Ecopetrol (NYSE:EC) reported first-quarter financial results on Wednesday. The transcript from the company’s first-quarter earnings call has been provided below.
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The full earnings call is available at https://xegmenta.co/ecopetrol/registro-conferencia-de-resultados-1t-2026/
Summary
Ecopetrol recorded first-quarter 2026 revenues of 28.6 trillion pesos, with an EBITDA of 13.5 trillion pesos and net income of 2.9 trillion pesos. The EBITDA margin expanded to 47%, driven by cost discipline and a strong refining business.
The company highlighted successful exploration results, including the Copua Sul one well in the Caribbean, and production reaching 725,000 barrels of oil equivalent per day, despite challenges with gas production.
Strategic initiatives include the acquisition of a majority stake in Brava Energia in Brazil, aiming to strengthen the company’s asset base and international presence.
Ecopetrol advanced transportation and refining capabilities, with a notable refining margin increase to $17.3 per barrel, and significant progress in optimizing logistics and gas import solutions.
Future guidance maintains a full-year production target between 730,000 and 740,000 barrels of oil equivalent per day, with capital investment plans trending towards the upper end of the range.
Management emphasized strategic partnerships with Parex and Gran Tierra to enhance asset development and production efficiency, alongside a focus on renewable energy projects.
The company addressed financial stability with strong cash flow management, maintaining a cash balance of 14 trillion pesos and leverage ratios reflecting disciplined capital allocation.
Full Transcript
OPERATOR
Good morning. My name is Natalia and I will be your operator today. Welcome to Ecopetrol’s earnings conference call in which we will discuss the main financial and operating results of the first quarter of 2026. There will be a question and answer session at the end of the presentation. Before we begin, it is important to mention that the comments in this call by Ecopetrol 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. Juan Carlos Urtal, Acting CEO of Ecopetrol; Carlos Mauricio Avila, Acting Executive Vice President of Hydrocarbons; Camilo Varco, CFO; and Byron Triana, Executive Vice President of Energies for the Transition. Thank you for your attention, Mr. Hurtado. You may begin your conference.
Welcome to the first quarter 2026 earnings call. It’s an honor to address you as acting president of the Ecopetron group. 2026 began in a volatile international environment marked by an intensification of geopolitical tensions with direct impacts on energy markets and global logistics. Within this context, our operational capabilities were key to sustaining the group’s performance. Let me highlight the main milestones of the quarter. In exploration, we underscored the successful result of the Copua Sul one well in the Caribbean offshore.
This confirms new gas accumulations independently from Sirius and expands the bloc’s potential contributing to the country’s energy security. In production, we reached 725,000 barrels of oil equivalent per day. The strength of domestic crude production at 527,000 barrels per day partially offset lower gas production, a structural challenge that we continue to address. In addition, we advanced with the optimization of our upstream portfolio through agreements with Perex and Grand Tierra in the Magdalena Mello region.
In transportation, we moved 1,122,000 barrels per day, close to a 2% increase compared to the same period of the prior year, driven by integrated management aimed at maximizing infrastructure utilization. The reversal of the Convenhos Atecucho system was key to incorporating crude oil and mitigating lower domestic production. In refining, we achieved a consolidated throughput of 417,000 barrels per day, a 5% increase versus the first quarter of 2025.
The Barranca Vermeja refinery reached one of the highest throughput levels in its history, while Cartagena maintained solid performance despite operational events in March. As a result, the refining margin reached $17.3 per barrel, a 60% increase versus the first quarter 2025, reflecting favorable market conditions and consistent operational execution. Consistent with our diversification and international expansion strategy, we advance since the agreement to acquire majority stake in Brava Energia in Brazil.
Upon closing, this investment is expected to strengthen our presence in a strategic geography and add reserves and incorporate high quality assets to our portfolio. On the commercial front, we managed increases in freight rates by implementing strategies to strengthen logistics reliability and supply continuity, including the contracting of time, chartered vessels for products and crude that aims to secure transportation capacity in a volatile environment, improve supply timing and reduce logistics costs.
In gas, we advanced in structuring import and regasification solutions in the Caribbean, leveraging infrastructure for the receipt, storage and delivery between 126 and 370 million cubic feet per day of imported natural gas into the national transportation system in 2026. Finally, ESA received the award of new transmission projects in Brazil, while in Colombia we advanced power transmission expansion initiatives aligned with the country’s needs. Please move now to financial results.
During the first quarter of 2026, Ecopetrol Group recorded revenues of 28.6 trillion pesos, an EBITDA of 13.5 trillion pesos and a net income of 2.9 trillion pesos. We highlight the expansion of the EBITDA margin to 47%, driven by disciplined cost execution and a stronger contribution from refining business. The price environment showed mixed dynamics. Brent strengthened toward the end of the quarter. However, the appreciation of the Colombian peso put pressure on revenues while differentials widened versus the previous year.
Additionally, higher logistics costs, particularly freight, generated significant pressures across the value chain. Amid this environment, the group captured value supported by a robust commercial strategy, market diversification and positioning of our crude in international markets. On the corporate front, the general shareholders meeting approved the merger with Parque Porton del Sol, a relevant milestone in our energy transition and operational efficiency strategy.
It also reaffirms our commitment to shareholder value creation reflected in the dividends paid at the end of April. The investment plan is progressing as planned with approximately 23% executed to date, including key projects in sustainability and ESG initiatives. We closed the quarter with a balance of 4.2 trillion pesos in the Fuel Price Stabilization Fund in a context of higher international fuel prices and the accumulated balance from 2025. Lastly, we highlight the filing of the 2025 Form 20F with the US Securities and Exchange Commission, reflecting our commitment to transparency and rigorous market disclosure.
Let’s move to the next slide. Consistent with our growth and sustainability strategy, we are progressing in the potential acquisition of a stake in Bravajia E in Brazil. Brazil is a geography where the Ecopetrol group has operated for over 20 years. Through this transaction we would expand our position, diversifying our asset base and strengthening our international portfolio. We expect to implement a relationship model with Braava that enables operational and financial synergies, including human capital, offshore and onshore expertise, enhanced recovery and onshore assets and others.
