By: Jon Costello
GeoPark (GPRK) has changed considerably over the past year. Its operational outlook has improved, its growth opportunities have expanded, and the company’s potential value if management executes successfully is substantially greater than it was before.
The proposed acquisition of Venezuela’s Bare Block adds another dimension to that upside. Bare is a massive, already-producing resource with a relatively straightforward path to materially higher production over the next several years. Management believes the transaction could help take GeoPark from roughly $280 million of Adjusted EBITDA in 2025 to around $1.2 billion by 2030 at $75 Brent. Those numbers deserve to be taken seriously.
Despite the positives, more potential upside doesn’t necessarily make a stock easier to value.
The Old Valuation No Longer Fits
In January, I estimated that GeoPark shares could be worth roughly $21 if management delivered on its development plan, using a 3x EV/EBITDA multiple. At the time, I expected Vaca Muerta to be the company’s principal growth investment.
That framework no longer describes the company. On September 2, GeoPark agreed to acquire the remaining 95% of a holding company with rights to develop Venezuela’s Bare Block. The consideration is at least 42.1 million newly issued shares and could rise to 47.6 million, while Grupo Gilinski would emerge with more than 56% of the company and control it.
Bare could prove enormously valuable. But the transaction also significantly increases the share count, introduces a controlling shareholder, creates a new capital program, and adds a long-duration Venezuelan asset. I therefore no longer have enough confidence in my old $21 estimate to rely on it.
From Vaca Muerta to a Broader Capital Program
The broader scope of GeoPark’s capital program adds another layer of valuation uncertainty. Less than a year ago, the company’s growth plan centered on Vaca Muerta. In December, GeoPark projected $190 million to $220 million of 2026 capital spending, including $80 million to $100 million for Vaca Muerta.
Bare now adds another substantial, long-duration development program, and management has indicated that it may pursue further opportunities in Venezuela, Colombia and Argentina. GeoPark therefore has a broader—and potentially much larger—capital program than shareholders were evaluating less than a year ago.