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 2016

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.	GeoPark Limited Interim Condensed Consolidated Financial Statements for the six-months period ended 30 June 2015 and 2016

Item 1

GEOPARK LIMITED

Interim condensed consolidated  

financial statements

AND explanatory notes

For the six-months period ended 30 June 2015 and 2016

GEOPARK LIMITED

30 JUNE 2016

 

CONTENTS

Page
3	Consolidated Statement of Income and Consolidated 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 2016

 

CONSOLIDATED STATEMENT OF INCOME  

Amounts in US$  ´000	Note	Three-months period ended 30 June 2016 (Unaudited)			Three-months period ended 30 June 2015 (Unaudited)			Six-months period ended 30 June 2016 (Unaudited)			Six-months period ended 30 June 2015  (Unaudited)
NET REVENUE	2		45,924			62,039			82,487			116,470
Production and operating costs	4		(13,787	)		(22,472	)		(26,802	)		(46,367	)
Geological and geophysical expenses	5		(2,931	)		(3,631	)		(5,285	)		(6,292	)
Administrative expenses	6		(8,237	)		(8,377	)		(15,722	)		(18,218	)
Selling expenses	7		(494	)		(1,113	)		(3,164	)		(3,420	)
Depreciation			(16,614	)		(24,380	)		(38,136	)		(49,851	)
Write-off of unsuccessful efforts	9		(447	)		-			(447	)		-
Other expenses			(638	)		(1,604	)		(1,377	)		(8,763	)
OPERATING PROFIT (LOSS)			2,776			462			(8,446	)		(16,441	)
Financial costs	8		(7,637	)		(8,095	)		(16,601	)		(17,125	)
Foreign exchange income (loss)			9,558			3,728			17,015			(16,018	)
PROFIT (LOSS) BEFORE TAX			4,697			(3,905	)		(8,032	)		(49,584	)
Income tax (expense) benefit			(6,322	)		(5,525	)		(5,637	)		4,137
LOSS FOR THE PERIOD			(1,625	)		(9,430	)		(13,669	)		(45,447	)
Attributable to:
Owners of the Company			(1,333	)		(7,568	)		(10,589	)		(40,224	)
Non-controlling interest			(292	)		(1,862	)		(3,080	)		(5,223	)
Losses per share (in US$) for loss attributable to owners of the Company. Basic			(0.02	)		(0.13	)		(0.18	)		(0.70	)
Losses per share (in US$) for loss attributable to owners of the Company. Diluted			(0.02	)		(0.13	)		(0.18	)		(0.70	)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Amounts in US$  ´000	Three-months period ended 30 June 2016 (Unaudited)			Three-months period ended 30 June 2015 (Unaudited)			Six-months period ended 30 June 2016 (Unaudited)			Six-months period ended 30 June 2015 (Unaudited)
Loss for the period		(1,625	)		(9,430	)		(13,669	)		(45,447	)
Other comprehensive income
Currency translation differences		3,205			489			5,620			(3,886	)
Total comprehensive income (loss) for the period		1,580			(8,941	)		(8,049	)		(49,333	)
Attributable to:
Owners of the Company		1,872			(7,079	)		(4,969	)		(44,110	)
Non-controlling interest		(292	)		(1,862	)		(3,080	)		(5,223	)

GEOPARK LIMITED

30 JUNE 2016

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Amounts in US$  ´000	Note	At 30 June  2016 (Unaudited)			Year ended 31 December 2015
ASSETS
NON CURRENT ASSETS
Property, plant and equipment	9		510,900			522,611
Prepaid taxes			1,136			1,172
Other financial assets			18,531			13,306
Deferred income tax			23,184			34,646
Prepayments and other receivables			247			220
TOTAL NON CURRENT ASSETS			553,998			571,955
CURRENT ASSETS
Inventories			3,427			4,264
Trade receivables			11,441			13,480
Prepayments and other receivables			8,895			11,057
Prepaid taxes			19,119			19,195
Other financial assets			1,756			1,118
Cash at bank and in hand			79,247			82,730
TOTAL CURRENT ASSETS			123,885			131,844
TOTAL ASSETS			677,883			703,799
EQUITY
Equity attributable to owners of the Company
Share capital	10		60			59
Share premium			233,025			232,005
Reserves			128,636			123,016
Accumulated losses			(220,125	)		(208,428	)
Attributable to owners of the Company			141,596			146,652
Non-controlling interest			50,518			53,515
TOTAL EQUITY			192,114			200,167
LIABILITIES
NON CURRENT LIABILITIES
Borrowings	11		331,395			343,248
Provisions for other long-term liabilities	12		41,004			42,450
Deferred income tax			4,764			16,955
Trade and other payables	13		29,960			19,556
TOTAL NON CURRENT LIABILITIES			407,123			422,209
CURRENT LIABILITIES
Borrowings	11		38,536			35,425
Current income tax			2,433			208
Trade and other payables	13		37,677			45,790
TOTAL CURRENT LIABILITIES			78,646			81,423
TOTAL LIABILITIES			485,769			503,632
TOTAL EQUITY AND LIABILITIES			677,883			703,799