The transaction contemplates a private acquisition of approximately 26% of the company’s equity and the launch of a volunteer tender offer with the objective of reaching a controlling stake of up to 51%. Based on 2025 figures, this represents a company with 459 million barrels of oil equivalent in 1P reserves, production of approximately 81,000 barrels per day and an EBITDA of around $806 million. Positioning it as a relevant asset in the region.
This transaction would allow us to increase our reserves and strengthen group production. Closing remains subject to the fulfillment of precedent conditions, particularly the success of the tender offer and the corresponding regulatory approvals. Let’s move to the next slide. In line with our strategy, the agreements with Parex and Grantierra allow us to accelerate the development of mature assets by incorporating strategic partners that bring capital and capabilities.
With Perex, we are enabling an investment of about $250 million, fully funded by the partner to execute activities with a potential to add approximately 94 million barrels of oil equivalent growth while extending the economic life of the CASAB and Janito assets. With Grantierra, we are progressing in Tiscurama and San Roque with an investment of about $92 million, also fully funded by the partner to execute activities with the potential to add about 30 million barrels of oil equivalent gross, strengthening recovery and the sustainability of these fields.
While in the short term we share production, we do so with the clear objective on enabling higher production, additional reserves and lower unit costs in the medium term, unlocking greater value from our assets.
Carlos Mauricio Avila (Acting Executive Vice President of Hydrocarbons)
Thank you, Juan Carlos. On the exploration front, we continue to strengthen a high potential portfolio in Colombia. At the close of the first quarter, we drilled five wells, achieving our first success with the Copua SO1 well located at the WAF 0 block about 9 km from the Sirius 1 and Sirius 2 wells. This well confirmed the presence of gas in two accumulations separate from Cereus, expanding the block’s discovery potential. Initial testing is currently underway with the aim of obtaining the first estimate of its potential by year’s end.
In the same block, we’re making progress with planning on exploratory wells on BL1, which drilling is expected in the second half of the year. Regarding Cereus, we are moving forward with the prior consultation process in coordination with the National Prior Consultation Authority with the goal of completing this phase by year’s end and filing the environmental impact assessment in the first quarter of 2027. Let’s move on to the next slide please.
Let’s talk about production. On the production front, in the first quarter production reached 725,000 barrels of oil equivalent per day reflecting the following dynamics. First, domestic oil production increased by 6,000 barrels per day compared to the fourth quarter of 2025, driven by growth at CPO09, the commissioning of new wells and Capachos, the strong performance in the Castilla field and the addition of a development well in Putumayo under our agreement with Perex.
Second, gas sales decreased by around 5,000 barrels of oil equivalent per day, mainly in line with seasonal sales patterns. Third, international production declined by approximately 5,000 barrels of oil equivalent per day associated with the investment plan that we have in premium and scheduled maintenance at Ecopetrol America. It should be noted that we are maintaining our full year production target between 730 and 740,000 barrels of oil equivalent per day and we have several key operational enablers to continue our drilling campaign focusing on CPO09 and Kanye Sutton, advance the in situ combustion pilot in Chichimende as part of our enhanced oil recovery blend, expand processing facilities in Rubiales and ensure that premium’s contribution to the plan by adding 4,000 barrels of oil equivalent per day. In addition, to further enhance our asset in Colombia and optimize capital allocation, we signed two farm-in agreements, one with Grantierra in the Tisquiramas and Roque fields and another with Perex in the Casabe and Janito assets, both located in the Middle Magdalena region. Our plans also incorporate external challenges that may affect production during the remainder of the year, such as El Nino weather phenomenon.
Finally, the financial performance of the hydrocarbon segment reflects improved profitability, with the EBITDA per barrel reaching $27 and a margin of 40%. This represents a material improvement compared to the previous quarter’s trend despite a lower realized basket price versus the first quarter of 2025 driven by heavy crude market conditions. This performance is supported by disciplined capital allocation and efficient cost management. The end of the first quarter of 2026, we recorded a net income of 2.9 trillion pesos, reflecting a strong recovery versus previous quarters and a marginal decrease of 0.2 trillion pesos compared to the first quarter of 2025, mainly explained by three factors. First, market factors contributed a net positive effect of about 700 billion pesos driven by a more favorable environment compared to the prior year. The increase in Brent prices from $75 to $78 per barrel and improved refined product spreads strengthened revenues and inventory valuation, largely offsetting a lower average exchange rate, weaker crude differentials, and inflationary pressures on costs and expenses. Second, tax-related factors impacted results by about 600 billion pesos. Half of this impact is explained by the update of the income tax surcharge increasing from 0 to 10% in line with Brent price projections, and the other half by the extraordinary wealth tax corresponding to the recognition of one quarter of the total tax amount. It is worth noting that the wealth tax will have an impact of about 1.2 trillion pesos on full-year results and will be recognized proportionally each quarter in accordance with the current accounting policy and applicable regulations.
Third, operational and financial factors had a net impact of 300 billion pesos driven by two key elements. On the one hand, the execution of a structured liquidity transaction related to the management of VAT receivables, which generated a financial cost of about 400 billion pesos and improved the company’s working capital, and on the other hand, OPEX control contributed a positive effect of 100 billion pesos supported by disciplined and consistent efficiency management.
Let’s move to the next slide, please. We closed the quarter with a cash balance of 14 trillion pesos, maintaining a solid position supported by healthy operating cash flow and efficient working capital management. Operating cash flow reached 7.2 trillion pesos driven by higher prices, the strong performance of the refining segment, and active management of tax receivables. Cash flow from investing activities represented an outflow of 3 trillion pesos mainly associated with CAPEX at EcoPedrolesea, Brazil, ESA, and Permian.
As a result, free cash flow was positive at 4 trillion pesos regarding dividends, financing, and other activities. The quarter recorded a cash outflow of 2.9 trillion pesos. Of this total, $0.5 trillion corresponded to dividends paid to non-controlling interest and subsidiaries, while $2.4 trillion was primarily allocated to debt service. Additionally, on April 30, dividends were paid to all shareholders for approximately $4.4 trillion, with the second installment corresponding to the majority shareholder scheduled for payment in June.
The ending cash balance consisted of $12.9 trillion in cash and cash equivalents and $1.1 trillion in investment portfolios with a share of 59% in US dollars and 41% in Colombian pesos. Regarding the FEPC, the account receivable closed at 4.2 trillion pesos, reflecting an accumulation of 1.2 trillion during the quarter plus the 2025 balance. In addition, a payment agreement was executed with the government for about 1.6 trillion pesos corresponding to the first quarter of 2025.
