GeoPark Limited, the leading oil and gas company headquartered in Chile, has confirmed that it has entered into an agreement to buy the interest of LG International Corporation (LGI) in GeoPark’s Chilean and Columbian subsidiaries and operations. GeoPark, for the record, is an independent oil and gas explorer, operator and consolidator that has operations in Argentina, Brazil, Chile, Colombia, and Peru.
Reportedly, this acquisition deal will elevate the equity interest of GeoPark in its Colombian and Chilean businesses to 100%, besides helping it streamline organizational, financial tax and cost structures. Its businesses in Chile and Columbia are comprised of several hydrocarbon blocks along with associated oil and gas production and reserves, including the GeoPark-operated Llanos 34 block in Columbia.
GeoPark’s Chief Executive Officer, James F. Park was quoted saying that LGI has proven to be an exceptional strategic partner for the company over the last eight years. Its guidance and support played a vital role towards developing the company’s regional portfolio of assets early, as well as for the tremendous growth it achieved in recent years.
Park is confident that the company’s relationship with LG will continue to develop and will create additional opportunities in the future. GeoPark has increased its ownership in key operating businesses with this deal, which will generate more income to improve its bottom line, he further added.
According to the reports, the cost of acquisition involves a fixed payment of $81 million to be paid when the deal is closed. There would further be two additional and equal installments of $15 million each, which will be paid in June 2019 and June 2020, respectively.
Three contingent payments could also be made over a course of three years, valued at $5 million each, on the conditions of specified production thresholds being exceeded. The transaction is expected to be closed by November 28, 2018.