Breaking Down GeoPark Limited (GPRK) Financial Health: Key Insights for Investors

You are looking at GeoPark Limited and trying to decide if their strategic pivot to the Vaca Muerta formation in Argentina is a true game-changer or just a costly distraction from the core Colombian business. The Q3 2025 financials confirm a company executing a disciplined, high-stakes transition, but the market is still pricing in significant near-term risk. They delivered a strong quarter with an adjusted net profit of $23.4 million, and year-to-date Adjusted EBITDA is already near $230.0 million, showing solid operational cash flow that fully funded the investment program. Their balance sheet is robust, with net debt sitting at a manageable $373.4 million, giving them a low 1.2x leverage ratio. But here's the rub: S&P projects their 2025 full-year EBITDA to drop to approximately $332 million from $443 million in 2024, reflecting the expected dip in Colombian production, so the transition is defintely critical. The street sees a potential upside of up to +33.72% from the current price, but that hinges entirely on the success of the new Argentina growth platform and how they manage the $17.5 million in Q3 capital expenditures going forward. This is a transition play, pure and simple.

Revenue Analysis

You need a clear picture of where GeoPark Limited (GPRK) is making its money, and the short answer is: oil and gas, overwhelmingly from Colombia, but the mix is changing. The trailing twelve months (TTM) revenue ending September 30, 2025, stood at $525.94 million, reflecting a significant contraction in sales compared to the prior year.

This decline is a key point for any investor. The TTM revenue growth rate was a sharp -26.63% year-over-year, and the Q3 2025 sales of $125.09 million were down -21.58% from the same quarter in 2024. That's a serious headwind, driven by a combination of lower realized oil prices, reduced production volumes, and strategic divestments. Honestly, you need to understand the source of this dip before making any defintely long-term moves.

Primary Revenue Sources and Regional Contribution

GeoPark Limited's revenue is nearly 100% derived from the sale of crude oil and natural gas, and it's heavily concentrated geographically. For the last twelve months ending September 30, 2025, the vast majority of revenue came from a single country. Here's the quick math on the segment breakdown:

• Colombia: $494.72 million
• Ecuador: $25.52 million
• Brazil: $3.84 million
• Corporate/Other: $1.86 million

Colombia contributes over 94% of the total TTM revenue, primarily through its core Llanos 34 and CPO-5 blocks. This high concentration means the company is highly sensitive to regulatory changes, operational issues, or price volatility in that single region.

Shifting Portfolio and Near-Term Risks

The revenue streams are in a period of transition, which maps directly to your risk/opportunity analysis. GeoPark Limited is actively transforming its portfolio, moving away from non-core assets while scaling a new growth platform. For example, in Q2 2025, the company divested its working interest in the Perico and Espejo Blocks in Ecuador, which will reduce future revenue from that region but also streamline operations.

The biggest change, though, is the strategic acquisition of four unconventional hydrocarbon blocks in Argentina's Vaca Muerta formation, which became effective in mid-2024. This is a massive play to diversify and scale a new growth platform outside of Colombia. The long-term strategic plan, outlined in October 2025, targets an Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization-a key measure of operating cash flow) between $520 million and $550 million by 2030, a clear signal that management expects this new segment to drive substantial future revenue and profit growth.

What this estimate hides is the execution risk in developing a new, transformational asset like Vaca Muerta. It's a high-reward move, but it requires significant capital expenditure-an estimated $17.5 million was spent on CapEx in Q3 2025 alone, focused on maintaining and improving production in the core Colombian assets. You can read more about the company's financial health and valuation in our full post: Breaking Down GeoPark Limited (GPRK) Financial Health: Key Insights for Investors.

Profitability Metrics

You need to know if GeoPark Limited (GPRK) is turning its oil and gas sales into real profit, and the short answer is yes, with robust margins that point to strong operational control, even as the broader market tightens. For the third quarter of 2025 (3Q2025), GeoPark Limited reported a Revenue of $125.1 million and an Adjusted Net Profit of $23.4 million, excluding a non-recurring $7.5 million exploration write-off. That's a solid bottom line.