This will be paid in short-term test bonds in December of this year with interest accrued until payments. On the tax front, group companies fulfilled their obligation to pay the wealth tax amounting to 1.2 trillion pesos. About half was paid in cash in April, and the remainder was offset against tax receivable during the first days of May. Regarding the ongoing process with DIAN related to the VAT of fuel imports for the 2022-2024 period, it remained in the corresponding legal stage with no accounting provisions recorded during the quarter.
We strengthened our financial position through active liquidity management. This included the monetization of tax receivables for approximately 1.8 trillion pesos, tax offsets of 1.9 trillion, and intra-group cash mobilization of approximately $521 million. In terms of financing, we highlight the $1.25 billion liability management transaction which generates savings of approximately 90 basis points in the total cost of debt. In line with this, we maintain a controlled maturity profile and do not expect to incur incremental debt to finance the Organic Capital Investment Plan at Ecopetrol S.A. Now let’s hand over to the CEO who will present conclusions. In summary, the quarter’s results reflect strong execution capabilities in a volatile geopolitical environment. We were able to sustain and optimize value generation, offsetting external pressures through the efficiency and flexibility of our integrated model. Looking ahead, our priorities are clear: deepen structural efficiencies, grow through value-accretive opportunities, strengthen the core business, and accelerate the development of gas as a pillar of energy transition.
We are evolving to a more diversified model focused on stable results and disciplined capital allocation. Thank you. We will now open the floor for the Q and A session.
OPERATOR
Muchas gracias. Comenzaremos ahora la sesión de preguntas y respuestas. Les recordamos a todos los analistas.
Daniel Guardiola
Good morning and thank you for your presentation. I’d like to talk about two things. First, about the acquisition of Brava and I’d like to know what price did you purchase at 26% that you already agreed with the investors group? When do you plan to launch the IPO in the market? And is there any risk to expand this IPO for 100% of the stocks, considering that you will be the new controller? And if you do not reach that 25%, can you declare the IPO as deserted?
That’s when it comes to the transaction of Brava. Also about Brava and looking at the many reserves that Brava has recorded in past years, I’d like to know if you consider or do you have an estimate or adjustments for the reserves since you consolidate this with the balance of Ecopetrol, incorporating them with the methodology applied by Ecopetrol. And last, it’s about the sensitivity to the price of oil of Ecopetrol. Are you adjusting this for the 2026, the CapEx, the cash flow and could you share with us what’s the Brent that you expect for the remaining nine months of the year?
The sensitivity of the EBITDA and free cash flow if the dollar is above the price you have.
Camilo Barco, CFO of Grupo Ecopetrol
When we look at the agreements we have with each of this, once we close the transaction, the IPO is projected to be launched this second quarter. It will be announced when we have the terms agreed or according to the schedule. But the purpose is to acquire at least 51%. And if we can’t reach that percent, we will not be part of the business when it comes to the reserves. Understanding that there are major volumes today in the company, we have to keep in mind that they have a methodology that’s different to what we apply.
We apply SEC and they the IPRs. So once the transaction is closed, we can validate the volumes according to our regulation and do everything according to the volumes identified. When it comes to the CAPEX guide and the cash flow, we have been making updates prices monthly and we’ve been adjusting and placing the resources where we find the most value within the projects. That’s what we’re seeking right now, the Brent of the year. We’re analyzing again this monthly understanding that for the last two, two and a half months we’ve been undergoing the process of high price because of the conflict in the Middle East, the sensibility of the EBITDA and cash flow. We have metrics and let me give the microphone to Camilo Barco to talk about this. Thank you for your question and good morning, Daniel. My name is Camilo Barco and I am the CFO of Grupo Ecopetrol. And allow me to review, to particularly refer to your question. And everything has to do with the guidance and the multiples that can give us at least an orientation or a guide of what we can expect this year with this new price setting in terms of cap exhibit, profitability and possibly cash flow.
I think that what’s most important has been said regularly we make a review of projections. Of course, in this highly volatile and uncertain time. This is very much related to the duration of the market disruption and it’s, it’s a hard question to answer. Still, we have projections that are updated, aligned with the market’s consensus. Some of the projections of ages are all kept in mind. We work with a margin that or better range between 83 and $93 per barrel for the rest of the year.
And emphasizing, of course, not only the Brent prices but also the exchange rate and the differentials products have major differences in the indicators when it comes to the theoretical exercise and clarification, clarifying that this gives us a range, but still these are more approximate than anything else. We can say that $1 variation in the price of Brent has an effect on the EBITDA of the consolidated group of 700 billion pesos and on the net profit closer to 400,400 million pesos.
And the net profit for every variation of $1 on the Brent price. On the other hand, the exchange rate, I said, is an important factor, the exogenous that has an influence on the results. And this has an effect of about 1.6 trillion pesos on the EBITDA and with the variation of 100 pesos on the quote of the exchange rate. And when it comes to the net profit, an effect of about 800 million pesos. So that’s like an overview of the indicator that can give us a guidance of where the results can stand for the year so far of 2026, with the Brent in a range of 83 to $93 per barrel and an exchange rate between 3,600 and 4,000 pesos.
Katherine Ortiz
Thank you so much for your answers. We are also joined by Katherine Ortiz from correct. Hello to everyone. Can you hear me? Yes, we can. Gracias. Okay, thank you. Okay, I have several questions following the topic of the acquisition. Just to confirm with Daniel’s question, at least 51% means that there’s a chance of an IPO for 100%. And also I’d like to ask for more information on your outlook on the metrics to leverage initially with the acquisition and how do you expect the performance and when will you reach again levels?
They’re more optimal for Ecopetrol and the management given to the pressure of liquidity. Keeping in mind that financing would be made with a bridge short-term loan. So I’d like to understand the strategy to refinance once the acquisition takes place. That’s regarding the acquisition, but I have another question related to the… The fourth quarter we saw that PEPEC generated a super avid surplus of 300 billion pesos and this quarter we saw a deficit of 1.2 billion. Evidently, this is in February or March when you see the effect of the higher prices of oil. But I would like to know monthly how much is the accumulation of the surplus FFX since March on average and I don’t know if you have the calculation of how much will the prices increase of fuels to have again at least a zero level or to go back to the super habit we had.
