BOGOTA, Colombia, Nov. 17, 2015 /CNW/ -- Ecopetrol S.A. (BVC:
ECOPETROL; NYSE: EC; TSX: ECP) announced today Ecopetrol Group's
financial results for the third quarter of 2015 and the nine first
months of the year, prepared and filed in Colombian pesos (COP$)
and under International Financial Reporting Standards (IFRS)
applicable in Colombia.
Table 1: Summary of the Group's Consolidated Financial
Results
A
|
B
|
C
|
D
|
E
|
F
|
G
|
H
|
I
|
J
|
(COP$
Billion)
|
3Q
2015*
|
3Q
2014*
|
∆
($)
|
∆
(%)
|
2Q
2015*
|
Jan-Sep
15*
|
Jan-Sep
14*
|
∆
($)
|
∆
(%)
|
Total
Sales
|
13,003.4
|
16,813.7
|
(3,810.3)
|
(22.7%)
|
14,009.6
|
39,313.8
|
51,717.2
|
(12,403.4)
|
(24.0%)
|
Operating
Profit
|
2,850.1
|
4,443.5
|
(1,593.4)
|
(35.9%)
|
3,549.2
|
8,757.2
|
15,620.5
|
(6,863.3)
|
(43.9%)
|
Consolidated Net
Income
|
886.5
|
1,885.0
|
(998.5)
|
(53.0%)
|
1,695.5
|
2,938.0
|
8,708.8
|
(5,770.8)
|
(66.3%)
|
Non-Controlling
Interest
|
(232.4)
|
(154.0)
|
(78.4)
|
50.9%
|
(188.9)
|
(617.3)
|
(492.6)
|
(124.7)
|
25.3%
|
Ecopetrol Equity
Holders**
|
654.1
|
1,731.0
|
(1,076.9)
|
(62.2%)
|
1,506.6
|
2,320.7
|
8,216.2
|
(5,895.5)
|
(71.8%)
|
Other Comprehensive
Income
|
2,203.0
|
1,209.7
|
993.3
|
82.1%
|
459.1
|
3,374.5
|
920.8
|
2,453.7
|
266.5%
|
EBITDA
|
4,698.4
|
6,344.3
|
(1,645.9)
|
(25.9%)
|
5,521.9
|
15,003.0
|
21,241.7
|
(6,238.7)
|
(29.4%)
|
EBITDA
Margin
|
36.1%
|
37.7%
|
|
|
39.4%
|
38.2%
|
41.1%
|
|
|
|
* These figures are
included for illustration purposes only. Unaudited.
|
|
** According to
IAS-1, "Presentation of financial statements", paragraph 83, the
company must include in the statement of comprehensive results the
results attributable to non-controlling interest (minority
interest) and the results attributable to shareholders of the
controlling company.
|
|
Note: To see the
impact of the Hedge Account over the net income of 1Q 2015, 2Q
2015, 3Q 2015 and January-September 2015, please refer to the table
12 of the chapter "Cash Flow Hedge for Future Company
Exports".
|
In the opinion of Ecopetrol's CEO Juan
Carlos Echeverry G.:
"The industry continued to operate in a complex environment
given low crude prices and the consequent adjustments in
investments, costs and expenses observed in oil and gas companies.
Ecopetrol, additionally, has responded to the challenges posed by
attacks on oil infrastructure, El Nino Phenomenon, closing of the
border with Venezuela and
devaluation of the exchange rate. In order to face this new
reality, the company has been reinventing itself by means of the
transformation program contained in the 2015-2020 strategy. The
implementation of the transformation program increases efficiency
from a structural standpoint and strengthens an organizational
culture based on the principles of: integrity, collaboration and
creativity.
The transformation plan also includes a comprehensive program
for improving oil recovery that seeks to maximize the potential of
existing fields and aims to strengthen our position in the Americas
as a reference for this type of activity.
