Ecopetrol Sa · BVC:ECOPETROL

Ecopetrol Sa — Q4 2021 Earnings Presentation

26 slides from Ecopetrol Sa's earnings presentation, Mar 2, 2022

  1. Slide 1: 4Q21 and 2021 Results

    Traducir 4Q21 AND 2021 RESULTS

  2. 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

  3. Slide 3: Speakers

    SPEAKERS ALBERTO CONSUEGRA FELIPE BAYÓN JAIME CABALLERO URIBE COO CEO CFO 3

  4. Slide 4: Best Results Ever

    BEST RESULTS EVER COP T 91.7 87.6 67.8 70.8 66.0 52.1 55.2 47.7 50.0 42.0 31.1 39.2 30.8 24.5 46% 23.1 45.4% 43.9% 18.1 18.0 16.8 16.7 37.2% 41.8% 11.8 13.3 7.4 34.7% 37.7% 6.6 34% 2.3 12.0 1.7 16.3 5.7 2.4 11.6 5.3 1.6 1.2 -4.0 2014 2015 2016 2017 2018 2019 2020 2021 9.6% 1.9% 2.7% 8.6% 13.1% 14.3%

  5. Slide 5: Ecopetrol Continues to Deliver Superior Results

    ECOPETROL CONTINUES TO DELIVER SUPERIOR RESULTS ROACE (%) +10 13.6 METRICS 2 0 2 1 TA R G E T 2021 REAL 3.7 Organic Investment USD 3,500 – 4,000 M USD 3,243 M* Operating Cash Flow ~USD 3,500 – 5,000 M USD 5,660 M EBITDA Margin 35% – 38% 46% Majors IOCS NOCS Ecopetrol Gross Debt/EBITDA <2.5x 2.3x Res

  6. Slide 6: Growth with the Energy Transition, Generate Value through TESG, Competitive Returns

    GROW WITH THE GENERATE VALUE CUTTING-EDGE COMPETITIVE ENERGY TRANSITION THROUGH TESG KNOWLEDGE RETURNS • Exploratory success (Gas) • Lowest TRIF ever • Digital benefits of USD 93 • 13.6% ROACE M in 2021 • RRI of 200%, the highest • Climate change targets • COP 3 T on Efficiencies in last 12 years •

  7. Slide 7: ISA: A Promise Delivered

    Energy Transmission and Toll Roads ISA: A PROMISE DELIVERED 2021 RESULTS EXCEEDING EXPECTATIONS SUCCESSFUL INTEGRATION REVENUES COP 11.2 T (+ 9.8% vs 2020) Financial consolidation: September 2021 and 4Q21 EBITDA Margin 76% People and Culture: Focus on management change EBITDA COP 7.1 T (+ 8.4% vs 20

  8. Slide 8: Operating Results

    = OPERATING RESULTS

  9. Slide 9: Strategic Progress in Exploration

    13 Exploration 3 Succesful STRATEGIC PROGRESS IN 5 Dry EXPLORATORY 4 Under evaluation EXPLORATION WELLS FY 2021 1 Study - plugged and abandoned + 4 exploratory wells operated at sole risk by partners CARNAVAL-1 BASARI-1 NEW DISCOVERY 2022 SILVERBACK-2 CAYENA 1 ST1 ML2 Ibamaca-1 (Tolima) well drilled

  10. Slide 10: On the Road to Recovery: Production and Reserves

    Production and Reserves ON THE ROAD TO RECOVERY Reserves Growth + 462 +282 organic management mboed MBPE +180 price effect 700 - 705 +4 +5 +1 -5 200% RRR +6 690 694 699 695 695 Production sources 2022 676 684 684 679 661 Primario Primary Oil Crudo* 51% Recovery* Gas andGas & White 22% Blancos** prod

  11. Slide 11: Progress in Unconventional Reservoirs

    PROGRESS IN UNCONVENTIONAL RESERVOIRS PPII PERMIAN (U.S.A.) KALÉ PLATERO 20 250 +22% 132 19.3 EBITDA GE USD M Reserves Wells drilled mboed 21 2023 Drilling 2023 growth since 84% Drilling EBITDA the acquisition Margin 2021 Average net Environmental Production ECP license PERMIAN (Rodeo JV) Environmen

  12. Slide 12: Midstream: Multipurpose Pipelines Growth and Record Financial Results

    Midstream MULTIPURPOSE PIPELINES GROWTH AND RECORD FINANCIAL RESULTS +2.1% 4Q20 vs 4Q21 1,027 1,049 1,017 1,007 1,007 960 1,012 267 274 288 290 231 +20% 277 • 20% increase in refined products 256 transported in 2021 760 733 759 786 730 704 724 • Caño Limón operation stabilized after rainy season and

  13. Slide 13: Downstream: Energy Security for the Country

    Downstream ENERGY SECURITY FOR THE Polypropylene Production (KTon) COUNTRY 500 490 Gross Refining Margin and Throughput 460 450 10.1 12.5 10.2 15. 0 8.5 8.0 9.5 9.0 10. 0 2019 2020 2021 350 5.0 250 0.0 Operational stability during 355 320 360 360 354 340 354 -5.0 scheduled major maintenance and 150

