Slide 1: Operating and Financial Results Third Quarter 2020
OPERATING AND FINANCIAL RESULTS THIRD QUARTER 2020 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: Speakers
SPEAKERS Felipe Bayón Jaime Caballero Uribe CEO CFO Alberto Consuegra COO 3
Slide 4: Business continuity leveraged on digital transformation
Business continuity leveraged on digital transformation # Active Drilling Rigs Employees Working Remotely (Average) & in Fields As of September 59% 39 35 24 of the APPROVED SOCIAL INVESTMENT 82% 75% 13 13 14 has been delivered 19 19 9 8 9 to support the country’s 11 3 10 10 COVID-19 health emergency
Slide 5: Gradual recovery of demand and prices
Gradual recovery of demand and prices Basket Price US$/Bl** Domestic Fuels Demand 2020* 26.3 US$/ Bl 40.2 US$/ Bl Forecast ~ 110% 290 272 43 244 45.8 229 236 224 211 202 33 38.4 195 36.5 184 149 mbd 106 20.4 2Q 20 3Q 20 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dic Historic Brent Crudes Products G
Slide 6: Proven resilience in the new normal
Proven resilience in the “new normal” 720 730 735 678 681 X= 62 X= 62 X= 51 X= 33 X= 43 45.9% 42.6% 38.6% 34.9% 18.6 23.6% 18.0 15.1 12.3 8.3 8.4 7.2 5.3 5.3 3.0 4.0 2.0 0.9 0.1 0.0 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 Revenues EBITDA Net Income Production (mboed) X= Average Brent EBITDA Margin Figures in
Slide 7: Operating Results
Operating Results Picture: Cusiana 7
Slide 8: Operational recovery in line with market conditions
Operational recovery in line with market conditions Upstream Midstream Production (mboed) Transported volume (mbd) Ronda 735 678 681 698 ~700 Heavy crude 1,157 1,136 Campos 138 133 143 138 141 transport tests to 927 979 650 cSt at Cenit, 277 263 2020 170 225 597 545 538 560 559 Ocensa, ODL an ODC pi
Slide 9: Growing gas contribution
Growing gas contribution 141 EBITDA Margin 55%** 135 137 131 9M 20 16 20 20 34% share of Upstream EBITDA 20 Financing, payments relief and mboed 119 117 111 121 volume negotiation COP$ 50 B Social investment in natural gas 3Q19 1Q20 2Q20 3Q20 ~ COP$ 6.5 B Gas NGL* 2020 domestic demand trend 1,200 1,
Slide 10: Progress in unconventionals
Progress in unconventionals PPII* PERM IAN 2019 2020 2021 - 2022 PPII* Technical Environmental ANH Environmental licensing 51% 49% announcement & Social & Contractual CEPI** process OXY ECOPETROL (Sept. 10*) Regulation terms process High PERMIAN Court (Rodeo JV) 16 secondees Regulatory Framework pro
Slide 11: Operating costs adjusted to current environment
Operating costs adjusted to current environment Lifting Cost Dilution Cost US$/Bl US$/Bl -41% -19% 4.5 4.1 4.3 8.7 8.6 8.8 7.1 2.5 2018 2019 9M 19 9M 20 2018 2019 9M 19 9M 20 Transportation cost per barrel Total Cost per Barrel Trend* US$/Bl US$/Bl 0% -28% 3.3 3.3 34.2 37.0 3.0 3.0 32.8 24.5 21.3 20
Slide 12: Financials
Resultados Excepcionales Financials 12
Slide 13: Financial indicators reflect an inflection point
Financial indicators reflect an inflection point EBITDA EBITDA EBITDA/Bl by segment 5.3 22.5 US$/BL EBITDA 6.5% 5.4% 5.7% Margin COP T E&P 46% 43% 32.9% 44.1% 47.3% Midstream 35% 116.6% 8,270 24% 37.4 Downstream 60.6% 5,257 5,254 22.2 22.5 47.3% 50.3% 1,996 8.4 -13.9% -2.7% 3Q 19 1Q 20 2Q 20 3Q 20 3
Slide 14: Net income growth underpinned by interventions
Net income growth underpinned by interventions COP B (Variation between periods) 1,073 -420 -1,151 265 1,889 -813 -13 855 25 Utilidad… Efecto precio… Efecto volumen Costos+gastos Gasto financ + dif en cambio No recurrentes Prov Renta Interés… Utilidad… Net Revenues Volume Costs and Financial Non-rec
Slide 15: Sustained discipline in cash management
Sustained discipline in cash management COP T 2.1 3.5 1.5 MAJOR CASH 2.9 OUTFLOWS 4Q 20 1.9 0.3 Payment of scheduled dividends 15.0 Increased investment 12.0 levels Debt maturities and interest Cash balance Cash flow Capex FCF Dividends Debt* Interest Cash balance 2Q 20 from income and 3Q 20 operati
Slide 16: Investment executed amidst challenging environment
Investment executed amidst challenging environment Investment evolution Growth in 4Q 20 US$ MM US$ 1,819 MM # of development September wells drilled +33% vs August 940 681 – 1,181 (cumulative) + Facilities 502 164 378 135 148 + Operational 110 116 119 127 continuity 77 1Q 20 2Q 20 3Q 20 4Q 20 (e) 0
Slide 17: Making progress in our TESG commitment
Making progress in our TESG* commitment SAN FERNANDO SOCIAL ENVIRONMENTAL MEGA Social and Environmental Investment – 9M 20 SOLAR FARM 64% Water COP 192 B Reuse 25% (62% in 3Q 19) 12% 20% Access to Public Services 59 MWP 113 Thousand Education, Sports and Healthcare Installed Latest generation 13% In
Slide 18: 2020 full year outlook
2020 full year outlook Results in line with the new plan targets Indicator Target Operating Cash Flow ~ US$ 1,900 M Cash Breakeven* < 30 US/Bl Gross Debt / EBITDA < 3.5x Production (mboed) ~ 700 Transported Volume (mbd) ~ 1,000 Refineries Throughput (mbd) 300 - 320 Increasing capex momentum TESG str
Slide 19: Q&A
Q&A 19
Slide 20: Q&A Participants
Q&A PARTICIPANTS Felipe Bayón CEO Alberto Consuegra Jaime Caballero Uribe COO CFO Jorge Osorio Jorge Calvache VP Development and VP Exploration Production Milena López Walter Fabian Canova Director of Strategy and VP Downstream Finance - Cenit Juan Manuel Rojas Pedro Manrique VP Strategy and Busines
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Slide 22: Glossary
GLOSSARY Acronym Definition Bl Barrel Bn Thousand of million COP Colombian pesos TESG Technology, Environmental, Social and Governance EG Ecopetrol Group JV Joint Venture mbd Thousand of barrels per day mboed Thousand of barrels of oil equivalent per day KTON Thousand of tons Mbtu Million of British