That’s regarding the Fed back. And lastly, I’d like to understand a bit more the context of the deficit of gas. Ecopedre has been very active and you showed us making agreements and leading this process to increase the gas through new regasifiers. And regarding the regasification agreement with Puerto area, could you please tell us more about this business with the Copetrol and the commercialization process that you mentioned that took place in February and March, what percentage was contracted and commercialized and if this was on a seven-year term?
I’m asking this because one of the biggest concerns is that there’s a major offer now or regasification projects and there’s a chance in the future of having new projects and there’s a concern on the profitability and of the chance of capturing or recovering better profitably the investment in these projects. So I’d like to get to know more about this process of commercialization. Those are my questions.
Juan Carlos
Good morning, Catherine. Juan Carlos, Acting CEO. Let me begin with your second question. What do we have to date and accumulated at 4.2 trillion pesos in the past month. It was 1.5, we estimate every month, understanding that it depends on the price of the barrel, the exchange rate and differentials between 1.1 and 1.5 every month billion pesos that could be generating the PEC. So we’ve been working on this like this, to be more precise, with regards to your first question, we are going for the 51%.
If we don’t reach that percentage, we’re not part of the business, but we’re not going to ask for more than 51%. That gives you a precise answer. Camilo, could you give us a hand with the other question?
Camilo Barco, CFO of Grupo Ecopetrol
Catherine, good morning. Thank you for your question. I’m going to specifically refer to the topics related to finance, the Bravo transaction and several of the finance and metrics that we use. And let me expand a bit on these metrics. So when it comes to the Brava transaction, let me refer to two things. First, in terms of the depth of EBITDA of the target firm Brava, the metric is similar to that of Ecopetrol, between 2 and 2.5 times the EBITDA, clarifying that it has a robust cash position which allows its net debt versus EBITDA is substantially lower.
This means that still using financing a bridge on a short-term basis, it does not impact, but just marginally, even after post-acquisition. What does this mean? That we will have our indicator still at 2.2 times depth EBITDA. And you mentioned before that this indicator was closer to 2.5 at the end of the last year. But it’s important to keep in mind with the new price scenario and the better betas and the lower exchange rate today we have an indicator that gives us an additional margin as that’s closer to 2.1 or 2.2 times depth EBITDA.
If we add to this that a good part of the debt comes from ESA, we see the indicator of 1.6 times debt EBITDA for Grupo Petrol without or just excluding ESA. So this is healthy and it gives you an idea not only of the position of liquidity, but the capacity of debt that the group can have under these conditions. I would stop here in terms of financing and ahead, perhaps we can provide additional details. When it comes to the BP of energy transitions, the group has been committed to supply gas through import sources at the lowest price and as soon as possible with the alternatives.
We found the Puerto a project, a project that has a value, a promise to contribute gas to the country in 2026 we signed an agreement of logistics and integral service with Puerto Aria in which they are in charge of making the investment, assuming all the risks of development and construction of the project while we commercialize the molecule and we pay them for the regasification process day by day. When it comes to the commercial process, we place 250 gigawatts day average day in the next seven years and it has two phases.
The first phase, the first two years of 167 square feet and the other 170. The priority in the commercialization is of the Ecopetrol group. In both processes, the process launched, we took gas to 15 agents, no, 13 agents, where we have the main distributors of the country and they’re commercializing and generators agents. And this allows us to give a better situation for this process. Catherine Camilo Barco Again I was seeing that I missed something to talk about in your question about financing.
So allow me to refer to the refinancing strategy. We said that firstly the financing of the acquisition of Braba would be with a bridge and it’s important to say that as of now we’re working on the takeout and financing this on a long term. And for this we are assessing all of the alternatives possible. We constantly monitor the capital market and the conditions. Initially we do not see yet conditions that have the level or enough attractiveness to make a decision on that matter.
But we are evaluating, evaluating again different alternatives, banking and in the market. And also for this takeout, surely we will not refinance 100% of the amount of the transaction. It will be a lower percentage since we are foreseeing that part of the flows used will come from reassigning capex and rotations of portfolio. So I think that with this we have a good framework of the scenario to refinance in the next year.
Katherine Ortiz
Perfect, thank you. Let me confirm from Puerto R the 126 million b you gave the 126 to these three agents or.
Camilo Barco, CFO of Grupo Ecopetrol
Hello, Catherine. Because of commercial and strategic topics we cannot give you the exact value. But yes, the. The. These were assigned to the 13 because of the amount gas as. As you said, because of the El Nino we are even going to place more amounts when the infrastructure is built. If it’s the alternative 126 we see with the regasification, backups, trains, we can even place more gas to face the El Nino weather phenomenon. But it is important to clarify that Puerto Valla still works on trying to place more amounts and there are scenarios in which we can place even 300 gigawatts day.
So we’re working in different scenarios. We have line baseline of the 126 and most of it is commercialized and sold.
OPERATOR
Perfect, thank you to you all. The questions next will be made in English. So please all of the analysts to choose on the interpretation globe the language in which you will ask the questions. Otherwise we cannot hear you. The next question is from Bruno Montanari from Morgan Stanley. Mr. Montanari, the floor is yours.
Bruno Montanari, Analyst at Morgan Stanley
Thank you very much for taking my questions. I have a follow up on Bravo and then two questions on Brava. I understand you will disclose the price information once the transaction closes. But can you tell us if the price offered to the shareholder group is different from the 23 AI per share offering price? Because I think that information is quite important for minorities to decide if they should accept the offer once it’s launched. My second question is, you mentioned that CAPEX should land at the higher part of guidance, but in Q1 it seems to be tracking closer to the bottom end of the range.
So how should we think about the CAPEX acceleration and distribution of investments between the second quarter and the fourth quarter of 2026? And then my last question is about the crude differentials. Your crude basket in the second quarter, have you seen improvement versus the first quarter where the discount was a little bit larger? So wondering if there is more interest from Colombian oil at better prices now on the back of all the geopolitical uncertainties.
Thank you very much.