  14. Slide 14: Efficiencies and Cost Optimization

    Costs EFFICIENCIES AND COST OPTIMIZATION EFFICIENCIES Total Unit Cost GE 20211 (USD/Bl) CAPEX COP 2.9 T 2021 40.6 DRILLING COST 39.6 39.1 0.7 0.4 1.5 (USD/ft) 253 833 25.5 25.8 25.8 241 COP Billion 1,430 14.0 14.0 14.8 13.3 13,3 212 2021 before Inflation Public order 2021 Efficiencies 2021 real 709

  15. Slide 15: Financial Performance

    FINANCIAL PERFORMANCE

  16. Slide 16: Revenues, Net Income & EBITDA at Highest Levels Ever

    REVENUES, NET INCOME & EBITDA AT HIGHEST LEVELS EVER Historic REVENUES, COP T NET INCOME and 21.6 0.5 0.5 EBITDA 6.1 As a result of Favorable market 0.3 16.7 0.5 0.7 environment + Commercial Strategy O&G Segments Outstanding contribution ISA’s contribution Permian’s 1.7 Production Contribution 2020

  17. Slide 17: Commercial Performance Enables Value Capture

    COMMERCIAL PERFORMANCE ENABLES VALUE CAPTURE Exports Destination Diversification Favorable Realization Prices 2020 Crudes USD/Bl 49% Brent 70.9 2021 27 million barrels of crude Products 42% 41% sold in DAP to destinations 36% such as South Korea, India, Brunei, Sweden and USGC Brent 43.2 80 67 9% 10

  18. Slide 18: Strong Contribution from Transmission and Toll Roads

    STRONG CONTRIBUTION FROM TRANSMISSION AND TOLL ROADS ISA’s Financial Results and Effect of ISA’s Consolidation on the Business’ Contribution in 2021 Forecast Group's Balance Sheet Ecopetrol Group excl. ISA ISA ISA (12M) 244.3 COP T Net Income Growth REVENUES 13.5 COP T 98.8 Expected Growth in 2022:

  19. Slide 19: Resilience and Value Generation

    RESILIENCE AND VALUE GENERATION O&G Indicators ISA Indicators Ecopetrol Group’s Indicators EBITDA/Bl EBITDA Margin EBITDA Margin EBITDA by 42.4 USD/Bl 76.1% 45.7% Segment 42.4 5% 5% 6% 39.6 35.8 8% 76.1% 45.4% 45.7% 32% 43.9% 24% 75.3% 55% 17.9 33.7% 62% 61% 71.7% 71.8% 40% 2018 2019 2020 2021 2018

  20. Slide 20: Growing Capex Execution Capabilities

    GROWING CAPEX EXECUTION CAPABILITIES Organic Capex on Recovery Path Transition to the Energy Business USD M Ecopetrol Series3 ISA USD M Organic Growth Inorganic Growth ISA 4,800 - 5,800 8,024 4,351 1,108 3,521 4,413 2,917 1,108 3,673 2,674 2,785 2,917 892 3,243 3,521 2,674 3,243 2018 2019 2020 2021

  21. Slide 21: Robust Cash Balance

    ROBUST CASH BALANCE COP T FCF and OCF Sensibility 7.8 FEPC Brent -0.5 0.5 13.3 +/- 1 USD/Bl -0.5 0.5 22.5 TRM -0.9 0.9 9.7 2.8 7.8 +/- 100 COP/USD -0.6 0.6 14.2 0.5 17.5 Production -0.2 0.2 5.9 1.1 +/- 5 mbd production -0.2 0.2 8.1 OCF FCF 2020 Operating Organic ISA's ISA's Investment Debt Dividends

  22. Slide 22: TESG

    TESG

  23. Slide 23: Moving Forward in Our TESG Commitment

    MOVING FORWARD IN OUR TESG COMMITMENT ENVIRONMENTAL SOCIAL CORPORATE GOVERNANCE Emission reductions (mtCO2e) Regional development Executed New Adherence to 2020 2021 2024 (e)* 287 Projects 364 Projects the program -200 -200 2021 subscribed -294 Economic reactivation: -1,600 Rating increased Existing

  24. Slide 24: Ecopetrol's Socio-Economic Impact

    ECOPETROL’S SOCIO-ECONOMIC IMPACT ~26 COP T 2021 Contribution GOVERNMENT SHAREHOLDERS1 COMMUNITY EMPLOYEES4 SUPPLIERS* +16.7 80.4 0.5 +5.3 3.1 COP T COP B COP T COP T COP T Dividends, taxes and Dividends2 Social and environmental Salaries, benefits and Local contracting royalties investment variable

  25. Slide 25: Summary

    SUMMARY… • We delivered record financial results in 2021 • Profitable growth underpinned by TESG • Progress in diversifying through the new energy transmission and toll roads business (ISA) • Competitive returns ✓ Dividend proposal 2021 COP $280 per share (16x vs 2020) ✓ Efficiencies of COP 3 T ✓ EB

  26. Slide 26: Q&A

Ecopetrol — Q4 2021 Earnings Presentation on 6ix