Ecopetrol Sa · BVC:ECOPETROL
Ecopetrol Sa — Q3 2021 Earnings Presentation
28 slides from Ecopetrol Sa's earnings presentation, Nov 10, 2021
Slide 1: Results 3Q 2021
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: Enduring capture of favorable market conditions
Enduring capture of favorable market conditions 678 681 694 676 661 684 Record-high 33 43 45 61 69 73 Financial Results 49% 48% 44% 43% Successful closing of 23.3 ISA’s acquisition 22,3 31% 24% 19.4 First liability management 17.2 transaction for US$2.0 billion 14.2 12.3 Common Stock 10.4 Issuance P
Slide 5: The New Ecopetrol Group
The New Ecopetrol Group Leading energy and integrated infrastructure company in the region GRADUAL TRANSITION Transition Management Office (TMO) Leader in hydrocarbons and Latam leader Ensuring financial, legal and renewable self-generation in power Phase 1 regulatory compliance in Colombia transmis
Slide 6: Operating Results
Slide 7: Exploration
Exploration Progress in Near Field Exploration aligned with the plan 10 5 Exploratory CARNAVAL-1 4 Appraisal phase BASARI-1 EXPLORATORY 1 Study well Under drilling WELLS 2021 Projection: 14 - 17 wells Under evaluation Drilled in 3Q21 ESTR SN-8 5 CHIMUELO-1 4 Successful NEW DISCOVERY BORANDA SUR-1 3
Slide 8: Production
Production Recovery and profitable growth ~700 3 4Q21 Activity 5 4 +8 -10 ~4 +12 704 100-130 160 - 170 695 Wells Workover mboed 686 684 684 684 691 676 +13 675 661 661 1Q21 2Q21 Production Castilla Gas+ white Winter / 3Q21 Gas+Blancos Reversion Operational / Subsidiaries 4Q21 forecast recovery and p
Slide 9: Production: Response to a challenging year
Production Response to a challenging year INITIATIVES Increased Rigs 15 23 700 - 710 -34.4 2020 2021e -10.6 16.6 ~ 680 • Castilla • Impacts on projects and • Increase in WO’s • BSW* stabilization exploratory wells • Advance activity 2022 Increased Workovers • Public order • Base improvement • • Weat
Slide 10: Progress in unconventional reservoirs
Progress in unconventional reservoirs PPII PERMIAN (EEUU) 24.4 Gross production (mboed) 21.2 KALÉ PLATERO 7.4 Key milestones 4.8 Drilling 2023 Drilling 2023 ▪ Kalé´s EIA filing 8.4 Environmental ▪ Start up of Mobile license 6.1 6.2 16.4 17 Environmental Lab 4.8 2.3 Environmental license 2.2 2.2 0.8
Slide 11: Midstream
Midstream AGREEMENT APPROVAL Increase in transported volumes ADMINISTRATIVE TRIBUNAL OF CUNDINAMARCA Transported Volume (mbd) +3.3% 979 1,027 1,007 960 1,012 225 267 274 288 256 • COP 729 B receivable Recovery 754 760 733 704 724 • Frontera transfers its 43.03% interest in BIC to Cenit 3T20 3Q20 4T2
Slide 12: Downstream
Downstream Profitable operation whilst ensuring reliability THROUGHPUT (mbd) MBR US$/Bl Units Maintenance to leverage operational availability and future 10.1 value generation 9.5 9 8.5 1H21 3Q21 4Q21 7.4 FCC Cracking HDT Gasoline Ref. Cartagena Alkylation 355 360 360 354 Shut Down 324 HDT Disel Shu
Slide 13: Discipline and cost efficiency
Discipline and cost efficiency EFFICIENCIES Efficiency KPIs COP 1.8 T 9M21 Savings in renewable energy COP B 20.0% 2.39 2.39 7.4 Energy Efficiency* 18.5% 1.95 1.93 Dilution Factor 1.77 1.73 1.68 1.71 16.9% 2.6 4.8 466 15.2% 14.8% 14.2% 835 13.8% 13.6% 3.8 0.9 2.16 2.61 4.59 6.54 7.12 7.43 7.50 7.17
Slide 14: fe x ™K
5 fe x ™K yu e \ a ei f i ual ' »
Slide 15: Consolidating a strong financial performance
Consolidating a strong financial performance Net Income 9M21 Net Income 3Q21 COP Trillion (change between periods) COP Trillion (change between periods) Ebitda (+15.5) Ebitda (+5.1) 4.2 0.6 0.7 0.4 1.8 0.4 1.3 0.4 5.0 1.2 0.74 0.8 4.2 0.31 13.0 1.5 1.3 0.2 10.6 3.81 0.86 1.01 Utilidad Efecto Volumen
