Latin American oil and gas explorer GeoPark has renewed its offtake and prepayment agreement with Vitol to supply all its crude oil production from Colombia\u2019s Llanos basin.<\/p>\n
Originally established in May 2024, the agreement involved the sale and delivery of a minimum of 20,000 barrels of oil per day (bopd) from the Llanos 34 block.<\/p>\n
The extension is currently set to expire on 31 December 2028. It covers production from the Llanos 34 block, where GeoPark holds a 45% working interest, as well as the Llanos 123 block with a 50% working interest, and the CPO-5 block, in which GeoPark has a 30% non-operated working interest.<\/p>\n
Deliveries under the new terms will commence in January 2026 for Llanos 34, and in May 2026 for CPO-5 and Llanos 123.<\/p>\n
This marks a continuation of the companies’ collaboration, which was originally scheduled to end in June 2027.<\/p>\n
The revised agreement is expected to enhance GeoPark\u2019s price realisations by $0.33 per barrel on a weighted-average basis compared to the company’s recent six-month average.<\/p>\n
This adjustment aims to improve profit margins and cash flow predictability by reverting weighted-average netbacks to levels observed in 2020.<\/p>\n
Additionally, GeoPark will benefit from a prepayment facility provided by Vitol, which offers up to $500m (SFr383.6m), including a firm commitment of $330m with an option to increase by $170m through prepaid future oil sales over the contract period.<\/p>\n
The financial structure of the facility allows borrowing without mandatory repayment obligations, permitting GeoPark to repay through future oil deliveries or prepayments without penalty.<\/p>\n
Interest rates for borrowed amounts are based on a one-month secured overnight financing rate plus a margin of 3.50% per annum, reflecting a reduction from previous terms.<\/p>\n
Vitol’s funding availability extends until 30 June 2027, contingent on certain criteria being met.<\/p>\n
The agreement is part of GeoPark\u2019s strategy to bolster financial resilience and flexibility amid current market conditions, while supporting strategic objectives for the years 2026\u201328.<\/p>\n
In 2025, GeoPark announced the divestment<\/a> of non-core assets and the implementation of cost-effective initiatives.<\/p>\n