Ecopetrol Business Group presents third quarter and year-to-date 2017 Results
November 07, 2017 at 17:17 PM EST
BOGOTÁ, Colombia, Nov. 7, 2017 /PRNewswire/ --
Today, Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) announced third-quarter and year-to-date 2017 financial results for the Business Group, prepared and presented in billions of Colombian pesos (COP), in accordance with International Financial Reporting Standards applicable in Colombia.
The figures included in this report are unaudited, expressed in billions of Colombian pesos (COP) or US dollars (USD), or thousands of barrels of petroleum-equivalent per day (mboed) or tons, and are so indicated where applicable. For presentation purposes, certain figures in this report have been rounded to the nearest decimal point.
In the opinion of Ecopetrol S.A. CEO Felipe Bayón Pardo:
"Year to date 2017, Ecopetrol reported a much higher operating and financial result than for the same period last year, we highlight an EBITDA of COP 17.3 trillion and an EBITDA margin of 43.4%, the highest in the past two years. Year-to-date net profit totaled COP 3.2 trillion, double the figure for all of 2016. These results reflect our soundness and our ongoing pursuit of: i) improved operating and commercial capacity, ii) greater efficiencies and cost reductions, iii) a focus on capital discipline, as well as a better environment for crude prices.
The Business Group's average production year to date totaled 715 mboed, in line with the 2017 production target, despite the challenges raised by a difficult environment in terms of security and operational events. We note also that we achieved our activity goals with a lower CAPEX, thanks to significant efficiencies in the production segment. Water injection projects continue to show positive results in fields such as Casabe, La Cira Infantas, Chichimene and Castilla, among others, where investments in water injection have yielded increased or stable production, along with better operating responses. This quarter, the International Energy Agency (IEA) invited Ecopetrol as a member of the technical recovery group this organization leads.
It is worth noting that the export basket spread for the third quarter totaled -USD 6.0/bl, the best of the past seven years and around 50% below the figure from two years ago. The basket's spread year to date as of September 2017 was -USD 6.9/bl, improved from the year-to-date figures for the same period in 2016 (USD -9.6/bl), largely due to: i) Changes in commercial strategy to reach directly end clients, ii) production cuts by OPEC, especially in heavy crudes, and iii) demand for heavy crudes in the Gulf of Mexico and Asia.
We closed out the quarter with a cash position of COP 12.8 trillion, confirming our financial soundness and flexibility. For its part, Moody's recognized the company's achievements and strategy, upgrading Ecopetrol's outlook to "stable" and retaining its investment-grade rating (Baa3). In October we completed the program to divest our equity stake in EEB, selling the remaining shares for COP 56.930 million.
Drilling activities are currently underway at four exploratory wells: Lunera, Molusco, Trogón and Coyote (re-entry to execute tests and hydraulic stimulation). The Bonifacio well, operated by our subsidiary HOCOL, has completed its drilling period and is now in the evaluation stage. During the quarter, drilling activities were completed at the Bullerengue and Brama wells, which were unsuccessful, as no commercial accumulation of hydrocarbons was found.
September 20 saw the start of drilling of the Molusco well (Block RC-9) in the Colombian Caribbean offshore, approximately 30 kilometers from Riohacha, in La Guajira. Molusco represents one of the most important milestones in Ecopetrol's history, as the first drilled offshore exploratory well operated by the company, through its subsidiary Ecopetrol Costa Afuera SAS - ECAS (50%), in joint venture with ONGC (50%). For the close of 2017, we are committed to meeting the goal of drilling 17 exploratory wells and adding contingent resources of 250 MBPE.
In the third quarter of 2017 crude was transported at viscosities of 600 centistokes (cst - a measurement of viscosity) through the systems of Cenit and its subsidiaries, which helped demonstrate the commercial feasibility of high-viscosity crudes. We exceeded operating milestones by transporting all the country´s crude along a single corridor, thanks to the bi-directional carrying ability of the Bicentenario oil pipeline and the capacity of OCENSA.
The third quarter was the best of the year for the Cartagena Refinery, as for the first time it posted double-digit operating margins, of USD 10.3/bl, a result of progress in unit stabilization and better market conditions for refiners worldwide. The year-to-date refining margin as of the third quarter totaled USD 8.3/bl, a 93% increase over the same period in 2016 (USD 4.3/bl). The third quarter also saw 100% completion of the individual unit tests of the refinery. The Barrancabermeja refinery posted profitable and efficient operations, with a year-to-date refining margin of USD 14.1/bl.
Our purpose is to continue strengthening safety as a pillar of our operations. The company's TRIF [Total Recordable Injury Frequency] index improved 38% compared to the same period last year, placing us among the top companies worldwide in terms health and security. To align our HSE [Health, Safety and the Environment] practices with high global standards and enhance our competitiveness, the company obtained OHSAS 18001 (Occupational Health and Safety) and ISO 14001 (Environmental Management) certifications.
Ecopetrol remains committed to the country's growth and development, the care of its workers, the environment and the communities in which it operates, constantly seeking shared prosperity and operational safety at all levels. Our focus will continue to be on delivering outstanding results, with the aim of maintaining a sustainable company that creates value for its shareholders."
The earnings release will be available on Ecopetrol's website:
This release contains statements that may be considered forward looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All forward-looking statements, whether made in this release or in future filings or press releases or orally, address matters that involve risks and uncertainties, including in respect of the Company's prospects for growth and its ongoing access to capital to fund the Company's business plan, among others. Consequently, changes in the following factors, among others, could cause actual results to differ materially from those included in the forward-looking statements: market prices of oil & gas, our exploration and production activities, market conditions, applicable regulations, the exchange rate, the Company's competitiveness and the performance of Colombia's economy and industry, to mention a few. We do not intend, and do not assume any obligation to update these forward-looking statements.
For further information, please contact:
Head of Capital Markets
Media Relations (Colombia)
SOURCE Ecopetrol S.A.