GeoPark stock surges as it enters Venezuela, Gilinski takes control

GeoPark Ltd (NYSE:GPRK) shares rose 4% Thursday following the company’s announcement of its strategic entry into Venezuela through the Bare Block acquisition and a change of control transaction with Grupo Gilinski.

The Latin American energy company will acquire a heavy oil asset in the Orinoco Heavy Oil Belt through a 25-year Production Participation Contract framework with PDVSA Petróleo S.A. Grupo Gilinski will become GeoPark’s controlling shareholder, holding approximately 56.3% of outstanding shares after the transaction closes.

GeoPark will issue 42.1 million shares to Grupo Gilinski at $12.22 per share, representing a 26% premium to the company’s $9.67 30-day volume-weighted average price. The transaction includes a $100 million tender offer at $12.22 per share, providing a liquidity option for existing shareholders.

The Bare Block contains approximately 15.7 billion barrels of original oil in place and currently produces around 11,000 barrels of oil per day. GeoPark expects peak production potential of 85,000-95,000 bopd, with more than 10 years of potential plateau production at 55,000-62,000 bopd net to the company.

Under the agreement, GeoPark will operate the asset with a 65% net working interest and fund 100% of capital expenditures. The company has access to approximately $700 million of liquidity to support the development.

The transaction is expected to increase GeoPark’s production to 75-85 thousand barrels of oil equivalent per day by 2030, approximately 2.7 times current production levels. The company projects proforma adjusted EBITDA of $380-$460 million in 2027, rising to $925 million-$1.3 billion by 2029-2030.

GeoPark CEO Felipe Bayon said the Bare Block "offers massive scale, existing infrastructure, production history, and material redevelopment potential in one of the world’s largest hydrocarbon basins."

The transaction remains subject to regulatory approvals and sanctions-related compliance requirements, with an estimated maximum period of 120 days. BTG Pactual served as financial advisor to GeoPark and delivered a fairness opinion on the transaction.