Ecopetrol Sa · BVC:ECOPETROL
Ecopetrol Sa — Investor Presentation (September 2018)
29 slides from Ecopetrol Sa's investor presentation, September 2018
Slide 1: Investors Presentation: Profitable Growth
INVESTORS PRESENTATION Profitable Growth September 2018 Photo: Cartagena Refinery- Archives: Ecopetrol
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: 2020+ Strategy: Focus on Profitable Growth
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 Inorganic growth 3
Slide 4: Solid Results
SOLID RESULTS PROFITABLE GROWTH 2016 2017 1H17 1H18 1P RESERVES 1,598 1,659 NET PROFIT 2.19 6.13 MMBOE COP Tn AVERAGE 6.8 7.1 EBITDA MARGIN 43% 50% RESERVE LIFE Years NET DEBT/EBITDA 1.9x 1.3x RESERVE -7% 126% REPLACEMENT RATIO DOWNSTREAM 338 367 Throughput/MBD Upstream: Midstream: Downstream: • Com
Slide 5: Favorable Environment
FAVORABLE ENVIRONMENT PROACTIVE COMMERCIAL STRATEGY Crude Prices USD/Bl 75 8.2 62 67 67 64 55 52 60 51 51 55 51 47 53 6.6 12 45 35 47 46 46 42 44 39 38 38 34 25 7.5 7.7 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Brent ECP Basket Spread (Q) Spread (H) We have succeeded in keepin
Slide 6: Transformation
TRANSFORMATION BASIS FOR A PROFITABLE FUTURE Results of the Efficiency Initiatives* Accumulated Efficiencies in Opex, Capex and Income In Billions of Pesos 892 1.175 +73% 393 795 2.588 224 516 2.254 7.035 2.193 1H17 1H18 Real 2015 Real 2016 IQ IIQ IIIQ IVQ Real 2017 2015 - 2017 *In Billions of Colom
Slide 7: Sustained Improvement
SUSTAINED IMPROVEMENT IN KEY OPERATING METRICS LIFTING COST (USD/BOE) DILUTION COST (USD/BL) 1H18 8,2 1H18 4,7 14.7% 2017 7.6 2017 3.9 15.7% 2016 6.5 2016 4.2 16.9% 2015 7.4 2015 5.1 18.5% 2014 11.2 2014 6.7 20% % Dilution factor DAYS OF DRILLING 34 26 20 18 Record 8 6 6 Record 13 4 Castilla Rubiale
Slide 8: Sólidos Resultados Upstream
SÓLIDOS RESULTADOS COMPROMETIDOS CON LA EXCELENCIA UPSTREAM FINANCIEROS EBITDA 7.1 COP Bn MÁRGEN EBITDA 49% DIFERENCIAL DE PRECIO 7.3 REFINACIÓN Carga/KBD 360 1T2018 USD/BL REFICAR, MAYOR CARGA HISTÓRICA EN MARZO CON UN PROMEDIO DE 16O KBD ENTORNO Logramos restablecer las operaciones cumpliendo los
Slide 9: Successful Reserves Addition
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 Producción 2017 Production 2017 Recobro Enhaced Extensiones Extensions y Compras
Slide 10: Production
PRODUCTION COMMITED TO GROWTH 2.8% Production (MBOED) 725 Average Growth 721 715 1Q 2018 – 2Q 2018 701 PRODUCTION 738.8 MBOED 1Q 2018 2Q 2018 2018(e) PEAK* 738.8 KBPED INCREASING ACTIVITY TO ENSURE PRODUCTION TARGET 1 RIGS 2018 2 DEVELOPMENT WELLS 3 RECOVERY PROGRAM 40 42 42 41 +620 37 37 +25% Produ
Slide 11: Succesful Recovery Program
SUCCESFUL RECOVERY PROGRAM CONTRIBUTING TOWARDS PRODUCTION TARGET 16 MBOED 164 Recovery Pilots Production 547 711 14 1 1 148 MBOED Campos prod. Pilotos Pilotos Piloto SteamInyección Injection Otros campos Producción Recovery Contribution Secondary/Terciary Water Injection Polymer Other Fields Produc
Slide 12: Successful Projects
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 (BOD) increased in 259 mmboe through 40000 through infill the increase of th
Slide 13: Recovery Program
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 Incremental percentage 8% Primary 6% Pilot results of production 6,1
Slide 14: "Near Field" and Extensions
“NEAR FIELD” AND EXTENSIONS RESERVES AND PRODUCTION POTENTIAL INFANTAS ORIENTE LORITO AND NUEVA ESPERANZA SAURIO 2 LOCATION: Santander Department LOCATION: Meta Department LOCATION: Meta Department APIAY-SURIA LA CIRA CPO-09 BLOCK AKACÍAS BLOCK INFANTAS FIELD SAURIO-2* FIELD INFANTAS ORIENTE-1 2.3 K
