Ecopetrol Sa · BVC:ECOPETROL
Ecopetrol Sa — Investor Presentation (June 2020)
28 slides from Ecopetrol Sa's investor presentation, June 2020
Slide 1: Investor Presentation - Colombia Inside Out
Investor Presentation Colombia Inside Out June 2020 Picture: Chuchupa Field 1
Slide 2: Legal Disclosure
LEGAL DISCLOSURE This document was prepared by Ecopetrol S.A. (the “Company” or “Ecopetrol”) 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
Slide 3: Summary
Summary 1 2 3 4 5 Decisive response to Value and Track record of ESG and societal Sustaining strategic COVID-19 and oil sustainable growth performance values investment price environment Reserves and 759 Mmboe* of Major ESG COP 3.5 Tn in costs EOR production growth reserves have been inves
Slide 4: Life ensures business continuity: COVID-19 response plan
Life ensures business continuity RESPONSE PLAN Leadership IT Management COVID-19 • COVID-19 Crisis Committee • Secure digital connection for +9,000 • Health Response Committee employees • Diagnostic tests at Barrancabermeja • Chatbot to determine risk of Hospital contagion • CoronApp** for self-diag
Slide 5: Strategy remains focused on value generation
Strategy remains focused on value generation Existing Fields Reserves and Production Growth Exploration Unconventional in Colombia Competitiveness and Sustainability Strict Capital Cash Protection Discipline and Cost Efficiency International 5
Slide 6: Delivering strong returns despite price volatility
Delivering strong returns despite price volatility 718 715 720 725 735 45 55 72 64 51 100 80 70.8 67.8 Brent (US$/Bl) 55.2 60 47.7 40 30.8 31.1 23.1 18.0 20 13.3 15.1 11.6 6.6 5.3 1.6 0.1 0 2016 2017 2018 2019 1Q20 2.7% 8.6% 13.1% 14.3% 12.2% Revenues EBITDA Net Income ROACE* Production (mboed) Bren
Slide 7: Oil market is facing an unprecedented supply and demand shock
Oil market is currently facing an unprecedented supply and demand shock Brent, Peso and FX Basket Price (US$/BL) National Demand 2020 COP $211,962 Bl COP US$ 62.6 /Bl US$ 39.2 /Bl mbd $156,328 Bl 72.4 290 273 5.6 34 35 Forecast 211 203 US$ 66.8 /Bl (6,7) 51.1 20 10 118 175 Dic US$ 66/Bl 60.1 8.7 122
Slide 8: Facing this new challenge
Facing this new challenge COP 3.5 Tn >US$ 130 M We maintain investments OPEX REVENUE Commercial in strategic projects (COMMERCIAL) Strategy Optimization Enhanced Oil Recovery Technologies COSTS AND EXPENSES Gas Opportunities INVESTMENT PLAN Digital Transformation US$ 2.5 - 3.0 Bn FINANCING CAPEX Ren
Slide 9: Creating value to society
Creating value to society 13.7 US$ B Contributed in 2019 8.0 0.5 0.3 0.9 3.9 US$ Bn US$ Bn US$ Bn US$ Bn US$ Bn Republic of Shareholders Community* Employees* Suppliers* Colombia Salaries Dividends Social & Environmental Variable Compensation Local Taxes Dividends Investment Benefits** Procurement R
Slide 10: Corporate governance practices
Corporate governance practices BOARD OF DIRECTORS +20 years of experience in international business, Former Vice President of Capital Markets and Corporate public policy, and public & private project finance Development at Bancolombia Group Former Executive Director of the Inter-American For
Slide 11: Upstream
Upstream Photo: Rubiales Field 11
Slide 12: Progress in the incorporation of resources
Progress in the incorporation of resources MATURITY OF DISCOVERIES EXPLORATORY ACTIVITY 1Q20 Andina Flamencos Bullerengue Arrecife Esox Norte Under Production In production Planned In production commercial testing and testing and production testing 2020 OBIWAN-1 study appraisal appraisal plan testin
Slide 13: Focus on profitable production
Focus on profitable production 5 4 1 5 735 ~5 730 ~27 ~8 mboed ~14 ~1-21 660 - 680 Q4 19 4Q19 Operative Field reversion Acquisitions 2019 Security events Q1 20 1Q20 Lower activity Profitability criteria Reduced Other (operating, Natural gas Estimated 2Q20 performance COVID-19 Capex/ non security eve
Slide 14: Gas continues as strategic priority