Here's the quick math on their core profitability ratios for 3Q2025, which are the clearest indicators of their financial health right now:

• Gross Profit Margin: Industry analysis suggests GeoPark Limited maintains an impressive gross profit margin, hitting around 74% in 2Q2025. This shows their direct cost of production (lifting costs) is very low relative to revenue.
• Operating Profit Margin: The reported Operating Profit of $32.4 million in 3Q2025 translates to an Operating Margin of approximately 25.9%. This margin accounts for depreciation and amortization, providing a clearer picture of core business efficiency before interest and taxes.
• Net Profit Margin: The adjusted Net Profit Margin for 3Q2025 stands at roughly 18.7% (calculated from the adjusted $23.4 million net profit on $125.1 million revenue). This is the final take-home percentage after everything.

Trends and Operational Efficiency

Looking at the trend, GeoPark Limited's profitability is high-quality, driven by disciplined cost management. The company's Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin was 60% in 2Q2025, which then moderated slightly to 57% in 3Q2025. This small dip is normal in the volatile energy sector, but a margin consistently above 50% is a sign of a highly efficient, low-cost producer, especially in their core Colombian assets.

Operational efficiency is defintely a strength. Their operating costs remained stable and competitive at $12.5 per barrel of produced oil equivalent (boe) in 3Q2025, in line with their market guidance. This stable, low-cost structure is what allows them to maintain such a high gross margin, even with realized oil prices around $57.1/bbl in the quarter. That's a huge competitive advantage.

Industry Comparison: GeoPark vs. Peers

When you stack GeoPark Limited up against the wider Exploration & Production (E&P) industry, their profitability holds up well, especially when considering the inherent volatility of the sector. The Trailing Twelve Months (TTM) average Operating Margin for the broader Oil & Gas sector is around 28.73%. While GeoPark Limited's 3Q2025 Operating Margin of 25.9% is slightly below that average, their adjusted Net Profit Margin of 18.7% is strong, demonstrating effective management of non-operating expenses like interest and taxes, which is crucial for a Latin American operator.

The key takeaway is that GeoPark Limited is a high-margin business in a cyclical industry, but their cost control provides a significant buffer. You can dive deeper into their strategy and risks in the full post: Breaking Down GeoPark Limited (GPRK) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

You need to know how GeoPark Limited (GPRK) is funding its growth, and the simple answer is: heavily through debt, especially when compared to its peers. The company's financial structure is highly leveraged, a strategy that amplifies returns when oil prices are high but also increases risk significantly during downturns.

GeoPark Limited's most recent balance sheet data from June 2025 shows total debt at approximately $625.6 million. This financing is predominantly long-term, which is typical for a capital-intensive industry like oil and gas. For a clearer picture, as of the end of the third quarter of 2025 (3Q2025), the company reported a Net Debt of $373.4 million, reflecting a strong cash position of $197.0 million. This cash buffer is crucial.

Here's the quick math on leverage: GeoPark Limited's Debt-to-Equity (D/E) ratio currently stands at about 2.92. To be fair, you have to compare this to the industry. The average D/E ratio for the Oil & Gas Exploration & Production (E&P) industry is much lower, around 0.49. This means GeoPark Limited uses nearly six times more debt relative to its equity than the average E&P company. This high leverage is reflected in a Net Leverage Ratio (Net Debt/Adjusted EBITDA) of 1.2x at the end of 3Q2025, which is manageable but on the higher end for a growth-focused E&P firm.

The company has been very active in managing its debt profile this year. In January 2025, GeoPark Limited successfully issued $550.0 million in Senior Notes due January 31, 2030, with a coupon of 8.750%. This move was a strategic refinancing, using the proceeds to repurchase $405.3 million of the company's 2027 notes, effectively pushing out the majority of its principal debt maturities until January 2027. They've also been proactive in reducing the new debt, repurchasing and cancelling an additional $108.3 million of the 2030 Notes between June and October 2025.