Camilo Barco, CFO of Grupo Ecopetrol
Good morning, Bruno. As to your first questions, once we announce the IPO, we will provide the details of this process and the values that we will be indicating in this process. In addition, once we formalize and close the agreement with the acquisition of that 51%, we will provide detailed information about this process. When it comes to CAPEX, we are within a plan for execution that’s about 95%. This first cue understanding that we are aligned with the hydrocarbon segment, transmission and roads and transition energies focusing to enhance and reach the execution levels that we wish to be able to adjust the plan.
We have to make an assessment of the performance of prices. And as I said before, we are looking at the projects that will provide us revenue taking advantage of the high prices that we have today. Good morning. The question on differentials for the second quarter in oil, my name is Julio Cesar Herrera. When it comes to the crude oil, we see a differential close to two digits, $10 per barrel. This goes with the crude oil market and we have strategies to mitigate that differential.
Colombian oil is quite different. In the markets, in the international markets, because we have quality. We have an internationalization strategy that’s still working as well. Thank you.
OPERATOR
Let’s continue with Nicolas Barras from Bank of America. Mr. Barros, the floor is yours.
Nicolas Barras, Analyst at Bank of America
Good morning everyone. I have two questions here still on Bravo, right? And more direct to the point. Do you expect any to implement any management changes once you are in the company? And then the second one, mostly related to fuel pricing, right? On the downstream, how are you currently seeing local diesel and gasoline prices, discounts relative to the import parity prices, and also if you could comment on the latest pricing adjustments that you guys have implemented. Thank you so much.
Julian Lemos, VP Corporate Strategy and New Businesses
Hello, Nicolas. Thank you for your question. This is Julian Lemos, VP, Corporate VP of Strategy and New Businesses. With regards to your first question, I’d say that once we reach the closure of this transaction, as Juan Carlos said before, this means to be successful in the IPO and to reach that 51 that we want to control the company, we will take the measures that we deem adequate for the integration. Of course, we acknowledge that Bravo is a company that has an operational and financial performance at solid.
And what we seek is to complement Bravo’s operation with Eco Petrol’s experience and to gain for Eco Petrol the capability, technical capabilities that this company has and that can boost our operation in Brazil and our operations offshore in Colombia. Thank you. Good morning, Nicolas. Julio Cesar. With regards to your second question, we are looking at fuel prices at oil prices that are close to 80 to $90 a barrel with a differential of 10. As to products, we had close to $16 per barrel.
In addition of margin mainly driven by which was $16 and Jet which is at $9 per barrel. So do we see ahead? Regarding your question for the second quarter, we already saw in April a differential of products that was positive of 26.$40. And we expect that differential, given the current market conditions, will be at 26 to $28 per barrel. That directly affects the FFEC, since the international indicators go directly to the recognition price. That’s the calculation of the formula used by the Ministry of Mines and of treasury to pay our refineries the production of gasoline and diesel.
OPERATOR
Next question from Joao Bardicello from UBS.
Julian Leslie
For the offer to acquire my general stake in the company, what are the key drivers that you are seeing? I mean, what do you like in the company and or in Brazil? And what’s the goal once you assume the operations of the assets? Additionally, the company’s current priorities have been on its drilling campaign in offshore assets and plans for further deceleration in Capex and deleverage, which could enable dividends for the next year. Could you maintain this capital allocation strategy, or do you see other priorities regarding its portfolio and financials?
And my second question is, we have noticed in the past years the company focused on providing more details on the energy transition movements, but in this quarter we noted Upstream on the spotlight, including the deals with Grantera, Parex, and Brava on the first page of the earnings report. So could you provide more details on how you’re seeing the strategy from here? Could you see more new investments in Upstream and maybe even new M&A? That’s it from my side.
Joao
Buenos dias. Muchas gracias por tu pregunta, Julian Leslie.
Tulen Lemos
Thank you for your question. I am Tulen Lemos. With regards to your first question, let me say this. Brazil is a geography in which Ecopetrol has been present for 20 years. And we see this geography as favorable for the hydrocarbon industry in a market that provides opportunities, material opportunities. Frequently in this process of ongoing evaluation that we make, we find an opportunity to acquire a controlling position in Brava and to have the possibility, as Juan Carlos mentioned before, to incorporate through IPO an important volume of production and a component that’s also important of reserves in our records and to incorporate or to consolidate with figures at the end of 2025 close to $800 million of EBITDA. Of course, we recognize that Brava has a strategy determined a major focus on offshore and on maximizing its mature fields. And there’s where we believe there’s synergy in the knowledge that Ecopetrol has to contribute to that growth and consolidation of this company. Looking at the overall strategy, I’d say that we are complementing our posture in Colombia and Brazil where we will close this transaction with a company that will produce barrels on a short-term basis and on a medium-term basis we will carry out our ORCA project or Gato d’Amato, previously known, and the exploratory well we have in the sandus. With regard to your second question, I’d say that we’ve had or better focused on different moments for our organization. The business line of hydrocarbons has always been present. And I’d just like to mention that a year ago we were talking about purchasing Repsol of the SEP009 in Colombia. And although in 2025 we had a notorious activity in transition energies, the challenge that the company has today is to consolidate these purchases, execute the projects like Winpece, for instance, and to reflect the goal that why we bought them.
I think that every business line deserves its attention and we’re doing on a timely basis this and we’re making efforts for acquisitions that are focused on what each line requires at its moment. Last year we looked at the strategic goals when it comes to renewable energy and this year with this acquisition we hope to contribute to the incorporation of reserves and production for Ecopetrol. Lastly, I’d say that what we’re seeking also in the partners, especially with Inspirama, San Roque, and Casabe, is to give dynamics to the market while we are joining companies that want to invest in Colombia and with these structures where we share benefits and risks, we can grow the business in these fields that have a maturity level that’s important and major challenges which we jointly believe we can drive. Thank you.
Hugo Beltran
Thank you. Firstly, it has to do with the last report of some that you say that there will be a review that’s based on cash flows and an improvement of these indicators. So what’s your outlook for this year? Do you think that you can have better indicators of cash flow for this? Second, on the IQs with regards to the taxes that improve the market capital for this quarter, could you give us more details? What’s the rationale behind that operation and the effects that we would have in the next quarters?
And lastly, when it comes to the strategy, can we see in different periods a change or an impact of this strategy?
