Stock Quote

Ecopetrol Announces Results for the Second Quarter and First Half of 2009

BOGOTA, July 31 /PRNewswire-FirstCall/ -- Ecopetrol, S.A. (BVC: ECOPETROL; NYSE: EC), the Colombian integrated oil and natural gas company, announced today its unaudited consolidated(1) and unconsolidated financial results for the second quarter of 2009 and the first half of 2009. Financial statements were prepared and filed according to the Regimen de Contabilidad Publica (RCP or Colombian Government Entity GAAP) enacted by the Contaduria General de la Nacion de Colombia (Colombian General Accounting Department), in Colombian pesos (COP).

    (Logo: http://www.newscom.com/cgi-bin/prnh/20090209/ARM001LOGO )

    Below is a summary of Ecopetrol's unconsolidated financial results:

    (In billions of COP)
                     Unconsolidated             Unconsolidated
                      2Q09     2Q08       %   1st Half 09 1st Half 08  %

    Total Sales     6685.5   9424.8   -29.1%   11798.3   16647.2   -29.1%
    Operating
     Profit         2132.3   4384.8   -51.4%    3153.2    8150.5   -61.3%
    Net Income       762.0   3356.7   -77.3%    2371.3    5650.0   -58.0%
    Earnings per
     Share(COP)      18.83    82.94   -77.3%     58.59    139.60   -58.0%
    EBITDA          2807.6   4823.2   -41.8%    4436.9    9024.4   -51.8%
    EBITDA Margin       42%      51%                38%       54%

1 Pursuant to the RCP, Colombian companies only have the obligation to consolidate their financial statements at the end of each fiscal year. Therefore, figures in this report do not constitute a formal consolidation of Ecopetrol's financial statements. However, they do present an estimated consolidation of Ecopetrol's financial statements.

Commenting on the second quarter 2009 results, Javier Gutierrez, Ecopetrol's Chief Executive Officer, said "Ecopetrol achieved significant improvements in its operating performance on a sequential basis, more than doubling its operating profit compared to the previous quarter. Sequential improvements were driven by higher volumes and prices and increased hydrocarbon production and purchases, while there was a loss in our non- operating results, due to the effect of revaluation on portfolio investments. In annual terms, the 2009 financial results were below those of year 2008 due to lower crude oil and natural gas prices.

We continued to successfully implement our strategic plan, increasing production to 504.2 thousand BOE/D in June. This significant milestone toward our goal of producing the equivalent of one million barrels of oil by 2015 was achieved six months ahead of schedule. We strengthened our exploratory activities in the second quarter by increasing our portfolio of prospects in Colombia and expanding our international activity through strategic alliances.

All of the strategic acquisitions announced during the first quarter were completed and we began their integration in the second quarter. We recently entered the debt market, raising COP 2.2 trillion through a syndicated loan from Colombian banks and USD 1.5 billion through an international note offering which was six times oversubscribed. Those are the first steps to optimize our capital structure."

Market Environment

The second quarter was marked by the first signs of a global economic recovery, which impacted commodity prices and exchange rates in emerging countries as investors again took positions in those markets. The exchange rate appreciated by 15.7% during the quarter (from USD/COP 2,561 at the end of March to USD/COP 2,159 at the end of June), while the price of the WTI barrel rose from USD 49.7/barrel to USD 69.9/barrel (a 40.6% increase) from the end of March to the end of June.


    Sales Volume

    Domestic Sales Volume           2Q09          2Q08        %
     (thousands BOE/D)
       Crude Oil                    79.1          74.7      5.8%
       Natural Gas                  69.1          63.3      9.2%
       Gasolines                    59.1          61.9     -4.5%
       Medium Distillates           93.1          95.3     -2.3%
       LPG and Fueloil              19.3          20.5     -6.1%
       Industrial and Petrochemical
        Products                    14.3          14.5     -1.6%
       Total Domestic Sales        333.9         330.2      1.1%

       Exports Volume
        (in thousand BOE/D)         2Q09          2Q08      %
       Crude Oil                   216.7         142.1     52.5%
       Products                     55.5          51.5      7.8%
       Natural Gas                  26.4          19.5     35.5%
       Total Export Sales          298.6         213.1     40.1%

       Total Volume Sold           632.5         543.3     16.4%



    Domestic sales volume       1st Half 09   1st Half 08     %
     (in thousand BOE/D)
       Crude Oil                    81.4          73.9      10.1%
       Natural Gas                  66.0          65.6       0.7%
       Gasolines                    59.7          62.3      -4.2%
       Medium Distillates           91.7          91.8      -0.2%
       LPG and Fuel oil             20.1          20.2      -0.7%
       Industrial and Petrochemical
        Products                    14.1          16.2     -12.7%
       Total Domestic Sales        332.9         330.0       0.9%

       Exports Volume
        (in thousand BOE/D)        1st Half 09   1st Half 08    %
       Crude Oil                   200.4         137.0      46.3%
       Products                     56.0          47.9      16.9%
       Natural Gas                  24.7          13.9      77.7%
       Total Export Sales          281.1         198.8      41.4%

       Total Volume Sold           614.0         528.8      16.1%

Total sales volume rose 16.4% during the second quarter of 2009 as compared to the same period in 2008 due to an 85.5 thousand BOE/D increase in exports. The largest increases were in Castilla crude exports (120%), and natural gas exports (35.5%). For the first half of 2009 as compared to the first half of 2008, there was a 16.1% increase due to a 41.4% increase in exports.

Domestic sales increased slightly by 3.7 thousand BOE/D from the second quarter of 2009 as compared to the second quarter of 2008 due mainly to a 5.8 thousand BOE/D rise in natural gas sales resulting from larger consumption in the thermal energy sector, and a 4.4 thousand BPCD increase in crude oil sales to the Cartagena Refinery, which helped offset the 5 thousand BPD decline in gasoline and medium distillate sales. For the first half of 2009 compared to the same period in 2008, there was a 0.9% increase in domestic sales resulting from greater sales of crude oil to the Cartagena Refinery.

The lower domestic consumption of refined products was due to an increase in the distribution of gasoline with 10% ethanol, greater restrictions on the use of vehicles in several Colombian cities, and the conversion of vehicles to natural gas as a result higher domestic gasoline prices as compared to natural gas prices for vehicles.

The availability of Ecopetrol crude oil and products included the following purchases and imported volumes:


       Purchases(in thousand BOE/D) 2Q09           2Q08       %
       Crude Oil                   165.4         137.9     19.9%
       Refined Products              9.8           6.5     50.9%
       Natural Gas                  37.6          31.6     19.2%
       Total Purchases             212.8         175.9     20.9%


       Imports (in thousand B/D)    2Q09          2Q08        %
       Crude Oil                       0             0        0%
       Products                     37.5          28.1     33.5%
       Total imports                37.5          28.1     33.5%



       Purchases
        (in thousand BOE/D)     1st Half 09   1st Half 08     %
       Crude Oil                   162.7         137.7      18.2%
       Refined Products              8.5           4.8      76.8%
       Natural Gas                  36.0          31.5      14.4%
       Total Purchases             207.3         174.0      19.1%


       Imports (in thousand B/D)  1st Half 09  1st Half 08    %
       Crude Oils                    0.0             0.4    -100%
       Products                     35.5            23.7    49.8%
       Total Imports                35.5            24.1    47.1%



    Unconsolidated Financial Results
    Unconsolidated Profit and Loss Statement
    (In billions of COP)

                        2Q09    2Q08       %  1st Half 09 1st Half 08  %

       Domestic Sales 3438.6   5838.6   -41.1%   6592.4  10385.5   -36.5%
       Export Sales   3015.3   3360.3   -10.3%   4738.3   5821.6   -18.6%
       Services Sales  231.7    225.8     2.6%    467.6    440.1     6.2%
    Total Sales       6685.5   9424.8   -29.1%  11798.3  16647.2    -29.1%
       Variable Costs 2674.4   3473.5   -23.0%   5259.9   5690.3     -7.6%
       Fixed Costs    1326.2   1232.4     7.6%   2416.8   2159.0     11.9%
    Cost of Sales     4000.6   4705.8   -15.0%   7676.7   7849.2     -2.2%
    Gross Profit      2685.0   4718.9   -43.1%   4121.5   8798.0    -53.2%
       Operating
        Expenses       552.7    334.2    65.4%    968.3    647.5     49.6%
    Operating Profit  2132.3   4384.8   -51.4%   3153.2   8150.5    -61.3%
    Non-operating
     Profit (Loss)    -1030.3   394.2  -361.4%    163.3   -242.9    167.2%
       Provision for
        Income Tax     340.0   1422.3   -76.1%    945.2   2257.6    -58.1%
       Net Income      762.0   3356.7   -77.3%   2371.3   5650.0    -58.0%

