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GeoPark (GPRK) Acquires Unconventional Blocks in Argentina
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GeoPark Limited (GPRK - Free Report) has signed an agreement to purchase non-operated working interest in four adjacent unconventional blocks in the Neuquén Basin in Argentina from Phoenix Global Resources. The latter is a subsidiary of Mercuria Energy Trading. GPRK will acquire a 45% working interest in the Mata Mora Norte producing block and Mata Mora Sur exploration block, and a 50% working interest in the Confluencia Norte and Confluencia Sur exploration blocks.
The company will acquire 122,315 gross acres (58,402 net acres) for a consideration of $190 million. It will pay 100% of the exploratory commitments up to $113 million gross ($57 million of net carry) over two years. It will also fund an $11 million midstream capacity acquisition according to its working interest and a $10 million bonus, subject to the success of the Confluencia exploration campaign. The transaction is expected to conclude by third-quarter 2024-end.
The newly acquired assets are expected to increase the company’s 2024 production by an estimated 5,500-6,500 net barrels of oil equivalent per day (boepd), contingent upon the closing date of the transaction. The average gross production of these assets came in at 11,220 boepd in the first quarter of 2024. The gross exit production from the assets has been projected in the range of 13,500-14,000 boepd for 2024.
In the Mata More Norte block, approximately 150 drilling locations have been identified for full development. Per the agreed development program, production from the block is anticipated to reach nearly 40,000 gross boepd by 2028.
Presently, the Mata Mora Norte Block has a drilling rig that is slated to drill 12-15 wells in 2024. In addition, full development and exploration plan involves introducing a second drilling rig by late 2025. This will continue to increase the production to the anticipated plateau levels. The development plan includes risked estimates of seven committed wells across two exploration blocks.
Currently in the exploration phase, the Mata Mora Sur, Confluencia Norte and Confluencia Sur blocks boast significant production and reserves upside potential. These three exploration blocks are spread over 79,000 gross acresand 241 mmboe of gross 3C certified contingent resources. The production from these assets is forecastto reach nearly 15,000 – 20,000 gross boepd by 2028, contingent upon exploration success, with the first exploratory well on the Confluencia Norte Block under progress.
The Vaca Muerta shale formation in Latin America boasts an estimated 16 billion barrels of oil and more than 300 thousand cubic feet of unconventional gas resources. Of this, less than 10% of this has been developed so far.
Since 2019, oil production from Vaca Muerta has increased nearly four times to reach 352,715 barrels per day and currently contributes almost 50% of Argentina’s total oil production. The production can potentially triple over the next six years. GeoPark has stated that this acquisition complements its asset base in Colombia, Ecuador and Brazil.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
SM Energy is an upstream energy firm operating in the prolific Midland Basin region and the South Texas region. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
Eni is a leading global integrated energy company with a prominent focus on liquefied natural gas businesses. As natural gas has a lesser carbon footprint compared with other fossil fuel, it will play an important role in the global energy transition process. Eni’s participation in the natural gas market will allow it capitalize on the mounting global demand in the future.
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GeoPark (GPRK) Acquires Unconventional Blocks in Argentina
GeoPark Limited (GPRK - Free Report) has signed an agreement to purchase non-operated working interest in four adjacent unconventional blocks in the Neuquén Basin in Argentina from Phoenix Global Resources. The latter is a subsidiary of Mercuria Energy Trading. GPRK will acquire a 45% working interest in the Mata Mora Norte producing block and Mata Mora Sur exploration block, and a 50% working interest in the Confluencia Norte and Confluencia Sur exploration blocks.
The company will acquire 122,315 gross acres (58,402 net acres) for a consideration of $190 million. It will pay 100% of the exploratory commitments up to $113 million gross ($57 million of net carry) over two years. It will also fund an $11 million midstream capacity acquisition according to its working interest and a $10 million bonus, subject to the success of the Confluencia exploration campaign. The transaction is expected to conclude by third-quarter 2024-end.
The newly acquired assets are expected to increase the company’s 2024 production by an estimated 5,500-6,500 net barrels of oil equivalent per day (boepd), contingent upon the closing date of the transaction. The average gross production of these assets came in at 11,220 boepd in the first quarter of 2024. The gross exit production from the assets has been projected in the range of 13,500-14,000 boepd for 2024.
In the Mata More Norte block, approximately 150 drilling locations have been identified for full development. Per the agreed development program, production from the block is anticipated to reach nearly 40,000 gross boepd by 2028.
Presently, the Mata Mora Norte Block has a drilling rig that is slated to drill 12-15 wells in 2024. In addition, full development and exploration plan involves introducing a second drilling rig by late 2025. This will continue to increase the production to the anticipated plateau levels. The development plan includes risked estimates of seven committed wells across two exploration blocks.
Currently in the exploration phase, the Mata Mora Sur, Confluencia Norte and Confluencia Sur blocks boast significant production and reserves upside potential. These three exploration blocks are spread over 79,000 gross acresand 241 mmboe of gross 3C certified contingent resources. The production from these assets is forecastto reach nearly 15,000 – 20,000 gross boepd by 2028, contingent upon exploration success, with the first exploratory well on the Confluencia Norte Block under progress.
The Vaca Muerta shale formation in Latin America boasts an estimated 16 billion barrels of oil and more than 300 thousand cubic feet of unconventional gas resources. Of this, less than 10% of this has been developed so far.
Since 2019, oil production from Vaca Muerta has increased nearly four times to reach 352,715 barrels per day and currently contributes almost 50% of Argentina’s total oil production. The production can potentially triple over the next six years. GeoPark has stated that this acquisition complements its asset base in Colombia, Ecuador and Brazil.
Zacks Rank and Key Picks
Currently, GPRK holds a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are Archrock Inc. (AROC - Free Report) , SM Energy (SM - Free Report) and Eni SpA (E - Free Report) . Archrock and SM Energy presently sport a Zacks Rank #1 (Strong Buy) each, while Eni carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
SM Energy is an upstream energy firm operating in the prolific Midland Basin region and the South Texas region. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
Eni is a leading global integrated energy company with a prominent focus on liquefied natural gas businesses. As natural gas has a lesser carbon footprint compared with other fossil fuel, it will play an important role in the global energy transition process. Eni’s participation in the natural gas market will allow it capitalize on the mounting global demand in the future.