The company's debt financing strategy is clear: use long-term debt to fund capital-intensive projects and acquisitions, but aggressively manage the debt load with free cash flow. This is a classic growth-via-leverage model. The 2030 Notes carry a credit rating of B+ from both S&P and Fitch, which is non-investment grade, signaling higher risk but also higher potential returns if their growth strategy pays off. The balance is a trade-off: debt provides immediate capital without diluting shareholders, but that 2.92 D/E ratio is a flashing light for interest rate and oil price sensitivity.

• Debt-to-Equity ratio of 2.92 is significantly higher than the E&P industry average of 0.49.
• No material principal debt maturities are due until January 2027.
• The company's Net Debt is $373.4 million as of 3Q2025.

To understand what this capital allocation means for your stake, you should read more about Exploring GeoPark Limited (GPRK) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You're looking for a clear signal that GeoPark Limited (GPRK) can handle its short-term bills and still fund its growth, and honestly, the Q3 2025 numbers show a rock-solid liquidity position. The company isn't just surviving; it's generating substantial cash flow while actively cleaning up its balance sheet, which is defintely a strong sign for investors.

In the oil and gas sector, you want to see a healthy buffer against commodity price swings. GeoPark's latest metrics indicate they have more than enough liquid assets to cover their immediate obligations, a key strength as they expand into new areas like Vaca Muerta, Argentina.

Assessing GeoPark Limited (GPRK)'s Liquidity Ratios

A quick look at the liquidity ratios tells the story of GeoPark's near-term financial health. The Current Ratio (current assets divided by current liabilities) for the most recent quarter (MRQ) stands at a strong 2.63. This means GeoPark has $2.63 in short-term assets for every dollar of short-term debt. A ratio over 1.0 is good; over 2.0 is excellent, especially in an industry with capital-intensive operations.

The Quick Ratio (or acid-test ratio), which strips out inventory-often less liquid for an oil producer-is also impressive at 1.94. This high ratio confirms that even without selling off their oil inventory, GeoPark has nearly twice the highly liquid assets needed to pay off all their current liabilities. That's a huge cushion.

Cash Flow and Working Capital Trends

Working capital trends are looking very positive, primarily driven by robust cash generation. GeoPark ended the third quarter of 2025 with $197.0 million in cash. This level of cash in hand gives them significant financial flexibility to manage operations and pursue growth without immediate external funding pressure.

Here's the quick math on their cash flow generation and use over the trailing twelve months (TTM) leading up to Q3 2025:

• Operating Cash Flow (TTM): $161.35 million.
• Free Cash Flow (TTM): $49.90 million.

The company is generating strong operating cash flow, which is the lifeblood of any business. This cash generation fully funded their Q3 2025 capital expenditures of $17.5 million and still left a significant amount for debt reduction and shareholder returns. That's the definition of a self-funding business model.

Financing Activities and Liquidity Strength

The financing side of the cash flow statement shows GeoPark actively strengthening its capital structure. Between June and October 2025, they repurchased $108.3 million of their 2030 Notes below par. This move alone generates $9.5 million in annual cash savings, which is a smart use of excess cash. Plus, they have no principal debt maturities until 2027, giving them a clear runway for the next few years.

The net leverage ratio (Net Debt to Adjusted EBITDA) is a low 1.2x as of the end of Q3 2025, reflecting a robust capital structure. This low leverage and high liquidity means the risk of a near-term liquidity crunch is minimal. For a deeper dive into who is betting on this financial strength, you should check out Exploring GeoPark Limited (GPRK) Investor Profile: Who's Buying and Why?

Valuation Analysis

You're looking at GeoPark Limited (GPRK) and asking the core question: is this stock priced fairly? Based on its current trading multiples in November 2025, the market seems to be pricing in significant near-term risk, suggesting a potential undervaluation compared to its historical averages and sector peers. It's a classic deep value situation, but you must be comfortable with commodity cyclicality.

The stock has seen a wild ride over the last 12 months, trading in a 52-week range of $5.66 to $11.72. As of November 2025, GeoPark Limited (GPRK) is trading near the $7.70 to $8.01 mark, which is a significant pullback from its yearly high. This price action reflects the volatility typical of the exploration and production (E&P) sector, plus some company-specific concerns.

