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Santander's 23rd Annual Latin America Conference – Ecopetrol S.A.

Ecopetrol S.A. · Jan 15, 2019 · 37 slides

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Slides

  1. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 1
    Santander's 23rd Annual Latin America Conference January 2019 Photo: Cartagena Refinery- Archives: Ecopetrol
  2. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 2
    2020+ STRATEGY FOCUS ON PROFITABLE GROWTH EOR Reserves and Production growth RESERVES AND Cash protection PRODUCTION Strict capital and cost discipline GROWTH efficiency Exploration Unconventional TRANSFORMATION PROGRAM…
  3. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 3
    BEST FINANCIAL RESULTS IN THE PAST 4 YEARS 120.0 USD/Bl 755 761 718 715 716 100.0 X=99 X=54 X=45 X=55 X=73 66.0 37% 35% 38% 42% 48% 80.0 55.2 52.1 47.7 49.5 60.0 24.5 23.1 23.8 40.0 18.1 18.0 8.9 5.7 6.6 1.6…
  4. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 4
    SOLID RESULTS PROFITABLE GROWTH 2016 2017 Jan-Sep17 Jan-Sep18 1P RESERVES 1,598 1,659 NET PROFIT 3.19 8.90 MMBOE COP Tn AVERAGE 6.8 7.1 EBITDA MARGIN 43% 48% RESERVE LIFE Years NET DEBT/EBITDA 1.7x 1.1x RESERVE -7% 126% REPLACEMENT…
  5. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 5
    COMMERCIAL STRATEGY MAXIMIZING REVENUE Crude Prices USD/Bl 75 76 8.4 62 67 67 64 67 55 52 60 51 51 55 51 47 5.9 53 12 45 35 47 46 46 42 44 39 38 38 34 25 11.4 11.1 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17…
  6. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 6
    SUSTAINED IMPROVEMENT IN KEY OPERATING METRICS DILUTION COST LIFTING COST (USD/Bl) (USD/Bl) 20.0% 18.5% Benchmark* 16.9% 15.7% 14.6% Sep 2018 8.5 2017 7.6 6.7 Dilution 2016 5.1 4.7 Factor 6.5 4.2 3.9 2015 7.4 2014 11.2 2014…
  7. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 7
    SLIDOS RESULTADOS COMPROMETIDOS CON LA EXCELENCIA UPSTREAM FINANCIEROS EBITDA 7.1 COP Bn MRGEN EBITDA 49% DIFERENCIAL DE PRECIO 7.3 REFINACIN Carga/KBD 360 1T2018 USD/BL REFICAR, MAYOR CARGA HISTRICA EN MARZO CON UN PROMEDIO DE 16O…
  8. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 8
    PRODUCTION ON TRACK TOWARDS GOAL Production DRILLING CAMPAIGN RESULTS (MBOED) (+14.5 MBOED in 4 fields) 26.2% 2.0% 16.5% 2.7% 725 MBOED 120.1 122.5 113.3 116.4 22.9 28.9 18.2 21.2 721 724 715 La Cira- Infantas Rubiales…
  9. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 9
    SUCCESSFUL RESERVES ADDITION 295 MMBOE IN ADDITIONS FOR A REPLACEMENT OF 126% AND EXTENDED RESERVES LIFE TO 7.1 YEARS Technical and Commercial Management 94 1659 1598 201 MMBOE -234 67 13 44 4 73 295 MMBOE Balance 2016…
  10. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 10
    SIGNIFICANT POTENTIAL FROM EXISTING FIELDS RF (%) 19% 23% 32% 36% 36% 53.8** Recovery Factor Billions BOE Potential RF through Primary, EOR and IOR technologies *OOIP does not include: 6.4 BBOE of exploration and 7.6…
  11. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 11
    SUCCESFUL RECOVERY PROGRAM CONTRIBUTING TOWARDS PRODUCTION TARGET 17 MBOED 166 Recovery Pilots Production 550 716 15 1 1 149 MBOED Campos prod. Secondary/Terciary Pilotos Water Injection Pilotos Polymer Piloto Inyeccin…
  12. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 12
    SUCCESSFUL PROJECTS ADDING PRODUCTION AND RESERVES La Cira Infantas Mid-Magdalena Valley Partnership 70000 Infill and water injection recovery 60000 Crude Rate program since 2005. Reserves Incremental 50000 Production…
  13. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 13
    RECOVERY PROGRAM RESULTS TO INCREASE RESERVES Chichimene, an example of recovery potential PILOT EXPANSION Pilot Results Incremental Recovery Factor % Potential initial Secondary Expansion (Higher production) 10% 8.6% Lower range…
  14. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 14
    NEAR FIELD AND EXTENSIONS RESERVES AND PRODUCTION POTENTIAL LORITO AND NUEVA ESPERANZA SAURIO 2 LOCATION: Meta Department LOCATION: Meta Department CPO-09 BLOCK APIAY-SURIA AKACAS BLOCK FIELD SAURIO-2* LORITO-1 Productive…
  15. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 15
    ECOPETROL EXPANDS ITS PRESENCE IN BRAZIL Pau-Brazil Block Santos: one of the most prolific basins in the world High materiality combined with low risk Strategic partners with experience in the offshore CONSORTIUM 50% 30% 20%…
  16. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 16
    EXPLORATION ACTIVITY POLLERA-1 2018 SSJN-1 SN-15-17 GULF OF MXICO 337 Km COLOMBIA ONSHORE: PURCHASE OF 2D AND 3D SEISMIC ARRECIFE-1 Light Oil Discovery in the Well Andina-1 COYOTE-2 ANDINA-1 REX NE-02 ST1 (Tame, Arauca)…
  17. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 17