    Earnings per Share
     (COP)             18.83    82.94   -77.3%   58.59    139.60      -58%
    EBITDA            2807.6   4823.2   -41.8%  4436.9    9024.4    -50.8%
    EBITDA Margin         42%      51%              38%       54%

While international prices improved during the second quarter of 2009, they continued to be below those of the comparable period in 2008. This resulted in a decline in the average price of the crude oil export basket from USD 112.14/barrel in second quarter 2008 to USD53.66/barrel in second quarter 2009; and in the average refined export products basket, which fell from USD 88.86/barrel in second quarter 2008 to USD 52.22/barrel in second quarter 2009. During the first half of 2009, the average export crude oil basket was USD 42.7/barrel and the export products basket was USD 42.8/barrel, compared to an average of USD 98.4/barrel and USD 79/barrel, respectively, for the same period in 2008.

Lower prices during the second quarter of 2009 led to a 29.1% decrease in total sales, from COP 9,424.8 billion in the second quarter of 2008 to COP 6,685.5 billion in the second quarter of 2009. For the first half the year, total sales were COP 11,798.3 billion, which is a 29.1% decrease from the same period in 2008 when total sales were COP 16,647.2 billion.

The differential between the crude oil basket and WTI improved from an average of USD 11.84/barrel in second quarter 2008 to an average of USD 5.96/barrel in second quarter 2009. For the first half of the year, the average differential was USD 8.62/barrel for 2009, compared to USD 12.57/barrel for 2008. Ecopetrol's heavy crude oil differential improved as a result of the reduction in other heavy crude oils from Mexico, Venezuela, and Canada in the U.S. market.

The export product basket differential with WTI also improved from an average of USD 35.12/barrel during second quarter 2008 to an average of USD 7.40/barrel in second quarter 2009. For the first half of the year, the differential was USD 8.54/barrel for 2009 compared to USD 31.91/barrel for the same period in 2008. This improvement is due to the higher price of Fuel Oil No. 3 (benchmark for Colombian fuel oil) in the international market.

Cost of sales decreased 15.0% in second quarter 2009 compared to the second quarter of 2008 due to a 23.0% decline in variable costs, which (partially) offset a 7.6% increase in fixed costs. For the first half of the year 2009, cost of sales decreased 2.2% as compared to the same period in 2008.

The decrease in variable costs was mainly due to the lower value of crude oil purchases, whose average price decreased from USD 98.50/barrel in the second quarter 2008 to USD 49.74/barrel in the second quarter 2009, and to the decline in the value of imports, whose average purchase price decreased from USD 185.9/barrel in the second quarter of 2008 to USD 68.06/barrel in the second quarter of 2009.

Fixed costs increased 7.6% in the second quarter of 2009 compared to the same period in 2008, mainly as a result of increases in operating maintenance costs, and well reconditioning costs, as well as higher hydrocarbon transport costs stemming from the increased use of trucks to transfer higher quantities of heavy crude oils from the Rubiales field.

The Company continued to implement its strategy of optimizing goods and decreasing services' supply costs, which prevented an estimated cost of COP 252.8 billion during the first half of 2009.

Gross profit was COP 2,685.0 billion during the second quarter of 2009, resulting in a 40.2% gross margin, compared to COP 4,718.9 billion and a corresponding 50% gross margin in the second quarter 2008. Gross profit was COP 4,121.5 billion in the first half of 2009, compared to COP 8,798.0 billion in the first half of 2008.

Operating expenses increased 65.4% in the second quarter of 2009 compared to the second quarter of 2008 as a result of the following two factors: (i) a 207.4% increase in exploration and project expenses due to the recognition of unsuccessful exploratory activities, mainly Gibraltar 3P, and geological and seismic study costs; and (ii) a 72.8% increase in administrative expenses primarily as a result of goodwill amortization related to the acquisitions of Propilco, Offshore International Group, Ocensa, and Hocol and, in line with the Company's expansion, an 11.5% increase in employee headcount from June 2008 to June 2009. For the first half of the year 2009, there was a 49.6% increase in operating expenses compared to the first half of 2008 due to greater costs associated with Ecopetrol's exploration activities.

The operating profit for the second quarter of 2009 decreased as compared to the operating profit of the second quarter of 2009, and was COP 2,132.3 billion in the second quarter of 2009 as compared to COP 4,384.8 billion in the comparable 2008 period. Nevertheless, operating profit increased 108.9% as compared to the first quarter of 2009 as a result of higher production levels.

Non-operating profit decreased 361.4% compared to the second quarter of 2008 due to a COP 1,030.3 billion loss in the second quarter of 2009 compared to a COP 394.2 billion profit in the same period last year. The loss is mainly the result of the impact of the peso revaluation against the dollar on the portfolio (63% denominated in US dollars) during the second quarter of 2009, which resulted in a currency exchange loss of COP 911.2 billion. By contrast, in the second quarter of 2008, the peso devalued against the dollar, resulting in a COP 399.3 billion currency exchange gain.

Net profit for the second quarter 2009 was COP 762.0 billion or COP 18.83 per share, a drop of 77.3% from the second quarter of 2008, when net profit was COP 3,356.7 billion or COP 82.94 per share. For the first half of 2009, net profit reached COP 2,371.3 billion or COP 58.59 per share, 58.0% less compared to the same period of 2008. For the first half of 2008, net profit was COP 5,650.0 billion or COP 139.60 per share.

EBITDA totaled COP 2,807.6 billion in the second quarter of 2009, resulting in a 42% EBITDA margin, compared to COP 4,823.2 billion and a corresponding 51% EBITDA margin in the same period of 2008. EBITDA for the first half of the year reached COP 4,436.9 billion in 2009, or a 38% EBITDA margin, compared to COP 9,024.4 billion, or a 54% EBITDA margin in 2008.



    General Balance Sheet
    Unconsolidated General Balance Sheet
                                  As of June    As of March
       In billions of COP            2009          2009         %
       Current Assets              14,053.5      18,497.0    -24.0%
       Long Term Assets            36,056.1      34,854.8      3.4%
       Total Assets                50,109.6      53,351.8     -6.1%
       Current Liabilities         12,728.5      18,016.0    -29.3%
       Long-Term Liabilities        9,204.1       7,604.1     21.0%
       Total Liabilities           21,932.6      25,620.1    -14.4%
       Shareholders' Equity        28,177.0      27,731.8      1.6%
       Total Liabilities and
        Shareholders' Equity       50,109.6      53,351.8     -6.1%

       Memorandum Accounts*      135,399.68    168,298.71

As of June 30, 2009, Ecopetrol had assets of COP 50,109.6 billion, compared to COP 53,351.8 billion at the end of the first quarter of 2009. This decline was attributable to the decline in current assets due to the liquidation of portfolio investments in order to pay dividends and acquire Hocol.

Liabilities at June 30, 2009 amounted to COP 21,932.6 billion, compared to COP 25,620.1 at the end of first quarter 2009. The decline was due to the first dividend payment of COP 3.027,3 billion in April, and the second and third installments of the 2008 income tax payment in the amount of COP 2,285.9 billion.

Shareholders' equity rose from COP 27,731.8 billion as of March 31, 2009 to COP 28,177.0 billion as of June 30, 2009 due to a COP 762.0 billion increase in net income and a COP 116 billion valuation surplus, which were [partially] offset by an exchange loss generated by USD equity investments in ODL Finance, Offshore International Group, Andean Chemicals Limited, Ecopetrol Transportation Company, and Ecopetrol del Peru in the amount of COP 428 billion.

