GeoPark to Acquire Bare Block Interest in Venezuela

Cleary Gottlieb is representing GeoPark Limited (GeoPark) in connection with its agreement to acquire Grupo Gilinski’s interest in the Bare Block, a large-scale producing heavy oil asset located in Venezuela’s Orinoco Heavy Oil Belt.

The transaction will result in GeoPark acquiring 100% interest in the holding company through which the Bare Block interest is held. In consideration for the acquisition, GeoPark will issue approximately 42.1 million common shares to an entity affiliated with Grupo Gilinski, subject to an adjustment mechanism that could result in the issuance of up to approximately 5.4 million additional shares.

Upon completion of the acquisition, Grupo Gilinski is expected to hold approximately 56.3% of GeoPark’s outstanding common shares. The transaction also provides for Grupo Gilinski to launch a tender offer following closing to purchase GeoPark shares at $12.22 per share, subject to maximum aggregate consideration of $100 million.

The transaction marks GeoPark’s strategic entry into Venezuela at a time of significant change in the country’s oil sector, following recent reforms designed to expand private participation and attract new investment. The Bare Block is a producing heavy oil asset with approximately 15.7 billion barrels of original oil in place and approximately 1,100 existing wells. Its redevelopment will be undertaken under Venezuela’s new Production Participation Contract (CPP) framework pursuant to a 25-year CPP with PDVSA Petróleo S.A.

GeoPark is a leading independent energy company with more than 20 years of operations across Latin America and existing key positions in Colombia and Argentina.

For more information, please see the press release.

The Cleary team was led by partners Juan Giraldez and Claire Schupmann and associate Isabella Dominguez. The OFAC advisory team was led by partner Samuel Chang and associates B.J. Altvater and Alexi Stocker. Partner Duane McLaughlin and associate Alex Patterson advised on finance matters.