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GeoPark's (GPRK) Offtake Pact With Vitol Expands Funding Access
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GeoPark Limited (GPRK - Free Report) , an independent oil and gas explorer, operator and consolidator in Latin America, has signed an offtake agreement with a leading energy and commodity company, Vitol. The offtake agreement outlines the sale and delivery of a minimum of 20,000 barrels of oil per day from Llanos 34 Block in Colombia to Vitol.
The agreement is scheduled to begin on Jul 1, 2024, for a minimum of 20 months and up to 36 months. Management expects the agreement to increase its price realizations by 15 cents per barrel compared with the current agreement. It also mentioned that the price realization is anticipated to improve by 60 cents per barrel compared with the average price realization since January 2021.
The transaction between GeoPark and Vitol allows the former to gain immediate access to funding from Vitol, initially up to $300 million. The offtake agreement allows for the option to increase the funding to $500 million in prepaid future oil sales committed over the duration of the contract.
The funds committed by Vitol will be available to GPRK until Jun 30, 2025, subject to specific conditions. Any amount drawn on this prepayment facility can be repaid either through future oil deliveries or by making prepaid payments at any time without incurring penalties. The interest cost on this facility is based on the Secured Overnight Financing Rate in addition to a margin of 3.75% per annum.
The transaction is expected to result in improved commercial performance for GeoPark. Additionally, the contract gives the Latin American energy player access to competitive and flexible financing, which provides it with immediate value and options for future growth.
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.
Hess is a leading upstream energy company, with its operations focused on the prolific resources offshore Guyana. The company has made significant oil discoveries in the Stabroek Block, off the coast of Guyana. These discoveries have totaled more than 11 billion barrels of oil equivalent in gross recoverable resources, adding to Hess’ production potential.
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 fuels, it will play an important role in the global energy transition process. Eni’s participation in the natural gas market will allow it to capitalize on the mounting global demand in the future.
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GeoPark's (GPRK) Offtake Pact With Vitol Expands Funding Access
GeoPark Limited (GPRK - Free Report) , an independent oil and gas explorer, operator and consolidator in Latin America, has signed an offtake agreement with a leading energy and commodity company, Vitol. The offtake agreement outlines the sale and delivery of a minimum of 20,000 barrels of oil per day from Llanos 34 Block in Colombia to Vitol.
The agreement is scheduled to begin on Jul 1, 2024, for a minimum of 20 months and up to 36 months. Management expects the agreement to increase its price realizations by 15 cents per barrel compared with the current agreement. It also mentioned that the price realization is anticipated to improve by 60 cents per barrel compared with the average price realization since January 2021.
The transaction between GeoPark and Vitol allows the former to gain immediate access to funding from Vitol, initially up to $300 million. The offtake agreement allows for the option to increase the funding to $500 million in prepaid future oil sales committed over the duration of the contract.
The funds committed by Vitol will be available to GPRK until Jun 30, 2025, subject to specific conditions. Any amount drawn on this prepayment facility can be repaid either through future oil deliveries or by making prepaid payments at any time without incurring penalties. The interest cost on this facility is based on the Secured Overnight Financing Rate in addition to a margin of 3.75% per annum.
The transaction is expected to result in improved commercial performance for GeoPark. Additionally, the contract gives the Latin American energy player access to competitive and flexible financing, which provides it with immediate value and options for future growth.
Zacks Rank and Other Key Picks
Currently, GPRK has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the energy sector are SM Energy (SM - Free Report) , Hess Corporation (HES - Free Report) and Eni SpA (E - Free Report) . SM Energy and Hess presently sport a Zacks Rank #1 (Strong Buy) each, while Eni carries a Zacks Rank of #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
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.
Hess is a leading upstream energy company, with its operations focused on the prolific resources offshore Guyana. The company has made significant oil discoveries in the Stabroek Block, off the coast of Guyana. These discoveries have totaled more than 11 billion barrels of oil equivalent in gross recoverable resources, adding to Hess’ production potential.
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 fuels, it will play an important role in the global energy transition process. Eni’s participation in the natural gas market will allow it to capitalize on the mounting global demand in the future.