Cash Position

As of June 30, 2009, Ecopetrol held, unconsolidated, COP 5,711.4 billion in cash, cash equivalents, and investments, including investments in portfolios at maturity totaling COP 268.9 billion, and had long-term financial debt of COP 1,764.7 billion as a result of the syndicated loan entered into with a syndicate of local banks. Net cash used for operating activities in the second quarter of 2009 was COP 2,319.9 billion, compared to COP 2,061.9 billion in the second quarter of 2008.



    Results by Segment

         Quarterly Results by Segment
         In billions of COP        E&P                    Refining
                                   2Q09       1Q09        2Q09     1Q09
            Domestic Sales        2512.0     1812.9      2614.2   2366.9
            Exports               1579.2      551.3       526.7    395.5
            Total Sales           4091.2     2364.3      3140.9   2762.4
            Operating Profit      1995.2      925.3       -98.5     17.3
            Net Income            1421.3      755.3       -77.7    188.8




         Quarterly Results by Segment
         In billions of COP          Transportation      Marketing and Sales
                                     2Q09      1Q09        2Q09       1Q09
             Domestic Sales          519.1   488.6         1054.1    944.9
             Exports                     0       0          909.4    776.2
             Total Sales             519.1   488.6         1963.5   1721.1
             Operating Profit        137.7   164.5          148.5    -77.6
             Net Income               87.9   137.1          140.1    -51.7



         Quarterly Results by Segment
         In billion
         COP      E&P                 Corporate              TOTAL ECP
                                    2Q09       1Q09       2Q09      1Q09
            Domestic Sales        -3029.2   -2223.6      3670.1    3389.7
            Exports                     0         0      3015.3    1723.1
            Total Sales           -3029.2   -2223.6      6685.3    5112.8
            Operating Profit        -50.6      -8.6      2132.3    1020.9
            Net Income             -809.6     579.7       762.0    1609.3


    Accumulated Results by Segment
    Billions of COPs

                                          E&P      Refining  Transportation
                                       As of June As of June  As of June
                                          2009       2009        2009
    Domestic Sales                       4325.0     4981.0      1007.6
    Export Sales                         2130.5      922.2           0
    Total Sales                          6455.5     5903.3      1007.6
    Operating Profit                     2920.5      -81.2       302.2
    Net Income                           2176.7      111.0       225.0



    Accumulated Results by Segment
    Billions of COPs
                                     Marketing &
                                       Sales     Corporate     TOTAL ECP
                                     As of June  As of June    As of June
                                        2009        2009         2009
    Domestic Sales                     1999.0     -5252.8        7059.7
    Export Sales                       1685.7           0        4738.4
    Total Sales                        3684.6     -5252.8       11798.1
    Operating Profit                     70.9       -59.2        3153.2
    Net Income                           88.5      -229.9        2371.3

The segment report is calculated on the basis of transfer prices among business units, using export parity prices as reference. In addition, the methodology assigns fixed discounts for crude oil that the Marketing and Sales segment provides to the Barrancabermeja refinery.

The Exploration and Production segment contributed 91.8% to accumulated net profit in the amount of COP 2,177.0 billion, resulting from increased production of heavy crude oils for the export market.

The Refining segment accumulated a COP 111.0 billion net profit for the first half of the year, but reported a loss of COP 77.7 billion for the second quarter as a result of low levels of crack spread, which since March 2009 has been maintained at values below the 2004 minimum. Additionally, crude oil used to load the refineries has become relatively more expensive due to higher prices of heavy crudes in the export market.

The Transportation segment recorded an accumulated net profit of COP 225.0 billion resulting from higher volumes transported during the first half of 2009 compared to the same period in 2008, which increased from 730.4 thousand BPCD to 760.6 thousand BPCD, respectively.

The Marketing and Sales segment had an accumulated net profit of COP 88.5 billion as a result of an improvement in the hydrocarbon sales margin during the second quarter of 2009.

The Corporate segment reported an accumulated net loss of COP 229.9 billion due mainly to other non-operating expenses, particularly taxes on net worth and retirement expenses.

Consolidated Financial Results

Pursuant to the RCP, Colombian companies only have the obligation to consolidate their financial statements at the end of each fiscal year. Therefore, figures in this report do not constitute a formal consolidation of Ecopetrol's financial statements. However, they do present an estimated consolidation of Ecopetrol's financial statements.

For purposes of the estimated consolidation of Ecopetrol's financial statements for second quarter and first half 2009, in addition to Ecopetrol S.A. results, the following companies were included:

In the Upstream Area: Ecopetrol Oleo e Gas Do Brasil, Ecopetrol America Inc, Ecopetrol del Peru S.A., and Hocol.

In the Downstream area: Bioenergy S.A., Andean Chemicals Limited, ECP Global Energy, Propilco S.A., Comai, ODL Finance S.A., Ecopetrol Transportation Company, Oleoducto de Colombia, Ocensa S.A., and Refineria de Cartagena (as of May 2009); and Black Gold Re Ltd.

For the second quarter and the first half of 2008, the following companies were included: Ecopetrol S.A. Black Gold Re Ltd, Ecopetrol Oleo e Gas Do Brasil, Ecopetrol America Inc, Ecopetrol del Peru S.A., Andean Chemicals Ltd, Propilco, and Comai.


    Consolidated Profit and Loss Statement with Subsidiaries*

       In billion
       COP             2Q09    2Q08    %   1st Half 09 1st Half 08  %
       Domestic Sales 3500.3  6031.7  -42.0%   6687.5  10578.6  -36.8%
       Export Sales   3544.5  3484.5    1.7%   5361.6   5950.0   -9.9%
       Services Sales  231.7   225.8    2.6%    467.6    440.1    6.2%
    Total Sales       7276.5  9742.0  -25.3%  12516.6  16968.7  -26.2%
       Variable Costs 2742.5  3755.6  -27.0%   5329.8   5690.3   -6.3%
       Fixed Costs    1942.3  1232.4   57.6%   3112.9   2441.8   27.5%
    Cost of Sales     4684.8  4988.0   -6.1%   8442.7   8132.0    3.8%
    Gross Profit      2591.7  4754.0  -45.5%   4073.9   8836.7  -53.9%
       Operating
        Expenses       490.8   350.5   40.0%    910.4    663.8   37.1%
    Operating Profit  2101.0  4403.5  -52.3%   3163.5   8172.9  -61.3%
    Non-Operating
    Profit (Loss)    -1067.3   394.3 -370.7%    105.3   -246.5 -142.7%
       Provision for
        Income Tax     348.7  1426.2  -75.6%    975.3   2261.5  -56.9%
       Minority
        Interest         7.2     0.0    0.0%     -7.2     0.0     0.0%
    Net Income         692.3  3371.6  -79.5%   2300.7   5664.9  -59.4%

    EBITDA            3134.1  4841.9  -35.3%  4,889.7  9,046.8  -46.0%
    EBITDA Margin        43%     50%               39%      53%

    * These values are included for reference purposes only

With respect to total sales for second quarter 2009, the greatest contributions by individual subsidiaries (without taking into account the effect of deletions) came from Refineria de Cartagena with COP 1,394.0 billion, Hocol with COP 732.6 billion, Propilco S.A. with COP 502.2 billion, and Ocensa S.A. with COP 345.2 billion.

Consolidated net profit was COP 692.3 billion for second quarter 2009, representing a 79.5% decrease from the same period in 2008 when consolidated net profit was COP 3,371.6 billion. For the first half of 2009, consolidated net profit totaled COP 2,300.7 billion.

Among subsidiaries, the greatest net profits came from Hocol with COP 33.3 billion, Invercolsa with COP 12.5 billion, Ecopetrol del Peru S.A. with COP 14.7 billion, and Andean Chemicals Limited with COP 10.6 billion. Through the equity method, Offshore International Group contributed COP$22.1 billion and Invercolsa COP$13.5 billion. Refineria de Cartagena showed a loss of COP 49.6 billion.

