Ecopetrol Sa · BVC:ECOPETROL
Ecopetrol Sa — Latin America Conference - BBVA 2017
19 slides from Ecopetrol Sa's conference presentation, May 2017
Slide 1: Overcoming the Industry Challenges
GRUPO EMPRESARIAL ECOPETROL Overcoming the Industry Challenges May, 2017
Slide 2: Cautionary Statement
Cautionary Statement This document was prepared by Ecopetrol S.A. 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 the probable development o
Slide 3: Challenging Environment
Challenging Enviorment We have challenged ourselves to improve BRENT US$/B Challenging 120 2014 2015 2016 Enviorment 110 =99 Since 2014 the 100 industry has been 90 under pressure from falling oil 80 prices. 70 60 =54 Between 2014 and 2016 Brent 50 lowered its price by 55% 40 =45 30 16% additional M
Slide 4: Transformation Model
Transformation Model Changes in leadership, procurement and surroundings relations 4
Slide 5: Results 2016
Results 2016
Slide 6: CAPEX Reduction and Structural Efficiencies
CAPEX Reduction and Structural Efficiencies CAPEX 2014-2016 USD bn (23%) (63%) 8.7 Production 6.7 Midstream Exploration Corporate Downstream Others* 2,5 2014 2015 2016 4.3 Structural Savings 2014-2016 COP Bn 0.3 0,2 0.4 0,4 2,2 0.2 0,7 2,1 2,1 2015 Dilution Contract Mgt. Midstream Upstream transp. D
Slide 7: Key Savings - Operational Efficiency
Key Savings - Operational Efficiency LIFTING COST DILUTION FACTOR USD/bl 2016 17% -3% 2016 6,5 -42% 2015 7,4 2015 19% 2014 2014 20% 11,2 DAYS OF DRILLING TRANSPORTATION COST USD/bl 2014 2015 40 36 2016 RECORD 34 12 16 26 26 20 21 2016 3,3 -3% 20 5 8 6 2015 3,4 0 Castilla Chichimene Rubiales 7
Slide 8: Recovery Pilots: New Technologies
RECOVERY PILOTS: New Technologies 2014 - 2016 Results • Addition of 1,200 kbpe in contingent resources • Production response on 18 recovery pilots • Original Oil in Place of 53 billion barrels and a recovery factor of 19% ‘La Cira Infantas’ – Mid-Magdalena Valley – Partnership 70000 Infill and water
Slide 9: 2016: Exceeding the Goals
2016: Exceeding the Goals REVENUES EBITDA LEVERAGE COP tn COP tn Veces (x) -8% 18 18 2.9 3.0 52 48 2.6 +3% 2.2 2015 2016 2015 2016 ND/Ebitda GD/Ebitda 35% 38% 2015 2016 Ecopetrol is one of the few Oil & Gas companies that reported positive results Margin 9
Slide 10: Solid results
Solid results Benefits of being an Integrated Group In a low price and production environment, we managed to maintain EBITDA vs 2015 and increase the margin by 3% points 10
Slide 11: Cash position as a growth catalyst
Cash position as a growth catalyst COP Tn 1.66 (3.41) 17.16 (5.84) (4.72) (2.76) 14 (0.23) 8.4 6.55 5.3 Initial cash balance Cash from Recovery of funds Net tax Capex Investment Debt outflows & FX Ending cash Other financial operations and desinvestments portfolio other balance assets The cash posit
Slide 12: Exceeding the goals of 2016
Exceeding the goals of 2016 FINANCIAL OPERATIONAL EBITDA 38% PRODUCTION 718 MARGIN OVERPERFORMANCE mbod UPSTREAM 10.5 EBITDA/bl (USD) WARRIOR CRUDE OIL DISCOVERY SAVINGS GOAL EXCEEDED (COP) 2.2 Tn REFICAR POSITIVE 34 UNITS SOLID CASH 14 Tn POSITION (COP) MARGIN AND LOAD EVOLUTION 12
Slide 13: Comparison with peers
Comparison with peers EBITDA Margin EBITDA/bl NET DEBT/EBITDA 38% US$ 22,5 2,2x Majors IOC NOC Majors IOC NOC Majors IOC NOC 11% 19% 26% 17,0 9,5 12,4 1,9 3,9 1,4 Majors O&G IOC: Internationals NOC: National 13
Slide 14: Reserves Balance 2016
Reserves Balance 2016 RRR Excluding Price Effect: 79% RRR: -7% 2.000 1,849 -235 1.800 -202 186 1.598 1.600 1.400 Mboe 1.200 1.000 800 600 Balance Dec 15 Prod. 2016 Price Cost Opt. Balance Dec 16 Costs Optimization Lower transportation cost 20% drop in SEC price Reserve Management 14
Slide 15: Exploratory campaign 2016 - 2017
Exploratory campaign 2016 - 2017 15
Slide 16: Outlook 2017-2020
Outlook 2017-2020 16
Slide 17: 2017 Perspectives
2017 Perspectives • 17 exploratory wells drilled: 6 offshore Colombia and 11 onshore Colombia. • Production Target: 715 Mboed • Robust liquidity opens up opportunities for inorganic growth • Gross Debt/Ebitda: 2.5-3x • New target savings of USD 0.24 Bn 1 in 2017. • Stabilization of Reficar and integ
Slide 18: Outstanding Operational performance and Financial Excellence
Outstanding Operational performance and Financial Excellence PRODUCTION Fulfillment of Profitable production goal 715 mboed FINANCIAL Greater available cash Solid Debt/EBITDA indicator Structural efficiencies Stable EBITDA margin EXPLORATION USD 650 MM CAPEX for 2017 Committed to search for new rese
Slide 19: Q&A
Q&A 19