Ecopetrol S.A. (EC) Q2 2022 Earnings Call Transcript

For the period ending June 30, 2022

August 4, 2022 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Welcome to Ecopetrol's Earnings Conference Call, in which we will discuss the main financial and operational results for the second quarter 2022. All lines have been muted. There will be a Q&A 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.

This call will be led by Mr. Felipe Bayon, CEO of Ecopetrol; Alberto Consuegra COO; Jaime Caballero, CFO; and Yeimy Baez, Vice President of Low Emission Solutions. Thank you for your attention.

Mr. Bayon, you may now begin your conference.

Felipe Bayon

Good morning, everyone and welcome to this conference call, where we will present the financial and operating results of the Ecopetrol Group for the second quarter and the first half of year 2022. I am extremely proud to announce that we continue to excel in our results, achieving the best-ever quarter as well as the best-ever semester in the history of Ecopetrol.

During the first half of the year, our net income has already exceeded the net income of the 12 months in year 2021. These results are underpinned by the company's ability to amongst others returned to production levels above 700,000 barrels per day, capture the benefits of competitive oil prices and spreads through our solid commercial strategy, reduced inflationary pressures, thanks to cost efficiencies and mitigation measures and a proactive management of our working capital.

Let's move on to the next slide. During the second quarter of the year, we made important progress in the four pillars of our 2040 strategy Energy That Transforms. In the first pillar, growing with the energy transition I want to highlight the following aspects. The declaration of success for the Uchuva-1 exploration well, that proves the potential for offshore gas in Colombia and supports a strategy to increase gas share in our total production.

The return of a steady production level reaching close to 740,000 barrels of oil equivalent per day for the month of July. The historical results of our downstream segment with a combined throughput for the quarter of 365,000 barrels per day, a record gross margin of $29 per barrel and an EBITDA of COP3.7 trillion underpinned by an excellent operational performance.