GEOPARK LIMITED

30 JUNE 2016

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Attributable to owners of the Company
Amount in US$ '000	Share Capital		Share Premium			Other Reserve		Translation Reserve			Accumulated losses			Non - controlling Interest			Total
Equity at 1 January 2015		58		210,886			127,527		(3,510	)		40,596			103,569			479,126
Loss for the six-months period		-		-			-		-			(40,224	)		(5,223	)		(45,447	)
Currency translation differences		-		-			-		(3,886	)		-			-			(3,886	)
Total comprehensive loss for the period ended 30 June  2015		-		-			-		(3,886	)		(40,224	)		(5,223	)		(49,333	)
Repurchase of shares		-		(1,327	)		-		-			-			-			(1,327	)
Share-based payment		-		310			-		-			2,805			-			3,115
		-		(1,017	)		-		-			2,805			-			1,788
Balance at 30 June 2015 (Unaudited)		58		209,869			127,527		(7,396	)		3,177			98,346			431,581
Balance at 31 December 2015		59		232,005			127,527		(4,511	)		(208,428	)		53,515			200,167
Loss for the six-months period		-		-			-		-			(10,589	)		(3,080	)		(13,669	)
Currency translation differences		-		-			-		5,620			-			-			5,620
Total comprehensive loss for the period ended 30 June 2016		-		-			-		5,620			(10,589	)		(3,080	)		(8,049	)
Repurchase of shares		-		(727	)		-		-			-			-			(727	)
Share-based payment		1		1,747			-		-			(1,108	)		83			723
		1		1,020			-		-			(1,108	)		83			(4	)
Balance at 30 June 2016 (Unaudited)		60		233,025			127,527		1,109			(220,125	)		50,518			192,114

GEOPARK LIMITED

30 JUNE 2016

 

CONSOLIDATED STATEMENT OF CASH FLOW

Amounts in US$ ’000	Six-months period ended 30 June 2016 (Unaudited)			Six-months period ended 30 June 2015  (Unaudited)
Cash flows from operating activities
Loss for the period		(13,669	)		(45,447	)
Adjustments for:
Income tax expense (benefit)		5,637			(4,137	)
Depreciation		38,136			49,851
Write-off of unsuccessful efforts		447			-
Amortisation of other long-term liabilities		(869	)		(228	)
Accrual of borrowing’s interests		13,948			13,037
Unwinding of long-term liabilities		1,242			1,447
Accrual of share-based payment		723			3,115
Foreign exchange (income) loss		(17,015	)		16,018
Customer advance payments		10,000			-
Income tax paid		-			(7,625	)
Change in working capital		(10,150	)		(17,359	)
Cash flows from operating activities – net		28,430			8,672
Cash flows from investing activities
Purchase of property, plant and equipment		(14,134	)		(15,974	)
Cash flows used in investing activities – net		(14,134	)		(15,974	)
Cash flows from financing activities
Proceeds from borrowings		186			-
Proceeds from loans received from related parties		5,210			2,400
Principal paid		(10,087	)		(51	)
Repurchase of shares		(727	)		(1,327	)
Interest paid		(12,757	)		(12,987	)
Cash flows used in financing activities - net		(18,175	)		(11,965	)
Net decrease in cash and cash equivalents		(3,879	)		(19,267	)
Cash and cash equivalents at 1 January		82,730			127,672
Currency translation differences		396			(3,106	)
Cash and cash equivalents at the end of the period		79,247			105,299
Ending Cash and cash equivalents are specified as follows:
Cash in banks		79,236			105,285
Cash in hand		11			14
Cash and cash equivalents		79,247			105,299

GEOPARK LIMITED

30 JUNE 2016

 

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”) is the exploration, development and production for oil and gas reserves in Chile, Colombia, Brazil, Peru and Argentina.

