Ecopetrol Sa · BVC:ECOPETROL
Ecopetrol Sa — 2018 Global Energy Conference, Bank of America Merrill Lynch
24 slides from Ecopetrol Sa's conference presentation, November 2018
Slide 1: 2018 Global Energy Conference
2018 GLOBAL ENERGY CONFERENCE BANK OF AMERICA MERRILL LYNCH November 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: Best Financial Results in the Past Years
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 -3.9 20.0 2014 2015 2016 2017 Jan-Sept 2018 COP Tn EBITDA Revenue EBITDA Net Income Producti
Slide 5: Solid Results: Profitable Growth
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 RATIO DOWNSTREAM 340 371 Throughput/MBD Upstream: Midstream: Downstr
Slide 6: Sustained Improvement in Key Operating Metrics
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 2015 2016 2017 Sep 2018 REFINING CASH COST** COST OF SALES/REVENUES (USD/Bl)
Slide 7: 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 8: Production: On Track Towards Goal
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 Quifa 701 Castilla 3Q 2017 3Q 2018 RIGS 1Q 2018 2Q 2018 3Q 2018 2018(e) 41 42 44
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 2016 Balance Producción 2017 Production 2017 Recobro Enhanced Extensiones Extensi
Slide 10: Significant Potential from Existing Fields
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 BBOE of Subsidiaries Closing figures 2017, gross unrisked numbers RF: Recovery Fact
Slide 11: Ecopetrol Wins Sub-Salt Exploration Block in Brazil
ECOPETROL WINS SUB-SALT EXPLORATION BLOCK IN BRAZIL Santos: one of the most prolific basins in the World High materiality combined with low risk Strategic partners with experience in the offshore Opportunity for portfolio growth CONSORTIUM Block Pau-Brazil 1.184 Km² 2.200 m. Water Depth 50%
Slide 12: Unconventional Potential: Middle Magdalena Valley Basin
UNCONVENTIONAL POTENTIAL MIDDLE MAGDALENA VALLEY BASIN BOLIVAR Olivo-1 Catalina-1 Association Contracts with ECP VMM 2 Mono Araña-1 TISQUIRAMA Pico Plata-1 ECP E & P Agreement VMM 3 ExxonMobil PLAYON 50%-70% of the potential resources are ConocoPhillips MIDDLE MAGDALENA located in blocks owned by EC
Slide 13: Midstream
Midstream
Slide 14: Midstream: Strong EBITDA Growth
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 into operation in 2018 and P135 in the second half of 2017 The transported volum
Slide 15: Downstream
Downstream
Slide 16: Downstream: Cartagena Refinery
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% 51% 34% 29% 21% 20% 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 1Q 17 2Q 17 3Q 17 4Q 17 1Q
Slide 17: Downstream: Barrancabermeja Refinery
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 recovery Stability of operation 3Q 2018 maximum throughput and margins of the
Slide 18: Financial Results
Financial Results
Slide 19: Outstanding Results as of September 2018
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 2016 2017 Sep-18 2015 2016 2017 Sep-18 2015 2016 2017 Sep-18 1.7 1.5 6.0 6.4
Slide 20: Capex: Focused on Profitable Growth
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 Growth 117 Pau-Brasil block 60 107 Development of enhanced oil recovery tec
Slide 21: 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 22: 2018 Outlook: Profitable and Sustainable Growth
2018 OUTLOOK 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 sources of renewable energy
Slide 23: Energy for the Future
octterrou 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 24: Oil and Gas Infrastructure
OIL AND GAS INFRASTRUCTURE
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