GeoPark Limited GPRK recently announced that it would not be able to move ahead with the planned acquisition of the CPO-9 block in Colombia because Ecopetrol S.A. EC exercised its preemptive rights. Under the Joint Operating Agreement, EC, the operator of the block with a 55% working interest, had the preemptive right to acquire the remaining 45% non-operated interest held by Repsol, S.A. REPYY.
GPRK’s initial acquisition plan dates back to Nov. 29, 2024, when the company made an announcement to obtain REPYY’s upstream oil and gas assets in Colombia.
As a leading energy company in Latin America, GeoPark, carrying a Zacks Rank #3 (Hold) at present, had announced the acquisition of a 45% working interest in the CPO-9 Block and a 25% working interest in SierraCol Energy Arauca LLC.
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Per its ambitious “North Star” strategy, GPRK had the target to acquire high-valued and advantaged assets in the Llanos Basin to deliver a highly profitable and sustainable portfolio across Latin America. The proposed acquisition was also about boosting the company’s production and cash flow levels.
However, the invocation of preemptive rights by Ecopetrol, a leading petroleum company focused on identifying opportunities within the eastern Llanos Basin of Colombia,shifts the asset’s trajectory.
Although the acquisition of the CPO-9 block has been interrupted by the EC, GPRK retains its option to acquire another venture. The company is still eyeing a 25% stake in SierraCol Energy Arauca LLC, located in the Arauca Department, where the partners are yet to exercise their preemptive rights, leaving an option with GeoPark to proceed with its acquisition.
The Arauca acquisition will align with GPRK’s strategy to strengthen its presence in Latin America’s dynamic energy sector. With a strong financial structure, the company is well positioned to pursue strategic acquisitions.
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Ecopetrol S.A. (EC) : Free Stock Analysis Report
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Publish date : 2025-01-01 21:52:00
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