Ecopetrol Sa · BVC:ECOPETROL
Ecopetrol Sa — FY2009 Earnings Presentation
28 slides from Ecopetrol Sa's earnings presentation, Feb 17, 2010
Slide 1: Financial and Operating Results Fourth quarter and full year 2009
Financial and Operating Results Fourth quarter and full year 2009 February 17, 2010 1
Slide 2: Disclaimer
DISCLAIMER This document was prepared by Ecopetrol S.A. with the purpose of providing the market and interested parties certain financial and other information of the Company. This document may include strategy discussions and forward-looking statements regarding the probable development of Ecopetro
Slide 3: Management participants in today's conference call
MANAGEMENT PARTICIPANTS IN TODAY’S CONFERENCE CALL • Javier Gutierrez, Chief Executive Officer • Adriana Echeverri, Chief Financial Officer • Nelson Navarrete, EVP of Exploration & Production • Pedro Rosales, EVP of Downstream • Camilo Marulanda, EVP of Growth and Strategy • Mauricio Echeverry, Gene
Slide 4: Agenda
AGENDA • 2009 Highlights • Financial results for the fourth quarter and full year • Outlook for 2010 4
Slide 5: 2009 Highlights: significant progress in our strategy
2009 HIGHLIGHTS: SIGNIFICANT PROGRESS IN OUR STRATEGY • 1P gross reserves of 1,88 mn BOE* and RRI of 359% • Group´s production increase of 17%** , year average production of 521 MBOED E&P • Acquisition of 50% of Savia (Petrotech), and of 100% of Hocol • Increase of exploratory activity • 501 kms of
Slide 6: Investment plan 2009
INVESTMENT PLAN 2009 Capex 2008 Vs Capex 2009 (USD Bn) Key Projects in Capex plan 2009 (USD mn) Project Capex 6.31 Rubiales - Pirirí 248 Castilla 244 La Cira Infantas 130 Production Apiay 105 4.82 2.36 Casabe 91 Other 1.370 38% Tahiti West 29 1.24 26% Will k 31 0.15 Sismic 28 2% 2% Exploration 0.10
Slide 7: Upstream highlights for 2009
UPSTREAM HIGHLIGHTS FOR 2009 • Increase of exploratory activity manly in Brazil, Peru and the US Gulf Coast • Increase in number of blocks international operation 1P Reserves Balance (bn BOE) Exploration • U.S. Gulf Coast: 22 blocks RRI* 60% 37% 359% • Brazil: 1 block 1,878 1,793 • Peru: 2 blocks 1,
Slide 8: During 2009 we strengthened our E&P portfolio
DURING 2009 WE STRENGTHENED OUR E&P PORTFOLIO Colombia US Gulf Coast Production Exploration Ecopetrol Production Exploration Ecopetrol • Production 500 MBOED • Total blocks 53 K2 (9.2% interest) • Total blocks 101 • Heavy crudes 169 MBOED • 17 million Ha • Production for • 22 blocks awarded in (34%)
Slide 9: Downstream highlights in 2009
DOWNSTREAM HIGHLIGTS IN 2009 • 94% progress in hydro-treatment project • Cleaner fuels Km of pipelines Refining • Estimated potential configuration and construction savings of USD 911 millions from integration of Cartagena and B/meja refinery modernization plans 9,164 • 501 kms added to pipelines* •
Slide 10: Downstream progress: consolidation and growth potential
DOWNSTREAM PROGRESS: CONSOLIDATION AND GROWTH POTENTIAL Refining and petro-chemicals Transportation Propilco (polypropilene) Reficar Heavy crude oil transportation system •Ecopetrol supplied 30% • Basic engineering phase •Oleoducto Colombia capacity increased to 190 MBD of raw materials in 2009 conc
Slide 11: Organizational consolidation highlights in 2009
ORGANIZATIONAL CONSOLIDATION 2009 HIGHLIGHTS IN 2009 • Five-year collective bargaining agreement signed with labor unions Accident frequency rate HR (accidents / million labor hours) • 6.8% improvement in workplace employees survey • Reduction of 28% in accident frequency rate 1.7 • Resouces for COP
Slide 12: Agenda
AGENDA • 2009 Highlights • Financial results for the fourth quarter and full year • Outlook for 2010 12
Slide 13: Financial results
FINANCIAL RESULTS* Total Revenue (COP tn) Costs and Expenses (Cop tn) Operating Profit (COP tn) 19.9 19.6 35 32.7 20 12.9 27.7 18 30 16 25 14 8.1 20 12 10 15 8 8.5 5.8 6.7 7.4 6 5.4 5.1 10 6.1 5.1 4.1 4.6 2.1 2.2 2.7 4 1.0 5 2 0.7 0 0 4Q08 2008 1Q09 2Q09 3Q09 4Q09 2009 4Q08 2008 1Q09 2Q09 3Q09 4Q09