This consolidated interim financial report was authorised for issue by the Board of Directors on
10 August 2016.

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 2014 and 2015, 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 2015.

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.

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 2015.

GEOPARK LIMITED

30 JUNE 2016

 

Note 1 (Continued)

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 2015.

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 2016 (a):

(a) LG International is not a subsidiary, it is Non-controlling interest.

There have been no changes in the Group structure since December 2015.

GEOPARK LIMITED

30 JUNE 2016

 

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 Limited – Bermuda	100%
	GeoPark Argentina Limited – Argentinean Branch	100% (a)
	GeoPark Latin America Limited	100%
	GeoPark Latin America Limited – Agencia en Chile	100% (a)
	GeoPark S.A. (Chile)	100% (a) (b)
	GeoPark Brazil Exploração y Produção de Petróleo e Gás Ltda. (Brazil)	100% (a)
	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)	100% (a)
	GeoPark Colombia SAS (Colombia)	80% (a)
	GeoPark Latin America Coöperatie U.A. (The Netherlands)	100%
	GeoPark Colombia Coöperatie U.A. (The Netherlands)	80% (a) (c)
	GeoPark S.A.C. (Peru)	100% (a)
	GeoPark Perú S.A.C. (Peru)	100% (a)
	GeoPark Operadora del Perú S.A.C. (Peru)	100% (a)
	GeoPark Peru Coöperatie U.A. (The Netherlands)	100%
	GeoPark Brazil Coöperatie U.A. (The Netherlands)	100%
	GeoPark Colombia E&P S.A.(Panama)	100% (b)
Joint operations	Tranquilo Block (Chile)	50% (e)
	Flamenco Block (Chile)	50% (e)
	Campanario Block (Chile)	50% (e)
	Isla Norte Block (Chile)	60% (e)
	Llanos 17 Block (Colombia)	36.84%
	Yamu/Carupana Block (Colombia)	89.5%/100% (e)
	Llanos 34 Block (Colombia)	45% (e)
	Llanos 32 Block (Colombia)	10%
	CPO-4 Block (Colombia)	50% (e)
	Puelen Block (Argentina)	18%
	Sierra del Nevado Block (Argentina)	18%
	CN-V Block (Argentina)	50% (e)
	Manati Field (Brazil)	10%

(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, totaling 31.2%.

(e) GeoPark is the operator in all blocks.

GEOPARK LIMITED

30 JUNE 2016

 

Note 2

Net Revenue

Amounts in US$ '000	Three-months period ended 30 June 2016		Three-months period ended 30 June 2015		Six-months period ended 30 June 2016		Six-months period ended 30 June 2015
Sale of crude oil		34,303		50,207		57,472		91,000
Sale of gas		11,621		11,832		25,015		25,470
		45,924		62,039		82,487		116,470

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 Executive Committee. This committee is integrated by the CEO, COO, CFO and managers in charge of the Geoscience, Operations, Corporate Governance, Finance and People 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. Since 1 January 2015, the committee has changed the disclosure of certain elements of performance to be more comparable with other companies in the market and also to better follow up the performance of the business. This change impacts the segment information because gross profit or loss is no longer shown but no impact is generated in the measure of segment profit and loss.

The Executive 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, certain non-cash items such as impairments and write-offs of unsuccessful efforts, accrual of share-based payment and other non recurring events. Operating Netback is equivalent to Adjusted EBITDA before cash expenses included in Administrative, Geological and Geophysical and Other operating expenses. Other information provided to the Executive Committee is measured in a manner consistent with that in the financial statements, except as noted below.

