GeoPark Limited, a prominent independent explorer and operator, has inked a pivotal offtake and prepayment agreement with Vitol, the global energy and commodity powerhouse.
According to a press release, Under the terms of the agreement, GeoPark will supply Vitol with a minimum of 20,000 barrels of oil per day from the prolific Llanos 34 Block, enhancing the company’s revenue by $0.15 per barrel—a substantial improvement over the current contract and a $0.60 increase compared to average realizations since January 2021. This strategic partnership is set to commence on July 1, 2024, and will extend for a period ranging from 20 to 36 months.
This deal marks a financial windfall for GeoPark, granting them immediate access to up to $300 million in funding from Vitol, with the potential to augment this amount by an additional $200 million, totaling a staggering $500 million. These funds, earmarked for future oil sales, will be available until June 30, 2025, and come with the flexibility of penalty-free repayment through future oil deliveries or prepayment.
The financing terms are highly competitive, with an interest rate pegged to the SOFR risk-free rate plus a 3.75% annual margin.
GeoPark’s enhanced commercial standing and the advantageous financing options secured through this deal are poised to inject immediate value into the company and broaden its horizons for future expansion.
Vitol, with over 55 years of experience and a robust operational footprint in Colombia and Latin America, reaffirms its status as a leading entity in the energy sector through this agreement.