Ecopetrol S.A. (EC) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

May 11, 2022 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning. My name is Hilda, and I will be your operator today. Welcome to Ecopetrol's Earnings Conference Call in which we will discuss the main Financial and Operational Results for the First Quarter 2022. All lines have been muted. There will be a question-and-answer session at the end of presentation.

Before we begin, it is important to mention that the comments in this call by Ecopetrol's senior management include projections of the Company's future performance. These projections do not constitute any commitment as to future results nor do they take into account risks or uncertainties that could materialize. As a result, Ecopetrol assumes no responsibility in the event that future results are different from the projections shared on this conference call.

The call will be led by Mr. Felipe Bayon, CEO of Ecopetrol; Alberto Consuegra, COO; and Jaime Caballero, CFO. Thank you for your attention.

Mr. Bayon, you may begin your conference.

Felipe Bayon

Good morning, everyone, and welcome to our conference call of the results for the first quarter of 2022. I am proud to announce that during this quarter, we continued to deliver historical financial results underpinned by some of the following issues. First, positive industry conditions with an average brent of $98 per barrel in the quarter, which is 60% higher than the price we have shared in the first quarter of 2021. Second, the company's efforts to capture efficiencies and savings that helped us mitigate inflationary pressures. And third, our focus on sustainable value generation for our stakeholders with a clear commitment with our TESG goals.

Additionally, I would like to highlight the recent approval in the AGM of a dividend of COP11.5 trillion equivalent to COP280 per share, which represented a dividend yield of 10.4% for our shareholders and a payout of 69% of the net income of the year 2021.

In the same meeting, the AGM, some changes were approved in the company's bylaws aimed at strengthening our corporate governance and giving continuity to the 2040 strategy announced a few months ago, which we have named Energy that Transforms. The changes introduced to the bylaws included amongst others, the extension of the Board members' period from two to four years.

In terms of production and after some operational and public order challenges faced at the beginning of the current year, we continue to take decisive steps on the recovery path. The production for the first quarter of the year was 692,000 barrels of oil equivalent per day, whilst in March, we reached an average production of 705,000 barrels, and in April 708,000 barrels equivalent per day. All this aligned with the production target for the year between 700,000 and 705,000 barrels of oil equivalent per day.