FINANCIAL AND OPERATIONAL RESULTS 1Q-2016 May 2016 Cautionary - PowerPoint PPT Presentation

CORPORATE GROUP FINANCIAL AND OPERATIONAL RESULTS 1Q-2016 May 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 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 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. 2

Juan Carlos Echeverry MANAGEMENT CEO PARTICIPANTS Maria Fernanda Suarez Felipe Bayón VP of Strategy and Executive VP Finance Hector Manosalva Max Torres VP of Development and VP of Exploration Production Thomas Rueda Juan Pablo Ospina CEO VP of Commerce and Cenit Marketing Adolfo Tomas Hernández Rafael Guzman VP of Refining and Industrial Technical VP Processes María Catalina Escobar Alberto Vargas Head of Corporate Finance and Financial Comptroller Investor Relations

Agenda Market Overview 1Q 2016 Highlights Operational Results Financial Results 2016 Perspectives Q&A 4

Ecopetrol Group generated a net income despite facing the lowest crude prices in 12 years BRENT PRICE 160 (USD) 140 120 100 80 60 40 36.6 20 28.8 27.9 0 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Fuente: Bloomberg 5

The Colombian Peso devaluation had a positive effect on revenues Crude Prices COP/USD Average $ 3,500 USD 60 3,249 55 BRENT 3,059 $ 3,000 USD 50 ECP Basket 45 44 2,469 $ 2,500 USD 40 35 34 $ 2,000 USD 30 25 $ 1,500 USD 20 $ 1,000 USD 10 $ 500 USD 0 $ 0 1Q-2015 4Q-2015 1Q-2016 1Q-2015 4Q-2015 1Q-2016 At the end of 1Q 2016 the exchange rate appreciated 4% vs. 2015 year end, La tasa de cierre se revaluó xx% lo que fue positivo para resultado neto resulting in a positive effect on our net financial result (non-operational) * Rounded Figures 6

1Q 2016: positive results under complex market conditions o Positive results reflected in : o 127% increase in the net income between 1Q 2015 vs. 1Q 2016, despite a 43% decrease on our crude oil basket prices and a 24% fall in B/meja refining margins. o Group’s EBITDA of COP$ 4.1 Tn and 39.5% EBITDA margin o Focus on Cash Flow  No dividend distribution  ~ 38% 2016 CAPEX reduction (USD$3 - $3.4 Bn vs USD$4.8 Bn)  Divestments: ISA for COP$ 377 billion  1Q 2016 Group’s savings of COP$0.42 Tn . The target for the full year 2016 is COP$1.6 Tn. o Financing for USD$ 475 million 7

Capital discipline 2016 CAPEX adjustment to navigate current market conditions USD$ millions Conclude transportation projects Transportation 3,000 -3,400 and complete Reficar’s and and Refining 34 Bioenergy’s start -up Other 1,135 Investments on main production Production Refining fields: Expected production of ~ 715 433 mbpd Midstream Ratification of 2015 exploratory Production Exploration 1,116 discoveries and new projects on- shore Colombia and GOM-US Exploration 282 2016 CAPEX Segment % UP 90% CAPEX 2017 - 2020 DOWN 7% MID 3% 8

Cost efficiencies Savings of COP$ 0.42 Tn for 1Q 2016 and main 2016 iniciatives 1Q 2016 achieved savings 2016 savings initiatives* COP$Billion COP$ Billion 1,600 Consulting, Trucks, Fixed Costs 332 160 Energy Variable Costs 17 160 Inventories Optimization 210 Operational Expenses 72 Association Contracts 220 Total Savings 421 290 Maintenance Labor Costs 560 Supply 2016 Savings Figures are rounded and subject to further reallocation 9

Cost efficiencies Reduction in Direct and Indirect Personnel Personnel* 53,543 -48% # of personnel 39,050 27,954 44,393 30,319 19,266 9,150 8,731 8,688 2014 2015 1Q 2016 Direct Personnel Outsourcing Ecopetrol’s total personnel, including outsourcing, decreased from 53,543 in December/2014 to 27,954 in March/2016. A 48% reduction * Figures correspond to period end 10

