Latin American oil and gas explorer GeoPark has renewed its offtake and prepayment agreement with Vitol to supply all its crude oil production from Colombia’s Llanos basin.
Originally established in May 2024, the agreement involved the sale and delivery of a minimum of 20,000 barrels of oil per day (bopd) from the Llanos 34 block.
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The extension is currently set to expire on 31 December 2028. It covers production from the Llanos 34 block, where GeoPark holds a 45% working interest, as well as the Llanos 123 block with a 50% working interest, and the CPO-5 block, in which GeoPark has a 30% non-operated working interest.
Deliveries under the new terms will commence in January 2026 for Llanos 34, and in May 2026 for CPO-5 and Llanos 123.
This marks a continuation of the companies’ collaboration, which was originally scheduled to end in June 2027.
The revised agreement is expected to enhance GeoPark’s price realisations by $0.33 per barrel on a weighted-average basis compared to the company’s recent six-month average.
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By GlobalDataThis adjustment aims to improve profit margins and cash flow predictability by reverting weighted-average netbacks to levels observed in 2020.
Additionally, GeoPark will benefit from a prepayment facility provided by Vitol, which offers up to $500m (SFr383.6m), including a firm commitment of $330m with an option to increase by $170m through prepaid future oil sales over the contract period.
The financial structure of the facility allows borrowing without mandatory repayment obligations, permitting GeoPark to repay through future oil deliveries or prepayments without penalty.
Interest rates for borrowed amounts are based on a one-month secured overnight financing rate plus a margin of 3.50% per annum, reflecting a reduction from previous terms.
Vitol’s funding availability extends until 30 June 2027, contingent on certain criteria being met.
The agreement is part of GeoPark’s strategy to bolster financial resilience and flexibility amid current market conditions, while supporting strategic objectives for the years 2026–28.
In 2025, GeoPark announced the divestment of non-core assets and the implementation of cost-effective initiatives.