Camilo Barco, CFO of Grupo Ecopetrol
Thank you, Hugo, for your questions. Indeed, the report specifically mentions in Moody’s report they are concerned about the fact of financing the transaction 100% with a short-term loan. But they also talk about the chance of improving this rating once we implement the structuring of the takeout or the long-term. So as I said before, we’re working on this and we have different alternatives that we are evaluating and monitoring and we see a very good appetite and space both in the market and in the banks to refinance this transaction, even along with the operations that we regularly make to improve the conditions and operations to handle the debt and terms and interest rates. So we will be working on this and we have high expectations and we’re convinced that there will be an improvement of the rating because of the stability of cash flows and that this will take place in the approximate future. When it comes to the sale of taxes in favor as an operation to improve the working capital, basically what was structured is an operation, the sales operation as its name says, it’s a sale of balances in favor of the total amount of the taxes that today Ecopetrol Group has in its favor.
And we sold about $500 million. And with this, we managed to incorporate 1.8 trillion pesos to the cash flow and to the working capital. A transaction that we made in the first quarter. And as really it was very important for the liquidity that we have today at levels that are healthy and robust. Mostly because of this transaction that contributed that 1.8 trillion in the first quarter. Good morning, Hugo. As to your third question, the strategy basically is enhanced by the good results that we have leveraged in the area of refinery refineration.
We’ve been making important charges and overcoming records of the 467,000 barrels that we had in the first semester. And this is a record high in 16 years. And this contributes to have better margins because of the refinery of main projects, which adds value like jet gasoline to drive and maintain a trend, taking advantage of the differentials of the products that we have today in the market.
Ricardo Sandoval
Thank you so much. We are also with Ricardo Sandoval. The floor is yours. Good morning to everyone. Thank you for your talk. I have three questions. First has to do with the decline of costs of local purchases. I can see that most of the efficiencies reached this quarter was because a decline of the purchasing costs. But this decline is explained because of a lower volume of purchases. I see that equipment purchased 28% less of domestic crude oil.
But I see that the national production hasn’t declined strongly. Could you please expand why these purchasing volumes fell if this is a trend that is kept throughout 2026? And what’s the margin overall with these local purchases? My second question relates to the transformation of the regasification Coenas project because most of the non-conventional potential is in the middle region of Magdalena. And when EcoPedrel will make the transformation of oil pipes to gas pipes.
I’d like to know how limited would the capacity of Capital B to take these potential non-conventional oils from these two basins. Especially because there are two presidential candidates that are talking about fracking openly. And my third question is more question, but to expand more about Brava. You’ve been asked many things about this, but is it possible to expand on the methodology that used, which is the SEC and the methodology that Brava has?
Could you please explain to us the differences, main differences between both methodologies? And when it comes to reserves, what’s the real difference between what we see today in Bravo and the incorporation of reserves that Ecopetrol will have because of these changes?
Carlos Mauricio Avila (Acting Executive Vice President of Hydrocarbons)
Good morning. I am Mr. The Commercial and Marketing Vice President. Let me answer your first question. There is no real decline in local purchases but instead we have a change that’s given in the decrease of purchases of purchasing domestic crude because of the royalties. After the transition of the payment scheme that we’ve been handling. We paid in money and we’ve applied a resolution of the AH977 of December 2025. We have the purchases of local producers and the change that you see is the payment a change in payment of royalties.
Also we prioritize that that will go to the our refineries and a small part is exported. But when we look at the local purchases, this has, this has increased that oil when going to the refinery. That margin is seen through the refineries. The benefit of this is going through the refinery margin and that’s, this is a measure that you can see and, and really they’re destined for that.
Alexander Berdin
Good morning. This is Alexander Berdin, this is the president of Sen. I believe that to answer your question I have to expand a bit on how we’re working as the Mexican segment and a word that really collects everything that we’ve shown as the results. The latest quarters has to do with flexibility. We are recurringly looking and following up the use of our infrastructure with pipelines, gas lines and ports. And we look at this information with the country’s projections always trying to make the most use of these systems.
And this significantly improves the use of systems and of course their profitability. Within the multiple alternatives that we have we have evaluated. There are pipelines to transport refined products and turn them in pipelines or to turn them into natural gas precisely with the results that we’ve seen. We have the conversion of the pipeline adjustments Cucho Conas and today we can import the fuel from the refinery of Barranca which improved the use that we had of that corridor.
When it comes to this question that you made to fracking, any decision on of infrastructure needs regulatory clarity. We have transportation agreements, but we do not have the firm demand today. So to go from one to the other when we have a structure deficit would mean deficit of structure. And with this we could have enough time to expand or redirect our infrastructure. If in the medium term there is a non-conventional commercial infrastructure, we can either reverse the infrastructure or redirect the oil through several corridors that we already have that will allow us to make the expansions with marginal investment.
Since today we have that capability.
Carlos Mauricio Avila (Acting Executive Vice President of Hydrocarbons)
Good morning, I am Carlos Mauricio Avila, VP, acting BP of the Hydrocarbons line. To answer your question on the differences of the methodologies used by Brava and Ecopetrol. Not really specifically talking about Brava, but the differences really have to do with five aspects that we have to consider when we use PRO methodologies. One has to do with the price criteria and the economic limit it will use to calculate the recoverable volumes. And SEC usually uses a price historical, fixed historical price.
While PRMs can have a projection of the company or of third parties, advisors or price projections other than what SEC does. Second aspect has to do with the maturity of the project and the five-year rule. Compared to the investment plan that we have approved for each of these assets. When we calculate the reserve, SEC is very strict and demands a development plan backed by a final an FID. And usually this is made in a 5-year term overall. But for PMS this is a bit more flexible.
Because we can classify the volumes under limits that go beyond the five-year term and beyond having an FID, we can justify that if there’s a firm intent to make an investment plan, we can register the volumes. The third aspect has to do with the uncertainty and categorization of those volumes. When we talk about reserves, these are approved and possible that we know as 1P, 2P and 3P approves. So with SEC, the focus for that record is made under 1P or approved reserves.
With instead the pyrams, the volume could go to 3P reserves. The other has to do with contractual limit applied to each area that exploits these assets and set. These volumes must be reported up to the date of the expiration. But instead with PMS, we can have volumes beyond those limits and we could be counting on contingent resources with that methodology. The other one has to do with topics more specific to the type of technology used. But I believe that there is a big difference.
So these are the aspects that we can say that are relevant in terms of the differences between one and the other.
