Ecopetrol (EC) Q3 FY25 earnings call: guidance and Q&A

Is there a government instruction/expectation to sell the Permian and does management agree; and has the company assessed the risk of a senior manager landing on the OFAC list and its financing/default impact?

Ecopetrol and its shareholders are not interested in divesting the Permian; any portfolio decision is analyzed rigorously and decided by the Board. On sanctions, the compliance officer said robust governance monitors scenarios and mitigations; the CFO added a mitigation plan with specific measures to reduce/eliminate risk to capital-market access and to ensure strict compliance with financial obligations.

“Ecopetrol and its shareholders are not interested in the divestment of Permian. However, any decision that has to do with the portfolio of Ecopetrol will be analyzed with rigor and discussed within the Board of Directors”

asked by Daniel Guardiola · answered by Julian Lemos Valero

How much does the exchange rate revaluation affect operating earnings, and how much facilitation is the national government providing to advance Sirius on schedule?

CFO confirmed ~COP 700 billion full-year net-profit sensitivity per COP 100 FX move; the 9-month average rate of COP 4,132 vs COP 3,970 last year gave a positive ~COP 600B net-profit / COP 1.1T EBITDA contribution, though recent appreciation below the COP 4,150 plan requires more measures, partly neutralized via hedge accounting to equity. On Sirius, Petrobras is operator; Ecopetrol closely follows up and works with authorities/DANCP, targeting flow consultations ending July 2026 then the Ballena connection.

“sensibility for every COP 100 of variation in the exchange rate can have an effect of COP 700 billion on the net profit for the entire period of the year”

asked by Andres Duarte · answered by Alfonso Camilo Munoz

Would a DIAN embargo trigger a bond default, and are there relevant clauses in the bond prospectuses?

CFO said DIAN officially discarded any embargo in the controversy; Ecopetrol and Reficar have taken protective measures (tutelas, requested control-agency intervention) and continue meeting all financial obligations timely, with cash-flow projections to cover contingencies depending on any amount determined.

“the DIAN or the Tax Authority of Colombia stated officially and specifically, this discards any embargo in this controversy on the -- that for Ecopetrol”

asked by Ricardo Andres Sandoval Carrera · answered by Alfonso Camilo Munoz

What is the Q4 2025 and 2026 production outlook amid oil-price volatility, and what is a normalized refining EBITDA/bbl and the path to reach it?

Production should land at the upper end of the 740–750 range for 2025; 2026 plan not yet set but expected close to the 2025 range. Refining focus on five levers — operating availability, utilization factor, sustained higher loads, maximizing valuable products, and cost reduction — should sustain good yields in 2026 given favorable differentials.

“we have to keep in mind the fall of the oil price, which -- that we've seen this quarter, and we expect it will happen also next year. But we're also hoping to be close to the production range”

asked by Luisa Belin · answered by Rafael Guzmán

What is the structure and expected 2026 production/investment for the Permian?

The JV runs to mid-2026 with predetermined investment; thereafter Ecopetrol can extend the JV or continue under the signed JOA with Oxy in Texas, choosing what is most convenient. Expected 2026 Permian production is close to ~90,000 bbl/d, dependent on the post-H1 2026 agreement; investment levels still being worked but intent is to maintain production.

“we expect production to be close to what we planned for this year, meaning close to 90,000 barrels per day”

asked by Nicolas Barros · answered by Rafael Guzmán

Which assets might Ecopetrol divest vs acquire next year, and what drove the better-than-expected upstream EBITDA despite flat prices and production?

Capital is allocated to higher-profitability assets; partner structures (e.g., Parex in Putumayo, ~COP 350 million) fund non-prioritized fields, with more such deals being negotiated. Upstream margin gains came from three drivers: cost/efficiency (lifting-cost inflection), maximized infrastructure utilization (including midstream line reversal for crude imports), and upstream portfolio optimization.

“we have an alliance made with Parex in Putumayo to invest from projects COP 350 million in that area where we do not plan to make investments”

asked by Guilherme Costa Martins · answered by Rafael Guzmán

With YTD net income down 32%, will payout stay at the high end and could the policy change; and is there room to return lifting cost to $11/bbl?

Dividend to remain within the 40–60% distributable-profit policy, proposed closer to the mid-range, with the shareholders' meeting deciding. Management is committed to further lifting-cost reductions via the efficiency plan plus divesting high-cost/low-profitability assets and boosting production (including partner capital) at those assets.

“we have a clear policy to distribute dividends that range between 40% and 60% of distributable profit”

asked by Joao Barichello · answered by Alfonso Camilo Munoz

How does the suspension of operations in Tibú affect gas service and how long will it last?

Only the northern part of the Tibú field is suspended, representing less than 1% of Colombia's total gas production but an important source for Norte de Santander; gas has been replaced from other sources while Ecopetrol works with authorities, the army and police to restore operations as soon as possible.

“The gas production of this part is less than 1% of the total production of gas we have throughout Colombia. But it is an important source for Norte de Santander”

asked by Jose Ortiz · answered by Unknown Executive