GEOPARK LIMITED

30 JUNE 2016

 

Note 3 (Continued)

Segment Information (Continued)

Six-months period ended 30 June 2016

Amounts in US$ '000	Total			Colombia			Chile			Brazil			Argentina			Peru			Corporate
Net Revenue		82,487			47,664			19,006			15,817			-			-			-
Sale of crude oil		57,472			47,664			9,445			363			-			-			-
Sale of gas		25,015			-			9,561			15,454			-			-			-
Production and operating costs		(26,802	)		(12,135	)		(10,708	)		(3,959	)		-			-			-
Royalties		(4,327	)		(2,074	)		(768	)		(1,485	)		-			-			-
Transportation costs		(1,262	)		(604	)		(658	)		-			-			-			-
Share-based payment		(150	)		(117	)		(33	)		-			-			-			-
Other costs		(21,063	)		(9,340	)		(9,249	)		(2,474	)		-			-			-
Depreciation		(38,136	)		(14,296	)		(16,529	)		(7,155	)		(91	)		(65	)		-
Operating (Loss) / Profit		(8,446	)		8,220			(13,177	)		2,432			607			(1,647	)		(4,881	)
Adjusted  EBITDA		32,017			23,065			3,524			9,782			1,793			(1,552	)		(4,595	)

Six-months period ended 30 June 2015

Amounts in US$ '000	Total			Colombia			Chile			Brazil			Argentina			Peru			Corporate
Net Revenue		116,470			71,902			25,670			18,301			597			-			-
Sale of crude oil		91,000			71,902			17,967			534			597			-			-
Sale of gas		25,470			-			7,703			17,767			-			-			-
Production and operating costs		(46,367	)		(24,147	)		(17,095	)		(3,554	)		(1,571	)		-			-
Royalties		(6,104	)		(3,259	)		(1,157	)		(1,654	)		(34	)		-			-
Transportation costs		(2,626	)		(1,233	)		(1,393	)		-			-			-			-
Share-based payment		(152	)		(58	)		-			-			(94	)		-			-
Other costs		(37,485	)		(19,597	)		(14,545	)		(1,900	)		(1,443	)		-			-
Depreciation		(49,851	)		(22,886	)		(19,845	)		(6,955	)		(100	)		(65	)		-
Operating (Loss) / Profit		(16,441	)		15,121			(26,972	)		5,746			(3,232	)		(2,256	)		(4,848	)
Adjusted  EBITDA		44,959			39,942			(1,069	)		12,808			(2,044	)		(2,219	)		(2,459	)

Total Assets	Total		Colombia		Chile		Brazil		Argentina		Peru		Corporate
30 June 2016		677,883		158,087		358,216		105,278		3,142		4,927		48,233
31 December 2015		703,799		153,071		381,143		114,974		3,181		4,287		47,143

GEOPARK LIMITED

30 JUNE 2016

 

Note 3 (Continued)

Segment Information (Continued)

A reconciliation of total Operating netback to total profit (loss) before income tax is provided as follows:

	Three-months period ended 30 June 2016			Three-months period ended 30 June 2015			Six-months period ended 30 June 2016			Six-months period ended 30 June 2015
Operating netback		31,732			38,519			52,713			66,662
Geological and geophysical expenses		(3,135	)		(3,560	)		(5,438	)		(6,089	)
Administrative expenses		(8,133	)		(6,841	)		(15,258	)		(15,614	)
Adjusted EBITDA for reportable segments		20,464			28,118			32,017			44,959
Depreciation (a)		(16,614	)		(24,380	)		(38,136	)		(49,851	)
Write-off of unsuccessful efforts		(447	)		-			(447	)		-
Share-based payment		(233	)		(1,915	)		(723	)		(3,115	)
Others (b)		(394	)		(1,361	)		(1,157	)		(8,434	)
Operating Profit / (Loss)		2,776			462			(8,446	)		(16,441	)
Financial costs		(7,637	)		(8,095	)		(16,601	)		(17,125	)
Foreign exchange income (loss)		9,558			3,728			17,015			(16,018	)
Profit / (Loss) before tax		4,697			(3,905	)		(8,032	)		(49,584	)

^(a) Net of capitalised costs for oil stock included in Inventories. Depreciation includes US$ 1,861,000 (US$ 1,849,000 in 2015) generated by assets not related to production activities. For the three months period ended 30 June 2016 the amount included in depreciation is US$ 906,000 (US$ 933,000 in 2015).

^(b) Mainly includes termination costs (see Note 14 to the audited Consolidated Financial Statements as of 31 December 2015).