Up to September, Ecopetrol achieved budgetary savings of COP$1.6
trillion pesos, exceeding the initial goal of COP$1.4 trillion
pesos set for 2015. This figure reflects both structural savings,
as well as the streamlining of certain activities. This effort can
be observed in the reduction of the company's production/barrel
costs: lifting cost per barrel in 3Q 2015 was US$6.89/barrel, compared to US$7.47/barrel in 2Q 2015 and US$10.70/barrel in 3Q 2014. During January and
September 2015, lifting cost per
barrel was US$7.29/barrel, compared
to US$10.91/barrel in the same period
of 2014, reflecting a US$1.03/barrel
reduction attributable to efficiency and cost reduction strategies
and -US$2.61 attributable to the
exchange rate.
The company has set a new challenge to achieve budgetary savings
of COP$2.2 trillion pesos in 2015, in an effort to mitigate some of
the effect of a lower international price of crude through
efficiencies and lower cost of services, purchases, and oil and
maintenance services, among others.
In the third quarter, Ecopetrol also generated value for its
shareholders through the rotation of its asset portfolio,
completing the first stage of divestment of its share interest in
Empresa de Energia de Bogota, from
which it obtained COP$614 billion pesos. The company also opened
the first round in the process of selling off Interconexion
Electrica S.A.
Other business opportunities have arisen in the Middle Magdalena
region with Occidental Andina LLC (OXY) for the development of a
pilot project. If successful, it could increase the company's
reserves by up to 100 million barrels of crude at the field La
Cira-Infantas. Another pilot will be developed with the Canadian
company Parex Resources, at the field Aguas Blancas, designed to
recover 55 million barrels of light crude.
In the production segment, enhanced recovery was strengthened
with 28 recovery pilot projects underway, of which 16 show positive
results in increasing pressure and 14 in increasing the production
of crude. Over the past 5 years, Ecopetrol has added 187 million
barrels of proven reserves by means of enhanced recovery, in which
it is a pioneer, and has yielded proven results such as the one in
La Cira-Infantas field. Through steam injection, production
increased from 5 thousand barrels/day in 2005 to 40 thousand
barrels/day in 2015. Processes are becoming increasingly more
efficient: between 2014 and 2015 the number of drilling days per
well decreased from 34 to 26 at Castilla field and from 36 to 20 at
Chichimene.
In the first 9 months of 2015, the Corporate Group's
year-to-date production was 761 mboed, 9 thousand barrels more than
in the previous year. This result was achieved despite the nearly
2% drop in production in 3Q 2015 versus 3Q 2014 because of the
attacks on the oil pipeline Cano
Limon-Covenas, the decline of certain fields, and the lower
price level affecting some fields with high price contract clauses.
The increase in activity at the fields Castilla and Chichimene has
mitigated the impact of these events. Currently, and with an
improvement in the public order situation, production has recovered
to reach the goal of 760 thousand barrels equivalent/day for
2015.
In exploration, in the past year, Orca and Kronos were
discovered offshore in the Colombian Caribbean. The exploratory
campaign also included drilling of the well Calasu in the
Caribbean and two wells onshore:
Muergana Sur, located in the Llanos Orientales, and Champeta,
located in the lower Magdalena valley. Furthermore, blocks were
added in basins of interest such as those awarded to Ecopetrol
(50%) and Anadarko (operator, 50%) and another one 100% Ecopetrol
in Lease Sale 426 by the U.S. BOEM (Bureau of Ocean Energy
Management) in the Gulf of
Mexico.
In refining, on October
21st, the new Cartagena Refinery reached a key
milestone in the start-up process and commissioning with the
introduction of hydrocarbons in the Crude Unit. The first shipment
of refined products will take place in November. This is the first
step in the commissioning of 31 sequential plants making up the new
Cartagena Refinery, capable of producing clean fuels that meet
international markets' highest environmental standards. All of the
plants will be operating by the second quarter of 2016.
The new refinery, considered the most modern in Latin America, will increase its capacity in
2016 from 80 thousand to 165 thousand barrels/day, and its
conversion factor from 74% to 97%, with greater flexibility in
processing heavier crudes. Ecopetrol concludes investments over a
9-year period in this refinery, which required significant infusion
of cash, which now can be used to focus on the exploration and
production segments.
At the Barrancabermeja Refinery, gross margin was US$16.7/ barrel in 3Q 2015 versus US$15.5/barrel in 3Q 2014, due to the
implementation of initiatives to transform streams such as LPG and
vacuum bottoms into diluent for heavy crude, and the performance of
international prices of refined products compared to crude.
