GeoPark Signs 25-Year Contract to Develop Venezuela's Bare Oil Field
en.Wedoany.com Reported - On September 4, Venezuela's state-owned oil company PDVSA and GeoPark officially signed a 25-year oil and gas participation contract (CPP) for the Bare block. Bare is located in Venezuela's Orinoco heavy oil belt and is a mature heavy oil asset already in production. Under the contract terms, GeoPark will serve as the project operator, assuming 100% of the capital expenditures under the approved work program, and holding a 65% net working interest in the project. The contract also grants the operator rights to directly sell and monetize oil and gas products, use key infrastructure, and participate in operational control.
The Bare block holds original oil in place of approximately 15.7 billion barrels (OOIP), with cumulative historical production exceeding 700 million barrels and approximately 1,100 existing wells. The block's historical peak production exceeded 100,000 barrels per day, and current total production is approximately 11,000 barrels per day. GeoPark's redevelopment plan targets a peak total production of approximately 85,000 to 95,000 barrels per day, with GeoPark's corresponding net production expected to sustain a plateau level of 55,000 to 62,000 barrels per day for more than 10 years.
The current development plan is expected to generate approximately 400 million barrels of cumulative net production for GeoPark, with plans to increase the Bare block's recovery factor from the current 4%–5% to 8%–9%. The project will implement phased field redevelopment utilizing existing well patterns and established infrastructure, including restoring and enhancing existing production capacity, infrastructure rehabilitation, and subsequent investments in production wells and surface facilities.
The Bare project transaction arrangement was facilitated by Grupo Gilinski. GeoPark will first acquire a 5% interest in the company holding the CPP rights, and subsequently plans to acquire the remaining 95% interest held by Grupo Gilinski, using 42.1 million GeoPark shares as the base consideration. The share issuance price is calculated at $12.22 per share, approximately 26% higher than the 30-day volume-weighted average price of $9.67 during the reference period; the transaction arrangement corresponds to a value of approximately $160 million. Upon completion of the transaction, Grupo Gilinski is expected to indirectly become GeoPark's controlling shareholder.
GeoPark disclosed on September 2 that the effectiveness of the Bare project contract framework remains subject to applicable approvals, authorizations, regulatory, and sanctions compliance requirements, with an estimated maximum processing period of approximately 120 days. Therefore, the formal signing of the CPP on September 4 represents a new contractual milestone for the project, followed by the stage of fulfilling relevant approvals and contract effectiveness conditions.