Slide 15: Successful Exploratory Activity 2017
SUCCESSFUL EXPLORATORY ACTIVITY 2017 GORGON-1 MOLUSCO-1 Most important discovery in recent years in Colombia First offshore well operated by Ecopetrol Gorgon-1 GAS DISCOVERY 21 wells Seismic Acquisition 19 Exploratory & 2 Appraisal Onshore Colombia 518 km 2D Success rate: 43% Offshore Brazil 446 km2
Slide 16: 2018 Exploratory Strategy
2018 EXPLORATORY POLLERA-1 STRATEGY GULF OF MEXICO SN-15-17 COYOTE-3 AIMING FOR NEAR TO LONGER TERM 2D SEISMIC ACQUISITION 337 Km COYOTE-2 RESERVES INCORPORATION CAPACHOS SUR-2 INFANTAS ORIENTE-1* ANDINA-1 60.075 Km 2D PULPO-1 42% (5 wells) of 12 planned wells have been drilled, 2 have been successf
Slide 17: Discoveries: Work in Progress
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 Discovery exploration Commerciality appraisal wells Gas Discovery and testin
Slide 18: Midstream
Midstream
Slide 19: Midstream: Contributing to Group EBITDA
MIDSTREAM CONTRIBUTING TO GROUP EBITDA EBITDA Cost of Sales COP Tn +14% COP Tn -3.2% 4,45 1,57 1,52 3,90 1H 2017 1H 2018 1H 2017 1H 2018 Transported Volume San Fernando-Monterrey System came into operation in 1Q18 MBOD +0.6% 270 273 Increased availability in Pozos Colorados-Galán 816 819 Resumption
Slide 20: Downstream
Downstream
Slide 21: Downstream: Cartagena Refinery
DOWNSTREAM CARTAGENA REFINERY Throughput (KBD) Gross Margin (USD/Bl) Cartagena´s Throughput Evolution +13% +44% 39% 42% 49% 66% 71% National 79% 136 153 11,1 crudes 7,7 61% 58% 51% Imported 34% 29% 21% crudes 2Q 2017 2Q 2018 2Q 2017 2Q 2018 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 Stability of operatio
Slide 22: Downstream: Barrancabermeja Refinery
DOWNSTREAM BARRANCABERMEJA REFINERY Throughput (MBD) Gross Margin (USD/Bl) 13.1 +9% 10.5 3,7 1,6 Gross Margin 203 221 8.9 Diff. Products - Brent 9.4 Diff. Throughput - Brent 2Q 2017 2Q 2018 2Q 2017 2Q 2018 Stability of operation Increase in price of raw materials Segregation of light crudes in
Slide 23: Financial Results
Financial Results
Slide 24: Outstanding Results
OUTSTANDING RESULTS FIRST SEMESTER 2018 50% EBITDA/Bl 43 COP Tn 42% 30 31 USD/Bl 23 38% 35% 6,6 6,1 2016 2017 1H2017 1H 2018 1,6 Maximizing VALUE per barrel EBITDA PER SEGMENT +38% 15.8 -4.0 11.4 10,3 COP Tn 2015 2016 2017 1H 2018 6,7 0,8 1,0 Net Income 3,9 4.4 EBITDA Margin 1H17 1H18 RECORD in EBIT
Slide 25: Solid 1H 2018 Financial Results
SOLID 1H2018 FINANCIAL RESULTS Cash Net Income Ebitda Margin Ebitda/Bl Break even* Break even USD/bl USD/bl 50% US$ 43 118 65.8 35.4 30,1 62,9 23,3 30,1 42% 22,1 71 45,4 37% 35% 38% 33,8 29,3 39 40 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 Gross Debt Net Debt De
Slide 26: Capex: Focused on Profitable Growth
CAPEX FOCUSED ON PROFITABLE GROWTH USD MM +15% INVESTMENT LEVEL 2018 9 -24 -17 1,009 USD Bn 3 - 3.5 875 166 -0.26 Plan Range -0.24 4.0 +23% 3.5 876 710 Increased upstream investment 3.5 3.0* 84 60 81 64 9 1H 2017 Upstream Corporate Midstream Downstream 1H 2018 Initial Plan Capital Phasing Capex 2018
Slide 27: 2018 Investment Plan
2018 INVESTMENT PLAN USD $3.0 TO $3.5 BILLION Exploration Production Production Break Even Midstream Between Downstream 715 and 725 MBOED Other 1% 6% 11% 8% Investment in Drilling Colombia 620 development wells at least 12 exploration wells and 28 rigs Investment E&P More than Cartagena Refinery 41
Slide 28: Energy for the Future
octterrot 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.
Slide 29: Oil and Gas Infrastructure
OIL AND GAS INFRASTRUCTURE