Consolidated EBITDA totaled COP 3,134.1 billion for the second quarter of 2009, or a 43.1% EBITDA margin, compared to COP 4,841.9 billion and a corresponding 50% EBITDA margin for the same period in 2008.

Accumulated EBITDA was COP 4,889.7 billion as of June 30, 2009, of which 90.7% was contributed by Ecopetrol, 4.4% by Hocol, 3.3% by Ocensa, and 1.6% by the remaining subsidiaries.

Significant Aspects of the Strategic Plan financing

To support the development of the Strategic Plan, the Company announced an estimated financing requirement of up to USD 8.0 billion for the 2009-2011 period, of which up to USD 3.7 billion would be needed in 2009, based on an average WTI of USD 50 /barrel.

In May 2009, Ecopetrol obtained a syndicated loan from local banks in the amount of COP 2.2 trillion. The term of the loan is seven (7) years, including a grace period of two (2) years, and has an interest rate of DTF (fixed term deposit) + 4% (the anticipated quarterly rate).

Additionally, on July 23 the Company raised USD 1.5 billion through a Rule 144A/Regulation S international 10-year, 7.625% bond issue, with registration rights with the Securities and Exchange Commission.

Ecopetrol's corporate debt was rated BB+ with a stable outlook by the risk-rating agencies Standard & Poor's and Fitch, while Moody's rated the Company's corporate credit risk in local currency Baa2 with a stable outlook, which placed Ecopetrol in the investment grade category.

Exploration

In the second quarter, as part of its internationalization and risk diversification strategy, Ecopetrol, through its affiliate Ecopetrol Oleo E Gas do Brasil LTD, in partnership with Anadarko Exploracao e Producao de Petroleo e Gas Natural Ltd, entered into agreements to explore the BMC-29 block in Brazil, located offshore the Campos Basin. Ecopetrol also obtained, through its subsidiary Ecopetrol del Peru S.A., in partnership with Talisman (Peru) Ltd, authorization to enter into a License Agreement for Hydrocarbon Exploration and Production in Block 158 in Peru.

Ecopetrol continued its expansion activities in the U.S. Gulf of Mexico, gaining a total area of 46,701 hectares during the bidding round of Lease 208, achieving participation in 26 blocks, of which 15 are fully owned by Ecopetrol and the remaining 11 are shared with Repsol, which business was ratified on June 18, 2009.

As of June 30, 2009, Ecopetrol had drilled five exploratory wells, directly and through joint ventures, four in Colombia and one in the U.S. Gulf of Mexico, which is currently under evaluation. One of the wells drilled in Colombia, Quriyana-1 (located in Putumayo), confirmed the presence of oil and is under extensive testing to determine its potential. The exploratory success index of Ecopetrol was 25% for the first half of 2009.

During the first half of 2009, the Company acquired in 1,250 equivalent kilometers of seismic in Colombia, directly and through joint ventures, and its partners acquired 490 equivalent kilometers, for a total of 1,740 kilometers, compared to 1,136 equivalent kilometers of seismic acquired during the first half of 2008, of which 745 equivalent kilometers corresponded to Ecopetrol and 391 equivalent kilometers corresponded to its partners. At the international level, 248 kilometers of seismic were acquired in Brazil.

Production

In line with its goals of increasing crude oil and natural gas production, Ecopetrol achieved a monthly average gross production of 504.2 thousand BOE/D in June, a 9.1% increase compared to average production in March of 2009.

For the second quarter of 2009, the three-month average gross production of oil and equivalent gas increased 9.7% from 445.4 thousand BOE/D (80.7% of crude oil and 19.3% of natural gas) in the second quarter of 2008 to 488.5 thousand BOE/D (80.9% of crude oil and 19.1% of natural gas) in the second quarter 2009.

This growth was marked by a higher gross production of heavy crude oils in the Llanos Orientales region, and in the mature fields of the Magdalena Medio zone.

For the first half of the year, gross production increased 7.1%, from 441.5 thousand BOE/D in 2008 (356.7 thousand BPD of crude oil and 84.8 BOE/D of natural gas) to 472.9 thousand BOE/D (385.3 thousand BPD of crude oil and 87.7 thousand BOE/D of natural gas) in the same period in 2009.

In terms of its acquisition strategy, on May 27 Ecopetrol completed the purchase of Hocol. The transaction, in the amount of USD 580 million plus USD 162 million in working capital, included all assets under production and development in Colombia, as well as some exploratory blocks and shares in the pipelines Oleoducto Alto Magdalena (36.12%) and Oleoducto Colombia (21.72%).

Hocol contributed average gross production of 23.91 thousand BOE/D in June, while Offshore International Group contributed a 6.24 thousand BOE/D production for the first half of 2009. These production amounts are not included in Ecopetrol's above-mentioned gross production.

Production results were supported by the drilling management of development wells. The Company took part in the drilling of 142 development wells during the second quarter of 2009, compared to 139 development wells in the second quarter of 2008.

Ecopetrol drilled 34 development wells during the second quarter of 2009 on its own, while the other 108 were drilled by its partners, compared to 34 wells drilled on its own and 105 through arrangements with its partners in the second quarter of 2008.

Lifting costs were USD 5.77/barrel for the first half of 2009, compared to USD 6.84/barrel in the first half of 2008. This decline was the result of higher production levels and the positive impact on costs of a higher exchange rate in first half of 2009, compared to the exchange rate for first half of 2008. Such improvements [partially] offset higher maintenance service costs for expansion of production facilities, and associated operating services resulting from Ecopetrol's greater participation in association agreements.

Refining

Subsequent to the acquisition of the remaining 51.0% of Refineria de Cartagena from Glencore on May 27, 2009 for USD 549 million, the Company is evaluating the potential synergies relating to the modernization projects of the Cartagena and Barrancabermeja refineries.

The hydrotreatment project in Barrancabermeja, which will enable improved fuel quality, is now 82% complete.

In the second quarter of 2009, 213.7 thousand BD of crude oil were loaded in the Barrancabermeja refinery, compared to 233.2 thousand BD refined in the second quarter of 2008. The lower load was due to scheduled maintenance works in May 2009. In the first half of 2009, the load for the Barrancabermeja refinery was of 213.5 thousand BD, compared to 229.1 thousand BD in the first half of 2008.

The gross margin of refined products for the Barrancabermeja refinery was USD 3.40/barrel in the first half of 2009, compared to USD 7.96/barrel during the first half of 2008. The decline was due to the lower average price of the sold products basket in 2009, and the fact that it fell proportionally more than the average basket for raw material purchases.

The refining cash cost for the Barrancabermeja refinery was USD 4.49/load barrel in the first half of 2009, compared to USD 5.92/barrel for the first half of 2008. This improvement was due to lower cost of natural gas, material, and maintenance costs, and to the positive impact on costs of a higher exchange rate during the first quarter of 2009 compared to the first quarter of 2008.

Transportation

The expansion of infrastructure systems is required in order to transport higher production of heavy crude oil from the Llanos Orientales [field]. The new Apiay-Porvenir pipeline began operating at full capacity in the second quarter of 2009, with a total capacity of 160 thousand BCD, which will allow transportation of heavy crude oils from the Meta province to the Vasconia station, from where it can be transferred for export.

The transportation cost for the first half of 2009 was COP 8.1 /barrel/kilometer (USD 0.37 cents/barrel/kilometer), compared to COP 7.1/barrel/kilometer (USD 0.33 cents/barrel-kilometer) in the first half of 2008. This increase in cost is mainly due to higher variable costs, contracted services, and maintenance associated with increasing volumes of transported crude oil.

Investments

Capitalized total investments for the second quarter of 2009, including acquisitions, were COP 4,633 billion, compared to COP 2,524 billion in the second quarter of 2008.

In the first half of 2009, capitalized total investments were COP 8,217 billion, of which COP 5,082 billion corresponded to acquisitions and COP 3,135 billion corresponded to organic investments, compared to capitalized total investments of COP 3,077 billion for the first half of 2008, which included COP 1,821 billion in organic investments and COP 1,256 billion related to the acquisition of Propilco.

