid taxes
            13,722       6,979  
Cash at bank and in hand
            125,297       121,135  
TOTAL CURRENT ASSETS
            254,445       214,628  
                         
TOTAL ASSETS
            1,079,460       846,415  
EQUITY
                       
Equity attributable to owners of the Company
                       
Share capital
    10       58       44  
Share premium
            211,274       120,426  
Reserves
            128,809       126,465  
Retained earnings
            57,201       23,906  
Attributable to owners of the Company
            397,342       270,841  
Non-controlling interest
            104,328       95,116  
TOTAL EQUITY
            501,670       365,957  
LIABILITIES
                       
NON CURRENT LIABILITIES
                       
Borrowings
    11       349,921       290,457  
Provisions for other long-term liabilities
    12       42,372       33,076  
Deferred income tax
            45,563       23,087  
Trade and other payables
    13       7,011       8,344  
TOTAL NON CURRENT LIABILITIES
            444,867       354,964  
CURRENT LIABILITIES
                       
Borrowings
    11       18,723       26,630  
Current income tax
            4,299       7,231  
Trade and other payables
    13       109,901       91,633  
TOTAL CURRENT LIABILITIES
            132,923       125,494  
TOTAL LIABILITIES
            577,790       480,458  
                         
TOTAL EQUITY AND LIABILITIES
            1,079,460       846,415  

 
4

 
GEOPARK LIMITED
30 JUNE 2014
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

   
Attributable to owners of the Company
             
Amount in US$ '000
 
Share Capital
   
Share Premium
   
Other Reserve
   
Translation Reserve
   
Retained earnings (accumulated losses)
   
Non - controlling
Interest
   
Total
 
Equity at 1 January 2013
    43       116,817       127,527       894       (5,860 )     72,665       312,086  
Profit for the first half of the year
    -       -       -       -       8,616       5,619       14,235  
Currency translation differences
    -       -       -       (363 )     -       -       (363 )
Total comprehensive income for the period ended 30 June 2013
    -       -       -       (363 )     8,616       5,619       13,872  
Proceeds from transaction with Non-controlling interest
    -       -       -       -       -       5,175       5,175  
Shared-based payment
    -       60       -       -       3,486       -       3,546  
      -       60       -       -       3,486       5,175       8,721  
Balance at 30 June 2013 (Unaudited)
    43       116,877       127,527       531       6,242       83,459       334,679  
                                                         
Balance at 31 December 2013
    44       120,426       127,527       (1,062 )     23,906       95,116       365,957  
Profit for the first half of the year
    -       -       -       -       28,458       9,212       37,670  
Currency translation differences
    -       -       -       2,344       -       -       2,344  
Total comprehensive income for the period ended 30 June 2014
    -       -       -       2,344       28,458       9,212       40,014  
Proceeds from issue of shares
    14       90,848       -       -       -       -       90,862  
Shared-based payment
    -       -       -       -       4,837       -       4,837  
      14       90,848       -       -       4,837       -       95,699  
Balance at 30 June 2014 (Unaudited)
    58       211,274       127,527       1,282       57,201       104,328       501,670  

 
5

 
GEOPARK LIMITED
30 JUNE 2014
 
CONSOLIDATED STATEMENT OF CASH FLOW

Amounts in US$ ’000
 
Six-months period ended 30 June 2014 (Unaudited)
   
Six-months period ended 30 June 2013  (Unaudited)
 
Cash flows from operating activities
           
Profit for the period
    37,670       14,235  
Adjustments for:
               
Income tax
    16,832       7,092  
Depreciation
    48,070       32,605  
Loss on disposal of property, plant and equipment
    68       568  
Write-off of unsuccessful exploration and evaluation assets
    8,637       11,788  
Amortisation of other long-term liabilities
    (291 )     (1,359 )
Accrual of borrowing’s interests
    12,841       11,881  
Unwinding of long-term liabilities
    706       505  
Accrual of share-based payment
    5,597       3,486  
Income tax paid
    (1,306 )     (4,040 )
Changes in operating assets and liabilities
    (23,843 )     (9,655 )
Cash flows from operating activities – net
    104,981       67,106  
Cash flows from investing activities
               
