Ecopetrol Sa · BVC:ECOPETROL

Ecopetrol Sa — Q1 2010 Earnings Presentation

25 slides from Ecopetrol Sa's earnings presentation, Apr 27, 2010

  1. Slide 1: Financial and Operating Results First Quarter 2010

    FINANCIAL AND OPERATING RESULTS First quarter 2010 April 27, 2010 1

  2. Slide 2: Disclaimer

    DISCLAIMER This document was prepared by Ecopetrol S.A. with the purpose of providing the market and interested parties certain financial and other information of the Company. This document may include strategy discussions and forward-looking statements regarding the probable development of Ecopetro

  3. Slide 3: Management Participants in Today's Conference Call

    MANAGEMENT PARTICIPANTS IN TODAY’S CONFERENCE CALL Javier Gutierrez Mauricio Echeverry Chief Executive Officer General Counsel Adriana Echeverri Hector Manosalva Chief Financial Officer VP of Production Nelson Navarrete Diego Carvajal EVP of Exploration & Production VP of Exploration Pedro Rosales A

  4. Slide 4: Agenda

    AGENDA 1 Highlights for the first quarter 2010 2 Financial results for the first quarter 2010 3 Outlook for the second quarter 2010 4

  5. Slide 5: First Quarter 2010 Highlights: We Obtained Strong Results

    FIRST QUARTER 2010 HIGHLIGHTS: WE OBTAINED STRONG RESULTS • Largest quarterly production growth : Group 27%*, Ecopetrol 21%* E&P • High level of exploratory drilling and seismic activity • Most competitive bids for 19 blocks in the “Oil & Gas Lease Sale 213” round, U.S. GoM • 97% progress in Hydro t

  6. Slide 6: First Quarter 2010 Capex Plan: Significant Growth in Organic Investments

    FIRST QUARTER 2010 CAPEX PLAN: SIGINIFICANT GROWTH IN ORGANIC INVESTMENTS Organic Investments (USD mn) Key Projects in Capex Plan 1Q-2010 (USD mn) Project Capex 900 804 • Prospect Generation 2010 2.2 15 1% 800 Exploration • Other 54.6 87 11% --------------------------- ---- 700 • Rubiales 60.9 616 8

  7. Slide 7: Upstream: Remarkable Production Growth and Higher Exploratory Activity

    UPSTREAM: WE ACHIEVED REMARKABLE PRODUCTION GROWTH AND HIGHER EXPLORATORY ACTIVITY • Most competitive bids for 19 blocks in the “Oil & Gas Lease Sale Number of wells 213” round in the U.S. GoM: 7 6 • 5 blocks 100% Ecopetrol 6 5 • 14 blocks in partnership (10 Repsol and 4 ENI) 3 4 3 • Increase of exp

  8. Slide 8: Downstream: Transporting Higher Volumes While Upgrading Infrastructure

    DOWNSTREAM: WE ARE TRANSPORTING HIGHER VOLUMES, WHILE EXPANDING AND UPGRADING OUR INFRASTRUCTURE • 97% progress in Hydro treatment project Transported volumes • 43% advance in basic engineering of B/meja modernization plan (MBD) Refining • Lower sulfur content in diesel • Additional 25 MBD of naphth

  9. Slide 9: Organizational Consolidation

    ORGANIZATIONAL CONSOLIDATION: WE KEEP SUPORTING ENVIRONMENTAL PROTECTION AND IMPROVING OUR OPERATIONAL EFFICIENCY Environmental Incidents • 93% progress in milestones of human talent 15 HR development plan 9 HSE • 40% reduction in environmental incidents 1Q-2009 1Q-2010 • Centro de Información Técni

  10. Slide 10: Agenda

    AGENDA 1 Highlights for the first quarter 2010 2 Financial results for the first quarter 2010 3 Outlook for the second quarter 2010 10

  11. Slide 11: We Achieved the Best Financial Results of the Last Quarters

    WE ACHIEVED THE BEST FINANCIAL RESULTS OF THE LAST QUARTERS Total Revenue (COP tn) Costs and Expenses (COP tn) Operating Profit (COP tn) 27,7 19,6 8,1 3,2 8,7 5,8 5,5 2,7 7,4 8,5 4,6 5,1 2,2 6,7 4,1 2,1 5,1 1,0 1Q09 2Q09 3Q09 4Q09 2009 1Q10 1Q09 2Q09 3Q09 4Q09 2009 1Q10 1Q09 2Q09 3Q09 4Q09 2009 1Q10

  12. Slide 12: Segment Results

    SEGMENT RESULTS Sales (COP Trillion) 3.3 2.4 0.9 0.7 E&P Refining Transportation Sales & Marketing Net Income (COP Trillion) 2.0 0.2 -0.2 0.04 E&P Refining Transportation Sales & Marketing 12

