Good morning, welcome to the GeoPark Limited conference call following the results announcement for the first quarter ended March 31st, 2019. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at this time, press star one on your telephone keypad. If you would like to withdraw your question, press the pound key. If you do not have a copy of the press release, please call Sard Verbinnen & Co. in New York at 212-687-8080, we will have one sent to you. Alternatively, you may obtain a copy of the release in the investor support section on the company's corporate website at www.geopark.com. A replay of today's call may be accessed through this webcast in the investor support section of the GeoPark corporate website.
Before we continue, please note that certain statements contained in the results press release and on this conference call are forward-looking statements rather than historical facts and are subject to risks and uncertainties that could cause actual results to differ materially from those described. With respect to such forward-looking statements, the company seeks protections afforded by the Private Securities Litigation Reform Act of 1995. These risks include a variety of factors, including competitive developments and risk factors listed from time to time in the company's SEC reports and public releases. Those lists are intended to identify certain principal factors that could cause actual results to differ materially from those described in the forward-looking statements but are not intended to represent a complete list of the company's business. All financial figures included herein were prepared in accordance with the IFRS and are stated in U.S. dollars unless otherwise noted.
Reserves figures correspond to PRMS standards. On the call today from GeoPark is James F. Park, Chief Executive Officer, Augusto Zubillaga, Chief Operating Officer, Andres Ocampo, Chief Financial Officer, and Stacy Steimel, Shareholder Value Director. Now I'll turn the call over to Mr. James Park. Mr. Park, you may begin.
Thank you, and welcome everyone. We're joining you this morning with our executive team from Bogota, Colombia. We are pleased to report another record quarter of operational and financial performance. Oil and gas production up 23%. Revenues up 21%. EBITDA up 46%. Transportation and commercial costs down $2 per barrel in Colombia. Free cash flow of $44 million. Net profit of $20 million. Cash on hand of $147 million. Continued returning value to our shareholders by investing $16 million in our buyback program. Now we have seven rigs operating across our Latin American asset base. Given the fundamental long-term nature of our business, it's helpful to step back from the quarterly developments and also look at the bigger picture with our approach, our foundation, and our sustained performance which differentiate GeoPark from the pack.
We started out with an ambitious long-term vision and plan, which we have consistently worked to build and execute. We agreed on the required skill sets to achieve this plan and have steadily invested in and built these capacities to create the strongest oil and gas team in the region. We developed an ESG value system from the get-go, which we call SPEED, to ensure we are the employer of choice, the partner of choice, and the neighbor of choice wherever we are operating. Our strongest metric validating this big prize approach is GeoPark's 16-year track record of consistent growth in production, reserves, and net asset value, which has occurred regardless of whatever financial, industry, or political crisis has been thrown at us. Our oil-finding ability is demonstrated by a 70%-plus drilling success rate after drilling 300 wells with over 350 million barrels discovered.
We currently have over 180 million barrels of net certified 2P reserves valued at $2.7 billion. Our technical and operating know-how has led to peer-leading cost efficiencies with finding and development costs of just $3.60 per barrel and operating costs as low as $4 per barrel in Llanos 34. Our capital allocation discipline gives us an exceptional investment efficiency, which generates $3 of operating net back for every $1 we invest. With a return on capital employed of 38% over the last 12 months. With more hydrocarbons and less cost, our cash generation keeps picking up speed with an EBITDA of $360 million and free cash flow of $130 million over the last 12 months.
We have an in-place organic project inventory to continue growing production and reserves, which is all self-funded from our own cash flows and built on a rich platform of over five million acres in 29 blocks, in 10 hydrocarbon basins, in six countries. We also have developed a $4 billion-plus inventory of new potential acquisition projects across the region and have proven our ability to develop important partnerships and strategic alliances. The international investment community has taken increased notice of GeoPark's performance and rewarded our shareholders by making us the best performing upstream oil and gas company on the New York Stock Exchange for the last two years in a row. Importantly, all of this strong, short, and medium-term performance gives us the luxury and means to look further down the road and acquire more ammunition for the long haul.
For example, our recent successful entry into Ecuador is a major advancement. One of the biggest, most attractive, underdeveloped petroleum systems in Latin America and a long-term target of GeoPark is the Marañón-Oriente-Putumayo basin complex, stretching from Peru through Ecuador and into Colombia with over 10 billion barrels of remaining conventional hydrocarbon resources. With our existing platforms in Peru and Colombia, our Ecuador entry into this giant oil province substantially opens up our growth horizon for many years to come. Thank you. We'll be pleased to take your questions.
Thank you. The floor is now open for questions. To ask a question, please press star one on your telephone keypad. Our first question comes from Gavin Wylie of Scotiabank.
Yeah, thanks. Just a couple quick questions from me, just on the more or less on the CapEx side and free cash flow side. Vasconia is running much better than expected. Costs have come, I'd say in line, maybe even a little bit better than expected. When I think of Peru being delayed, that maybe frees up somewhere in the realm of about $100 million of CapEx that can then be pushed into other projects. I know that at the presentation, you've got the $80 case that shows $270 million of CapEx. The two questions I have are, first is, what do you expect CapEx to be for 2019, given the fact that you have deferred some of that Peruvian expenditures? Two, where is that incremental capital going?
