Independent Latin American oil and gas explorer, GeoPark, saw its natural gas prices and sales decline 38% in the second quarter, Kallanish Energy reports.
The company with operations in Colombia, Chile, Brazil and Argentina said in its Q2 results report that the realized gas price for the April-June period was $2.8 per thousand cubic feet (Mcf). In the same period last year, prices averaged $4.5/Mcf.
Sales of natural gas reached $6.6 million in the quarter, compared with $10.7 million in 2Q19 – a 38.3% drop. GeoPark said its gas revenues shrunk due to the 38% decline in gas prices and flat sales. The figures account for 12% of the company’s total revenue.
The realized gas prices varied in the different markets GeoPark operates. Revenues fell the most in Brazil (66% y-o-y drop). Yet the country featured the highest gas prices in the region at $4.1/Mcf.
Revenues were down 21% y-o-y in Chile, reflecting lower prices at $2.6/Mcf and higher deliveries, thanks to increased production at the Jauke gas field and a new discovery.
In Argentina, gas revenues were 29% lower, with GeoPark experiencing lower realized prices at $2.5/Mcf and slightly fewer sales volumes.
Gas production was 10.8% lower at 26.44 million cubic meters per day (Mmcm/d), from 29.64 Mmcm/d in 2Q19. Overall production declined 6% to 39,912 barrels of oil equivalent per day (Boe/d).
GeoPark said it had to temporary shut-in production “to preserve shareholder value and minimize contractor and employee activity in the fields.”
There were no new wells drilled and limited maintenance activities during the quarter. Production and all drilling and workover operations were suspended, including the shutdown of eight rigs.
During the lowest commodity prices period, GeoPark shut in 6,500-7,500 Boe/d, but as prices strengthened it recovered 70-80% of this volume, the firm said.
Current production is at around 40,000 Boe/d, which is in line with the guidance for this year at 40,000-42,000 Boe/d, with Brent at $35-40/Bbl. Around 88% of GeoPark’s production is oil.
Lower operating profits and higher financial expenses led the company to reporting a $19.9 million net loss in 2Q20, compared to a $31.5 million profit a year earlier.
This post appeared first on Kallanish Energy News.