Of total investments in the first half of 2009, including acquisitions, 25.9% was allocated to upstream activities (mainly mature and heavy crude oil fields), 12.3% to downstream activities, and the remaining 61.8% to acquisitions, mainly the acquisitions of Offshore International Group, Ocensa S.A., and Refineria de Cartagena S.A.


    Corporate Social Responsibility

Negotiation of the Collective Bargaining Agreement

Upon the filing of claims by the coexisting unions in Ecopetrol S.A. - namely, USO, ADECO, and SINDISPETROL - and under the terms of the respective Guarantee Acts, direct negotiation talks with these unions began on July 14. Exercising its legal powers, the Company filed a partial claim against the Collective Bargaining Agreement.

This process, whose aim is to establish the conditions governing labor contracts while in force, is of the utmost importance to Ecopetrol S.A. and its workers because the agreements reached will strengthen the relationship of trust with unions and contribute to the achievement of the Company's corporate goals.

Environment

Ecopetrol takes a leading role in several Colombian efforts to preserve the environment. In the first half of 2009, these efforts included the agreement among Ecopetrol, the Municipality of Barrancabermeja and Fundacion Ecopetrol for the Development of Magdalena Medio (Fundesmag) to invest COP 5.2 billion in the recovery and maintenance of the most relevant water bodies and green areas of this municipality. Additionally, the Company is supporting the creation of an air monitoring network within the Barrancabermeja refinery.

Additionally, and jointly with the Ministry of Environment, Housing and Land Development, Ecopetrol launched the Biodiversity National Call, which is focused on promoting know-how and conservation projects, biodiversity management and use of the High Andean wetlands, Orinoquia and Magdalena Medio, as well as of the ecosystems present in certain districts within the Company's area of influence. The Company made a COP 2.5 billion contribution to this Biodiversity National Call.



    Presentation of results

On August 4th, Ecopetrol's senior management will offer two online presentations of its results for the second quarter of 2009:

    In Spanish                    In English
    8:00 a.m. Bogota              10:00 a.m. Bogota
    (9:00 a.m. New York)          (11:00 a.m. New York)

The webcast will be available at Ecopetrol's web page: www.ecopetrol.com.co., and in the following links:

http://phx.corporate-ir.net/playerlink.zhtml?c=218606&s=wm&e=2317454 (English) http://phx.corporate-ir.net/playerlink.zhtml?c=218606&s=wm&e=2330943 (Spanish)

Please access the website 10 minutes earlier in order to download the required software. A copy of the webcast will be available for one year after the live event.

About Ecopetrol S.A.

Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) is the largest Colombian company as measured by revenues, profit, assets, and stockholder's equity. Ecopetrol is also Colombia's only vertically integrated crude oil and natural gas company with operations in Colombia, Brazil, Peru and the U.S. Mexican Gulf Coast. Its subsidiaries include Colombia's largest petrochemical producer, Propilco, as well as Black Gold Re Ltda., Ecopetrol Oleo e Gas do Brazil Ltda., Ecopetrol America Inc., Ecopetrol del Peru S.A., Hocol, Andean Chemicals Limited, COMAI, Bioenergy S.A., ODL Finance S.A., ECP Global Energy, Ecopetrol Transportation Company, Ocensa S.A., and Refineria de Cartagena. Ecopetrol is one of the largest 40 oil companies in the world and one of the four largest oil companies in Latin America. It is majority owned by the Republic of Colombia, and its shares are traded on the Bolsa de Valores de Colombia S.A. (BVC) under the ticker ECOPETROL and on the New York Stock Exchange (NYSE) through its ADR under the ticker EC. The company divides its operations into five business segments, which include exploration and production, transportation, refining, marketing, and sales of crude oil, natural gas, and refined products, as well as a corporate center.

For further information on Ecopetrol, visit its website at www.ecopetrol.com.co.

Forward-looking statements

This release contains forward-looking statements related to business prospects, operating and financial results estimates, and Ecopetrol's growth prospects. These are mere projections, and, as such, are solely based on top management expectations regarding the future of the Company and its ongoing access to capital to finance the Company's business plan. Such forward-looking statements depend, basically, on variations in market conditions, government regulations, pressure from competition, the performance of the Colombian economy and the industrial sector, among other factors; therefore they are subject to change without prior notice.


    ECOPETROL:

    Investor Relations Director
    Alejandro Giraldo
    Phone: +571-234-5190
    Fax: +571-234-5628
    E-mail: investors@ecopetrol.com.co

    Media Relations (Colombia)
    Jorge Mauricio Tellez
    Phone: + 571-234-4329
    Fax: +571-234-4480



    ECOPETROL S.A.
    Unaudited Profit and Loss Statement


    In millions of Colombian Pesos
                                     2Q-09        2Q-08     %          1Q-09
    Revenues
        Domestic Sales               3438557      5838609   -41%      3153804
        Foreign Sales                3015286      3360343   -10%      1723061
        Service Sales                 231666       225800     3%       235888
    Total Revenues                   6685509      9424752   -29%      5112753
    Cost of Sales
        Variable Costs:
        Purchases from ANH and
         Third Parties               1716256      2337881   -27%      1399973
        Amortization and Depletion    429339       263542    63%       394519
        Imported Products             424803       843107   -50%       544050
        Inventory Changes            -191597        53659  -457%       240005
        Others                        295549       -24730  1295%         7006
        Fixed Costs:
        Depreciation                  162104       157171     3%       151630
        Contracted Services
         Association and Ecopetrol    301072       302317     0%       374210
        Maintenance                   235232       206853    14%        64946
        Labor Costs                   176530       157079    12%       190129
        Hydrocarbon Transportation
         Services                     201207       162068    24%       159581
        Others                        250064       246886     1%       150122
    Total Cost of Sales              4000559      4705833   -15%      3676171
    Gross Profit                     2684950      4718919   -43%      1436582
    Operating Expenses
        Administrative                123044        71198    73%        94028
        Selling Expenses              185763       183650     1%       223722
        Exploration and Project
         Expenses                     243862        79318   207%        97922
    Operating Profit                 2132281      4384753   -51%      1020910
    Non-operating Income (expenses):
        Financial Income             1430584      2115656   -32%      3147425
        Financial Expenses          -2147555     -1371097   -57%     -1822388
        Non-Financial Income          117871       381385   -69%       202683
        Non-Financial Expenses       -431197      -731785    41%      -334152

    Profit before Income Tax         1101984      4778912   -77%      2214478
    Provision for Income Tax          339975      1422260   -76%       605217
    Minority Interest
    Net Income for the Quarter        762009      3356652   -77%      1609261

    EBITDA                           2807640      4823221   -42%      1629228
    EBITDA MARGIN                        42%          51%                 32%
    EARNINGS PER SHARE                 18.83        82.94               39.76



       Unaudited Profit and Loss Statement
       ECOPETROL S.A.


                                           As of June 30, As of June 30,
                                                2009          2008       %
    In million Colombian Pesos
    Revenues
         Domestic Sales                        6592361      10385540    -37%
         Foreign Sales                         4738347       5821592    -19%
         Services Sales                         467554        440054      6%
    Total Revenues                            11798262      16647186    -29%
    Cost of Sales
         Variable Costs:
         Purchases from ANH and Third Parties  3116229       4251549    -27%
         Amortization and Depletion             823858        518271     59%
         Imported Products                      968853       1269744    -24%
         Inventory Changes                       48408       -357410    114%
         Others                                 302555          8107   3632%
         Fixed Costs:
         Depreciation                           313734        325754     -4%
         Contracted Services Association and
          Ecopetrol                             675282        587966     15%
         Maintenance                            300178        260906     15%
         Labor Costs                            366659        308515     19%
         Hydrocarbon Transportation Services    360788        273913     32%
         Others                                 400186        401901      0%
    Total Cost of Sales                        7676730       7849216     -2%
    Gross Profit                               4121532       8797970    -53%
    Operating Expenses
         Administrative                         217072        144439     50%
         Selling Expenses                       409485        363272      0%
         Exploration and Projects Expenses      341784        139754    145%
    Operating Profit                           3153191       8150505    -61%
    Non-operating Income (expenses):
         Financial Income                      4578009       3630971     26%
         Financial Expenses                   -3969943      -3163514     25%
         Non-Financial Income                   320554        509446    -37%
         Non-Financial Expenses                -765349      -1219785    -37%

