CORPORATE GROUP
FINANCIAL AND OPERATIONAL RESULTS
November, 2016 3Q 2016
FINANCIAL AND OPERATIONAL RESULTS November, 2016 3Q 2016 - - PowerPoint PPT Presentation
CORPORATE GROUP FINANCIAL AND OPERATIONAL RESULTS November, 2016 3Q 2016 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
CORPORATE GROUP
FINANCIAL AND OPERATIONAL RESULTS
November, 2016 3Q 2016This 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 of Ecopetrol’s Business. Said projections and statements include references to estimates or expectations of the company regarding its future and operational results. Potential investors and the market in general should be aware that the information provided herein does not constitute any guarantee of its performance, risks or uncertainties that may occur or materialize. Real results, may fluctuate and differ from those provided herein due to several factors outside of the control of the Company. Neither Ecopetrol nor its advisors, officers, employees, directors or agents, make any representation nor shall assume any responsibility in the event actual performance of the Company differs from what is provided herein. Moreover, Ecopetrol, its advisors officers, employees, directors or agents shall not have any obligation whatsoever to update, correct amend or adjust this presentation based on the information attained or events occurred after its disclosure. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Ecopetrol. Neither this presentation nor any of its contents may be used for any other purposes without the prior written consent of Ecopetrol.
Cautionary Statement
2María Catalina Escobar Head of Corporate Finance and Investor Relations Luisa Lafaurie CEO Cenit Rafael Guzmán Technical VP María Fernanda Suárez VP of Strategy and Finance Juan Carlos Echeverry CEO Héctor Manosalva VP of Development and Production Max Torres VP of Exploration Patricia Zuluaga VP of Commercialization and Marketing (A) MANAGEMENT PARTICIPANTS Felipe Bayón Executive VP Carlos Alberto Vargas VP of Transformation Adolfo Tomas Hernández VP of Refining and Industrial Processes
Basket differential in line with the 2020 strategy
51 47 47 39 38 38 USD 0 USD 10 USD 20 USD 30 USD 40 USD 50 USD 60 3Q-2015 2Q-2016 3Q-2016
Crude Prices (USD/bbl)
BRENT ECP BASKET9 12
USD/bbl differential Commercial reaction capacity in a challenging environment
9
ACTIVE RECOVERY PILOTS DAYS OF DRILLING RUBIALES EBITDA MARGIN START OF GUNFLINT PRODUCTION (MAX MBOED) SAVINGS GOAL EXCEEDED (COP) SOLID CASH POSITION (COP)
Operational excellence reflected in quarterly figures
1.9 Tn 7.7 Tn 40%
3Q PRODUCTION
(MBOED) 723
11.8 17 6 days
5FINANCIAL OPERATIONAL
Exceeded 2016 goal of COP 1.6 trillion
1.0 0.6 0.4 0.3 0.2 0.2 0.7 Total general Otras (33 Palancas) Perforación & Facilidades Transporte del Upstream Mantenimiento Abastecimiento O&M Midstream Dilución6 levers comprise 80% of cumulative efficiencies (2015-2016)
Figures in Billions (COP)Exceeded goal for structural efficiencies
6495 1,595 339 564 203 181 80 73 339 Opex Gestionable Dilución O&M Filiales Transporte Transporte Upstream Ingreso/Caja Capex Total Eficiencias
1,934Structural Non-Structural
Figures in Trillions (COP)3.4
O&M: Operations and MaintenanceManageable Opex Dilution O&M Transportation Upstream Transportation Revenue Cash Capex Total Efficiencies
Total Other (33 Levers) Perforation & Facilities Upstream Transportation Maintenance Procurement Strategy O&M Midstream DilutionProfitable production
647 672 48 51
2Q 2016 3Q 2016 Ecopetrol S.A. Subsidiaries
4%
695 723
Successful receipt of Rubiales and Cusiana Reactivation of Caño Sur (September 2016) Start of production at Gunflint – US GOM
mboed
Rubiales – successful operation
Zero HSE incidents Reduction of 25% in days of drilling, from 8 to 6 Production increasing due to resumption of activity Investment Flexible depending
With less
Better level of production to meet the 2016 goal
