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June 2016 Investor Presentation – Ecopetrol S.A.

Ecopetrol S.A. · Jul 29, 2016 · 30 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. June 2016 Investor Presentation – Ecopetrol S.A. – slide 1
    ECOPETROL Resilient and Transitioning to Overcome Growth Challenges June 2016 0
  2. June 2016 Investor Presentation – Ecopetrol S.A. – slide 2
    Agenda 1. Key Highlights 2. 2015: Navigating the Low Crude Oil Price Environment 3. 2016: Transitioning to Growth 4. 2017: Strategy Implementation 2
  3. June 2016 Investor Presentation – Ecopetrol S.A. – slide 3
    Agenda 1. Key Highlights 2. 2015: Navigating the Low Crude Oil Price Environment 3. 2016: Transitioning to Growth 4. 2017: Strategy Implementation 3
  4. June 2016 Investor Presentation – Ecopetrol S.A. – slide 4
    Key Highlights Challenges Management Decisions Strengthen our exploratory activity BCG(1) Assessment Costs grew faster than 2014 revenues Build the new strategy Complexity of operations in Colombia Plunge of oil prices New…
  5. June 2016 Investor Presentation – Ecopetrol S.A. – slide 5
    Key Highlights Decreasing lifting cost: 2014: USD11.23/bl, 2015: USD7.39/bl and LTM(1): USD6.70/bl World-class operator of 80% developed proved reserve base (total oil and gas reserves: mature assets and a national 1.8 bn barrels as…
  6. June 2016 Investor Presentation – Ecopetrol S.A. – slide 6
    Key Financial Metrics: Resilience to Lower Crude Oil Price Environment 1Q 2016 2015 2014 1Q 2016 1Q 2015 2015 2014 Crude Basket (USD/bl) 25.1 44.3 (43.4%) 43.9 87.3 (49.7%) Net Income 0.4 (1) 0.2 (1) +125% (7.2) (2)(5) 5.0 (2)…
  7. June 2016 Investor Presentation – Ecopetrol S.A. – slide 7
    Proven Reserves 2015 (1) 2015 Balance Million of barrels of oil equivalent (MMBOE) Net Addition: 16 MMBOE 2.084 (460) 322 154 1.849 (251) 1P 2014 Price Effect Production Optimization & Additions 1P 2015 Revisions…
  8. June 2016 Investor Presentation – Ecopetrol S.A. – slide 8
    Agenda 1. Key Highlights 2. 2015: Navigating the Low Crude Oil Price Environment 3. 2016: Transitioning to Growth 4. 2017: Strategy Implementation 8
  9. June 2016 Investor Presentation – Ecopetrol S.A. – slide 9
    Cost Efficiencies: Opportunities Realized since 2015 2015 Savings* 1Q 2016 Savings USD Millions USD Millions 1.009 Fixed and Variable 107 214 Costs 172 Operational 22 Expenses 213 410 53 8 Total Savings 129 110 87…
  10. June 2016 Investor Presentation – Ecopetrol S.A. – slide 10
    Upstream Optimization Achievements Drilling Days in the Companys Main Fields Significant drilling-days reduction 34 (44%) 36 (39%) 26 26 22 Standardized designs and operations 19 14 12 14 Cutting-edge drilling technology…
  11. June 2016 Investor Presentation – Ecopetrol S.A. – slide 11
    Sustained Lifting and Dilution Cost Reduction Enhances Heavy Crude Profitability Lifting cost USD/barrel Key drivers for lifting reduction: 12 Optimized subsurface and above ground 10 maintenance (34%) 8 (40%) 6 Increased self…
  12. June 2016 Investor Presentation – Ecopetrol S.A. – slide 12
    Initiatives Aimed to Increase Efficiency and Reduce Cost in Downstream and Midstream Refining cash cost(1) Downstream: USD/barrel Strategies for optimization in (39%) maintenance and support services 7,2 4,4 3,5 Renegotiation…
  13. June 2016 Investor Presentation – Ecopetrol S.A. – slide 13
    Capital Discipline: Capex Adjustment since 2015 with Significant Cuts CAPEX 2011 - 2016 2014 - 2016 USD Billions % (25%) (66%) Production (76%) 9.4 9.2 8.7 0.5 8.7 0.2 0.0 0.2 0.1 0.0 Exploration (80%) 0.2 0.0 1.7 1.0 1.6 1.3…
  14. June 2016 Investor Presentation – Ecopetrol S.A. – slide 14
    Exploration: Establishing a Robust and Diversified Portfolio Basin Potential Main Countries Recent Exploratory Discoveries and 2016 Activity ON-SHORE COLOMBIA ECOPETROL AMERICA OFF-SHORE COLOMBIA 2014: discoveries: CPO 1Q-2016:…
  15. June 2016 Investor Presentation – Ecopetrol S.A. – slide 15
    Reserves Incorporation Strategy Towards Sustainability and Growth Exploration Increase in OOIP* o Portfolio upgrade 60 +60% Bn boe 51 53 54 o Short term: onshore near field exploration 49 50 46 47 39 and key areas 40 34 35…
