GeoPark Ltd (NYSE:GPRK) gets a 'buy' rating from broker Eight Capital on Monday after news it has inked a joint venture with an affiliate of CEPSA SAU for new "high-potential" exploration acreage in the Llanos Basin in Colombia.
The Tiple Block acreage is adjacent to GeoPark’s prolific Llanos 34 Block, and covers around 21,000 acres with full 3D seismic coverage.
GeoPark will pay 100% of one well, which will cost between US$7 and US$8mln to earn 85% and operatorship upon commercial discovery. The well is scheduled for the first half of 2018.
GeoPark has discovered more than 230mln barrels of oil, 3P gross and increased production from zero to over 50,000 barrels of oil per day gross in less than five years within the basin.
“This is a meaningful addition to our large oil and gas acreage inventory because of its geographic and geologic proximity to our rapidly-growing and highly-successful Llanos 34 Block,” said James F. Park, the chief of GeoPark.
Eight Capital analyst Ian Macqueen noted: "Positive news out of GPRK but until a discovery is made we have no basis to attribute value to this potential land acquisition."
The analyst has a price target of US$14.25 on the shares, which is a good distance from where they are now - at US$8.40 - up 0.24%.