Here's a quick look at the core valuation metrics using trailing twelve months (TTM) and forward-looking data for the 2025 fiscal year:

• Price-to-Earnings (P/E): The TTM P/E is around 11.78, but the forward P/E (based on 2025 earnings estimates) drops sharply to about 6.42. This suggests analysts expect a strong bounce in profitability, or the stock is defintely cheap on a forward basis.
• Price-to-Book (P/B): At approximately 1.91, the P/B ratio indicates the stock is trading for less than two times its net asset value, which is reasonable for an E&P company with proven reserves.
• Enterprise Value-to-EBITDA (EV/EBITDA): This is the most compelling metric. The TTM EV/EBITDA is very low, sitting at about 2.72. For context, the industry median is often much higher, sometimes over 7.0. A multiple this low strongly signals potential undervaluation, as the market is paying very little for the company's operating cash flow (EBITDA).

To be fair, the market is usually right to discount a stock this heavily. The low EV/EBITDA multiple points to investor skepticism about the sustainability of GeoPark Limited's (GPRK) earnings before interest, taxes, depreciation, and amortization (EBITDA), likely due to fluctuating oil prices and geopolitical risks in their operating regions like Colombia.

The dividend picture is straightforward. GeoPark Limited (GPRK) is currently paying a quarterly dividend of $0.03 per share, which annualizes to $0.12. This translates to a forward dividend yield of roughly 1.5%. Crucially, the dividend payout ratio is a conservative 18.46%. This low payout ratio suggests the dividend is well-covered by earnings, leaving plenty of cash flow for capital expenditures and debt reduction. One clean one-liner: The dividend is safe, but the yield isn't why you buy this stock.

Analyst sentiment is mixed, which is often the case for value plays. The consensus rating swings between a 'Hold' (MarketBeat) and a 'Buy' (Investing.com). The average 12-month price target from analysts is around $10.42. Here's the quick math: trading at ~$8.00 today, a move to the average target represents an upside of over 30%, which aligns with the deep value signal from the EV/EBITDA ratio.

What this estimate hides is the commodity price risk. If oil prices drop significantly, the forward earnings estimates and the price target will fall with them. For a deeper dive into the operational risks and opportunities, you should check out the full post at Breaking Down GeoPark Limited (GPRK) Financial Health: Key Insights for Investors. Your next step should be to model the impact of a $10/barrel drop in oil price on that $10.42 price target.

Risk Factors

You're looking at GeoPark Limited (GPRK) and seeing the growth potential in Vaca Muerta, but you need to understand the near-term risks that could affect your investment thesis. Honestly, the biggest challenge for GPRK in 2025 is managing a temporary production dip in their core assets while funding a massive strategic pivot.

The company is undergoing a significant transition, and while the long-term outlook is strong, the next few years involve navigating some tricky operational and financial waters. It's a classic high-reward, high-risk scenario, and the numbers from the 2025 fiscal year filings make this clear.

• Operational Risk: Colombian Production Decline. The most immediate operational headwind is the expected decline in production from GeoPark's core Colombian assets. S&P Global Ratings projects GeoPark's consolidated production to decrease to around 27,000 barrels of oil equivalent per day (boe/d) in 2025, down from 34,000 boe/d in 2024. This drop, primarily from Colombia, puts pressure on cash flow until the new Argentine assets ramp up. GeoPark's base production is temporarily shrinking.
• Strategic Risk: Vaca Muerta Execution and Capital Intensity. The strategic move into Argentina's Vaca Muerta is a game-changer, but it comes with a high price tag and execution risk. The development plan for the new blocks requires a gross investment of $500-$600 million through 2028. This intense capital spending is why the company's revised dividend program will be suspended after the third quarter of 2026, redirecting shareholder returns into growth.
• Financial Risk: Elevated Leverage and Liquidity. While GeoPark's liquidity is adequate, the debt profile carries a warning sign. The company's debt-to-equity ratio is high at 3.2x, suggesting a heavy reliance on debt financing. More concerning is the reported Altman Z-Score of 1.34 as of October 2025, which places the company in the 'distress zone,' implying a possibility of financial distress in the next two years. Here's the quick math: the projected 2025 Adjusted EBITDA of approximately $332 million (S&P forecast) is lower than the initial guidance of $350 million to $430 million, which tightens the margin for error.