Purchase of property, plant and equipment
    (118,161 )     (113,952 )
Acquisitions of companies, net of cash acquired
    (114,967 )     -  
Collections related to financial leases
    3,391       6,489  
Cash flows used in investing activities – net
    (229,737 )     (107,463 )
Cash flows from financing activities
               
Proceeds from issuance of shares
    90,862       -  
Proceeds from borrowings
    67,155       292,363  
Proceeds from transaction with non-controlling interest
    -       36,313  
Proceeds from loans from related parties
    -       8,344  
Principal paid
    (18,550 )     (179,343 )
Interest paid
    (11,311 )     (6,175 )
Cash flows from financing activities - net
    128,156       151,502  
Net increase in cash and cash equivalents
    3,400       111,145  
Cash and cash equivalents at 1 January
    121,135       38,292  
Currency translation differences
    753       -  
Cash and cash equivalents at the end of the period
    125,288       149,437  
Ending Cash and cash equivalents are specified as follows:
               
Cash in banks
    125,276       149,413  
Cash in hand
    21       24  
Bank overdrafts
    (9 )     -  
Cash and cash equivalents
    125,288       149,437  

 
6

 
GEOPARK LIMITED
30 JUNE 2014
SELECTED EXPLANATORY NOTES

Note 1

General information

GeoPark Limited (the Company) is a company incorporated under the law of Bermuda. The Registered Office address is Cumberland House, 9th Floor, 1 Victoria Street, Hamilton HM11, Bermuda.

The principal activity of the Company and its subsidiaries (“the Group”) are exploration, development and production for oil and gas reserves in Chile, Colombia, Brazil and Argentina. The Group has working interests and/or economic interests in 29 hydrocarbon blocks.

On 7 February 2014, the Securities and Exchange Commission (“SEC”) declared effective the Company’s registration statement upon which 13,999,700 shares were issued, including over-allotment option, at a price of US$ 7 per share. Gross proceeds from the offering totalled US$ 98 million.  As a result, the Company commenced trading on the New York Stock Exchange (“NYSE”) under the ticker symbol GPRK. Also its shares are authorized for trading on the Santiago Off-Shore Stock Exchange.

Subsequently, the Company listing cancellation on the AIM London Stock Exchange became effective on 19 February 2014.

This consolidated interim financial report was authorised for issue by the Board of Directors on
21 August, 2014.

Basis of Preparation

The consolidated interim financial report of GeoPark Limited is presented in accordance with IAS 34 “Interim Financial Reporting”. It does not include all of the information required for full annual financial statements, and should be read in conjunction with the annual financial statements as at and for the years ended 31 December 2012 and 2013, which have been prepared in accordance with IFRS.

The consolidated interim financial report has been prepared in accordance with the accounting policies applied in the most recent annual financial statements. For further information please refer to GeoPark Limited's consolidated financial statements for the year ended 31 December 2013.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.

The activities of the Company are not subject to significant seasonal changes.

 
7

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 1 (Continued)

Estimates

The preparation of interim financial information requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2013.

Financial risk management

The Company’s activities expose it to a variety of financial risks: currency risk, price risk, credit risk- concentration, funding and liquidity risk, interest risk and capital risk. The interim condensed consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Company’s annual financial statements as at 31 December 2013.

There have been no changes in the risk management since year end or in any risk management policies.

Subsidiary undertakings

The following chart illustrates the Group structure as of 30 June 2014 (*):
 

(*) LG International is not a subsidiary, it is Non-controlling interest.
 
During 2013 and 2014, with the purpose of conducting its multilocation activities and for allowing future business structures, the Company has incorporated certain wholly owned subsidiaries, that are dormant companies at the date of the issuance of these interim financial statements.
 
 
8

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 1 (Continued)

Subsidiary undertakings (Continued)

Details of the subsidiaries and joint operations of the Company are set out below:

 
Name and registered office
   
Ownership interest
Subsidiaries
GeoPark Argentina Ltd. – Bermuda
   
100%
 
GeoPark Argentina Ltd. – Argentinean Branch
   
100% (a) (k)
 
GeoPark Latin America Limited
   
100% (g)
 
GeoPark Latin America Limited – Agencia en Chile
   
100% (a) (g)
 
GeoPark S.A. (Chile)
   
100% (a) (b)
 
GeoPark Brazil Exploração y Produção de Petróleo e Gas Ltda. (Brazil)
   