The following table presents a reconciliation of Adjusted EBITDA to operating profit for the six-month periods ended 30 June 2016 and 2015:

	Six-months period ended 30 June 2016
		Colombia		Chile		Brazil		Other (d)		Total
Adjusted EBITDA for reportable segments		23,065		3,524		9,782		(4,354	)	32,017
Depreciation		(14,296	)	(16,529	)	(7,155	)	(156	)	(38,136	)
Write-off of unsuccessful efforts		-		(447	)	-		-		(447	)
Share-based payment		(263	)	(153	)	(20	)	(287	)	(723	)
Others (c)		(286	)	428		(175	)	(1,124	)	(1,157	)
Operating Profit / (Loss)		8,220		(13,177	)	2,432		(5,921	)	(8,446	)

GEOPARK LIMITED

30 JUNE 2016

 

Note 3 (Continued)

Segment Information (Continued)

	Six-months period ended 30 June 2015
		Colombia		Chile		Brazil		Other (d)		Total
Adjusted EBITDA for reportable segments		39,942		(1,069	)	12,808		(6,722	)	44,959
Depreciation		(22,886	)	(19,845	)	(6,955	)	(165	)	(49,851	)
Share-based payment		(263	)	(110	)	(44	)	(2,698	)	(3,115	)
Others (c)		(1,672	)	(5,948	)	(63	)	(751	)	(8,434	)
Operating Profit / (Loss)		15,121		(26,972	)	5,746		(10,336	)	(16,441	)

^(c) Includes Argentina, Peru and Corporate. 

^(d) Includes termination costs.

Note 4

Production and operating costs

Amounts in US$ '000	Three-months period ended 30 June 2016		Three-months period ended 30 June 2015		Six-months period ended   30 June 2016		Six-months period ended 30 June 2015
Staff costs		2,383		4,705		5,424		10,310
Well and facilities maintenance		2,512		6,184		4,425		11,142
Royalties		2,571		3,866		4,327		6,104
Gas plant costs		1,602		381		3,249		885
Consumables		1,506		1,810		3,193		4,301
Equipment rental		813		677		1,729		1,717
Transportation costs		506		1,144		1,262		2,626
Field camp		183		565		675		1,535
Non operated blocks costs		221		99		513		969
Crude oil stock variation		47		873		308		2,416
Share-based payment		70		151		150		152
Other costs		1,373		2,017		1,547		4,210
		13,787		22,472		26,802		46,367

GEOPARK LIMITED

30 JUNE 2016

 

Note 5

Geological and geophysical expenses

Amounts in US$ '000	Three-months period ended 30 June 2016			Three-months period ended 30 June 2015			Six-months period ended 30 June 2016			Six-months   period ended   30 June 2015
Staff costs		2,625			2,715			4,334			4,734
Share-based payment		57			228			109			359
Other services		511			738			1,104			1,355
Allocation to capitalised project		(262	)		(50	)		(262	)		(156	)
		2,931			3,631			5,285			6,292

Note 6

Administrative expenses

Amounts in US$ '000	Three-months period ended 30 June 2016		Three-months period ended 30 June 2015		Six-months period ended 30 June 2016		Six-months period ended 30 June 2015
Staff costs		5,018		4,623		9,490		9,982
Consultant fees		896		829		1,635		1,742
Office expenses		595		538		1,105		1,439
Director fees and allowance		384		260		758		533
Travel expenses		435		367		632		529
Share-based payment		105		1,536		464		2,604
New projects		157		59		261		206
Other administrative expenses		647		165		1,377		1,183
		8,237		8,377		15,722		18,218

GEOPARK LIMITED

30 JUNE 2016

 

Note 7

Selling expenses

Amounts in US$ '000	Three-months period ended 30 June 2016		Three-months period ended 30 June 2015		Six-months period ended 30 June 2016		Six-months period ended 30 June 2015
Transportation		283		898		2,875		3,109
Selling taxes and other		211		215		289		311
		494		1,113		3,164		3,420

Note 8

Financial costs

Amounts in US$ '000	Three-months period ended 30 June 2016			Three-months period ended 30 June 2015			Six-months period ended 30 June 2016			Six-months period ended 30 June 2015
Financial expenses
Bank charges and other financial costs		467			656			1,377			1,663
Unwinding of long-term liabilities		397			733			1,242			1,447
Interest and amortisation of debt issue costs		7,292			7,370			15,199			15,119
Less: amounts capitalised on qualifying assets		(28	)		(56	)		(155	)		(159	)
Financial income
Interest received		(491	)		(608	)		(1,062	)		(945	)
		7,637			8,095			16,601			17,125