    Profit before Income Tax                   3316462       7907623    -58%
    Provision for Income Tax                    945192       2257626    -58%
    Minority Interest
    Net Income for the Quarter                 2371270       5649997    -58%

    EBITDA                                     4436868       9024438    -51%
    EBITDA MARGIN                                  38%           54%
    EARNINGS PER SHARE                           58.59         139.6



             Unaudited Profit and Loss Statement*
             Ecopetrol S.A. and Subsidiaries*

    In millions of Colombian Pesos                2Q-09         2Q-08      %
    Revenues
                       Domestic Sales           3500327       6031706    -42%
                       Foreign Sales            3544496       3484447      2%
                       Services Sales            231666        225800      3%
    Total Revenues                              7276489       9741953    -25%
    Cost of Sales
                       Variable Costs:
                       Purchases to the ANH
                        and Third Parties       1716256       2337881    -27%
                       Amortization and
                        Depletion                499277        263542     89%
                       Imported Products         424803        843107    -50%
                       Inventory Changes        -191597         53659   -457%
                       Other                     293749        257448     14%
                       Fixed Costs:
                       Depreciation              339643        157171    116%
                       Contracted Services
                        Association and
                        Ecopetrol                301072        302317      0%
                       Maintenance               235232        206853     14%
                       Labor Costs               176530        157079     12%
                       Hydrocarbons
                        Transportation
                        Services                 201207        162068     24%
                       Other                     688589        246886    179%
    Total Cost of Sales                         4684761       4988011     -6%
    Gross Profit                                2591728       4753942    -45%
    Operating Expenses
                       Administrative            186084         75468    147%
                       Selling Expenses           44570        195710    -77%
                       Exploration and
                        Project Expenses         260131         79318    228%
    Operating Profit                            2100943       4403446    -52%
    Non-Operating Income (Expenses):
                       Financial Income         6981821       2120726    229%
                       Financial Expenses      -7757423      -1378823   -463%
                       Non-financial Income      149617        418686    -64%
                       Non-financial Expenses   -441267       -766332     42%

    Profit before Income Tax                    1033691       4797703    -78%
    Provision for Income Tax                     348656       1426159    -76%
    Minority Interest                              7241
    Net Income for the Quarter                   692276       3371544    -79%

    EBITDA                                      3134115       4841914    -35%
    EBITDA MARGIN                                   43%           50%

Notes

* According to the Public Accounting Framework, Colombian companies only have the obligation to consolidate their financial statements at the end of each fiscal year, wherefore the figures in this report do not constitute a formal consolidation of Ecopetrol's financial statement, though they do adjust to the methodology defined for this purpose. These values are included for illustrative purposes only.

For the estimated consolidation of Ecopetrol's financial statements for second quarter and first half 2009, in addition to Ecopetrol S.A. results, the following companies were included: I

In the Downstream area: Bioenergy S.A., Andean Chemicals Limited, ECP Global Energy, Propilco S.A., Comai, ODL Finance S.A., Ecopetrol Transportation Company, Oleoducto de Colombia, Ocensa S.A., and Refineria de Cartagena (as of May 2009); and Black Gold Re Ltd.

For the second quarter and the first half of 2008, the following companies were included: Ecopetrol S.A. Black Gold Re Ltd, Ecopetrol Oleo e Gas Do Brasil, Ecopetrol America Inc, Ecopetrol del Peru S.A., Andean Chemicals Ltd, Propilco, and Comai.



    Unaudited Profit and Loss Statement*
    Ecopetrol S.A. and Subsidiaries*

                                              As of June    As of June
    Millions of Colombian Pesos                 30,2009      30, 2008    %
    Revenues
                       Domestic Sales           6687482      10578637    -37%
                       Foreign Sales            5361572       5950040    -10%
                       Services Sales            467554        440054      6%
    Total Revenues                             12516608      16968731    -26%
    Cost of Sales
                       Variable Costs:
                       Purchases to the ANH
                        and Third Parties       3116229       4251549    -27%
                       Amortization and
                        Depletion                893796        518271     72%
                       Imported Products         968853       1269744    -24%
                       Inventory Changes          48408       -357410    114%
                       Other                     302555          8107   3632%
                       Fixed Costs:
                       Depreciation              562223        343129     64%
                       Contracted Services
                        Association and
                        Ecopetrol                675282        587966     15%
                       Maintenance               300178        260906     15%
                       Labor Costs               366659        308515      0%
                       Hydrocarbons
                        Transportation Services  360788        273913      0%
                       Other                     847731        667338     27%
    Total Cost of Sales                         8442702       8132028      4%
    Gross Profit                                4073906       8836703    -54%
    Operating Expenses
                       Administrative            286512        148750     93%
                       Selling Expenses          281827        375332      0%
                       Exploration and Projects
                        Expenses                 342073        139754    145%
    Operating profit                            3163494       8172867    -61%
    Non-operating Income (Expenses):
                       Financial Income        10182748       3632372    180%
                       Financial Expenses      -9632256      -3171240    204%
                       Non-financial Income      352627        546747    -36%
                       Non-financial Expenses   -797783      -1254332    -36%

    Profit before Income Tax                    3268830       7926414    -59%
    Provision for Income Tax                     975311       2261525    -57%
    Minority Interest                             -7191             0      0%
    Net income for the Quarter                  2300710       5664889    -59%

    EBITDA                                      4889666       9046800    -46%
    EBITDA MARGIN                                   39%           53%

Notes

* According to the Public Accounting Framework, Colombian companies only have the obligation to consolidate their financial statements at the end of each fiscal year, wherefore the figures in this report do not constitute a formal consolidation of Ecopetrol's financial statement, though they do adjust to the methodology defined for this purpose. These values are included for illustrative purposes only.

For the estimated consolidation of Ecopetrol's financial statements for second quarter and first half 2009, in addition to Ecopetrol S.A. results, the following companies were included: I

In the Downstream area: Bioenergy S.A., Andean Chemicals Limited, ECP Global Energy, Propilco S.A., Comai, ODL Finance S.A., Ecopetrol Transportation Company, Oleoducto de Colombia, Ocensa S.A., and Refineria de Cartagena (as of May 2009); and Black Gold Re Ltd.

For the second quarter and the first half of 2008, the following companies were included: Ecopetrol S.A. Black Gold Re Ltd, Ecopetrol Oleo e Gas Do Brasil, Ecopetrol America Inc, Ecopetrol del Peru S.A., Andean Chemicals Ltd, Propilco, and Comai.



    Unaudited General Balance Sheet

                                             Ecopetrol S.A.

                                             As of June  As of March**
    Millions of Colombian Pesos               30, 2009      31,2009       %

    Assets
    Current Assets:
       Cash and Cash Equivalents              3896740      4905199       -21%
       Investments                            1140016      4056917       -72%
       Accounts and Notes Receivable          5443632      5823977        -7%
       Other                                  3573116      3710937        -4%
    Total Current Assets                     14053504     18497030       -24%
    Non Current Assets
       Investments                            8417755      9803942       -14%
       Accounts Receivable                    1375948       204772       572%
       Property, Plant and Equipment, Net     9102311      8205783        11%
       Natural and Environmental
        Resources, Net                        7019129      6908475         2%
       Resources Delivered under Management         0            0
       Others                                10140914      9731838         4%
    Total Non-current Assets                 36056057     34854810         3%
    Total Assets                             50109561     53351840        -6%

    Liabilities and Shareholders' Equity
    Current Liabilities:
       Financial Liabilities                    21328            0
       Accounts Payable and Related Parties  10199989     12969595       -21%
       Estimated Liabilities and Provisions    643986       661771        -3%
       Others                                 1863240      4384631       -58%

    Total current liabilities                12728543     18015997       -29%
    Long-term liabilities
       Long Term Labor Liabilities            2316441      2247638         3%
       Estimated Liabilities and Provisions   2729043      2832880        -4%
       Others                                 4158574      2523543        65%
    Total Long-Term Liabilities               9204058      7604061        21%
    Total Liabilities                        21932601     25620058       -14%
       Minority Interest
    Shareholders' Equity                     28176960     27731782         2%