100% (a)
 
Rio das Contas Produtora de Petróleo Ltda (Brazil)
   
100% (a) (j)
 
GeoPark Chile S.A. (Chile)
   
80% (a) (c)
 
GeoPark Fell S.p.A. (Chile)
   
80% (a) (c)
 
GeoPark Magallanes Limitada (Chile)
   
80% (a) (c)
 
GeoPark TdF S.A. (Chile)
   
68.8% (a) (d)
 
GeoPark Colombia S.A. (Chile)
   
80% (a)
 
GeoPark Colombia SAS (Colombia)
   
100% (a) (h)
 
GeoPark Brazil S.p.A. (Chile)
   
100% (a) (b)
 
GeoPark Latin America Cooperatie U.A. (The Netherlands)
   
100%
 
GeoPark Colombia Cooperatie U.A. (The Netherlands)
   
100% (a) (c)
 
GeoPark Perú Cooperatie U.A. (The Netherlands)
   
100%(b)
 
GeoPark Brazil Cooperatie U.A. (The Netherlands)
   
100%
Associates
Raven Pipeline Company LLC (United States)
   
23.5% (b)
Joint operations
Tranquilo Block (Chile)
   
29% (i) (f)
 
Otway Block (Chile)
   
25% (e) (f)
 
Flamenco Block (Chile)
   
50% (f)
 
Campanario Block (Chile)
   
50% (f)
 
Isla Norte Block (Chile)
   
60% (f)
 
Llanos 17 Block (Colombia)
   
36.84%
 
Yamu/Carupana Block (Colombia)
   
75%/54.5% (f) (l)
 
Llanos 34 Block (Colombia)
   
45% (f)
 
Llanos 32 Block (Colombia)
   
10%
 
Manati Field (Brazil)
   
10% (j)

 
(a)
Indirectly owned.
 
(b)
Dormant companies.
 
(c)
LG International has 20% interest.
 
(d)
LG International has 20% interest through GeoPark Chile S.A. and a 14% direct interest, totalling 31.2%.
 
(e)
In April 2013, the Group voluntarily relinquished to the Chilean Government all of our acreage in the Otway Block, except for 49,421 acres. In May 2013, our partners under the joint operating agreement governing the Otway Block decided to withdraw from such joint operating agreement and to apply to withdraw from the Otway Block CEOP, such that, subject to the Chilean Ministry of Energy’s approval, the Group will be the sole participant, and have a working interest of 100%, in the remaining areas in the Otway Block.
 
(f)
GeoPark is the operator in all blocks.
 
(g)
Formerly named GeoPark Chile Limited.
 
(h)
During 2013, the Company has finalized a merger process by which GeoPark Colombia SAS will continue the operations related to GeoPark Luna SAS (Colombia), GeoPark Llanos SAS (Colombia), La Luna Oil Co. Ltd. (Panama), Winchester Oil and Gas S.A. (Panama), GeoPark Cuerva LLC (United States), Sucursal La Luna Oil Co. Ltd. (Colombia), Sucursal Winchester Oil and Gas S.A. (Colombia) and Sucursal GeoPark Cuerva LLC (Colombia).
 
(i)
At 31 December 2013, the Consortium members and interest were: GeoPark 29%, Pluspetrol 29%, Wintershall 25% and Methanex 17%. During 2014, Methanex and Wintershall announced their decision to abandon the Consortium. The new ownership is being negotiated among GeoPark and Pluspetrol.
 
(j)
See Note 14.
 
(k)
In April 2014, the Company informed the Secretary of Infrastructure and Energy of the province of Mendoza of its decision to relinquish 100% of the Cerro Doña Juana and Loma Cortaderal Concessions to the Mendoza Province.
 
(l)
See Note 15.
 
 
9

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 2

Net Revenue
Amounts in US$ '000
 
Three-months period ended 30 June 2014
   
Three-months period ended 30 June 2013
   
Six-months period ended 30 June 2014
   
Six-months period ended 30 June 2013
 
                         
Sale of crude oil
    112,022       67,946       187,256       149,817  
Sale of gas
    19,427       4,925       28,924       10,989  
      131,449       72,871       216,180       160,806  

Note 3

Segment Information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the strategic steering committee. This committee is integrated by the CEO, COO, CFO and managers in charge of the Geoscience, Drilling, Operations and SPEED departments. This committee reviews the Group’s internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports.

