ECOPETROL (EC) Q2 2025 Earnings Call Transcript

Transcript

Speaker 4

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 second quarter of 2025. There will be a questions and answers session at the end of the 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.

Ricardo Roa, CEO of Ecopetrol, Rafael Guzmán, Executive Vice President of Hydrocarbons, Camilo Barco, CFO, and Bayron Triana, Executive Vice President of Transition Energies. Thank you for your attention. Mr. Roa, you may begin your conference.

Speaker 5

Welcome to Ecopetrol Group's second quarter of 2025 earnings call. During the quarter, we maintained solid operations with improvements in upstream recovery and downstream, and we're seeing results in the midstream segment despite a challenging environment marked by heightened volatility and declining crude prices due to geopolitical tensions and third-party disruptions to the transportation system infrastructure. We reached a semester production of 751,000 barrels of oil equivalent per day, the highest level in a decade. This was driven by fields in Colombia, such as Caño Sur and CPO-09, which contributed to the highest national crude production in four years, as well as a strong performance in the Permian Basin in the United States. We declared the commercial viability of the Loreto discovery in methane, the most significant in the past 10 years, following the recent acquisition of 45% of the CPO-09 block.

Additionally, we began drilling the Papayola well in the Caribbean offshore, aiming at expanding the country's gas potential. In the midstream volumes, we exceeded 1 million barrels per day, supported by operational solutions that mitigate the impact of external events. We highlight the expansion of the Pozos Colorados terminal, including the completion of the country's largest tank with a capacity of 320,000 barrels, and the unloading capacity increased to 550,000 barrels, enabling the reception of large vessels. In downstream, we reached 405,000 barrels per day in throughput with full operational recovery after completing major maintenance activities. We expect to capitalize on this with improved margins in the second half of the year. In the gas segment, we completed the first long-term commercialization of imported natural gas in Colombia, securing national supply through five-year contracts.

Finally, we signed the agreement to acquire Winpeche, Ecopetrol's first wind project developed by our own, located in La Bujía. This is a key step toward advancing decarbonization and reducing energy costs in our operations. In summary, Ecopetrol's operations have adapted swiftly to the environment, maintaining the positive trend seen in recent quarters. Let's move on to the next slide, please. The solid operational progress during the quarter was partially offset by the decline of the crude price. REM fell by 22% compared to the second quarter of 2024, impacting both revenue and profits. On the commercial front, we achieved the best quarterly crude differential in the past four years, thanks to a diversified basket and an active marketing strategy that allowed us to capture value even in a low-price environment.

We achieved efficiencies totaling COP 2.2 trillion, exceeding the semester's target by 27%, helping to mitigate the impact of lower prices. In terms of investments, we have committed our $2,500 million USD so far this year, aligned with our long-term strategy. It is worth noting that we are maintaining our production target for 2025. During the quarter, we completed the full payment of dividends to our shareholders, delivering a 10% return, reaffirming our commitment to generating value and competitive returns. Regarding the optimization plan announced last quarter, we have made 80% progress in reducing costs and expenses, strengthening our financial and cash position for the year. In conclusion, this was a quarter marked by strong operations and underpinned by competitive commercial decisions and by efficiencies that support the group's financial performance. Let's move on to the next slide, please. We continue to make steady progress on our TESG agenda.

We expect to exceed the goal of 900 megawatts in renewable energy for self-generation by 2025, thanks to acquisitions made during the quarter, which will be detailed later in the presentation. In the decarbonization, we continue to surpass our greenhouse gas emission reduction target with a reduction of 242,000 tons of CO2 equivalent, comparable to average annual energy consumption emissions of 190,000 Colombian households. On the social front, through the use of tax mechanisms, we completed six initiatives representing an investment of COP 43 billion, benefiting approximately 350,000 people across various regions of the country. Additionally, we allocated more than COP 180 billion to our sustainable territorial development portfolio, which includes social, environmental, and community engagement investments. In water resource management, we used over 44 million cubic meters of water in our direct operations.

