Ecopetrol Announces Its Results for the Third Quarter of 2014
October 31, 2014 at 09:28 AM EDT
BOGOTA, Colombia, Oct. 31, 2014 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC; TSX: ECP) announced today its unaudited financial results, both consolidated and unconsolidated, for the third 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:
"Our quarterly production improved, reaching 754 thousand barrels per day due to better operational conditions and progress of key projects in our fields. However, the period's financial results were clearly affected by the international situation, which led to a US$9.4 per barrel decline in crude export prices compared to the prior quarter, as well as weakening of the currencies of emerging countries.
As a result, our profit was lower because of the decline in the sale prices of crude, products and gas, which decreased 9.5%, 4.4% and 2.9%, respectively, in comparison to the second quarter of this year. We recorded a significant non-operating loss due to the valuation of our dollar denominated liabilities, at a higher exchange rate with increased COP 109 per dollar during September.
It is important to mention that a weakening of the peso-dollar exchange rate has two effects in our financial statements. A negative impact due to our dollar denominated debt, and a positive effect given that most of our operational revenue is dollar denominated while the operational costs are mainly peso denominated.
There were many highlights in the quarter, among which I would like to mention the following:
Production was up by 2.8% compared to the prior quarter, and our Chichimene field reached a record production of 66 thousand barrels a day.
In exploration, we announced a discovery in the U.S. Gulf of Mexico (Leon well) and in Colombia were awarded five blocks in the ANH Round 2014.
The volume of crude and products transported was higher owing to a decrease in number of attacks and the higher volumes transported by the Bicentenario oil pipeline.
Barrancebermeja's refining gross margin rose 52% due to the wider crude-product spread, driving a mayor increase in the segment's Ebitda. The modernization of the Cartagena refinery reached a 94.7% total progress.
We issued US$1.2 billion in external debt bonds, and the agencies Moody's and Fitch confirmed their Baa2 and BBB risk ratings in foreign currency, respectively, for Ecopetrol.
We must also mention the signing of a four year collective labor agreement with our unions.
As a closing, it is worth mentioning that several internal processes will be concluded in the coming months which are very important for our organization, including a review of our medium and long-term strategies, the approval of next year's investment plan and the preparation for adopting the International Financial Reporting Standards (IFRS) starting January 1, 2015."
The complete report is available in www.ecopetrol.com.co
SOURCE Ecopetrol S.A.