The committee considers the business from a geographic perspective.

The strategic steering committee assesses the performance of the operating segments based on a measure of Adjusted EBITDA. Adjusted EBITDA is defined as profit for the period before net finance cost, income tax, depreciation, amortization and certain non-cash items such as impairments and write-offs of unsuccessful exploration and evaluation assets, accrual of stock options and stock awards. Other information provided, except as noted below, to the strategic steering committee is measured in a manner consistent with that in the financial statements.

 
10

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 3 (Continued)

Segment Information (Continued)

Six-months period ended 30 June 2014
 
Amounts in US$ '000
 
Total
   
Argentina
   
Chile
   
Brazil
   
Colombia
   
Corporate
 
Net Revenue
    216,180       853       86,368       12,287       116,672       -  
Gross Profit
    114,179       713       47,962       5,106       60,398       -  
Operating Profit / (Loss)
    65,631       (3,181 )     27,283       3,015       42,380       (3,866 )
Adjusted  EBITDA
    124,780       (1,223 )     53,218       7,066       67,520       (1,801 )

Six-months period ended 30 June 2013

Amounts in US$ '000
 
Total
   
Argentina
   
Chile
   
Brazil
   
Colombia
   
Corporate
 
Net Revenue
    160,806       733       82,855       -       77,218       -  
Gross Profit
    79,659       19       49,167       -       30,473       -  
Operating Profit / (Loss)
    41,889       (1,822 )     33,239       (1,365 )     17,801       (5,964 )
Adjusted  EBITDA
    84,014       (1,284 )     52,267       (1,341 )     38,296       (3,924 )
 
Total Assets
 
Total
   
Argentina
   
Chile
   
Brazil
   
Colombia
   
Corporate
 
30 June 2014
    1,079,460       5,221       538,603       168,689       305,348       61,599  
31 December 2013
    846,415       7,977       477,263       29,222       259,421       72,532  

A reconciliation of total Adjusted EBITDA to total profit before income tax is provided as follows:
   
Three-months period ended 30 June 2014
   
Three-months period ended 30 June 2013
   
Six-months period ended 30 June 2014
   
Six-months period ended 30 June 2013
 
Adjusted EBITDA for reportable segments
    76,401       34,362       124,780       84,014  
Depreciation (a)
    (27,570 )     (16,836 )     (45,678 )     (32,605 )
Share-based payment
    (2,635 )     (1,679 )     (5,597 )     (3,486 )
Impairment and write-off of unsuccessful efforts
    (4,550 )     (5,871 )     (8,637 )     (11,788 )
Others (b)
    569       5,423       763       5,754  
Operating profit
    42,215       15,399       65,631       41,889  
Financial results
    (3,547 )     (7,950 )     (11,129 )     (20,562 )
Profit before tax
    38,668       7,449       54,502       21,327  

 
(a)
Net of capitalised costs for oil stock included in Inventories.
 
(b)
Includes internally capitalised costs.

 
11

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 4

Production costs
Amounts in US$ '000
 
Three-months period ended 30 June 2014
   
Three-months period ended 30 June 2013
   
Six-months period ended 30 June 2014
   
Six-months period ended 30 June 2013
 
Depreciation
    25,775       16,447       46,980       31,898  
Well and facilities maintenance
    5,777       4,733       10,243       9,003  
Royalties
    6,378       4,086       10,795       8,650  
Consumables
    4,803       3,049       9,220       6,610  
Transportation costs
    3,491       2,691       7,075       4,946  
Staff costs
    3,769       5,518       6,866       7,518  
Equipment rental
    2,194       782       4,074       2,360  
Field camp
    1,533       846       2,856       1,844  
Gas plant costs
    804       776       1,639       1,587  
Non operated blocks costs
    1,587       1,544       2,834       2,110  
Other costs
    4,811       4,564       7,336       5,794  
Crude oil stock variation
    3,405       (2,202 )     (7,917 )     (1,173 )
      64,327       42,834       102,001       81,147  