This is equivalent to nearly twice the annual domestic consumption of approximately 500,000 residents of the entire Casanare department. In job creation, we facilitated over 66,000 labor engagements in the first semester through our contractor companies, reaffirming our commitment to economic development in the regions where we operate. With these achievements, we continue to strengthen our contribution to regional well-being and the country's sustainable development. I now hand over to Rafael Guzmán, who will present the results of the hydrocarbons business line.

Speaker 3

Thank you, Ricardo. During the first half of 2025, we achieved significant progress in the upstream segment, driving forward key discoveries towards their development phase. To highlight the following milestones: the Commerciality Declaration of the Loreto Discovery in June, to be covered in more detail in the next slide. The recognition by the Brazilian National Agency of Petroleum and Biofuels of the Commerciality Declaration for the development areas Gato do Mato, now named Orca and South Orca, on May 20, 2025. This fulfilled a key milestone, enabling the start of proven reserves incorporation in 2025. In parallel, detailed engineering began for the floating production unit and processing facilities, along with safety analysis and the consolidation of project teams. The Sirius project progressed towards its development phase. Work is currently underway on the contract model for the design, construction, and operation of the necessary surface facilities for gas treatment.

Moreover, ethnic, social, and environmental feasibility activities are being carried out after obtaining the provenance certificate for the beach crossing, granted by the National Authority for prior consultation. Regarding the Southern Caribbean offshore assets, on June 9, 2025, we submitted a request to the ANH to assign a 50% interest in the block in favor of Ecopetrol. We continue advancing on the evaluation of alternatives for executing the development. By the end of the semester, six out of ten planned exploratory wells had been drilled, with $156 million of investment already executed. This includes the exploratory success of the Kurukutu One Well, operated by GeoPark in partnership with Hocol in block Llanos 143. This well is located in the same eastern Llanos basin as the Toritos Discovery, which reduces technical uncertainty in the block and expands its production potential to the north.

The exploration campaign in block Guajiro continued with the drilling of Buenas Suertes One Well. Such wells did not show commercial hydrocarbon accumulations. However, the well provided valuable geological insight into a play different from the one of Sirius, with additional prospectivity to be matured based on the data obtained. Drilling began in Papayola One Well, targeting a play similar to that of Sirius. Let's move on to the next slide. The declaration of commerciality for the Loreto discovery, located in the municipality of Guamal, Meta, marks the culmination of a successful exploration process and reflects the strategic value of acquiring the 45% interest in block CPO-9 from Repsol. It represents the most significant discovery in terms of resource potential over the past decade, with approximately 250 million barrels of oil in recoverable resources, including 109 million barrels classified as certified contingent resources.

This commercial milestone enables the development of 13,584 acres of area, a size comparable to the Chichimena field, and incorporates into the production two wells, the Juan Uno and Guamar Profundo Uno, located near the Casillas field, with a combined production potential of 1,450 barrels per day. As shown on the map, its proximity to existing production and transportation infrastructure, as well as the potential continuity of the reservoir with nearby fields such as Acacillas and Chichimene, facilitates commercial production, technical delineation, and enables capturing of operational synergies. The development plan will be submitted to the ANH in the fourth quarter of the year. This plan will include the proposed activities, licensing requirements, and necessary investment for the future progression to reserves. Let's move on to the next slide.

During the first half of 2025, we reached total production of 751,000 barrels of oil equivalent per day, the highest level recorded since 2015, driven by the following facts. First, the contribution from domestic crude oil production that reached 517,000 barrels of oil per day, the highest level since 2021, driven primarily by Caño Sur, which added 10,000 barrels per day compared to the same period last year, and the acquisition of 45% interest in block CPO-9, which contributed an additional 11,000 barrels per day. Second, the drilling campaign in the Permian Basin reached a production of 106,000 barrels of oil equivalent per day for the semester, an increase of 14,000 barrels compared to the same period last year. This result reflects the optimization of completion designs, efficiency in bringing new wells online, and an accelerated schedule enabled by operational efficiencies in drilling and completions.