  16. June 2016 Investor Presentation – Ecopetrol S.A. – slide 16
    Strategic Focus on Exploration and Production from 2017 Onwards CAPEX 2016-2020 % 1% 3% 14% 7% 38% 90% 47% Approved 2016 2017-2020 (e) (average per year) UPSTREAM DOWNSTREAM MIDSTREAM OTHERS 17
  17. June 2016 Investor Presentation – Ecopetrol S.A. – slide 17
    Downstream: Improved Refining Capacity; High-Value Products and Clean Fuels Reficar 165 KBD 3% Processing 100 MBD of Heavy 2% Crude, Extra Heavy Crude and Sour 35% Propylene 70% local crude and 30% LPG imported crude Naphta…
  18. June 2016 Investor Presentation – Ecopetrol S.A. – slide 18
    Midstream: Increasing Transport Capacity Enhances the Ecopetrol Group's Cash Flow Pipeline System Capacity* Key Transportation Assets Thousand barrels per day (mbod) 1,268 1,328 1,336 Santa Marta Pipelines: 5,269 km(1) and 32…
  19. June 2016 Investor Presentation – Ecopetrol S.A. – slide 19
    2016: Ongoing Transformation into a more Efficient and Competitive Company Focus on capital discipline and cash flow protection Capital Discipline 2016 CAPEX reduction Efficiency Focus Ecopetrol Groups savings amounted USD129…
  20. June 2016 Investor Presentation – Ecopetrol S.A. – slide 20
    Optimizations: Reduction in Direct and Indirect Employees Ecopetrols Employees* 53,600 (48%) 39,000 44,450 28,000 30,300 19,300 9,150 8,700 8,700 2014 2015 1Q 2016 Direct Employees Indirect Employees Ecopetrols total…
  21. June 2016 Investor Presentation – Ecopetrol S.A. – slide 21
    2016: Leveraging Cost-efficiencies by Enhancing Productivity and Sustainability Management and Cultural Transformation Leadership Program Management team renovation New culture and leadership with international experience*…
  22. June 2016 Investor Presentation – Ecopetrol S.A. – slide 22
    2016 Cost-efficient Financing Strategy: 85% of Requirements Fulfilled Outstanding Debt* 2016 Financing Needs USD million USD million 1,500 -1,900 Remaining Financing Company Total (%) Ecopetrol 13,434 74% Reficar 3,065 17%…
  23. June 2016 Investor Presentation – Ecopetrol S.A. – slide 23
    2016-2017 Divestment Program: Portfolio Rotation to Generate Cash Divestment Program comprising non- Divestments strategic assets and equity (USD million) participations: USD 400-900 o Second round of EEB offering o Second round…
  24. June 2016 Investor Presentation – Ecopetrol S.A. – slide 24
    Securing the Companys Future: Mid - Term Strategy Update May to August 2016 4Q-2016 I Baseline and business II III Business Plan Strategic Options portfolio Announcement Business segment Alternatives prioritization Companys long…
  25. June 2016 Investor Presentation – Ecopetrol S.A. – slide 25
    2017 Onwards: Continue Positioning for the Future in order to Secure Long Term Growth, Financial Sustainability and Value Creation Flexibility Secure Financial Efficiencies Strength Association Scenario Strategy…
  26. June 2016 Investor Presentation – Ecopetrol S.A. – slide 26
    Appendix 28
  27. June 2016 Investor Presentation – Ecopetrol S.A. – slide 27
    Financial Results: Net income increased by 127% between 1Q 2015 and 1Q 2016 Net Income (1) (COPBn) 39.5% 127% EBITDA Margin 38.9% 363 160 1Q -2015 1Q - 2016 (COPTn) 1Q 2016 1Q 2015 Revenues 10.5 12.3 - 15% Costs and…
  28. June 2016 Investor Presentation – Ecopetrol S.A. – slide 28
    Ecopetrol Groups Net income Net Income Variation 1Q 2015 vs. 1Q 2016 (1) (COPBn) REVENUES COST OF SALES EXPENSES FINANCIAL RESULT (COP1,816 Bn) COP1,109 Bn (COP51 Bn) COP 1,394 Bn (405) (28) (353) 160 179 (52) 363 1,799 (…
  29. June 2016 Investor Presentation – Ecopetrol S.A. – slide 29
    Income by Segment Income Variation by Segment 1Q 2015 vs. 1Q 2016 (1) (COPBn) 1Q 2015 E&P Downstream Midstream Eliminations 1Q 2016 EBITDA Margin 1Q 2016 17.3% 11% 79.9% 31 (1)Figures under Colombian IFRS
  30. June 2016 Investor Presentation – Ecopetrol S.A. – slide 30
    Cash Flow: Strong Cash Position Cash Flow 1Q 2016 (1) (COLmm) 1,315 596 3,725 1,058 788 458 7,636 6,550 Caja Inicial Initial Operacin Inversin Pago dividendos Aumento neto Pago intereses Efecto variacin Caja Final…

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