Note 5

Exploration costs

Amounts in US$ '000
 
Three-months period ended 30 June 2014
   
Three-months period ended 30 June 2013
   
Six-months period ended 30 June 2014
   
Six-months period ended 30 June 2013
 
Write-off of unsuccessful exploration and evaluation assets
    4,550       5,871       8,637       11,788  
Staff costs
    2,823       1,889       5,721       4,084  
Other services
    634       146       1,065       219  
Allocation to capitalised project
    (570 )     (265 )     (1,180 )     (1,145 )
Amortisation of other long-term liabilities related to unsuccessful efforts
    -       (600 )     -       (600 )
Recovery of abandonments costs
    -       (759 )     -       (759 )
      7,437       6,282       14,243       13,587  

 
12

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 6

Administrative costs

Amounts in US$ '000
 
Three-months period ended 30 June 2014
   
Three-months period ended 30 June 2013
   
Six-months period ended 30 June 2014
   
Six-months period ended 30 June 2013
 
Staff costs
    5,252       4,801       10,810       9,976  
Consultant fees
    1,528       1,946       2,791       3,082  
Office expenses
    1,037       439       1,806       781  
New projects
    880       485       1,311       661  
Depreciation
    571       389       1,090       707  
Travel expenses
    463       671       967       1,190  
Director fees and allowance
    326       726       612       992  
Other administrative expenses
    1,776       1,667       3,575       3,341  
      11,833       11,124       22,962       20,730  

Note 7

Financial income

Amounts in US$ '000
 
Three-months period ended 30 June 2014
   
Three-months period ended 30 June 2013
   
Six-months period ended 30 June 2014
   
Six-months
period ended
30 June 2013
 
Exchange difference
    3,173       (36 )     3,404       2  
Interest received
    1,846       334       2,363       602  
      5,019       298       5,767       604  

Note 8

Financial expenses
Amounts in US$ '000 
 
Three-months period ended 30 June 2014
   
Three-months period ended 30 June 2013
   
Six-months period ended 30 June 2014
   
Six-months period ended 30 June 2013
 
Bank charges and other financial costs
    708       1,303       1,015       1,568  
Bond GeoPark Fell SpA cancellation costs
    -       -       -       8,603  
Exchange difference
    498       931       2,012       1,483  
Unwinding of long-term liabilities
    651       289       706       505  
Interest and amortisation of debt issue costs
    7,544       6,227       14,380       9,931  
Less: amounts capitalised on qualifying assets
    (835 )     (502 )     (1,217 )     (924 )
      8,566       8,248       16,896       21,166  

 
13

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 9

Property, plant and equipment
Amounts in US$'000
 
Oil & gas properties
   
Furniture, equipment
and vehicles
   
Production facilities and machinery
   
Buildings
and improve-ments
   
Construction in progress
   
Exploration and evaluation assets
   
TOTAL
 
Cost at 1 January 2013
    344,371       3,576       86,949       3,198       54,025       93,106       585,225  
Additions
    2,502       1,128       10       47       59,479       83,979       147,145  
Disposals
    (546 )     (22 )     (15,870 )     -       -       -       (16,438 )
Write-off and impairment (1)
    -       -       -       -       -       (11,788 )     (11,788 )
Transfers
    77,166       -       14,963       927       (61,433 )     (31,623 )     -  
Cost At 30 June 2013
    423,493       4,682       86,052       4,172       52,071       133,674       704,144  
                                                         
Cost at 1 January 2014
    493,260       5,731       98,837       7,018       40,429       147,759       793,034  
Additions
    1,592       1,460       -       -       53,365       71,517       127,934  
Acquisition of subsidiaries
    115,345       270       -       -       -       -       115,615  
Currency translation differences
    3,168       -       -       -       -       -       3,168  
Disposals
    -       (319 )     -       -       -       -       (319 )
Write-off and impairment (1)
    -       -       -       -       -       (8,637 )     (8,637 )
Transfers
    91,219       -       7,568       95       (48,798 )     (50,084 )     -  
Cost At 30 June 2014
    704,584       7,142       106,405       7,113       44,996       160,555       1,030,795  
                                                         
Depreciation and write-down at 1 January 2013
    (98,156 )     (1,836 )     (26,336 )     (1,060 )     -       -       (127,388 )
Depreciation
    (27,418 )     (427 )     (4,480 )     (280 )     -       -       (32,605 )
Depreciation and write-down At 30 June 2013
    (125,574 )     (2,263 )     (30,816 )     (1,340 )     -       -       (159,993 )
                                                         
