The saga between Geopark and Parex doesn’t seem to have an end, at least in the short term. Back in October, it became public that Parex had presented an offer to acquire Geopark at USD 9 per share, or USD 464m in total, accusing the target’s board of not responding to the offer. At the time, Parex had already acquired 11.8% of Geopark’s shares. Geopark responded that it was engaged in negotiations, basically denying Parex’s claim that it wasn’t taking the offer seriously.

Later, Geopark said it had thoroughly analyzed the offer and found that it didn’t reflect the true value of the company, especially after the acquisition of assets in Argentina. Things then cooled off for a bit.

On 30 January, Geopark and Frontera Energy announced they had entered into an agreement in which Geopark would acquire Frontera E&P assets for USD 375m in cash plus up to USD 25m if certain milestones were accomplished. The Frontera 2028 bonds went up from the low 70s to the high 80s and US over-the-counter shares rose from USD 4.85 to the mid USD 7s.

Fast-forwarding to 23 February, Parex announced it had submitted an unsolicited bid to acquire the same assets Geopark wanted to buy from Frontera, but for USD 500m (USD 125m more than Geopark), plus the same USD 25m for the additional milestones. Frontera 2028s are now trading in the mid-90s and the shares are up to the mid USD 8s.

Who could make the purchase more easily and how it would look

Looking back at our report on Parex trying to acquire Geopark, Parex is much larger than Geopark, and has far superior credit metrics. Therefore, Parex has much deeper pockets and can either get Frontera or make Geopark significantly up its bid.

At a glance, Parex is 60%-70% bigger than Geopark. Parex’s revenue and LTM 9M25 adj. EBITDA are ~70% larger than Geopark’s, while in terms of Colombian production, it produces ~60% more. As of 30 September 2025, Parex had negative net debt, versus USD 400m for Geopark.

Geopark’s net leverage as of 30 September 2025 was 1.3x, and this figure didn’t include capex for the ramp-up and expansion of the operation in Argentina, which will require several hundred million dollars. With the USD 330m committed amount from the prepayment facility with Vitol, Geopark’s pro-forma net leverage would only rise to 1.5x thanks to Frontera’s E&P assets carrying a relatively low leverage (0.6x). However, if Geopark is forced to increase its bid to match Parex’s, the pro-forma net leverage would go to 1.7x (Table 1).

If Parex is the acquirer, however, its pro-forma net leverage would be half, or just 0.8x. Considering its heavy Argentine capex plan, Geopark increasing its bid could potentially put it in a delicate position going forward, especially in this low oil price environment.

In terms of production, either transaction would create, by far, the largest independent oil producer in Colombia. Based on LTM September 2025 data, Sierracol and Parex are tied for first place among independent producers, with 5.8% each. Although the list is not exhaustive, among the international bond issuers there is Frontera with 5.3%, Gran Tierra with 3.8% and Geopark with 3.6%. If Geopark gets Frontera, its market share would more than double to 8.9%, but if Parex gets it, their share would go up to 11.1% (Table 2 and 3).

Parex turns up the heat against Geopark to be the consolidator

On 20 February, Parex disclosed had it acquired an additional 100 shares of Geopark on 17 February and that it intends to nominate six Geopark board members. With this, Parex is putting pressure on Geopark on two fronts: competing for Frontera, while keeping the pressure to acquire Geopark.

Since Parex announced its intention to acquire Geopark, the former Chile-based company only briefly traded about USD 9 a share on 30 January when it announced the deal to acquire Frontera. Geopark’s shares are trading in the mid 8s.

The Colombian E&P space has been very fragmented for years. Some people we’ve spoken to attributed this to ego, where every participant thinks their company is worth more than it actually is. The result? The market capitalization of all companies has plummeted over the years. Now, with the eyes on a change in government in Colombia, many are trying to consolidate, and in that regard, Parex has the best balance sheet to do it.

Parex is all-in on Colombia. First, it only has assets in that country. Second, it is bidding both for Frontera’s E&P assets and for Geopark. Third, it signed an agreement with state-controlled oil firm Ecopetrol for capex commitments of USD 350m in the coming years.

If Parex manages to acquire Frontera’s E&P assets in Colombia and Geopark, it could become a giant with ~15% market share in oil, which could surely increase further with the production coming from a 50/50 JV with Ecopetrol. Net leverage including both acquisitions is “just” 1.3x, which could decline further if they sell Geopark’s Argentina assets (Table 4).

In addition to a potential international bidder for Sierracol’s assets, another question that arises for Colombia’s E&P space is: what happens with Gran Tierra’s Colombian assets? Gran Tierra acquired assets in Canada in 2024, in Ecuador in 2025 and more recently in Azerbaijan this year. Maybe it’s a good time to sell Colombia. Net leverage has increased significantly lately, so unloading the Colombian assets would definitely help.

Disclaimer:

This report should not be relied upon to make investment decisions. Furthermore, this report is not intended and should not be construed as investment advice. ION Analytics does not provide any investment advice, and clients should consult with their own financial advisor for matters requiring investment advice. All information is sourced from either the public domain or ION Analytics data or intelligence, and ION Analytics cannot and does not verify or guarantee the adequacy, accuracy or completeness of any source document. No representation is made that it is current, complete or accurate. The information herein is not intended to be used as a basis for investing and does not constitute an offer to buy or sell any securities or investment strategy. The information herein is for informational purposes only and ION Analytics accepts no liability whatsoever for any direct or consequential loss arising from any use of the information contained herein.