    DISCOVERIES WORK IN PROGRESS ONSHORE Coyote-1 Boranda-1 Lorito-1 Infantas Cosecha V- 01 Bullerengue-1 Near Field Re-entry of Field Evaluation Start of Oriente-1 Drilling of Appraisal of the Coyote-1. Drilling Plan (extended…
  18. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 18
    UNCONVENTIONALS POTENTIAL IN COLOMBIA Middle Magdalena Valley Basin Cesar-Ranchera Basin Potential of recoverable resources between Potential of recoverable tight gas 2.0 and 7.0 BBOE* greater than 10 TCF** *BBOE: billions of…
  19. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 19
    POTENTIAL ECONOMIC BENEFITS OF UNCONVENTIONAL 30 1.3 X 124k FDI Oil Sector Added Value Employment USDBn per year Per year 10% of the GDP in Consolidation stage The full development 2017 in the in the development of La…
  20. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 20
    Midstream
  21. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 21
    MIDSTREAM STRONG EBITDA GROWTH EBITDA Transported Volume COP Tn 7.1% 1.6% MBOD 1,086 1,103 267 274 6.00 6.42 819 829 Jan-Sep 2017 Jan-Sep 2018 Jan-Sep 2017 Jan-Sep 2018 Crude Refined San Fernando - Monterrey System came…
  22. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 22
    Downstream
  23. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 23
    DOWNSTREAM CARTAGENA REFINERY Throughput (MBD) Margin and throughput composition 12.5 11.5 12.1 +16% 10.3 11.1 Margin 7.7 (USD/Bl) 6.8 National 39% 42% 49% 66% 79% 80% 147 145 153 158 crudes 71% 136 Imported crudes 61% 58%…
  24. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 24
    DOWNSTREAM BARRANCABERMEJA REFINERY Throughput (MBD) Gross Margin (USD/Bl) +11% +32% 201 222 215 221 223 14.6 13.9 12.0 11.8 10.5 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 Synergies between refineries Margin…
  25. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 25
    Financial Results
  26. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 26
    OUTSTANDING RESULTS AS OF SEPTEMBER 2018 Operating Ebitda Margin Ebitda GE/bl* Cash Flow EBITDA PER SEGMENT 48% 47.3 17.9 23.8 48% 49% USD/B COP Tn 17.3 38% 42% 47.3 17.0 17.9 35% 30.0 48,7 11.7 14.2 15.6 22.1 23.5 9.8 2015…
  27. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 27
    NET INCOME REFLECTION OF FINANCIAL STRENGTH COP Tn (Variation between periods) 4.6 2.0 0.1 0.3 0.7 0.2 0.1 0.9 0.0 2.8 1.0 Utilidad 3T Ingresos Costos DD&A Gastos Actividad Dif. En cambio Resultado Prov. Renta Interes no…
  28. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 28
    CAPEX FOCUSED ON PROFITABLE GROWTH USD Million 789 1,798 Increased Activity Development Wells Workovers 80% vs execution 677 +600 492 1H18 421 +400 318 1,009 57 44 1,553 11 2017 Jan-Sep18 2017 Jan-Sep18 2018 (E) 876 Future…
  29. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 29
    2019 INVESTMENT PLAN USD 3.5 TO 4.0 BILLION Enhanced Oil Recovery Pilots Of total investment will be allocated in Colombia 30
  30. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 30
    CONSOLIDATED DEBT/EBITDA COMMITTED TO LOWER LEVERAGE COP Tn 2.9 x 2.9 x 2.6 x 2.4 x 1.9 x 1.4 x 0.8 x 1.1 x 1.5 x 1.4x 0.5 x 53.2 52.2 1.1x 46.7 43.8 43.5 0.2 x 0.5 x 35.0 35.6 35.0 28.6 22.2 28.5 27.4 23.1 27.8 29.5 13.7 24.5…
  31. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 31
    DEBT PROFILE ECOPETROL GROUP SEPTEMBER 2018 (USD Million) COP; 9.60% Currency 151 USD; 2,134 1,720 35 90.40% 480 2022 416 151 2024 425 70 2,294 1,490 1,671 2,000 LIBOR; IPC; 492 Interest rate 574…
  32. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 32
    CONSOLIDATED DEBT STRATEGIC USE OF CASH Consolidated Debt by Company September 2018 Nominal figures in USD Million Company USD Debt COP Debt(1) Total Ecopetrol 11,298 519 11,817 Average life(2) 10.2 years Bicentario - 417 417…
  33. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 33
    We are committed to reducing greenhouse effect Reduction Reduction Target 2025 2010-2017 2018-2025 TO REDUCE 3.7Mt CO2e 13.1Mt CO2e 3.5 Millions of tons of CO2e times the emissions of the last 8 years Gas Use Energy…
  34. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 34
    We might expand renewable energy resources from 43 MW to 181 MW Current Capacity (MW) BIOMASS Potential Installed Capacity (MW) SOLAR HYDRO Reduction of CO2 emissions KTons/year
  35. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 35
    2018 PROFITABLE AND SUSTAINABLE GROWTH Committed to production goal: 715 -725 MBOED Increase in activity in line with the investment plan Capital discipline under current oil price scenario Cleaner fuels and incorporation of…
  36. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 36
  37. Santander's 23rd Annual Latin America Conference – Ecopetrol S.A. – slide 37
    OIL AND GAS INFRASTRUCTURE

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