SCHEDULE: Parex Bids $9/Share for GeoPark, Citing Argentina Risk

Parex Resources Inc. has publicly announced an all-cash offer to acquire GeoPark Limited for US$9.00 per share, representing a significant premium, after GeoPark's board rejected the proposal and pursued a high-risk Argentine investment.

Summary

• Parex Resources Inc. submitted an all-cash proposal to acquire all outstanding common shares of GeoPark Limited for US$9.00 per share.
• GeoPark's Board of Directors rejected this proposal and refused to engage constructively with Parex.
• Parex has acquired an 11.8% ownership stake in GeoPark, just below the threshold of GeoPark's Shareholder Rights Plan.
• The proposal represents a 44% premium to GeoPark's share price on September 3, 2025, a 51% premium to its share price on October 21, 2025, and a 38% premium to its 90-day volume-weighted average share price as of October 28, 2025.
• The total value for GeoPark is approximately US$940 million, including net debt.
• Parex believes its proposal offers immediate, compelling, and certain value, allowing GeoPark shareholders to avoid risks associated with GeoPark's recently announced Argentine investment.
• Parex intends to review its investment and may increase/decrease its position, enter hedging transactions, or requisition a special meeting of GeoPark shareholders to replace the board.

Sentiment

Score: 8

Explanation: The filing presents a strong, assertive stance from Parex, highlighting a significant premium offer and criticizing GeoPark's board for rejecting it and pursuing a risky alternative. The tone is confident in its proposal's value and strategic benefits, indicating a positive outlook from Parex's perspective regarding the potential acquisition.

Positives

• Offers GeoPark shareholders a significant premium: 44% over September 3, 2025 closing price, 51% over October 21, 2025 closing price, and 38% over 90-day VWAP as of October 28, 2025.
• Provides immediate, compelling, and certain value to GeoPark shareholders through an all-cash offer of US$9.00 per share.
• Allows GeoPark shareholders to avoid the significant risks associated with GeoPark's recently announced capital-intensive, early-stage Argentine investment.
• The proposed total value of approximately US$940 million, including net debt, meaningfully exceeds the value of GeoPark's Colombian proved plus probable reserves based on its 2024 year-end disclosure.
• Parex is in a strong financial position and the transaction would not be subject to a financing condition.

Negatives

• GeoPark's Board of Directors has refused to engage constructively with Parex regarding the proposal.
• GeoPark's Board summarily rejected the all-cash offer without a convincing explanation.
• GeoPark proceeded with a capital-intensive, early-stage investment in Argentina, which Parex views as entailing significant spending, high debt levels, and execution risk.
• GeoPark implemented a Shareholder Rights Plan on June 3, 2025, which Parex acquired its stake just below.
• This is the second time in four years that GeoPark has failed to engage on a transaction following a formal approach from Parex.

Risks

• GeoPark's recently announced capital-intensive, early-stage investment in Argentina entails significant spending, high debt levels, and execution risk.
• Uncertainties exist regarding whether any definitive offer will be made by Parex or accepted by GeoPark, or if any agreement will be entered into.
• The outcome of any discussions between Parex and GeoPark could result in materially different terms for a potential transaction.
• Risks related to the completion, timing, and potential benefits of the proposed combination, including the possibility that the combined company may not achieve expected synergies or operating efficiencies.
• Integration of GeoPark's operations with Parex could be more difficult, time-consuming, and costly than expected.
• Risk that GeoPark's reserves estimates and net debt position are different than publicly announced.
• General economic conditions, commodity price volatility, regulatory changes, competition, and country-specific risks in Canada and Colombia.

Future Outlook

Parex Resources Inc. intends to continuously review its investment in GeoPark Limited. Depending on various factors, including potential discussions with GeoPark's Board, GeoPark's financial position, market conditions, and other investment opportunities, Parex may increase or decrease its stake, engage in hedging activities, or requisition a special meeting of GeoPark shareholders to replace all or part of the Board. Parex remains ready and willing to engage with GeoPark to finalize the proposed acquisition.