GEOPARK LIMITED

30 JUNE 2016

 

Note 9

Property, plant and equipment

Amounts in US$'000	Oil & gas properties			Furniture, equipment  and vehicles			Production facilities and machinery			Buildings and improvements			Construction  in progress			Exploration and evaluation assets			TOTAL
Cost at 1 January 2015		749,947			12,057			111,646			9,527			59,425			140,444			1,083,046
Additions		(709	)(a)		476			-			28			15,376			5,632			20,803
Currency translation differences		(12,580	)		(29	)		-			198			(1,170	)		(484	)		(14,065	)
Transfers		17,701			374			7,320			571			(20,358	)		(5,608	)		-
Cost at 30 June 2015		754,359			12,878			118,966			10,324			53,273			139,984			1,089,784
Cost at 1 January 2016		648,992			13,745			124,832			10,518			29,823			87,000			914,910
Additions		(2,906	)		270			-			-			8,153			6,058			11,575
Disposals		-			-			-			-			(300	)		(35	)		(335	)
Write-off of unsuccessful efforts		-			-			-			-			-			(447	)(b)		(447	)
Transfers		14,796			33			1,951			-			(9,403	)		(7,377	)		-
Currency translation differences		15,130			136			1,795			38			85			898			18,082
Cost at 30 June  2016		676,012			14,184			128,578			10,556			28,358			86,097			943,785
Depreciation and write-down at 1 January 2015		(240,439	)		(4,449	)		(45,147	)		(2,244	)		-			-			(292,279	)
Depreciation		(40,115	)		(1,398	)		(6,606	)		(451	)		-			-			(48,570	)
Currency translation differences		1,805			(111	)		-			(124	)		-			-			1,570
Depreciation and write-down At 30 June 2015		(278,749	)		(5,958	)		(51,753	)		(2,819	)		-			-			(339,279	)
Depreciation and write-down at 1 January 2016		(321,173	)		(7,317	)		(60,614	)		(3,195	)		-			-			(392,299	)
Depreciation		(30,216	)		(1,416	)		(5,637	)		(445	)		-			-			(37,714	)
Currency translation differences		(2,818	)		(55	)		23			(22	)		-			-			(2,872	)
Depreciation and write-down at 30 June 2016		(354,207	)		(8,788	)		(66,228	)		(3,662	)		-			-			(432,885	)
Carrying amount at 30 June 2015		475,610			6,920			67,213			7,505			53,273			139,984			750,505
Carrying amount at 30 June 2016		321,805			5,396			62,350			6,894			28,358			86,097			510,900

^(a) Corresponds to the effect of change in estimate of assets retirement obligations in Colombia. 

^(b) Corresponds to unsuccessful exploratory activities performed in 2013 in Chile (Flamenco Block).

GEOPARK LIMITED

30 JUNE 2016

 

Note 10

Share capital

Issued share capital	Six-months period ended 30 June 2016		Year ended 31 December  2015
Common stock (US$ ´000)		60		59
The share capital is distributed as follows:
Common shares, of nominal US$ 0.001		59,827,059		59,535,614
Total common shares in issue		59,827,059		59,535,614
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. 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 2015).

Note 11

Borrowings

The outstanding amounts are as follows:

Amounts in US$ '000	At   30 June 2016		Year ended 31 December 2015
Notes GeoPark Latin America Agencia en Chile (a)		303,211		302,495
Banco Itaú (b)		59,430		69,142
Banco de Chile (c)		7,119		7,036
Banco de Crédito e Inversiones (d)		171		-
		369,931		378,673

Classified as follows:

Current	38,536	35,425
Non-Current	331,395	343,248

GEOPARK LIMITED

30 JUNE 2016

 

