Ecopetrol Sa · BVC:ECOPETROL
Ecopetrol Sa — Q1 2021 Earnings Presentation
24 slides from Ecopetrol Sa's earnings presentation, May 5, 2021
Slide 1: 1
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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 ALBERTO CONSUEGRA FELIPE BAYÓN JAIME CABALLERO URIBE COO CEO CFO 3
Slide 4: Extraordinary recovery after the crisis
Extraordinary recovery after the crisis Relevant Milestones 737 712 701 728 735 676 of the Quarter 35 55 67 64 51 61 48.8% 47.6% 46.1% 43.5% 39.5% Shareholders Meeting 34.9% 100% Virtual COP 17 Dividend / Share 17.2 15.9 14.6 15.1 13.4 10.5 Successful Commercial Strategy 8.2 continues to enable new
Slide 5: Decarbonization targets
~ TARGET BY TARGET BY 20 50 * + REDUCTION 25% vs. 2019 scope l& 2 NET - ZERO EMISSIONS scopel & 2 REDUCTION 50% vs. 2019 scopel,2&3 Scope 1&2 MT CO2E 15.8 13.5 Reduction 5-6 MtCO,e Scope 1,2&3 MT CO2E 128 Red g emissions, venting, flaring e (solar, wind, geothermal and biomass) S solutions re, Usage
Slide 6: Making progress towards the energy transition
Making progress towards the energy transition COMPETITIVENESS DIVERSIFICATION DECARBONIZATION TESG Efficiencies Transmission Sector Entry Net Zero Emissions Cecilia María Vélez White COP 263.7 B Offer to acquire controlling stake 2050 Commitment Appointment in BoD in ISA Solar Parks BoD Special Comm
Slide 7: Operating Results
OPERATING RESULTS = TE.
Slide 8: Exploration: increased asset contribution and exploratory success
Exploration Increased asset contribution 5 Exploratory wells completed drilling phase Exploratory success Flamencos-2 El Niño-1 Production +39% vs 1Q20 Discoveries delineation Boranda Sur-2 Flamencos-2 (1) Well abandoned due to technical problems, failed to reach the section of interest.. (2) Flamen
Slide 9: Production: robust value generation amidst operational challenges
Production Robust value generation amidst operational challenges mboed Current Forecast 735 Projected 390 Number 91 wells 678 681 694 676 138 of wells* range 420 133 143 155 154 597 mboed 545 538 539 522 1Q20 2Q20 3Q20 4Q20 1Q21 Oil Gas + LPG 1Q21 Production Castilla Anticipated activity Improvement
Slide 10: Production: development of gas portfolio in line with strategy
Production Development of gas portfolio in line with strategy GAS + GLP 11% 53% Greenhouse Gas Emissions 23% Reduction of the Group’s Contribution to Gas and LPG Reduction of 88.980 tCO2e Upstream EBITDA EBITDA production Margin Margin Key Projects Progress Avances Hydrogen H2 Definition Strategy •
Slide 11: Progress in the development of unconventional reservoirs
Production Progress in the development of unconventionals reservoirs KALÉ PROJECT PERMIAN Readiness stage 51% OXY 49% ECOPETROL 44 20 EBITDA MARGIN PERMIAN 56% Environmental Wells in (Rodeo JV) monitoring production 21 Relations with Stakeholders and 6.2 mboed 5.1 mboed communities ECP net pre royal
Slide 12: Midstream: continued focus on reliability and efficiency
Midstream Continued focus on reliability and efficiency TRANSPORTED VOLUME (mbd) 1,136 Approval of the General Attorney’s 1,027 1,007 Office to the settlement agreement 979 263 between Cenit and Frontera 926 225 267 275 16 consecutive months with no 170 reversal cycles in the Bicentenario 873 pipeli