    Total Liabilities and Shareholders'
      Equity                                 50109561     53351840        -6%

    Memorandum Accounts                     135399679    168298711

** After the presentation of First Quarter 2009 Earnings Report, and following a recommendation from its auditors, Ecopetrol S.A. made the decision to reclassify contributions to pension fund and abandon fund to non current assets from current assets, as those funds correspond to long-term funds


    Unaudited General Balance Sheet
                                      Ecopetrol S.A. and Subsidiaries*

                                        As of June   As of March**
                                        30, 2009       31, 2009    %
    Millions of Colombian Pesos

    Assets
    Current Assets:
       Cash and Cash Equivalents         5301604    5340424      -1%
       Investments                       1585977    4308734     -63%
       Accounts and Notes Receivable     5945625    6345547      -6%
       Others                            4268444    4044325       6%
    Total Current Assets                17101650   20039030     -15%
    Non-current Assets
       Investments                       2025875    5333076     -62%
       Accounts and Notes Receivable      215407     161609      33%
       Property, Plant & Equipment,
        Net                             13742146   10760563      28%
       Natural and Environmental
        Resources, Net                   8924336    8425236       6%
       Resources Delivered under
        Management                             0          0
       Others                           10302129    9814356       5%
    Total Non-current Assets            35209893   34494840       2%
    Total Assets                        52311543   54533870      -4%

    Liabilities and Shareholders' Equity
    Current Liabilities:
       Financial Liabilities              187184     170080      10%
       Accounts Payable and Related
         Parties                         3118050   12859069     -76%
       Estimated Liabilities and
        Provisions                        824027     717446      15%
       Others                            7942303    4464972      78%

    Total Current Liabilities           12071564   18211567     -34%
    Long Term Liabilities
       Long Term Labor Liabilities       2352369    2247638       5%
       Estimated Liabilities and
        Provisions                       2820608    2867197      -2%
       Others                            6003109    2558403     135%
    Total Long Term Liabilities         11176086    7673238      46%
    Total Liabilities                   23247650   25884805     -10%
       Minority Interest                    0        918109       4%
    Shareholders' Equity                28106398   27730956       1%

    Total Liabilities and
      Shareholders' Equity              52311543   54533870      -4%

    Memorandum Accounts***             136651843  168549091

Notes

* According to the Public Accounting Framework, Colombian companies only have the obligation to consolidate their financial statements at the end of each fiscal year, wherefore the figures in this report do not constitute a formal consolidation of Ecopetrol's financial statement, though they do adjust to the methodology defined for this purpose. These values are included for illustrative purposes only.

For the estimated consolidation of Ecopetrol's financial statements for second quarter and first half 2009, in addition to Ecopetrol S.A. results, the following companies were included: I

In the Downstream area: Bioenergy S.A., Andean Chemicals Limited, ECP Global Energy, Propilco S.A., Comai, ODL Finance S.A., Ecopetrol Transportation Company, Oleoducto de Colombia, Ocensa S.A., and Refineria de Cartagena (as of May 2009); and Black Gold Re Ltd.

For the second quarter and the first half of 2008, the following companies were included: Ecopetrol S.A. Black Gold Re Ltd, Ecopetrol Oleo e Gas Do Brasil, Ecopetrol America Inc, Ecopetrol del Peru S.A., Andean Chemicals Ltd, Propilco, and Comai.

** After the presentation of First Quarter 2009 Earnings Report, and following a recommendation from its auditors, Ecopetrol S.A. made the decision to reclassify contributions to pension fund and abandon fund to non current assets from current assets, as those funds correspond to long-term funds

***Under Colombian GAAP, Ecopetrol must maintain in its accounting the recording of financial information and transactions not reflected in financial statements


   Unaudited Cash Flow Statement
    Ecopetrol S.A.


    Millions of Colombian Pesos            2Q-09      2Q-08     %      1Q-09

    BEGINNING BALANCE                     4905199   5114615    -4%    1870246
    OPERATING ACTIVITIES
    Cash from Clients                     6566615   7231803    -9%    4931556
    Cash from Financial Interest           288492    365995   -21%     208144
    Income from Reimbursements
     from FAEP and Other                        0         0     0           0
    Other Payments                              0         0     0           0
    Cash from Acquired Affiliates               0         0     0           0
    Financial Interest Payments                 0      -184   100%          0
    Cash Paid to Suppliers and
     Contractors                          -5955380  -1362334  -337%   -473100
    Payments for Hydrocarbon Purchases     -402532  -2610110    85%   -798838
    Payment of Income, Sales and Equity,
     Taxes                                -2486032  -1242830  -100%   -571795
    Payment of Salaries, Social Benefits
     and Social Security                   -331020   -225534   -47%   -227797
    Payment of Retirement Pensions and
     Transfer to Funds                           0    -94924   100%         0
    Net Cash from Operating Activities    -2319857   2061882  -213%   3068170

    INVESTMENT ACTIVITIES
    Net Decrease (Increase) in investments 4290176  -1573130   373%   1238306
    Investments in Property, Plant
     Equipment and Natural Resources      -1716984  -1440599   -19%  -1281444
    Net Cash Used in Investment Activities 2573192  -3013729   185%    -43138

    FINANCING ACTIVITIES
    Dividends Payment                     -3026185  -1163585  -160%         0
    Received from Partners -
     Capitalization                          -4522    176359  -103%      9921
    Increase (Decrease)of Financial
     Obligations                           1768913         0
    Cash Generated by (Used in)
     Financing Activities                 -1261794   -987226   -28%      9921


    CASH VARIATION                        -1008459  -1939073    48%   3034953
    END BALANCE                            3896740   3175542    23%   4905199



    ECOPETROL S.A.
    Unaudited Cash Flow Statement

                                         As of June 30, As of June 30,
    In million Colombian Pesos                 2009         2008         %

    BEGINNING BALANCE                         1870246      3466184       -46%
    OPERATING ACTIVITIES
    Cash from Clients                        11498171     13448057       -14%
    Cash from Financial Interest               496636       691493       -28%
    Income from Reimbursements
    from FAEP and Other                             0            0        0%
    Cash from Acquired Affiliates                   0            0        0%
    Other Payments                                  0            0        0%
    Financial Interest Payments                     0         -339       100%
    Cash Paid to Suppliers and Contractors   -6428481     -2963495      -117%
    Payment for Hydrocarbon Purchases        -1201370     -3175850        62%
    Payment of Income, Sales, and Equity
      Taxes                                  -3057827     -1965420       -56%
    Payment of Salaries, Social Benefits,
     and Social Security                      -558817      -397713       -41%
    Payment of Retirement Pensions and
     Transfer to Funds                              0      -244572       100%
    Net Cash from Operating Activities         748312      5392161       -86%

    INVESTMENT ACTIVITIES
    Net Decrease (Increase) in Investments    5528483     -3268203       269%
    Investments in Property, Plant and
     Equipment, and Natural Resources        -2998428     -1743767       -72%
    Net Cash Used in Investment Activities    2530055    -5011970       150%

    FINANCING ACTIVITIES
    Distribution of Profit                   -3026185     -1163585      -160%
    Received from Partners  - Capitalization     5399       496321       -99%
    Increase (Decrease) in Financial
     Liabilities                              1768913        -3569     49663%
    Cash Generated by (Used in)
     Financing Activities                    -1251873      -670833       -87%


    CASH VARIATION                            2026494      -290642       797%
    END BALANCE                               3896740      3175542        23%



    Unaudited Cash Flow Statement
    Ecopetrol S.A. and Subsidiaries *


    Millions of Colombian Pesos                2Q-09       2Q-08         %

    BEGINNING BALANCE                         5340425      5386758
    OPERATING ACTIVITIES
    Cash from Clients                         9657739      7229960       34%
    Cash from Financial Interest               290919       365855      -20%
    Income from Reimbursements from FAEP
     and Other                                      0            0
    Other Payments                                  0            0
    Cash from Acquired Affiliates              191736            0      100%
    Financial Interest Payment                      0         -184      100%
    Cash Paid to Suppliers and Contractors   -8191103     -1432439     -472%
    Payment for Hydrocarbon Purchases         -314361     -2610110       88%
    Payment of Income, Sales and Equity
     Taxes                                   -2510134     -1242830     -102%
    Payment of Salaries, Social Benefits
     and Social Security                      -342477      -225496      -52%
    Payment of Retirement Pensions and
     Transfer to Funds                              0       -94924      100%
    Net Cash from Operating Activities       -1217681      1989832     -161%