Depreciation and write-down at 1 January 2014
    (157,390 )     (2,800 )     (35,677 )     (1,721 )     -       -       (197,588 )
Depreciation
    (41,356 )     (702 )     (5,623 )     (389 )     -       -       (48,070 )
Disposals
    -       251       -       -       -       -       251  
Depreciation and write-down at 30 June 2014
    (198,746 )     (3,251 )     (41,300 )     (2,110 )     -       -       (245,407 )
                                                         
Carrying amount at 30 June 2013
    297,919       2,419       55,236       2,832       52,071       133,674       544,151  
Carrying amount at 30 June 2014
    505,838       3,891       65,105       5,003       44,996       160,555       785,388  

 
(1)
Corresponds to write-off of Exploration and evaluation assets in Chile for US$ 6,865,000 (US$ 8,753,000 in 2013) and US$ 1,772,000 in Colombia (US$ 3,035,000 in 2013). During the second quarter of 2014 the Company has written off all of its assets related to Otway Block in Chile for US$ 2,778,000 and two wells in the Non operated Arrendajo Block in Colombia.

 
14

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 10

Share capital
Issued share capital
 
Six-months period ended 30 June 2014
   
Year ended 31 December 2013
 
Common stock (US$ ´000)
    58       44  
The share capital is distributed as follows:
               
Common shares, of nominal US$ 0.001
    57,863,615       43,861,614  
Total common shares in issue
    57,863,615       43,861,614  
                 
Authorised share capital
               
US$ per share
    0.001       0.001  
                 
Number of common shares (US$ 0.001 each)
    5,171,949,000       5,171,949,000  
Amount in US$
    5,171,949       5,171,949  

GeoPark’s share capital only consists of common shares. The authorized share capital consists of 5,171,949,000 common shares of par value US$0.001 per share. As of the date of this interim condensed consolidated report, there are 57,863,615 common shares outstanding (see Note 1). All of the Company issued and outstanding common shares are fully paid and nonassessable. The Company also has an employee incentive program, pursuant to which it has granted share awards to its senior management and certain key employees (see Notes 25 and 29 to the audited Consolidated Financial Statements as of 31 December 2013).

Note 11

Borrowings

The outstanding amounts are as follows:

Amounts in US$ '000
 
At
30 June 2014
   
Year ended
31 December
 2013
 
Bond GeoPark Latin America Agencia en Chile (a)
    300,427       299,912  
Banco de Chile (b)
    -       15,002  
Banco de Crédito e Inversiones (c)
    152       2,143  
Banco Itaú (d)
    68,056       -  
Overdrafts (e)
    9       30  
      368,644       317,087  

Classified as follows:

Current
    18,723       26,630  
Non-Current
    349,921       290,457  

 
15

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 11 (Continued)

Borrowings (Continued)

(a) During February 2013, the Company successfully placed US$ 300 million notes which were offered under Rule 144A and Regulation S exemptions of the United States Securities laws.

The Notes, issued by the Company's wholly-owned subsidiary GeoPark Latin America Limited Agencia en Chile ("the Issuer"), were priced at 99.332% and carry a coupon of 7.50% per annum (yield 7.625% per annum). Final maturity of the notes will be 11 February 2020. The Notes are guaranteed by GeoPark Limited and GeoPark Latin America Cooperatie U.A. and are secured with a pledge of all of the equity interests of the Issuer in GeoPark Chile S.A. and GeoPark Colombia Cooperatie U.A. and a pledge of certain intercompany loans.  Notes were rated single B by both Standard & Poor's and Fitch Ratings. The debt issuance cost for this transaction amounted to US$ 7,637,000. The Notes include covenants restricting dividend payments and new indebtedness. As of the date of these interim condensed consolidated financial statements, the Company has complied with these covenants.

(b) Short term financing obtained in December 2013 and fully repaid in January 2014. The interest rate applicable to this loan was 0.71% per annum.

(c) Facility to establish the operational base in the Fell Block. This facility was acquired through a mortgage loan granted by the Banco de Crédito e Inversiones (BCI), a Chilean private bank. The loan was granted in Chilean pesos and is repayable over a period of 8 years. The interest rate applicable to this loan is 6.6%. The outstanding amount at 30 June 2014 is US$ 152,000 (US$ 212,000 in 2013).

