GeoPark yields control to Gilinski in $514M Venezuelan oil deal

GeoPark has agreed to issue 42.1 million common shares to Grupo Gilinski at an agreed price of $12.22 per share. The transaction has a base value of $514 million and will grant the group led by Colombian billionaire Jaime Gilinski a 56.3% majority stake in the oil producer, up from 28%.

In exchange, GeoPark will acquire a 95% interest in a holding company from Grupo Gilinski, adding to its initial 5% stake. The holding entity controls rights under a 25-year Production Participation Contract with state company PDVSA for the Bare block in Venezuela, which holds an estimated 15.7 billion barrels of original oil in place. GeoPark will hold a 65% net working interest, fund 100% of future capital expenditures, and partner alongside PDVSA, which holds the remaining 35%.

The transaction price of $12.22 per share represents a 26% premium over GeoPark's 30-day volume-weighted average price of $9.67 prior to the September 2 agreement. GeoPark stated that the deal creates an immediate value accretion of $160 million, or $1.50 per share, for existing shareholders. The closing agreement allows 120 days to satisfy closing conditions.

The agreement includes up to 5.4 million contingent adjustment shares, which could lift Grupo Gilinski's stake to 58.4%. Grupo Gilinski has also committed to launch a voluntary tender offer of up to $100 million at $12.22 per share, which implies pro-rata liquidity of $2.10 per share for existing holders and could expand Gilinski's ownership to 64%. On September 29, GeoPark completed a consent solicitation for its notes, paying a consent fee of $2.50 per thousand dollars of bond principal.

Current gross production at the Bare field is 11,000 barrels of oil per day, with target peak gross output projected at 85,000 to 95,000 barrels per day and target net plateau production of 55,000 to 62,000 barrels per day across a 10-year period. By 2030, GeoPark targets consolidated corporate production of 75,000 to 85,000 barrels of oil equivalent per day and projects proforma adjusted EBITDA of $380 million to $460 million for 2027. GeoPark shares closed at $11.45 on October 8.