Gas continues as strategic priority ~ 10% Upstream Income Lower self-consumption: due to lower $ Demand contracted at fixed prices throughput in refineries and closing of fields Force Majeure Demand Protection: sector measures to 5.4% mboed Q1 mitigate impact on customers Current Results Vol. 131 13
Slide 15: Unconventional potential in the Middle Magdalena
Unconventional potential in the Middle Magdalena Ecopetrol prepares for PPIR Middle 150 km 2019 2020 2021 2022 Magdalena Valley (MMV) State Council Regulatory Preparation, planning and execution of Clarification Framework PPIR MME Unconventional Colombia Unconventional MMV Basin 7 - 12 bboe 50 km Po
Slide 16: Midstream
Midstream Photo: Oleoducto de Los Llanos 16
Slide 17: Stability and flexibility amid a challenging environment
Stability and flexibility amid a challenging environment Transported volumes (mbd) Revenue (COP Tn) EBITDA (COP Tn) 1,137 1,136 1,071 1,068 3.18 2.57 2.49 3.05 260 263 2.73 2.19 266 272 2.50 1.94 805 796 877 873 78% 80% 84% 78% 1Q 17 1Q 18 1Q 19 1Q 20 1Q 17 1Q 18 1Q 19 1Q 20 1Q 17 1Q 18 1Q 19 1Q 20
Slide 18: Downstream
Downstream Photo: Reficar 18
Slide 19: Adapting operations to demand
Adapting operations to demand Sales Volume (MBD) Throughput (MBD) Barrancabermeja Cartagena Gasoline Diesel Jet 1Q 20 -21% -44% -23% 350 345 367 365 138 161 165 34 35 305 116 131 90 195 199 219 215 20 165 154 146 149 150 140 Jan 20 Feb 20 Mar 20 Jan 20 Feb 20 Mar 20 Jan 20 Feb 20 Mar 20 1Q 19 1Q 20
Slide 20: Financials
CONFIDENTIAL INFORMATION Resultados Financials Excepcionales 20
Slide 21: 1Q20 KPIs reflect changing market conditions
1Q20 KPI´s reflect changing market conditions Gross EBITDA 1Q 20 EBITDA Margin (%) Debt/EBITDA* COP 5.3 Tn 34.9% 1.6x % by segment E&P 45.4 46.1 1.6 6.4% 5.3% 3.0% 5.4% 43.9 Midstream 34.9 1.2 1.2 1.2 28.3% 32.2% 34.9% 47.3% Downstream 65.3% 62.5% 62.1% 47.3% 2018 2019 1Q 19 1Q 20 2018 2019 1Q 19 1Q
Slide 22: Robust cash position to face volatility
Robust cash position to face volatility Cashflow COP Tn 2.6 3.5 12.1 0.6 1.5 11.7 0.4 Cash balance 2019* Cash flow from Capex Debt Dividends Other** Cash balance Q1 20* operations Ecopetrol Ocensa ODL Bicentenario Invercolsa Financing Nuevo Endeudamiento Maturity profile 11.9 COP Tn 2.7 6.8 8.2 8.1
Slide 23: Continued focus on cost efficiency
Continued focus on cost efficiency Lifting Cost Refining Cash Cost 8.7 8.6 8.2 5.0 7.7 7.1 - 7.8 4.8 4.8 4.5 US$/Bl US$/Bl 2017 2018 2019 1Q20 2020 (e) 2017 2018 2019 1Q20 Efficiencies in operational processes (Energy, Subsurface and Operational efficiencies and capture of synergies between both Dil
Slide 24: Short-term financial framework
Short-term financial framework @ 30 - 40 US$/Bl CASH PROTECTION CAPITAL DISCIPLINE RESILIENCE / FLEXIBILITY Sustainable Production CAPEX Cash Flow @ <US$ 30 /Bl US$ 2.5 – 3.0 Bn Breakeven Previous US$ 4.5 - 5.5 Bn ~US$ 26 /Bl OPEX Optimizations Net Income Staggered Sanction Breakeven COP 3.5 - 4.5 T
Slide 25: 2020 Perspectives
2020 Perspectives @ 30 – 40 US$/Bl Our priorities: 2Q 2020 (e) 2020 (e) Commitment to life Production 660 - 680 664 - 710 Adapting to a new reality (mboed) Transported Cash protection and capital 800 - 1,000 850 - 1,100 Volume (mbd) discipline Crude Differential - 9.0 / - 13.0 - 9.0 / - 11.0 Strateg
Slide 26: Investor Relations contact information
Head of Capital Markets: Juan Pablo Crane juan.crane@ecopetrol.com.co Investor Relations Officer: Lina María Contreras lina.contreras@ecopetrol.com.co Investor Relations Team: Adriana Baptiste Investor adriana.baptiste@ecopetrol.com.co Investor Relations Luisa Marcella Mosquera luisa.mosquera@ecopet
Slide 27: PETROL
PETROL Ecopetrol S.A. All rights reserved. The re production of this presentation is forbidden wihout the written authorization of Ecopetrol S.A
Slide 28: Definitions
Definitions Acronym Definition bboe Billion barrels of oil equivalent Bl Barrel boed Barrels of oil equivalent per day CAGR Compound Annual Growth Rate CEOR Chemical Enhanced Oil Recovery CFFO Cash Flow From Operations EOR Enhanced Oil Recovery ESG Environmental, Social and Governance Gbtud Giga BTU