Successful operational and environmental continuity Reduction of drilling cost by 20% versus 2015
7 HSE: Health, Safety and Environment7.4 5.8 6.4
2015 Jan-Sep 2016 LTM*Optimization of processes is reflected in production indicators
Lifting Cost (USD/bbl)
Savings close to USD 400 MM (reduction of 20% in dilution factor vs 2014)
Dilution & Transportation Cost
* LTM: Last 12 months - 1 Oct. 2015 – 30 Sep. 2016 ** Data as of October 30, 201634 36 26 26 8 21 21 6
Castilla Chichimene Rubiales 2014 2015 2016Days of Drilling**
Record Record
16 12
Record
6
8Chichimene– Llanos– Direct Operation
82% increase in production rate in pilot area (2,404 BOD)
Castilla– Llanos– Direct Operation
Increase in production rate of 60% in pilot area (800 BOD)
Improved recovery key in addition to production and reserves
500 700 900 1100 1300 1500 1700 1900 2100 2300 ago-11 jul-12 jun-13 may-14 abr-15 mar-16 Crude Rate (BOD) Castilla K1 Water Injection Pilot Start-up of water injection pilot 500 1500 2500 3500 4500 5500 6500 7500 mar-10 nov-10jul-11mar-12 nov-12jul-13mar-14 nov-14jul-15mar-16 Crude Rate (BOD) Chichimene Water Injection Pilot Start-up of water injection pilotDecreasing costs are important to facilitate expansions and incorporate reserves at business plan prices
9Brazil North America
ECOPETROL BRASIL 3Q: PROCESSING 854 Km2 3D- SEISMIC POT-M-567 BLOCK OFFSHORE COLOMBIA 4Q: PURPLE ANGEL WELL TO INITIATE DRILLING Evaluation of projects in mature fields Exploratory activity zone in progressExploration Preparing 2017 exploration campaign
10 exploration activity zone for Q4 2016 Bullerengue Chimú NOGAL SEISMIC Pegaso Cusiana-Cupiagua-Recetor Molusco Siluro Gorgon Offshore 2017947 869 811 248 258 265 3Q 2015 2Q2016 3Q 2016
Refined Crude * Volumes transported correspond to group’s companies and third parties.Volumes transported* (mbod)
11production
2.86 2.57 2.43 3Q 2015 2Q 2016 3Q 2016
Midstream revenue (COP Tn)
Midstream Identifying opportunities for optimization
Gross Refining Margin B/meja (USD/bbl)
16.7 13.5 13.4
3Q 2015 2Q 2016 3Q 2016208 216 213
3Q 2015 2Q 2016 3Q 2016Refinery runs at B/meja (USD/bbl)
+2%
improvements in operating methods
Downstream Commissioning continues
37% 31% 24% 44% 58% 45% 68% 61% 43% 35% 18% 1% 15% 13% 7%
36.1% 24.1% 39.5% 38.5% 40.1%
00% 05% 10% 15% 20% 25% 30% 35% 40% $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 3Q15 4Q15 1Q16 2Q16 3Q16 Downstream Midstream Upstream Márgen EBITDA4.70 4.14 4.52 4.89 3.08
EBITDA performance (COP Tn)
Demonstrated operating capacity
Best EBITDA
6.62 13.55 1.38
Operating Income EBITDA Net IncomeSavings and efficiencies mitigated the effect on costs by:
2H 2016)
Financial results leveraged by operational excellence
3Q Income Statement (COP Tn)
14 *Does not include depreciation and amortization ** Includes Financial Result and share of profit in companiesCumulative results (COP Tn)
19.2% 39.4% 4.0% Sales Variable Costs* Fixed Costs* Deprec./ Amort Expenses Oper. Oper. Income Financial Result Income tax Non- controlling interest Net Income
Non-recurring impacts Margin
Sales Costs 8.74
6.47 0.27
(0.63) (1.13) (3.30) (1.88) Caja inicial 3T 2016 Flujo Operación antes de impuestos Pago de impuestos* Inversion CAPEX Inversión portafolio títulos yFinancial results Solid cash generation
3Q cash flow (COP Tn)
15 * Includes income and wealth taxInitial cash 3Q 2016 Operating Cash Flow before Taxes Tax payment* CAPEX investment Portfolio and other investments Financing activities FX effect Final cash 3Q 2016
Strict Capital Discipline Cash flow focus & cost efficiency Transformation Program Reserves & Production growth
Ecopetrol’s 2020 Corporate Strategy Pillars
16EXPLORATION PRODUCTION FINANCIAL
Fulfillment of goal of Profitable production 715 mboed Warrior, Payero, Boranda, Pegaso, Buyerengue and Chimú Drilling completed Purple Angel being drilled Greater available cash Solid Debt/EBITDA indicator Structural efficiencies Stable EBITDA margin
Outlook 2016 year-end