Management Comments

• "Our Proposal would deliver immediate and compelling value to GeoPark shareholders. By rejecting the Proposal, the GeoPark Board denied its shareholders an opportunity to receive cash for their shares at a significant premium."
• "Instead, GeoPark proceeded with an acquisition in Argentina, which entails significant spending, high debt levels, and execution risk."
• "Given the inherently low-risk nature of our all-cash Proposal, we believe GeoPark shareholders should be made aware of the premium they are being offered and provided the opportunity to review our Proposal."
• "The Proposals rejection by the GeoPark Board is part of a larger pattern in which GeoPark has failed to engage constructively with Parex to reach a deal in their shareholders best interests."

Industry Context

This announcement highlights consolidation efforts within the Latin American oil and gas sector, particularly in Colombia, where Parex is a major independent player. Parex's strategic move to acquire GeoPark, an operator with significant Colombian assets, aims to create a premier energy company in the region. The rejection of the offer by GeoPark's board and its subsequent investment in Argentina indicate differing strategic visions within the industry, with some companies prioritizing expansion into new, potentially higher-risk frontiers while others seek to consolidate and optimize existing core assets.

Comparison to Industry Standards

• The proposed US$9.00 per share acquisition price represents a substantial premium (44-51%) over GeoPark's recent trading prices, which is generally considered attractive for target company shareholders in M&A transactions.
• Parex's assessment that the total transaction value of US$940 million, including net debt, meaningfully exceeds GeoPark's year-end 2024 proved plus probable (2P) reserve value for its Colombian assets suggests a favorable valuation for GeoPark's core assets compared to industry benchmarks for reserve-based acquisitions.
• GeoPark's decision to pursue a capital-intensive, early-stage investment in Argentina, despite a premium all-cash offer, contrasts with a strategy focused on immediate shareholder value and risk reduction, potentially indicating a higher risk tolerance or different long-term growth strategy compared to industry peers prioritizing established, lower-risk production.

Corporate Governance

Stakeholder Impact

• GeoPark Shareholders: Offered a significant premium (US$9.00 per share in cash) and an opportunity to avoid risks associated with GeoPark's Argentina investment. The rejection by the board denies them this immediate value.
• Parex Shareholders: Potential for long-term value creation through a logical combination, material optimization potential, and strengthening of Parex's competitive position in Colombia.
• GeoPark Management/Board: Their decision to reject the offer and pursue the Argentina investment is being challenged, potentially leading to a proxy contest or changes in leadership if Parex succeeds in calling a special meeting.
• Employees (GeoPark & Parex): A successful acquisition would likely lead to integration efforts, potentially impacting roles and organizational structure.
• Regulatory Authorities: The proposed transaction would require customary regulatory approvals.

Next Steps

• Parex may increase or decrease its position in GeoPark through open market purchases or sales, or other transactions involving equity, debt, or derivative instruments.
• Parex may enter into transactions to increase or hedge its economic exposure to GeoPark's common shares without affecting beneficial ownership.
• Parex may requisition a special meeting of GeoPark shareholders to replace all or part of the Board of Directors.
• Parex remains ready and willing to engage with GeoPark to finalize a transaction as outlined in the proposal.
• The transaction would require the negotiation and execution of a definitive agreement, as well as GeoPark shareholder (65%) and customary regulatory approvals.

Key Dates

Recommendation

For GeoPark shareholders, the all-cash offer of US$9.00 per share represents a substantial premium (44-51% over recent trading prices) and offers immediate, certain value. This allows shareholders to monetize their investment at a high valuation and avoid the significant risks associated with GeoPark's recently announced capital-intensive, early-stage investment in Argentina. Given the compelling premium and the low-risk nature of the all-cash proposal from Parex, it is a strong buy recommendation for GeoPark shareholders to support this transaction or for investors to acquire GeoPark shares in anticipation of a successful acquisition at or above the proposed price.

Keywords

GeoPark, Parex Resources, Acquisition, Takeover Bid, Oil and Gas, Colombia, Argentina Investment, Shareholder Value, SEC Filing, Schedule 13D, Merger Proposal, Energy Sector