Production Investment focused in mitigating negative impact on production Corporate Group’s Production* 773 -4.8% Production due to: 737 51 47 o Investment adjustments o Natural decline mbpd o Judicial decisions (Hocol) 722 690 o Temporary suspension of fields with negative margins I trim. 15 I trim. 16 1Q 2015 1Q 2016 Subsidiaries Ecopetrol S.A Participaciones netas Production in line with 2016 goal: 715 mbpd 11 *Graph with rounded figures. Variations were computed with whole numbers

Production Structural efficiencies Lifting Cost* Drilling Days USD/bl -9.5% Average Drilling Days 12 7.4 6.7 4.8 Producción: 78 Kbpd Producción: 128 Kbpd 2015 1Q 2016 LTM** Record 2016 Dilution and Transportation Cost : Fields maintenance: Efficiencies achieved in 1Q2016 vs 1Q2015: Entry in operation of transportation systems • 23% in wells intervention cost with higher viscosity (405 cSt) • 7% in number of interventions • 8% in intervention times *Lifting Cost Ecopetrol Group – (Production without royalties). 1T 2016 Lifting Cost is affected downwards due to postponed activities caused by seasonality of the first quarter 12 **LTM: Last twelve trailing months (April/2015 - March/2016)

Exploration Exploration activities in Colombia and abroad OFF-SHORE COLOMBIA • DRILL IN 2016 APPRAISAL WELL KRONOS-2 ECOPETROL AMÉRICA North • LEON 2 APPRAISAL WELL America GoM COMPLETED • DRILL IN 2016 WARRIOR WELL KRONOS-2 – OPERATOR ANADARKO NISCOTA- PAYERO-1 Brazil ECOPETROL BRAZIL ACQUIRED 832KM2 OF CARDON SEISMIC 3D IN BLOCK POT-M-567 ON-SHORE COLOMBIA • WELL PAYERO-1 BEING DRILLED • CARDON SEISMIC PROGRAM : 228 KM OF SEISMIC 2D 13

Midstream Consistent cash flow generation for the Group Transported Volumes*(mbpd) Midstream’s Net Income (COP$Bn ) 1,274 1,216 253 Products 264 903 Crude 1,021 670 952 1Q 2015 1Q 2016 1Q 2015 1Q 2016 Lower crude volume due to (i) attacks and illicit valves in Caño Limón – Coveñas and Transandino and (ii) Lower country production volumes Higher revenues and net income driven by (i) the exchange rate (tariffs set it US dollars) and (ii) operative efficiencies. 14 * Transported volumes correspond to the Group’s companies and third parties. Percentages computed with whole numbers

Refining Progress in Reficar’s start-up process March average load: 124.6 MBD o Record load 140 MBD* o 28 out of 34 production units in operation. o First coke export embark took place in April (51 thousand Tons) Gross refining margin in Operating cash cost B/meja (USD/Bl) ($USD/Bl)** 18.6 14.1 4.7 3.5 1Q -2015 1Q- 2016 1Q -2015 1Q - 2016 *Highest load reached on March 17, 2016 **Figures of the Corporate Group. B/meja refinery and Essentia (former Propilco) are included. 15

Financial results Net income increased by 127% between 1Q 2015 and 1Q 2016 Net Income (COP$Bn) 39.5% 127% EBITDA Margin 38.9% 363 160 1Q -2015 1Q - 2016 1Q 2015 1Q 2016 (COP$Tn) Revenues 10.5 12.3 -15% Costs and Expenses 8.9 9.9 -11% Gross Margin 29% 30% EBITDA 4.1 4.8 * Variations were computed with whole numbers 16

Group´s net income Net Income Variation 1Q 2015 vs. 1Q 2016 (COP$Bn) FINANCIAL REVENUES COST OF SALES EXPENSES RESULT COP$-1,816 BN COP$1,109 MM COP$-51 COP$ 1,394 405 28 353 179 363 52 160 1,799 51 265 844 3,961 1,966 1T 2015 Efecto Volumen Efecto Precio TRM Compras Menores Gastos Oper cambio Int. y otros MPP Renta Interes no controlado 1T 2016 Costos Dif Interest Non- 1Q 2015 Volume Price FX Lower Operative FX Loss and Equity Income Purchases controlling 1Q 2016 Effect Effect Effect Costs Expenses /Gain Other Method Tax Interests 17

Income by segment Income Variation by Segment 1Q 2015 vs. 1Q 2016 (COP$Bn) 1Q 2015 E&P Downstream Midstream Eliminations 1Q 2016 EBITDA Margin 1Q 2016 17.3% 11% 79.9% 18