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., GeoPark Colombia Cooperatie U.A. and GeoPark Colombia S.A. and a pledge of certain intercompany loans. The debt issuance cost for this transaction amounted to US$ 7,637,000. The indenture governing our Notes due 2020 includes incurrence test covenants that provides among other things, that, the Debt to EBITDA ratio should not exceed 2.5 times and the EBITDA to Interest ratio should exceed 3.5 times. As of the date of these interim condensed consolidated financial statements, the Company’s Debt to EBITDA ratio was 6.1 times and the EBITDA to Interest ratio was 2.0 times, primarily due to the lower oil prices that impacted the Company’s EBITDA generation. Failure to comply with the incurrence test covenants does not trigger an event of default. However, this situation may limit the Company’s capacity to incur additional indebtedness, as specified in the indenture governing the Notes. Incurrence covenants as opposed to maintenance covenants must be tested by the Company before incurring additional debt or performing certain corporate actions including but not limited to dividend payments, restricted payments and others, (other than in each case, certain specific exceptions). As of the date of these interim condensed consolidated financial statements, the Company is in compliance of all the indenture’s provisions.

(b) 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. 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. In March 2015, the Company reached an agreement to: (i) extend the principal payments that were due in 2015 (amounting to approximately US$ 15,000,000), which will be divided pro-rata during the remaining principal installments, starting in March 2016 and (ii) to increase the variable interest rate to six-month LIBOR + 4.0%. As a result of the above, in March 2016 the Company paid US$ 10,000,000 corresponding to principal payments under the current principal amortization schedule.

The facility agreement includes customary events of default, and requires the Brazilian subsidiary to comply with customary covenants, including the maintenance of a ratio of net debt to EBITDA of up to 3.5x for the first two years and up to 3.0x thereafter. The credit facility also limits the borrower’s ability to pay dividends if the ratio of net debt to EBITDA is greater than 2.5x. As of the date of these interim condensed consolidated financial statements, the Company has complied with these covenants.

GEOPARK LIMITED

30 JUNE 2016

 

Note 11 (Continued)

Borrowings (Continued)

(c) During December 2015, GeoPark executed a loan agreement with Banco de Chile for US$ 7,028,000 to finance the start-up of new Ache gas field in GeoPark-operated Fell Block. The interest rate applicable to this loan is LIBOR plus 2.35% per annum. The interest and the principal will be paid on monthly basis; with a six months grace period, with final maturity on December 2017.

(d) During February 2016, GeoPark executed a loan agreement with Banco de Crédito e Inversiones for US$ 186,000 to finance the acquisition of vehicles for the Chilean operation. The interest rate applicable to this loan is 4.14% per annum. The interest and the principal will be paid on monthly basis, with final maturity on February 2019.

As of the date of this interim condensed consolidated report, the Group has available credit lines for approximately US$ 45,000,000.

Note 12

Provision for other long-term liabilities

The outstanding amounts are as follows:

Amounts in US$ '000	At 30 June 2016		Year ended 31 December 2015
Assets retirement obligation and other environmental liabilities		30,305		31,617
Deferred income		4,164		5,033
Other		6,535		5,800
		41,004		42,450

GEOPARK LIMITED

30 JUNE 2016

 

Note 13

Trade and other payables

The outstanding amounts are as follows:

Amounts in US$ '000	At 30 June 2016		Year ended 31 December 2015
Trade payables		19,283		25,906
Payables to related parties (a)		27,045		21,045
Customer advance payments (b)		10,000		5,266
Taxes and other debts to be paid		2,437		2,931
Staff costs to be paid		5,277		6,702
V.A.T.		463		908
To be paid to co-venturers		2,284		113
Royalties to be paid		848		2,475
		67,637		65,346

Classified as follows:

Current	37,677	45,790
Non-Current	29,960	19,556

^(a) Corresponds to related parties loans granted by LGI. The maturity of these loans is July 2020 and the applicable interest rate is 8% per annum.

^(b) In December 2015, the Company entered into a prepayment agreement with Trafigura under which the Company sells and deliver a portion of its Colombian crude oil production at spot prices. The agreement also provides GeoPark with prepayment of up to US$ 100,000,000 from Trafigura. Funds committed are available upon request and will be repaid by the Company on a monthly basis through future oil deliveries over the period of the contract, which is 2.5 years, including a 6-month grace period. As of the date of these Financial Statements, outstanding balances related to the prepayment agreement amount to US$ 10,000,000.

GEOPARK LIMITED

30 JUNE 2016

 

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 Financial Officer

Date: August 11, 2016