• Revenue: COP133.3 trillion in 2024.
• EBITDA: COP54.1 trillion with an EBITDA margin of 41%.
• Net Income: COP14.9 trillion, excluding external factors would be COP21 trillion.
• Reserve Replacement Ratio: 104% with 260 million barrels of oil equivalent added.
• Average Production: 746,000 barrels of oil equivalent per day.
• CapEx: Over $6 billion, including the acquisition of CPO-09.
• Dividend Proposal: COP214 per share.
• Operational Availability: 94.5% with a throughput of 414,000 barrels per day.
• Gross Refining Margin: $9.9 per barrel, a decrease of $10 compared to 2023.
• Cash Position: COP18.2 trillion at year-end.
• Free Cash Flow: Highest in history, supported by operational performance and receivables collection.
• Debt to EBITDA Ratio: 2.2x with an average debt life of 9.3 years.
• Investment Plan for 2025: COP24 trillion to COP28 trillion, with 60% for energy security and 40% for energy transition.

• Warning! GuruFocus has detected 6 Warning Signs with EC.

Release Date: March 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ecopetrol SA (NYSE:EC) achieved a reserve replacement ratio of 104%, adding 260 million barrels of oil equivalent in proven reserves, doubling the 2023 addition.
• The company exceeded its production target with an average of 746,000 barrels of oil equivalent per day, the highest level in the last nine years.
• Ecopetrol SA (NYSE:EC) recorded total revenues of COP133.3 trillion and an EBITDA of COP54.1 trillion with an EBITDA margin of 41%.
• The company successfully reduced greenhouse gas emissions by more than 462,000 tonnes of CO2 since 2020 and achieved an 81% water reuse rate.
• Ecopetrol SA (NYSE:EC) announced a dividend distribution proposal of COP214 per share, reflecting strong shareholder returns.

Negative Points

• The gross refining margin decreased by $10 per barrel compared to 2023, primarily due to a decline in international fuel prices.
• The company's EBITDA decreased by approximately COP6.6 trillion compared to the previous year, impacted by external factors such as price decreases and exchange rate variations.
• Ecopetrol SA (NYSE:EC) faced electrical reliability challenges in its downstream operations, affecting operational availability.
• The lifting cost remained high, with expectations to maintain similar levels in 2025, despite cost efficiency efforts.
• The company anticipates potential impacts from social unrest risks and environmental events on its production levels in 2025.

Q & A Highlights

Q: Can you explain the impairment terms of the refining segment and the assumptions used for valuation? A: Camilo Barco, CFO, explained that the impairment shown in the last quarter of 2024 was based on generally accepted methodologies, including discounted cash flows. Factors affecting this adjustment include projections of price differentials, local crude availability, and discount rate adjustments. These led to a recovery of approximately COP0.9 billion in the last quarter of 2024.

Q: Why is there an expected reduction in EBITDA margin for 2025 compared to 2024? A: Camilo Barco, CFO, stated that the projected EBITDA margin for 2025 is around 39%, down from 2024. This is due to a lower Brent price assumption of $73 per barrel compared to $80 in 2024. Despite this, the company is committed to achieving efficiencies of close to COP4.5 trillion to offset external factors.

Q: What are the details of the extension agreement with Oxy in the Midland Basin, and is there a potential contract cancellation? A: Ricardo Roa, CEO, confirmed the extension of the activity plan with Oxy, which includes developing around 90 wells in 2025. The ownership of acreage and production remains unchanged. The company constantly evaluates its assets and respects the terms of agreements with allies.

Q: What is Ecopetrol's stance on non-conventional oil and gas opportunities in Colombia? A: Ricardo Roa, CEO, stated that current government policy is rigorous regarding non-conventional exploration, leading to the suspension or closure of such contracts. Ecopetrol is focusing on exploring conventional resources and maximizing existing contracts.

Q: Can you provide more details on Ecopetrol's natural gas regasification capacity and future projects? A: David Riano, EVP of Energy for Transition, mentioned two projects: one in the Pacific with a capacity of 60 million cubic feet per day and another in the Caribbean with 200 million cubic feet per day. The Pacific project involves a third-party regasification service, while the Caribbean project uses existing infrastructure.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.