Slide 14: Lifting, refining and transportation costs
LIFTING, REFINING AND TRANSPORTATION COSTS Lifting costs (USD/BOE) 8.3 7.2 7.2 5.2 3.3 2005 2006 2007 2008 2009 Refining costs (USD/Bl) Transportation costs (USD cents/Bl-km)* 0.43 0.42 5.8 6.0 0.40 0.35 3.9 4.5 0.30 3.5 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 • Estimated with the average
Slide 15: Financial results: ROA, ROE and subsidiaries
FINANCIAL RESULTS Ecopetrol - Return on Assets (ROA) Ecopetrol - Return on Equity (ROE) 40% 39% 37% 34% 24% 21% 26% 26% 20% 22% 22%24% 23% 18% 18% 12% 12% 16% 17%16%16% 9% 10% 9% 9% 11% 10% 19% 8% 7% 9% 9% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q06 2Q06 3Q06
Slide 16: Segment results
SEGMENT RESULTS Sales (COP Trillion) 16.6 17.9 15.4 12.9 2008 4Q09 2009 8.9 4.6 3.7 1.7 2.1 2.8 3.0 0.6 -3.4 -6.3 -11.7 E&P Refining Transportation Sales and marketing Corporate Net Income (COP Trillion) 9.20 5.70 2008 4Q09 2009 1.94 1.37 0.53 0.34 0.09 0.30 0.20 0.04 0.13 -0.10 -0.50 -0.28 -0.38 E&
Slide 17: Balance sheet and cash flow: flexible capital structure and strong cash flow
BALANCE SHEET AND CASH FLOW: FLEXIBLE CAPITAL STRUCTURE AND STRONG CASH FLOW GENERATION Assets* Dec/09 (COP Trillion) Liabilities* Dec/09 (COP Trillion) 53.1 Other short term 4.4 Other short term Accounts receivable 3.9 2.3 Estimated liabilites and Cash and cash equivalents 9.3 provisions Other long
Slide 18: Agenda
AGENDA • 2009 Highlights • Financial results for the fourth quarter and full year • Outlook for 2010 18
Slide 19: Capex plan 2010 – USD 6,925 mn
CAPEX PLAN 2010 – USD 6,925 mn Uses Sources* • 20 exploratory wells > 13 in Colombia > 7 abroad • Financing needs of up to US$3.5 Exploration • 4 in US GoM billion for Ecopetrol USD 951 mn • 2 in Brazil • 1in Peru • Financing alternatives are: • 5,700 equivalent seismic kms Bonds (local and intern
Slide 20: Outlook for 2010
OUTLOOK FOR 2010 • Ecopetrol’s production growth of 12% and Group’s production growth of 15% E&P • Maintain exploration activity in Colombia and increase international drilling activity • Increase profitability of the refining business • Hydro treatment plant starting operations in the first semeste
Slide 21: Energy for the future
ENERGY FOR THE FUTURE Ecopetrol S.A. All rigths reserved. The reproduction of this presentation is forbidden without the writen consent of Ecopetrol S.A. 21
Slide 22: Capex 2005–2009
CAPEX 2005 – 2009 (USD Mn) 6,925* 387 6,305 735 Acquisitions Organizational consolidation 4,824 2,363 1294 Transport Refining and Petrochemical 1,238 Production 151 Exploration 103 613 571 517 435 3,558 1,760 1,255 1,962 2,189 922 951 515 473 2005 2006 2007 2008 2009 2010 * Does not include acquisit
Slide 23: Production
PRODUCTION Average production (MBOED) 521 6 15 500 447 376 385 399 2005 2006 2007 2008 2009 Petrotech Hocol Ecopetrol * Does not include acquisitions that will be analyzed on a case by case basis 23
Slide 24: Exploration
EXPLORATION Seismic Activity (Kms) 6,789 4,584 4,654 3,081 2,668 2005 2006 2007 2008 2009 24
Slide 25: 1P reserves balance
1P RESERVES BALANCE 1P reserves balance Dec-09 (Ecopetrol Corporate Group) including royalties SEC Standard ECP Prices SEC Standard and Price Oil Gas Equivalent Oil Gas Equivalent million million oil million million oil bbls Scf million bbls Scf million BOE BOE Proved Reserves 2008 986 2.743 1.474 9
Slide 26: Reserves balance (SEC) – MBOE
RESERVES BALANCE (SEC) – MBOE CORPORATE GROUP 1P NET PROVED RESERVES BALANCE (SEC) CORPORATE GROUP Previous 1P Current 1P Production Variation MBOE - Eq Year IRR: 98% 65% 46% 351% 26
Slide 27: Refining margin
REFINING MARGIN USD per barrel 11.4 10.6 8.9 1,2 3.5 2005 2006 2007 2008 2009 27
Slide 28: Accidents
ACCIDENTS (# accidents / mn labor hours) 5.8 2.6 1.8 1.7 1.2 2005 2006 2007 2008 2009 28