Boardroom spat erupts at Latin American explorer GeoPark
The board of directors at Latin American oil and gas explorer GeoPark fired back at its former chairman June 18 after he questioned the performance of the CEO.
In an open letter to the board, former GeoPark chairman and co-founder Gerald O’Shaughnessy said CEO Jim Park stands in the way of an independent evaluation of the company’s assets and has in general missed out on new opportunities.
“For several years, I have asked our CEO for independent third-party analyses and true collaboration between the board and management in the development of strategic plans,” O’Shaughnessy wrote. “He has consistently resisted these attempts and has chosen to focus almost exclusively on his own management reports and strategic plans.”
GeoPark operates primarily in the Latin American market. First quarter production was split between an average of 32,877 barrels/day of oil and 31.5mn ft3/d of gas. Overall this amounted to 38,131 barrels of oil equivalent/day, a 15% decline from Q1 2020.
Net revenue of $146.6mn marked a near-10% improvement yr/yr, while adjusted Ebitda of $66.5mn was 14% lower than in Q1 2020.
O’Shaughnessy argued that while its Colombian assets, which is mostly oil, generate attractive returns, its projects in Argentina, Brazil, Chile and Peru underperform.
“Elevated levels of debt also now restrict our ability to return capital to shareholders and have left us with limited exposure to resurgent commodity prices due to the hedging of production required given our debt load,” he said.
O’Shaughnessy said he raised his concerns with the board in May, including the possibility of “potential business transactions that would address the strategic challenges GeoPark is facing,” but was asked to resign. Instead, he was removed as board chairman on June 6.
In response, the board of directors noted that it added two independent members to the group over the last 12 months and had a third waiting in the wings. The board is evolving and will continue to build value for shareholders, it said.
Calling O’Shaughnessy’s allegations “baseless,” the board said it regretted the stance he was taking now, after 18 years of service as the chairman.
“The board and the management team are focused on the best interests of the Company and our shareholders,” it responded. “We maintain an open dialogue with our shareholders and are always open to opportunities that will create value for all shareholders.”