In addition, during 2011, GeoPark TdF obtained financing from BCI to start the operations in the newly acquired blocks. The outstanding amount at 31 December 2013 was US$ 1,931,000. This financing was structured as letter of credit and was fully repaid in February 2014.

(d) During March 2014, GeoPark executed a loan agreement with Itaú BBA International for
US$ 70,450,000 to finance the acquisition of a 10% working interest in the Manatí field in Brazil (see Note 14). The interest rate applicable to this loan is LIBOR plus 3.9% per annum. The interest will be paid semi-annually; principal will be cancelled semi-annually with a year grace period. The debt issuance cost for this transaction amounted to US$ 3,295,000. This loan includes covenants restricting dividend payments and new indebtedness. As of the date of these interim condensed consolidated financial statements, the Company has complied with these covenants.

(e) The Group has been granted with credit lines for over US$ 85,000,000.

 
16

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 12

Provision for other long-term liabilities

The outstanding amounts are as follows:
Amounts in US$ '000
 
At
30 June 2014
   
Year ended
31 December
 2013
 
Assets retirement obligation and other environmental liabilities
    31,909       24,166  
Deferred income
    5,912       6,204  
Other
    4,551       2,706  
      42,372       33,076  

Note 13

Trade and other payables

The outstanding amounts are as follows:
Amounts in US$ '000
 
At
30 June 2014
   
Year ended
31 December
 2013
 
Trade payables
    76,807       61,130  
V.A.T.
    8,049       8,074  
Taxes and other debts to be paid
    7,263       9,190  
Staff costs to be paid
    7,066       8,551  
Payables to related parties (1)
    7,011       8,456  
To be paid to co-venturers
    6,118       1,201  
Royalties to be paid
    4,598       3,375  
      116,912       99,977  

Classified as follows:

Current
    109,901       91,633  
Non-Current
    7,011       8,344  

 
(1)
Corresponds to related parties loans granted by LGI. The maturity of these loans is December 2015 and the applicable interest rate is 8% per annum.


 
17

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 14

Entry in Brazil

Acquisition in Brazil

GeoPark entered into Brazil with the acquisition of a 10% working interest in the offshore Manati gas field ("Manati Field"), the largest natural gas producing field in Brazil. On May 14, 2013, GeoPark executed a stock purchase agreement ("SPA") with Panoro Energy do Brazil Ltda., the subsidiary of Panoro Energy ASA, ("Panoro"), a Norwegian listed company with assets in Brazil and Africa, to acquire all of the issued and outstanding shares of its wholly-owned Brazilian subsidiary, Rio das Contas Produtora de Petróleo Ltda ("Rio das Contas"), the direct owner of 10% of the BCAM-40 block (the "Block"), which includes the shallow-depth offshore Manati Field in the Camamu-Almada basin.

GeoPark has paid a cash consideration of US$ 140 million at 31 March 2014 or the closing date, which was adjusted for working capital with an effective date of 30 April 2013. The agreement also provides for possible future contingent payments by GeoPark over the next five years, depending on the economic performance and cash generation of the Block (see Note 34 to the audited Consolidated Financial Statements as of 31 December 2013).

The Manati Field is a strategically important, profitable upstream asset in Brazil and currently provides approximately 50% of the gas supplied to the northeastern region of Brazil and more than 75% of the gas supplied to Salvador, the largest city and capital of the northeastern state of Bahia. The field is largely developed with existing producing wells and an extensive pipeline, treatment and delivery infrastructure and is not expected to require significant future capital expenditures to meet current production estimates. Additional reserve development may be possible.

The Manati Field is operated by Petrobras (35% working interest), the Brazilian national company, largest oil and gas operator in Brazil and internationally-respected offshore operator. Other partners in the block include Queiroz Galvao Exploracao e Producao (45% working interest) and Brasoil Manati Exploracao Petrolifera S.A. (10% working interest).

In accordance with the acquisition method of accounting, the acquisition cost was allocated to the underlying assets acquired and liabilities assumed based primarily upon their estimated fair values at the date of acquisition. An income approach (being the net present value of expected future cash flows) was adopted to determine the fair values of the mineral interest. Estimates of expected future cash flows reflect estimates of projected future revenues, production costs and capital expenditures based on our business model. The purchase price allocation performed is preliminary, since the valuation process is ongoing. This process will be completed during 2014.