Slide 16: Relevant contribution of transmission and toll roads
Relevant contribution of transmission and toll roads ISA’s Results Non-Recurring Items COP Billion EBITDA Net Income +5.2% 1,559 1,635 5,025 5,287 • Financial costs associated to the liability management transaction at ISA-Interchile, +5.8% including the unwind of debt hedging 1,766 1,868 566 541 12
Slide 17: KPIs reflect increased financial strength
KPIs reflect increased financial strength O&G KPIs ISA KPIs Ecopetrol Group KPIs EBITDA/Bl EBITDA Margin EBITDA Margin EBITDA by segment 77.7% (%) 40.2 USD/Bl 46.7% 2.4 5.3 5.2 4.2 8.4 77.7 46.7 43.9 32.2 24.9 77.8 55.1 57.0 33.7 34.9 75.3 35.8 40.2 71.8 62.5 64.3 17.9 17.7 39.7 38.8 2019 2020 9M20
Slide 18: Outstanding commercial performance leverages profitability
Outstanding commercial performance leverages profitability Diversification of destinations ABT* (USD $ Million) Reaching new crude export destinations in Asia: Brunei, India, South Korea Maximizing the value of products through optimal use of our assets 57% 49% 46% +97% 41% 41% 2017 37% 35% 2018 34%
Slide 19: Positive CAPEX execution trend
Positive CAPEX execution trend Recovery and stabilization Value-focused diversification USD Billion %part by location %part by segment 3.52 3.3-3.5 Corp* Down 2% 2.92 12% 1.20 2.67 1.1-1.3 YTD YTD Mid Oil & Gas 72% 28% 9% Orgánic 2.21 1.12 Ytd 0.85 0.81 77% Up 2.32 2.21 PY21 PY21 77% 23% 1.80 1.82 1
Slide 20: Robust underlying cash growth
Robust underlying cash growth COP Trillion FEPC 6.9 20.3 2.8 0.9 7.2** 11.5 14.2 8.4 14.2 0.3 6.0 8.8 13.1 8.1 Caja 2020* Efectivo generado Inversión para Caja ISA Capex Crédito Pago capital e Rendimientos y Caja por la operación adquisición de ISA adquisición ISA intereses otros Sep-21* 10.0 Título
Slide 21: Proactive management of capital structure
Proactive management of capital structure Improvement on maturity profile* Credit Ratings Principal amounts - USD Billion Vida media: 8.63 años Fitch Ratings Moody’s S&P 2.00 Ecopetrol BB+ Baa3 BB+ ISA BBB Baa2 - 1.67 5.5 1.80 1.20 1.50 2.00 1.25 2.00 • ISA acquisition debt partially refinanced 0.85
Slide 22: TESG
Slide 23: Moving forward in our TESG commitment
Moving forward in our TESG commitment ENVIRONMENTAL SOCIAL Progress in renewable energies MW Social investment: 288 SAN FERNANDO • Ecopetrol, key player COP 269 B SOLAR PARK in the construction of as of Sep 2021 Colombia's Installed Capacity Hydrogen TECHNOLOGY 112 61 MW Roadmap Benefit capture of •
Slide 24: In summary…
In summary… ▪ We are a New Ecopetrol Group ▪ We continue to deliver record financial results ▪ Progress in updating the 2022 – 2024 Business Plan Energy growth Competitive returns TESG Organizational capabilities 22
Slide 25: Q&A
Slide 26: USAMOS NUESTRA ENERGIA PARA
USAMOS NUESTRA ENERGIA PARA CONSTRUIRUNA EMPRESA Y UN PAIS DE 1000S /HATODOS oth
Slide 27: Q&A Participants
Q&A PARTICIPANTS Felipe Bayón CEO Alberto Consuegra Jaime Caballero Uribe COO CFO Jorge Osorio Elsa Jeanneth Jaimes VP of Development and Production VP of Exploration Walter Fabian Canova Milena López VP of Refining and Industrial Processes Cenit VP of Strategy and Finance Nicolas Azcuenaga Pedro Ma
Slide 28: Glossary
GLOSSARY Acronym Definición Acronym Definición ANEEL Brazilian Electricity Regulatory Agency AOM Operating, administrative and maintenance expenses Method of participation in It gathers the profits of companies with control, joint control and significant Bl Barrel the individual Income influence. St