LONDON, Dec 21 (Reuters) - Latin American-focused oil and gas explorer GeoPark Ltd has signed a $100-million prepayment agreement with Swiss commodities trading group Trafigura, under which it will sell a portion of its Colombian crude oil output.
The pre-payment agreement will run for 2-1/2 years with a six-month grace period and has taken place on the same day the benchmark Brent crude oil futures contract fell to an 11-year low just above $36 a barrel.
“The offtake agreement provides for GeoPark to sell and deliver to Trafigura a portion of GeoPark’s Colombian crude oil production,” the companies said in a statement.
Pricing will be determined at future spot market prices, net of transportation costs, they added.
“We are pleased to begin this strategic partnership with Trafigura and look forward to a long-term relationship,” GeoPark chief executive James Park said.
“The partnership with Trafigura further strengthens our balance sheet by improving our bottom-line netbacks, reducing oil marketing risks, and providing a bigger and more solid liquidity cushion,” Park said.
Trafigura stores and transports over 1 million bpd of oil, making it one of the world’s largest crude trading houses.
In its third-quarter results, GeoPark said average net oil production in Colombia rose by 9 percent on the same quarter last year to 13,033 barrels of oil equivalent a day.
Geopark’s shares rose by more than 12 percent in morning trade in New York on Monday to around $3.10. (Reporting by Amanda Cooper; Editing by Greg Mahlich)