Juan Felipe Becerra
Good morning and thank you for your presentation. I have two questions. First, relates to the El Nino phenomenon and gas. What are you implementing a specific strategy to optimize gas in the country with a scenario with the El Nino phenomenon, with the decrease of the gas production this quarter, will this be stressful? For the end of the year and do you have a quantified sensitivity the impact this could have on the prices of energy? Regarding the lifting cost especially can you clarify what’s the exposure of Ecopetrol here and how much is in contracted and under generation?
And the second question or the second topic, could you tell us more about the Parax and ground project? But you already talked about this. But could you tell us more about those reserves? Would this imply a reduction in the reserves that you have reported? And if there is an initial decline, what’s an estimate of this decline in production and if so in reserves and on a medium-term basis, considering that these agreements have to do with more exploration and preparation activities.
What are your expectations in terms of production for these agreements?
Byron Triana (Executive Vice President of Energies for the Transition)
I am the VP of Transition Energies. Regarding your first question. For several years we have an optimization strategy for the use of natural gas internally and we’ve reduced about 8% of the use of natural gas, lowering from 200p to gigabyte day to 210 even months as you can see of 180. This optimization is made not only in efficiencies in energy inefficiencies, but in the added value that the renewable energies give to the group with projects like CETA or Kifa or Iguana.
These allow us to release natural gas and use renewable energies for hydrocarbons. And this is something we will continue doing. Taking a step back, looking at the El Nino weather phenomenon. This has to do with imports. We have the first project to import in September. October will begin in Buenaventura and the beginning of the Puerto Aia project with initially we will begin with 116 million cubic feet for this year. So these are the structural solutions to supply gas in a short term.
And we hope to give a hand to the country when it comes to facing the El Nino. When it comes to the impact of the prices in the pool, we have to clarify the big work done by the group to have a high level of contracting with the energy pool to be covered by these prices for the rest of the year. We have a coverage level of 90% which because 24, 23 we had an exposure to the pool of 28% but now 91 coverage implies that although there can be an impact in the lifting costs, it’s lower.
Of course in a medium demand scenario of the consumption of the network, we optimize the self-generation and the purchases of energy. We have a high level of coverage and we hope that with El Nino the impact on the lifting cost will be minimum.
Julian Lemos (VP Corporate Strategy and New Businesses)
Juan Felipe, thank you for your question. This is Julian Lemos, corporate VP of strategy and new businesses. Let me answer your question in two fronts. One, obviously these companies bet on making investments during the period of the agreement. Grantier $92 million and Parex about $250 million. And the counterprestation or the participation 50% of the basic production and the incremental products of these investments will be given in each field. This has an immediate effect on a short-term basis because Histaco Pedro will share that percentage of the basic and incremental production.
But what we seek with this agreement, and I think that Juan Carlos already mentioned this, is to increase volumes that are two and three times the production that we see today in the field. And on a medium and long-term basis. The final result for Ecopetrol will be a higher production and a higher corporation of reserves. So this is the total effect of the entire transaction. I don’t want you to just look at the effect in 2025. Because this isn’t an agreement made to be executed in the next six months, but instead in the next five years.
Thank you. Thank you. When it comes to the reserves of this agreement, how do they work? Do they remove? Are they of Ecopetrol for the five years? Juan Felipe, just like production, the reserves will be 50, 50. And as the investments come, we can migrate resources to reserves. The final balance for Ecopetrol will exceed what we have today.
Costa Martin
Thank you. I have just a quick. Two quick questions from my side. First, on Brava, we saw some news flow late last year around Bravo potentially considering in divesting from their onshore assets. And one of the potential synergies you have highlighted earlier in the call would be the exchange of expertise in onshore assets. Right? Do you intend to maintain Brava’s current portfolio, including their median downstream assets, once you close the deal?
And my second question, kind of a follow up, I understand if you guys are not able for any reason to reach a 51% stake in Brava, you are not continuing with the deal. Right? But do you have any intention of increasing your stake beyond 51% just for us to be 100% certain? Here. Thank you.
Julian Lemos (VP Corporate Strategy and New Businesses)
Gracias. Guillerme te haula. Julian Lemos, Vice Presidente Corporativo Estrategia y Nuevos Negocios.
Julian Lemos, VP Corporate Strategy and New Businesses
Thank you. This is Julian Lemos. As I said before, the technical financial analysis made about Brava is about the entirety of its portfolio. Today we believe that there are opportunities to capture synergies for both companies. But I’d say that like any oil company in the world, reviewing the portfolio is something ongoing. And once Ecopetrol has the control through this transaction, we will see what type of assets require special attention or a particular management through a rotation of the portfolio or incorporating partners.
With regards to your second question, I’d like to underscore today our plan and how we’re moving is to define a transaction that will leave 51% stake of Brava, not less nor more than 51%. Today we can say that we do not have, we haven’t made a decision or have no intention to go beyond that 51%. However, as we said before, once we control the company, we will make the decisions that we deem are the best for the group Ecopetrol.
OPERATOR
Thank you. The following questions will be in Spanish. Let’s continue with Andres Duarte from Corfi Colombiana.
Andres Duarte
Hello. Thank you. I have a question to follow up on Brava again. And two, about gas. The question about Brava is what’s the multiple of reserves implicit in what you are establishing for the IPO to give that 2027? Or could you give us what’s the reserve that you calculate? Because of the source that I’m consulting, I’m talking about 427 billion, but that’s not with the SEC methodology, but instead with the other. And my question is about gas. One has to do with the slide you showed us of driving solutions of natural gas imports, where you see Co Venus in the second quarter of 2029.
So I’d like to understand, or instead I understood before that that was something that you would do before, but I see that you’ve pushed that back. Could you please give us the rationale behind this, keeping in mind that besides the scenario that it’s already complicated, in which you’re importing a fourth of the gas of Colombia, you have to add at the end of the year El Nino and other problems with the kind of coal. And the last question has to do with Sirius.
Could you clarify better? Because I understood in the presentation that you made in September last year that the timetable for Sirius was to finish consultations in June 2026. I’d like to know where you’re standing there, because recently I read. No, today I read that you mentioned something related to the level reached in pre-consultations. So could you tell us more about that? And do you have an update about your expectation when would you complete that process?
Thank you for taking my questions.