In transportation, infrastructure was strengthened to ensure
Covenas' crude storage reliability, with the addition of two tanks
with 420 thousand barrels of capacity each that will be available
in 4Q 2015. In order to verify the performance of transport systems
with crude of heavier viscosity, a test was conducted in September
of oil pipelines that transport heavy crude for export (ODL and
Ocensa). The results were successful; this will help reduce diluent
consumption in 2016. This is an important step in efficiency, it is
the realization of a strategy to reduce the cost of dilution,
especially important for the production and profitability of heavy
crudes.
Despite the drop in production (-4%) and price of the crude
basket (-26%) between 2Q and 3Q of 2015, the Corporate Group had an
EBITDA margin of 36% and generated EBITDA of COP$4.7 trillion in
the third quarter of 2015, compared to COP$5.5 trillion in the
second quarter of 2015. This was made possible as a result of the
continuous effort of all segments to obtain greater savings in
their operations and to the strength derived from being an
integrated company.
The financial result of COP$654 billion pesos in third quarter
2015 reflects the adoption of the Hedge Accounting policy as
established by the international accounting standard IAS 39. The
adoption of this standard makes it possible for the effect of the
"Exchange Difference" on part of the dollar-denominated debt
portfolio to be reclassified in shareholder equity, taking into
account the natural hedge that Ecopetrol's crude export revenues
generate for it. Ecopetrol has thus made use of an instrument that
allows it to show in its financial statements management of
exchange rate risk based on the nature of its business.
The company has responded to the important challenges posed by
the low price environment, attacks on infrastructure, El Nino
phenomenon and closing of the border with Venezuela. It has managed its performance
based on financial discipline, operating efficiencies and
investment management. It remains focused on generating value for
stakeholders and ensuring profitable growth based on the guidelines
of its new strategy and its sustainability and financial soundness
in the long run."
The complete report is available in www.ecopetrol.com.co
---------------------------------------
Ecopetrol is the largest company in Colombia and is an integrated oil and gas
company; it is among the top 40 oil companies in the world and
among the top four oil companies in Latin
America. Besides Colombia –
where it generates over 60% of the national production – it has
exploration and production activities in Brazil, Peru,
and the US (Gulf of Mexico).
Ecopetrol owns the largest refinery in Colombia, most of the pipeline and
multi-product pipeline network in the country, and is significantly
increasing its participation in bio-fuels.
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
and gas, our exploration and production activities, market
conditions, applicable regulations, the exchange rate, Ecopetrol'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 Corporate Finance and Investor
Relations
Maria Catalina
Escobar
Phone: (+571) 234 5190
E-mail: investors@ecopetrol.com.co
Media Relations (Colombia)
Jorge Mauricio Tellez
Phone: +571-234-4329
e-mail: mauricio.tellez@ecopetrol.com.co
---------------------------------------
[1] According to Article 3 of Decree 2784 of December 28, 2012, the application date of the
new technical framework is December 31,
2015. Therefore, the financial information presented prior
to this date is preliminary and subject to adjustments. The
information presented in this report is not audited.
As indicated in paragraphs 9 and 18 of International
Accounting Standard 27 "Consolidated and Separated Financial
Statements," Ecopetrol and its corporate group must present their
financial information on a consolidated basis, combining the
financial statements of the parent company and its subsidiaries
line by line, adding assets, liabilities, shareholder equity,
revenues and expenses of a similar nature, removing the reciprocal
items between the corporate group and recognizing the
non-controlling interest.
The financial results in this report are not comparable
line by line with the previously issued financial results in the
report for the third quarter of 2014, which were prepared in
accordance with the Public Accounting Regime (Regimen de
Contabilidad Publica) as adopted by the Colombian National
Accounting Office. For the sake of comparison, the previously
issued financial results for the third quarter of 2014 are
presented in this report under IFRS.
The Company modified its EBITDA calculation methodology,
for more information please refer to the page number 10.
Some figures in this release are presented in U.S. dollars
(US$) as indicated. The exhibits in the main body of this report
have been rounded to one decimal. Figures expressed in billions of
COP$ are equal to COP$1 thousand million. All financial information
in this report is unaudited.
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SOURCE Ecopetrol S.A.