Ecopetrol Announces Its Results for the Second Quarter of 2014
July 31, 2014 at 21:06 PM EDT
BOGOTA, Colombia, July 31, 2014 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC; TSX: ECP) announced today its unaudited financial results, both consolidated and unconsolidated, for the second quarter of 2014. The financial results were prepared and filed in Colombian pesos (COP$) in accordance with the Public Accountancy Legal Framework (Regimen de Contabilidad Publica, RCP) of Colombia's General Accounting Office.
Some figures in this release are presented in U.S. dollars (US$), as indicated. The financial results in the main body of this report have been rounded to one decimal place. Figures presented in COP$ billion are equivalent to COP$1 thousand million (COP$1,000,000,000). Additionally, some 2013 figures have been reclassified to be comparable to those of 2014.
Summary of Ecopetrol S.A.'s financial results
In the opinion of Ecopetrol S.A.'s CEO, Javier Gutierrez:
"The results of the second quarter of 2014 show the positive effect of international crude prices that offset the strong impact of the difficult operational environment (29 attacks to the transport infrastructure during the quarter and 64 in the first semester of the year) on production and sales.
Even though we produced an average of 714 thousand barrels in June (Ecopetrol S.A. not including affiliates and subsidiaries), mainly due to normality in the operation, the results of April and May were hit by the forced shutdown of the Cano Limon - Covenas pipeline during 40 days between March 25 and June 3, as well as the shutdown of the Transandino pipeline since June 10, and repeated communities' blockades of production fields.
During the quarter, net income reached COP$2.85 trillion, 11.7% less than that of the first quarter of the year. EBITDA was COP$6.77 trillion, with a margin of 45% and a decrease of 12.1% compared to the previous quarter.
In this quarter, it is very important to highlight the progress of our international exploration strategy with the discovery in the Rydberg well on the U.S. Gulf of Mexico coast, and the acquisition of a 10% stake in blocks 38/11 and 39/11 in Angola. Subsidiaries keep delivering positive financial results, where transport subsidiaries stand out. Finally, 9 plants of the new Cartagena refinery had their mechanical completion and the overall progress of the project stands at 92%.
Regarding the operation, two very important milestones were reached and became effective on July 1. The first is the change in the organizational structure with the creation of the General Operations Directorate and to which the vice presidents of exploration, development and production, transportation and downstream report directly. This new structure will improve the coordination among the business areas. The second milestone is the Regional model under which the operation is grouped into four major regions: 1) Caribbean coast and Pacific coast, 2) Central, 3) Orinoquia and 4) Southern. Each will have with its own regional vice-presidency, which will help provide greater agility in decision making.
With respect to production, the progress of secondary recovery pilot projects in the Magdalena valley and the 7% growth in the production of companies in which Ecopetrol has a share interest stand out.
In relation to financial results, I highlight the offering of international bonds for US$2 billion with a 31-year term and a favorable yield, and S&P left unchanged our BBB/Stable rating in foreign currency. Both events show the confidence of capital markets and financial strength of our company.
Finally, this quarter was challenging for results and the operation, but with important progress in the strategy that allows us to be optimistic about the future of the company."
The complete report is available in www.ecopetrol.com.co
Ecopetrol is the largest company in Colombia and is integrated into the oil chain; it is among the 40 major oil companies in the world and among the four main ones in Latin America. Besides Colombia - where it generates over 60% of the national production - it is present in exploration and production activities in Brazil, Peru & US (Gulf of Mexico). Ecopetrol owns the largest refinery in Colombia and most of the pipeline and multi-product pipeline network in the country, and is significantly increasing its participation in bio-fuels.
This report contains statements associated with the business perspectives, estimates for operational and financial outcomes and affirmations associated to Ecopetrol's growth. All the above are projections, and as such are solely based on the expectations of its directors with respect to the future of the company and its ongoing access to capital to fund the company's commercial plan. The realization of such estimates in the future depends on market conditions, regulations, competitiveness, performance of Colombia's economy and industry, to mention a few; therefore, they are subject to changes without previous notice.
For further information, please contact:
Media Relations (Colombia)
Investor Relations Director
SOURCE Ecopetrol S.A.