  13. Slide 13: Flexible Capital Structure and Strong Cash Flow Generation

    WE MAINTAIN A FLEXIBLE CAPITAL STRUCTURE AND STRONG CASH FLOW GENERATION Cash flow 1Q2010 (COP Trillion) 0.4 13.5 8.2 6.7 4.8 5.5 1.1 0.2 Assets* March/10 (COP Trillion) Liabilities* March/10 (COP Trillion) Cash and cash equivalents 56.0 2.7 Accounts receivable 4.3 4.9 Other short term 9.0 Other lon

  14. Slide 14: Consolidation of Ecopetrol's Group

    WE MOVE FORWARD TO THE CONSOLIDATION OF ECOPETROL´S GROUP Company %Ecopetrol Revenues Net Income (COP bn) (COP bn) Hocol 100 594 100 • Contributed 33 MBOED of production to the Group EXPLORATION Savia 50 75* 19* Y PRODUCTION Ecopetrol Brasil 100 0 -4 • Developing exploratory Ecopetrol Perú 100 0 -1

  15. Slide 15: Agenda

    AGENDA 1 Highlights for the first quarter 2010 2 Financial results for the first quarter 2010 3 Outlook for the second quarter 2010 15

  16. Slide 16: Outlook for the Second Quarter 2010

    OUTLOOK FOR THE SECOND QUARTER 2010 • Increase in oil and gas production, mainly in fields operated by Ecopetrol in the Apiay region, from 130 MBOED to 150 MBOED. • Increase drilling activity in Colombia and abroad E&P • Completion of 3 exploratory wells outside Colombia (U.S. GoM 2 and 1 in Brazil)

  17. Slide 17: Energy for the Future

    ENERGY FOR THE FUTURE Ecopetrol S.A. All rights reserved. The re production of this presentation is forbidden without the written authorization of Ecopetrol S.A. 17

  18. Slide 18: Investment Plan

    INVESTMENT PLAN USD millones 6,925* 387 6,306 735 Acquisitions Organizational consolidation 4,824 2.363 1294 Transport Refining and Petrochemical 1.238 Production 151 Exploration 103 613 571 517 435 3.558 1.760 1.255 1.962 2.189 922 951 515 473 2005 2006 2007 2008 2009 2010 * Does not include acquis

  19. Slide 19: Production

    PRODUCTION Thousand barrels of oil equivalent per day (MBOED) 586,4 521 7,6 26 6 15 552,9 500 447 376 385 399 2005 2006 2007 2008 2009 1Q 2010 Savia Hocol Ecopetrol 19

  20. Slide 20: Costs Rose Due to Higher Activity and Revaluation of the Peso

    OUR COSTS ROSE DUE TO A HIGHER ACTIVITY RELATED TO INCREASE IN PRODUCTION AND THE REVALUATION OF THE COL$ Lifting Cost (USD/BOE) 7,2 8,3 7,2 6,5 5,2 5,1 2006 2007 2008 2009 1Q2009 1Q2010 Refining Cost (USD/Bl) Transportation Cost (USD cents/Bl-km)*** 0,43 0.30 5,8 6,0 0,40 0,40 4,5 5,5 0,35 0,29 3,5

  21. Slide 21: Exploration

    EXPLORATION Seismic equivalent kilometers 9.201 6.789 4.584 4.654 2.668 3.081 2005 2006 2007 2008 2009 1Q 2010 21

  22. Slide 22: Improved Returns on Assets and Equity

    IMPROVED RETURNS ON ASSETS AND EQUITY 24% 21% 20% 18% 12% 12% 15% Return on Assets 9% 10% 9% 8% 7% 9% 11% 10% (ROA) 9% 9% 40% 39% 37% 34% 26% 26% 28% 22% 22% 24% 23% Return on Equity 16% 18% 17% 16% 16% 19% (ROE) 22

  23. Slide 23: Corporate Group – SEC After Royalties

    RESERVES BALANCE– MBOE CORPORATE GROUP – SEC AFTER ROYALTIES IRR: 98% 65% 46% 351% 23

  24. Slide 24: Accident Rate

    ACCIDENT RATE Rate of accidents (# of accidents / million of man - hours) 5,8 2,6 1,8 1,7 1,2 1,3 2005 2006 2007 2008 2009 1Q-2010 24

  25. Slide 25: Expansion of Transportation Infrastructure

    EXPANSION OF TRANSPORTATION INFRASTRUCTURE SANTAMARTA POZOS COLORADOS GALÁN El Copey 140 Km out of 510 Km Retiro Orú Ayacucho Payoa Toledo Samoré B/bermeja Sebastopol MEDELLIN Araguaney RUBIALES MANIZALES YOPAL MONTERREY PEREIRA El Porvenir 235 Km Monterrey BOGOTA Apiay B/ventura Dina NEIVA APIAY PO

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