Three, given the fact that you're probably producing about $150 million of free cash flow this year, how are you prioritizing your sort of debt repayment and buybacks? You weren't really super active on the buyback here in the first quarter, and just wondering if that's going to kick up as we go through the balance of the year. Thanks.
Thanks, Gavin. Good morning. Yes, as you pointed out, with the deferral of Peru, the oil prices that we had anticipated in our budget, we are seeing more free cash flow. To your point about the CapEx program in 2019, we're estimating it's going to be around $140 million to $150 million. Our business units are continuously looking for different projects that they present, and we are doing almost like an ongoing capital allocation methodology, where we're just looking for projects and finding in our organic portfolio opportunities for us to invest. Our buyback program is one of those.
With the higher free cash coming from lower cost and higher oil prices funding the bulk of Peru CapEx for next year, yes, you should expect more cash being allocated to our buyback program at least during the second and third quarters of the year or probably the remaining of the year. So far, we have invested $16 million and bought back 1.1 million shares, more or less. We should expect that to pick up probably in the months that are coming forward.
Just a follow-up to that buyback question. Have you guys thought about or are looking at doing an automated buyback that wouldn't be subject to blackouts, or are you just going to stay on the discretionary path?
No, we do both. On 12 periods, we put it as automatic, and local periods, we do it on manual, basically. We have been doing it that way. The automatic order that the buyback has been receiving was probably more conservative during the last few months than it should be going forward.
Perfect. Thank you.
Sure.
Your next question comes from the line of Jenny Xenos of Canaccord Genuity. Jenny, your line is open.
Good morning. Can you hear me?
Yes, I can hear you.
Great. Thank you very much. Good morning, and congratulations on a great quarter. I have four questions, please. First. With regards to the commercial and transportation discounts, they have improved substantially in the first quarter of this year. What was behind this reduction, and is it sustainable for the remainder of the year and going forward? Second, when do you expect the Cuerva and Yamu disposition to close? Third, could you please give us an update on the EIA approval in Peru? Finally, with regards to the IFRS 16 adoption, it had about a $1.3 million positive impact on your profit, if I understand it correctly. How will you be reporting it going forward? Will it always be kind of below the EBITDA line, or will it become part of your kind of operating EBITDA future reporting? Thank you.
Thank you, Jenny. With respect to the commercial discounts, there's a couple of things. The main item here is that the commercial and transportation discounts this quarter, as reported, were reduced by $2 per barrel. We are expecting our flow line to be in operation before the end of the month. With that, we expect for the second half of the year, an extra dollar on top of the two that we have already achieved. Your second question was Oh, the Yamu closure. Sorry. It really rests on the hands of the ANH. We're pending their approval to effectively transfer the assets. Hopefully somewhere in this second quarter, so before the end of the quarter, it should happen. Unfortunately, it is a bit outside of our hands. We shouldn't expect any problems.
This is an asset that is being transferred from a qualified operator to another qualified operator. We really expect no surprises there. Unfortunately, sometimes these delays do happen. With respect to the EIA in Peru, there was time delayed. Part of those were on our side. Our team took their time to really address every single item that was included in the feedback from all the stakeholders into the EIA. That set of answers was fed back to Peru, to the SENACE. That now will be in the hands of them to process and come back to us with the final approval. We expect that to occur also before June. Hopefully before June, this quarter basically.
With that, I think we mentioned this in the previous call, with that timing, we would expect the first oil to occur still in 2020, more towards the last quarter of the year than the first, as we had said in the past. In the meantime, the team is making great progress on all the work that can still be advanced prior to getting the EIA approved. For example, we finalized the upgrading of the work at the base camp to be receiving the loads that are going to come once we're in operation. The flexi pipe has been built, transported to Lima, and now it's on the way to the camp. Everything that we can do to accelerate in the meantime, until we get the approval, is being done. The project still moves.
We will expect to get the approval probably before the end of June. The last question about IFRS 16. As you pointed out, you see the $1.3 million impact in our financial statements. Basically, with that, the reason really is with some of the leases that we have, we have to account them as both assets and liabilities. Some of them get removed from the lines, OpEx lines or G&A lines. On the assets and liabilities, it's around $14 million. On each, half of that is attributed to the leasing of the compression plant for Manati. If you look in our financial statements, you won't be able to reconcile the OpEx lines or the EBITDA lines.
In our earnings release, if you look at our adjusted EBITDA lines, all of the OpEx lines, and every single item that is included in our earnings release has been reconciled to be consistent in the past and going forward. Every time we disclose our adjusted EBITDA numbers, they are consistent to the accounting methodology that we used in the past. You can see the isolated impact on the second of note two on the financial statements.
Sorry.
No, it's okay. I think that was a question from Jenny.
Again, to ask an audio question, please press star one on your telephone keypad. I would now turn the call back over to Jim Parks for any closing or additional comments.
Thank you everybody for your interest in GeoPark and your continued support of the company. We encourage you to please visit us and our operations in each country and call us at any time for more information. Thank you.
Thank you. That does conclude today's GeoPark Limited conference call. You may now disconnect.