Undervalued E&P Company Reporting Solid Q2 Results
Fortunately, you can’t judge a book by its cover…or a company by its name. While GeoPark Ltd (NYSE:GPRK) may be a great oil and gas exploration and production (E&P) company, you would be forgiven for thinking it’s an environmental company that works in the green economy.
But it’s not. It’s a leading E&P company with operations across Latin America. While many have been calling for the end of crude oil and predicting peak oil demand for years now, the fact of the matter is, the demand for oil is expected to grow for decades.
The Organization of the Petroleum Exporting Countries (OPEC) recently increased its growth forecast for the next year by 100,000 barrels per day (BPD) to 1.38 million BPD in its monthly report. (Source: “OPEC projects global oil demand to rise by 1.38m bpd in 2026,” Arab News, August 12, 2025.)
Further out, OPEC expects world oil demand to rise from around 102 million BPD in 2025 to hit 120.1 million BPD by 2050. Admittedly, OPEC may not be the most objective source, but its bullish calls still point to supply growth from both OPEC and non-OPEC members. (Source: “OPEC boosts long-term oil demand outlook, driven by developing world growth,” September 24, 2024.)
And frankly, when it comes to sourcing oil and gas, you’d think it would make more sense to look to our allies than to bother with authoritarian nations like Saudi Arabia, Iran, and the United Arab Emirates. And that’s where GeoPark Ltd comes in.
GeoPark is a leading E&P company with a diversified portfolio of properties across Latin America. It currently has assets in Colombia, Ecuador, and Brazil. With a 22-year track record, GeoPark’s operations have ballooned from zero to 20,076 barrels of oil equivalent per day (BOEPD). (Source: “Corporate Presentation, June 2025,” GeoPark Ltd, last accessed August 12, 2025.)
As a low-cost operator, for 2025, approximately 87% of GeoPark’s expected production is hedged with price floors between $68.00–$70.00 per barrel. Its operating costs are just $12.30 per barrel of produced barrel of oil equivalent (BOE).
Some of the top tier companies GeoPark Ltd works with include Cargill BP plc, Morgan Stanley, and JPMorgan Chase & Co.
Solid Q2 Results
For the second quarter ended June 30, 2025, GeoPark delivered solid financial results despite lower oil prices. Revenue slipped to $8.0 million, while average oil and gas production came in at 27,380 BOEPD. Year-to-date consolidated average oil and gas production was 28,223 BOEPD. (Source: “GeoPark Reports Second Quarter 2025 Results,” GeoPark Ltd, August 5, 2025.)
The company’s net loss improved to $10.3 million from $13.1 million in the first quarter. Excluding non-recurring charges, its net profit was up 58% at $20.7 million. The non-recurring charges come from the company divesting itself from non-core assets in Ecuador.
GeoPark’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased 19% on a sequential basis to $71.5 million. The drop was a result of lower realized process and a slight decrease in production volumes. This was partially offset to an eight-percent reduction in production and operating costs, which remain at $12.30 per barrel of produced BOE.
At the end of the second quarter, the company had $266.0 million in cash in hand, while net debt stood at $359.5 million.
Commenting on the results, Felipe Bayon, GeoPark’s chief executive officer, said, “Our second quarter results were slightly ahead of our existing guidance, and we are actively reassessing our portfolio and cost structure, prioritizing capital allocation, divesting non-core assets and exploring new organic and inorganic opportunities to generate value.”
Dividend of $0.147/Share Declared
GeoPark has a long history of returning value to shareholders. Since 2019, it has returned $308.0 million through dividends and buybacks. On the dividend front, the company targets $30.0 million in dividend payouts.
In the second quarter, GeoPark declared a dividend of $0.147 per share, or approximately $7.5 million. This translates to an annual payout of $0.59 per share, for a forward dividend yield of approximately nine percent.
Could GPRK Stock Have 167% Upside Potential?
GPRK stock has been having a rough go of it, down 25% year to date and 23.5% over the last year. However, the stock has been making some moves since bottoming in early April on fears of what a global trade war could do to the economy. Still, GPRK has gone up 21% since then.
Wall Street is bullish on the stock though, expecting GPRK to close in on the December 2019 record high of $18.39 per share. Analysts have provided a 12-month share price target range of $10.40 to $18.00 per share, which points to potential upside of 54% to 167%.
Chart courtesy of StockCharts.com
The Lowdown on GeoPark Ltd
GeoPark Ltd is an E&P energy company with operations in Latin America. It has a strong balance sheet with safety nets in place, reliable cash flow generation, and a dependable quarterly dividend.
In the first half of 2025, GeoPark reported consolidated average oil and gas production of 28,223 BOEPD. By 2028, the company expects to scale production to 70,000 BOEPD; longer-term (2030+), it anticipates that this number to grow to more than 100,000 BOEPD.
Those kinds of growth metrics, coupled with its robust and flexible capital allocation, should help juice GeoPark’s financial results, share price, and dividend payouts.