 
18

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 14 (Continued)

Entry in Brazil (Continued)

The following table summarises the consideration paid, the preliminary fair value of assets acquired and liabilities assumed for the abovementioned transaction:
 
Amounts in US$ '000
 
Total
 
Cash (including working capital adjustments)
    140,100  
Total consideration
    140,100  
Cash and cash equivalents
    25,133  
Property, plant and equipment (including mineral interest)
    115,615  
Trade receivables
    9,757  
Prepayments and other receivables
    3,177  
Other financial assets
    950  
Deferred income tax liabilities
    (3,132 )
Trade and other payables
    (4,538 )
Provision for other long-term liabilities
    (6,862 )
Total identifiable net assets
    140,100  

Round 12 in Brazil

On 28 November 2013, the ANP awarded GeoPark with two new concessions in a new international bidding round, Round 12 (see Note 34 to the audited Consolidated Financial Statements as of 31 December 2013).

In Brazil, GeoPark Brazil is currently a party to a legal proceeding related to the concession agreement of Block PN-T-597 that the ANP initially awarded to GeoPark Brazil in the 12th oil and gas bidding round. As a result of a class action filed by the Federal Prosecutor’s Office, an injunction was issued by a Brazilian Federal Court against the ANP, the Federal Government and GeoPark Brazil on 13 December 2013. Due to the injunction GeoPark Brazil could not proceed to execute the concession agreement, and cannot do so until the injunction is lifted. According to the terms of the Court’s injunction, the ANP will first need to take certain actions, such as conducting studies that prove that drilling unconventional resources will not contaminate the dams and aquifers in the region. On 21 February 2014, GeoPark Brazil requested that the board of the ANP suspend the execution of the concession agreement (which entails delivery of the financial guarantee and performance guarantee and payment of the signing bonus) for six months with a possible extension of an additional six months, or until a firm court decision is reached that does not prevent GeoPark Brazil from entering into the concession agreement. On 16 April 2014, the ANP’s Board enacted a resolution stating that all proceedings related to the award of the concession of Block PN-T-597 to GeoPark Brazil were suspended.

 
19

 
GEOPARK LIMITED
30 JUNE 2014
 
Note 15

Subsequent events

New exploratory license in Colombia

GeoPark continued its expansion in Colombia through the award of a new exploratory license during the 2014 Colombia Bidding Round, carried out by the Agencia Nacional de Hidrocarburos (“ANH”) on 23 July 2014 in Cartagena, Colombia.

GeoPark was awarded the VIM-3 Block in the Lower Magdalena Basin, covering an area of approximately 225,000 acres. The block has an attractive oil and gas exploration potential in a large area within a proven hydrocarbon system, surrounded by existing oil and gas fields and with sparse exploration activity carried out to date.

GeoPark’s winning bid consisted of committing to a minimum investment program of 200 sq km of 2D seismic and drilling one exploration well, with a total estimated investment of US$ 22.2 million during the initial three year exploratory period and a Royalty X Factor of 3%. GeoPark will operate and have a 100% working interest in the block. The winning bid is subject to final signature of the contracts with the ANH, which is currently scheduled for third quarter of 2014.

Swap operation in Colombia

On 29 July 2014, GeoPark’s Colombian subsidiary agreed to exchange its 10% non-operating economic interest in Arrendajo Block for additional interests held by the seller in the Yamú Block (GeoPark operated) that includes a 15% economic interest  in all of the Yamú fields except for the Carupana field, where the seller had a 25% economic interest. According to the terms of the exchange, GeoPark will also receive US$3.2 million in cash from the exchange, adjusted by working capital. Following this transaction, GeoPark will continue to be the operator and have a 79.5% interest in the Carupana Field and 90% in Yamú and Potrillo Fields, all fields located in the Yamú Block.
 
 
20

 

 
SIGNATURE

 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
   
GeoPark Limited
 
       
       
     
By:
/s/ Andrés Ocampo
 
       
Name:
Andrés Ocampo
 
       
Title:
Chief FinancialOfficer
 

Date: August 25, 2014