External factors, especially the volatile nature of the oil and gas business, are always present. Geopolitical instability in Latin America, where GeoPark operates across Colombia, Argentina, Brazil, and Ecuador, remains a constant threat. Plus, the recent halting of the CPO-9 block acquisition in Colombia, due to Ecopetrol's exercise of preemptive rights, highlights the regulatory and partner risk inherent in the region.

To be fair, GeoPark has clear mitigation strategies. They are proactively managing oil price volatility by hedging approximately 50% of their estimated average 2025 production with price floors between $68 and $70 per barrel. They also strengthened their balance sheet by repurchasing $108.3 million in aggregate principal of their 2030 Notes between June and October 2025, reducing annual cash coupon savings by $9.5 million. That's defintely a smart move to optimize their capital structure and push out maturities.

For a deeper dive into the company's financial standing, you should review our full analysis at Breaking Down GeoPark Limited (GPRK) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking for where GeoPark Limited (GPRK) can actually grow, and the answer is a classic two-part strategy: a stable cash-cow base funding a major, transformational expansion. The company's near-term growth is anchored by its core assets in Colombia, but the big, long-term opportunity is the Vaca Muerta shale in Argentina.

The strategic shift is clear: use the high-margin, low-risk production from blocks like Llanos 34 and CPO-5 in Colombia to fund the capital-intensive ramp-up in unconventional resources (shale) in Argentina. They even streamlined their portfolio in 2025, divesting non-core assets like the Llanos 32 and Manati gas field, which is defintely a smart move to focus capital.

Here's the quick math on their strategic initiatives:

• Primary Growth Driver: Scaling the Vaca Muerta operation in Argentina, which GeoPark officially took over in October 2025.
• Core Cash Engine: Maintaining high-margin, stable production in Colombia, the backbone of their cash flow.
• Drilling Success: A market-leading drilling success rate of 81% in their core areas, which keeps exploration capital efficient.

2025 Financial Outlook and Projections

The company's financial projections for the 2025 fiscal year reflect a period of disciplined investment before the Vaca Muerta growth truly kicks in. For the full year 2025, GeoPark Limited has a production guidance of 26,000-28,000 barrels of oil equivalent per day (boepd). This is supported by a revised, more focused capital expenditure (CAPEX) guidance of $90 million to $120 million.

The adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the year is projected to be between $350 million and $430 million, assuming Brent crude prices of $70 to $80 per barrel. We saw strong operational performance in Q3 2025, with Adjusted EBITDA at $71.4 million and a 57% margin. For investors, one analyst estimate for 2025 earnings-per-share (EPS) is around $1.30.

What this estimate hides is the long-term vision. The October 2025 strategic plan targets consolidated production of 42,000-46,000 boepd by 2030, with an Adjusted EBITDA of $520-$550 million. That's a clear signal of an expected material step-change in scale after the current investment phase.

Competitive Edge: Low-Cost Production

In the volatile commodity business of oil and gas, a low-cost structure is the ultimate competitive advantage, and GeoPark Limited has it. Their operating costs per produced barrel of oil equivalent (boe) averaged a competitive $12.5 per barrel in Q3 2025. This means they are a resilient, low-cost producer, with approximately 90% of their production remaining cash flow positive even if Brent prices drop as low as $25-$30 per barrel.

This financial strength is also reflected in their balance sheet. They ended Q3 2025 with a strong current ratio of 2.47, meaning liquid assets easily cover short-term obligations. Plus, they've been proactive on debt, repurchasing $108 million face value of their 2030 Senior Notes, which saves them $9.5 million annually in interest. That's disciplined capital management in action.

To dig deeper into the company's financial structure, you should read the full analysis: Breaking Down GeoPark Limited (GPRK) Financial Health: Key Insights for Investors.

Next Step: Review the Q4 2025 Work Program and Investment Guidelines once released to confirm the initial capital deployment schedule for the Vaca Muerta assets.