SCHEDULE: Parex Halts GeoPark Acquisition Talks Over Value Gap

Parex Resources Inc. announced it has ceased discussions with GeoPark Limited regarding a potential acquisition, citing a significant gap in perceived value.

Summary

• Parex Resources Inc. (the "Reporting Person") filed Amendment No. 1 to its Schedule 13D, updating its position on GeoPark Limited.
• Parex has determined to halt discussions with GeoPark Limited regarding the acquisition of GeoPark by Parex.
• The decision was made after Parex's review of information provided by GeoPark since November 14, 2025, and virtual and in-person discussions with GeoPark management.
• Parex found no basis to increase its view on the value of GeoPark common shares relative to its September 4, 2025, proposal to acquire all GeoPark shares for US$9.00 per share in cash.
• Parex concluded that further discussions were unlikely to lead to an agreement due to the gap in perceived value.
• Parex beneficially owns 6,084,986 Common Shares of GeoPark, representing 11.8% of the 51,663,988 Common Shares outstanding as of September 30, 2025.

Sentiment

Score: 3

Explanation: The sentiment is negative as a significant acquisition attempt has failed due to a valuation gap, leading to uncertainty for GeoPark and a non-strategic stake for Parex. This outcome is generally unfavorable for GeoPark's share price and creates strategic ambiguity for both entities.

Positives

• Parex demonstrated valuation discipline by not increasing its offer, potentially avoiding overpayment for GeoPark.
• GeoPark maintains its independence and can pursue its own strategic direction without being acquired.

Negatives

• The proposed acquisition of GeoPark by Parex for US$9.00 per share in cash will not proceed, removing a potential premium for GeoPark shareholders.
• Uncertainty for GeoPark shareholders regarding future strategic options and potential share price performance following the cessation of talks.
• Parex's significant 11.8% ownership stake in GeoPark now lacks the strategic purpose of a full acquisition, potentially becoming a non-strategic asset.

Risks

• GeoPark's share price may experience negative pressure due to the removal of the acquisition premium and uncertainty regarding its future strategic path.
• Parex faces the challenge of managing its 11.8% non-strategic stake in GeoPark, which may require divestment or a revised investment strategy.
• The failure of these discussions could deter other potential acquirers from engaging with GeoPark in the near term.

Future Outlook

Parex does not intend to update forward-looking statements regarding a potential business combination with GeoPark unless required by applicable securities laws or as Parex otherwise deems appropriate. The halt in discussions indicates no immediate future for this specific acquisition.

Management Comments

• "Parex has determined that there is no basis to increase its view on the value of GeoPark common shares relative to the proposal to acquire all GeoPark shares for US$9.00 per share in cash."
• "Following its engagement with Geopark over the past month, Parex concluded, given the gap in perceived value, that further discussions were unlikely to lead to any agreement with respect to a transaction between GeoPark and Parex as outlined in the September Proposal and has determined to halt discussions with GeoPark."

Industry Context

The halt of acquisition talks between Parex and GeoPark highlights the challenges in M&A within the Latin American oil and gas sector, particularly when there are significant valuation gaps between potential acquirers and targets. This could signal a period of increased caution for M&A activity in the region, as companies prioritize disciplined capital allocation over aggressive expansion.

Corporate Governance

Stakeholder Impact

• Shareholders (GeoPark): Face increased uncertainty regarding the company's future strategic direction and potential for share price volatility, having lost a potential acquisition premium.
• Shareholders (Parex): Benefit from the company's disciplined approach to valuation, avoiding potential overpayment, but now hold a significant non-strategic stake in GeoPark.
• Management (Both Companies): Will need to re-evaluate strategic priorities and resource allocation following the failed acquisition attempt.

Next Steps

• Parex has halted further discussions regarding the acquisition of GeoPark.
• GeoPark's Special Committee will likely need to reassess its strategic options and communicate its plans to shareholders following the cessation of these talks.

Key Dates

Recommendation

For GeoPark, the failure of acquisition talks removes a significant potential upside, leading to uncertainty about its future valuation and strategic path. For Parex, the 11.8% stake is now a non-strategic asset, and its future disposition or integration is unclear. Both companies face a period of re-evaluation, making a 'hold' recommendation appropriate until clearer strategic paths emerge and market reactions stabilize.

Keywords

Parex Resources, GeoPark Limited, Acquisition Talks, Merger Failure, Oil and Gas, Colombia, SEC Filing, Schedule 13D, Investment Update, Shareholder Stake