Julian Lemos, VP Corporate Strategy and New Businesses
Andres, good morning. Let me refer to your first question. As Juan Carlos mentioned already, the agreement to purchase 26% has a confidentiality clause and therefore we cannot express the value. I understand, I didn’t refer to that, but instead. Brian, with a 27% premium over the market price. Yes, but let me develop the question, the answer. Andrea, sorry. Yes, we also have an indication in the market of what would be the launching price of the IPO, which as you said, with the price of today would be at 27% of Prima Premium.
But we have an uncertainty today with regards to the value with which we will close the IPO. I wouldn’t dare to say that that’s the value we hope it is. And with both components, the confidentiality of the 26% and the uncertainty of the total value as a result of the IPO, we cannot, we do not dare to publicly share with you a reference of a multiple of reserves. What can I say? The company published its levels of reserves of what you said in your question.
I think we could make an estimate, separate estimate, referring the potential global value. But since this is listed, this is a listed company and we are about to make the IPO. We don’t think it’s proper to make a public manifestation about this.
Byron Triana (Executive Vice President of Energies for the Transition)
With regards to what happened with the Covenas Phase 1 project. As we said before, the idea was to make the molecule as soon as possible and at the lowest price possible. So with this goal in mind, we have different alternatives to import at the same time. One indeed was the phase one of Quavanius and that phase one had all the permits to begin construction. What we needed was the approval of the connection point of transporters which goes to the Bayena Barranca work.
We needed the authorization for that connection point which we requested in October 2025 and to meet the promise to the market to launch in the first quarter of 2027. That connection point should have been approved before January 31st, but this didn’t take place. To date we haven’t had an official response from the transporter providing the access. So we were not going to meet the value promise for the first quarter of 2027. In that situation, we had to delay or better cancel the first phase of the COINES project to have a scheme or a project that could provide the same efficiency of energy entrance and natural gas in 2026 was the Puerto Aria project. So that phase one was replaced by the Puerto A project and we’re trying to look at the national transportation system with the gas line of ODC. And this would be a new source of imports to go by 2029 as a mechanism or as an asset of reliability of natural gas for the country.
Juan Carlos Hurtado (Acting CEO)
Regarding your question about Sirius, first, we are within the timetable established for this project. What does this mean? That within the phases that are relevant, we are closing consultations at the end of the first of the second quarter of 2026. The next thing with that information we hope to present the environmental impact study in the first quarter of 2027. Once we make those proceedings, we can make the FID of the project at the end of 2027 according to the timetable.
When it comes to the analysis or the detail of the consultation, what do we have from the ANCP? We have gas under 20 communities, 120 communities that we have been advancing within the agreements of pre-consultations with the 120 we have advanced with 114. And what is the pre-consultation? It covers agreements on the authorities, spaces of participation and costs. And according to what we’ve seen on site, we have advanced according to the timetable.
With this, we say so we are online with the process, understanding the materiality involved with the consultations approved to have the environmental study and the FID of the project and to keep advancing to have this gas by 2030.
OPERATOR
Muchas gracias.
Julian Lemos, VP Corporate Strategy and New Businesses
Thank you. We have no further questions now. We will continue with the questions of the chat. Julian Cardenas from Business Integration Partners says once IPO is closed, what’s the integration model foreseen? Brava will remain as a subsidiary with its own entity or will it be part of go through the affiliates of Ecopetrol Brazil? Who will lead the integration and how will the synergies be captured? Julian, thank you for your questions. This is Julian Lemos, the corporate BP.
Our vision today is to maintain the Brava operation as it is, acknowledging that firstly, we are not the sole shareholder of this company and that this company has the experience and operational results that we should capture, understand and use. Of course, having a company and having a presence in Brazil forces us to look at different scenarios, to coordinate and integrate everything. But I think it’s premature today to make an announcement if both companies will end up integrated or not.
What can I say now? All of the experience of the Ecopetrol Group in terms of development and managing mature fields onshore is something that we want to provide in this investment and to boost that work front and also to be able to capture and incorporate the best practices, operational practices that Brava has today offshore towards our operations and projects in Colombia. As far as this transaction will take place, we will provide more precise information in terms of times and expectations to capture synergies.
Thank you.
Juan Paulo Marin Ramirez
Juan Paulo Marin Ramirez from Banco VBN. Could you give us an update of the core eyes in the Guajita parks? With the bread prices so high this year, what’s your outlook of the FEPEC? Could you give us an update with the process of the Diane when it comes to the reficard Ecopetrol process? Good morning, this is the VP of Energy Transitions. When it comes to ITIs, right now we are completing the business case to make a final investment decision towards July or August this year.
We’re still working with IS to do to make the projects as soon as possible and to have a balance of a plan. But the investments plan will be made in August. Good morning Juan Pablo. This is Juan Carlos Hurtado, Acting CEO. With regards to your question, as we’ve said, understanding that this topic is related to prices and differentials and the exchange rate and what we’ve seen in the first quarter of 4.2 trillion pesos, we understand within our analysis making an average range of 80, 90 a year, we can have a monthly range of 1.1 to 1.5 trillion pesos.
So with this, we estimate we can find the amount of course according to the month-to-month conditions that we see. Juan Paulo, good morning. Let me refer to your third question related to the process of the VAT before the Colombian Tax Authority. In short, we can say that we have completed by today the administrative aspects or proceedings. We have answered all the reconsideration, revision, and clarification parts and after this, we have proceeded to present four demands regarding the eight official liquidations and we have presented four to re-establish the rights before the court of Bolivar and that of Bogota the contentious.
These four demands are underway to be admitted. One has been admitted already and with regards to the measures, we are waiting for an official ruling. So we’re still going ahead entirely within the jurisdictional process and we hope to advance with this controversy to the very last.
Juan Carlos Hurtado (Acting CEO)
Good morning again, Juan Carlos Hurtado, Acting CEO. I’d like to thank all of the people that joined us in this earnings call. I’d like to thank the leadership team for its great work and that shows with the results that we are giving you and to the more than 10,000 employees that we have, the Ecopetrol Group, because without them this is not possible. We have great results because they are aligned with our strategies. Have a great day.
OPERATOR
Thank you all. With this, we end our earnings call of the first quarter of 2026. Thank you for joining us. You may hang up now.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
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