    INVESTMENT ACTIVITIES
    Net Decrease (Increase) in Investments    5262934     -1546038      440%
    Investment in Property, Plant,
     Equipment and Natural Resources         -3279747     -1425727     -130%
    Net Cash Used in Investment
     Activities                               1983187     -2971765     -167%

    FINANCING ACTIVITIES
    Dividends Payment                        -3042626     -1163585     -161%
    Received from Partners - Capitalization     -4522       176359     -103%
    Increase (Decrease) of Financial
     Obligations                              2242821            0
    Cash Generated by (Used in)
     Financing Activities                     -804327      -987226       19%


    CASH VARIATION                             -38821     -1969159       98%
    END BALANCE                               5301604      3417599       55%

Notes

* According to the Public Accounting Framework, Colombian companies only have the obligation to consolidate their financial statements at the end of each fiscal year, wherefore the figures in this report do not constitute a formal consolidation of Ecopetrol's financial statement, though they do adjust to the methodology defined for this purpose. These values are included for illustrative purposes only.

For the estimated consolidation of Ecopetrol's financial statements for second quarter and first half 2009, in addition to Ecopetrol S.A. results, the following companies were included: I

In the Downstream area: Bioenergy S.A., Andean Chemicals Limited, ECP Global Energy, Propilco S.A., Comai, ODL Finance S.A., Ecopetrol Transportation Company, Oleoducto de Colombia, Ocensa S.A., and Refineria de Cartagena (as of May 2009); and Black Gold Re Ltd.

For the second quarter and the first half of 2008, the following companies were included: Ecopetrol S.A. Black Gold Re Ltd, Ecopetrol Oleo e Gas Do Brasil, Ecopetrol America Inc, Ecopetrol del Peru S.A., Andean Chemicals Ltd, Propilco, and Comai.



    Unaudited Cash Flow Statement
    ECOPETROL S.A. and Subsidiaries*

                                          As of June 30, As of June 30,
    In millions of Colombian Pesos              2009        2008          %


    BEGINNING BALANCE                         2113803      3749899
    OPERATING ACTIVITIES
    Cash from Clients                        14605590     13467414         8%
    Cash from Financial Interest               499824       691493       -28%
    Income from Reimbursements
     from FAEP and Other                            0            0         0%
   Cash from Acquired Affiliates               486369            0       100%
    Other Payments                                  0            0
    Financial Interest Payments                     0         -339       100%
    Cash Paid to Suppliers and Contractors   -8589569     -3094659      -178%
    Payments for Hydrocarbon Purchases       -1201361     -3175850        62%
    Payment of Income, Sales, and Equity
     Taxes                                   -3081929     -1965420       -57%
    Payment of Salaries, Social Benefits, and
     Social Security                          -571592      -397713       -44%
    Payment of Retirement Pensions and
     Transfer to Funds                              0      -244572       100%
    Net Cash from Operating Activities        2147332      5280354       -59%

    INVESTMENT ACTIVITIES
    Net Decrease (Increase) of Investments    6510174     -3167484       306%
    Investments in Property, Plant and
     Equipment, and Natural Resources        -4612557     -1774337      -160%
    Net Cash Used in Investment Activities    1897617     -4941821       138%

    FINANCING ACTIVITIES
    Distribution of Profit                   -3042626     -1163585      -161%
    Received from Partners - Capitalization      5399       496321       -99%
    Increase (Decrease) of Financial
     Liabilities                              2180079        -3569     61184%
    Cash Generated by (Used in)
     Financing Activities                     -857148      -670833       -28%


    CASH VARIATION                            3187801      -332300      1059%
    END BALANCE                               5301604      3417599        55%

Notes

* According to the Public Accounting Framework, Colombian companies only have the obligation to consolidate their financial statements at the end of each fiscal year, wherefore the figures in this report do not constitute a formal consolidation of Ecopetrol's financial statement, though they do adjust to the methodology defined for this purpose. These values are included for illustrative purposes only.

For the estimated consolidation of Ecopetrol's financial statements for second quarter and first half 2009, in addition to Ecopetrol S.A. results, the following companies were included: I

In the Downstream area: Bioenergy S.A., Andean Chemicals Limited, ECP Global Energy, Propilco S.A., Comai, ODL Finance S.A., Ecopetrol Transportation Company, Oleoducto de Colombia, Ocensa S.A., and Refineria de Cartagena (as of May 2009); and Black Gold Re Ltd.

For the second quarter and the first half of 2008, the following companies were included: Ecopetrol S.A. Black Gold Re Ltd, Ecopetrol Oleo e Gas Do Brasil, Ecopetrol America Inc, Ecopetrol del Peru S.A., Andean Chemicals Ltd, Propilco, and Comai.




    PROFIT AND LOSS U.S. GAAP

    ECOPETROL S.A.
    Consolidated Statements of income (*) USGAAP
    (In million Colombian pesos)
                                               JUNE 2009
                                              (Unaudited)


    Revenue:
    Local sales                                7,399,310
    Foreign sales                              5,361,572
    Total revenue                             12,760,882
    Cost of sales                              8,052,483
    Gross Profit                               4,708,399
    Operating expenses:
    Administration                             1,363,980
    Selling                                      613,444
    Operating
    income                                     2,730,975

    Non-operating, net                         1,748,067
    Income before income tax and
     minority interest                         4,479,042

    Income tax:                                   727,063

    Income before minority
     interest                                  3,751,979
    Minority interest                              7,191
    Net Income                                 3,759,170
    Earnings per share                             92.88

(*) During the second quarter of 2009, Ecopetrol made acquisitions of new companies, the financial statements don't include these effects, the company is including estimates for pension plans, impairments of fixed assets, ARO, under USGAAP, and for those reasons the statements don't reflect a full USGAAP reconciliation.



    ECOPETROL S.A.
    Consolidated Balance Sheet (*) USGAAP
    (In million Colombian pesos)

    Assets
    Current assets:
    Cash and cash  equivalents                 6,014,825
    Investments                                  884,950
    Accounts and notes
     receivable, net                           5,649,429
    Inventories                                1,921,970
    Deferred income taxes                        278,664
    Other                                      2,306,301
    Total current assets                      17,056,139

    Non current assets
    Investments                                3,041,718
    Accounts and notes
     receivable, net                             215,406
    Property, plant
     and equipment, net                       12,730,898
    Natural and environmental
     resources, net                            7,325,825
    Advances and deposits                        231,269
    Deferred income taxes                      2,064,144
    Other                                      3,884,362
    Total Non current assets                  29,493,622
    Total Assets                             $46,549,761

    Liabilities and shareholders'
     equity
    Current liabilities:
    Financial obligations                        187,185
    Accounts payable and
     related parties                           8,885,853
    Estimated liabilities
     and provisions                              637,673
    Other                                      2,323,077
    Total current  liabilities                12,033,788
    Long term Liabilities
    Financial obligations, long-term           3,485,791

    Pension plan obligation and
     other labor obligations,
     long-term                                 2,374,977
    Deferred income tax, long-term             1,255,972
    Estimated liabilities and provisions       2,095,955
    Other                                      1,393,341
    Total Long term liabilities               10,606,036

    Total liabilities                         22,639,824
    Minority interest                            957,495
    Shareholders' equity                      22,952,442
    Total liabilities and
     shareholders' equity                     46,549,761

(*) During the second quarter of 2009, Ecopetrol made acquisitions of new companies, the financial statements don't include these effects, the company is including estimates for pension plans, impairments of fixed assets, ARO, under USGAAP, and for those reasons the statements don't reflect a full USGAAP reconciliation.

SOURCE Ecopetrol S.A.

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.