Slide 13: Downstream: performance exceeds pre-pandemic levels
Downstream Performance exceeds pre-pandemic levels EBITDA (COP B) 6.7% THROUGHPUT (mbd) 4.8% 4.6% 10.1 3.4% 9.5 8.5 7.4 -1.3% 653 6.2 355 360 345 345 324 283 295 255 -54 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 GRM* (US/Bl) SALES VOLUME OF REFINED PRODUCTS (mbd) 262 256 262 GRM* and through
Slide 14: Cost trends reflect focus on efficiencies
Cost trends reflect focus on efficiencies Group’s Total Unit Cost ** Group’s Operative Costs and Expenses* 32.7 31.2 32.6 24.5 13.1 12.6 21.2 15.8 13.0 USD/Bl COP M 3,753 11.7 2,694 2,475 2,461 19.6 20.0 2,349 15.4 9.5 11.5 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 Purchases and imports Oper
Slide 15: Financial Results
FINANCIAL RESULTS 15 15
Slide 16: First quarter captures benefit of improved price environment
First quarter captures benefit of improved price environment Net Income 1Q20 vs 1Q21 Net Income 4Q20 vs 1Q21 COP T COP T 0.2 0.4 3.9 0.4 0.4 0.3 2.9 0.9 0.9 2.8 excluding non-recurring events*** 3.1 3.1 0.9 1.1 0.7 0.1 Net Income Net 2020 LT Net Income EBITDA Non FX expense Income tax Net Income Net
Slide 17: Strengthened financial indicators
Strengthened financial indicators EBITDA Margin EBITDA/Bl ROACE* 47.6% 37.9 USD/Bl 6.1% 47.6 42.6 37.9 34.9 12.2 30.5 23.6 22.2 22.5 9.0 18.5 7.3 6.1 8.4 3.7 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 Net Income Break Even Gross Debt / EBITDA 33.4 USD/BI 2.5x 39.7 42.
Slide 18: Investment Plan execution is on track
Investment Plan execution is on track Execution consistent with 1Q’s seasonality USD M Upstream Midstream Downstream Corporate* 5.000 1,200-1,400 3,500-4,000 4.000 3.000 900-1,100 2.000 750-900 1.000 650 0 1Q21 2Q21 (e) 3Q21 (e) 4Q21 (e) 2021 (e) * Includes investment in energy transition projects O
Slide 19: Investment supported by internal cash flow generation
Investment supported by internal cash flow generation FCF & OCF Trend COP T 5.3 3.5 2.6 2.9 1.8 1.9 COP T 2.9 2.4 0.6 -1.1 0.6 0.3 -2.2 0.2 8.1 8.1 OCF FCF -5.0 1Q20 2Q20 3Q20 4Q20 1Q21 FCF & OCF Sensitivity +/- 1 USD/Bl -0.5 0.5 -0.5 0.5 +/- 100 COP/USD -1.1 1.1 -0.8 0.8 Cash 2020* Cash flow from C
Slide 20: In summary: robust start to the 2021-2023 Business Plan
In summary… Robust start to the 2021 – 2023 Business Plan Results above our expectations Concrete steps in the Ecopetrol Group’s energy transition Decarbonization Plan, TCFD - SASB, Progress in Due Diligence of ISA Commitment to life as the highest priority Employees safety and social investment “Ap
Slide 21: Q&A
Q&A
Slide 22: Q&A Participants
Q&A PARTICIPANTS Felipe Bayón CEO Jaime Caballero Uribe Alberto Consuegra CFO COO Jorge Calvache Jorge Osorio VP of Exploration VP of Development and Production Milena López Strategy and Finance Walter Fabian Canova VP - Cenit VP of Refining and Industrial Processes Pedro Manrique VP Commercial and
Slide 23: USAMOS NUESTRA ENERGIA PARA
USAMOS NUESTRA ENERGIA PARA CONSTRUIRUNA EMPRESA Y UN PAIS DE 1000S /HATODOS oth
Slide 24: Glossary
GLOSSARY Acronym Definition Bl Barrel bped Barrels of oil equivalent per day COP B Billion Colombian Pesos (Nine zeros) COP M Million Colombian Pesos (Six zeros) COP T Trillion Colombian Pesos (Twelve zeros) FCF Free Cash flow JV Joint Venture Mbd Thousands of barrels per day Mboed Thousands of barr