As shown in the top right graph, in June, we were able to recover national crude oil production that had been affected by external events unrelated to Ecopetrol's operations, mainly concentrated in April. This recovery was possible thanks to our experience in effective incident management and minimization of operational disruptions. During the semester, $1.4 billion were invested, highlighting the expansion of water treatment capacity in Rubiales and Caño Sur, and the gradual commissioning of crude treatment capacity at the Orotoy Station, which by July had increased to 35,000 barrels. These facilities enabled the operational continuity of the fields and supported production growth. Additionally, we executed 180 work covers, a 59% increase over the same period last year, and 220 development wells, reaching levels close to those of 2024.

As part of the efficiency strategy and investment prioritization based on Brent price, total projected investment is $3.6 billion for production and $400 million for exploration, for a total of $4 billion in the upstream segment. These optimizations do not impact reserve incorporation or production levels. We maintain our established target of 740,000 to 750,000 barrels of oil equivalent per day for 2025. Let's move on to the next slide, please. The midstream segment delivered solid financial results with a 9% increase in EBITDA in the first half of the year compared to the same period in 2024. This demonstrates the operation's resilience in a challenging environment. In volumetric terms, transported volumes decreased by 6% compared to the second quarter of 2024 and by 4% compared to the first half of the previous year, as shown in the top left graph.

This was mainly due to an increase in external events such as blockades, attacks on transportation infrastructure, hydrocarbons theft, and lower crude oil production from third parties in the country. Additionally, the scheduled maintenance at the Barrancabermeja refinery impacted volumes of both crude and refined products. In response to the third-party impacts on transportation infrastructure, we have implemented strategies such as stronger operational control, leveraging technology for rapid detection, repair, and evacuation at affected points. These efforts were coordinated with government agencies and included the implementation of alternative evacuation routes, enabling transportation of more than 7 million barrels from the Janus Northfields via the Bicentennial Oil Pipeline and the segregation of this crude from Araguana into the Barrancabermeja refinery, preserving its quality and properties. At the same time, the segment made decisive progress that enhanced the resilience of the midstream systems, with some milestones as follows.

In refined products, a highlight included storage expansion at the Pozos Colorados terminal, reaching 1.5 million barrels of storage capacity and the capacity to receive refined product vessels of up to 550,000 barrels. In crude oil pipelines, capacity was increased in several systems. The Vasconia to Barrancabermeja line capacity was increased by 7%, enabling greater availability of domestic crude oil to the refinery. The Araguaney to Cusiana evacuation capacity was increased from 50,000 to 80,000 barrels per day, allowing faster inventory reduction from Caño Sur fields and lowering the risk of production deferrals. The stabilized operation of the Caño Sur to ODL pipeline with evacuation flows exceeding 50,000 barrels per day helped mitigate production deferrals and capture savings of COP 77 billion. This set of achievements demonstrates how, in a challenging context, the segment continues to execute strategic projects that reinforce the capacity and efficiency of Colombia's hydrocarbon transportation system.

Let's move to the next slide. In the second quarter of 2025, the downstream segment showed a recovery in its financial results, with a 53% increase in EBITDA compared to the same period in 2024. This was supported by an improvement in operational availability, which reached 95.8%, up from 91.2% in the first quarter of 2025. These results reflect continuous improvement in performance and operational stability at the refineries, driven by progress in the major maintenance cycle, with eight out of ten scheduled works completed, including those of cracking UOP-2, polyethylene-1, and Prime-G units. As a result, consolidated throughputs reached 413,000 barrels per day in the second quarter of the year, showing a 4% recovery compared to the first quarter of 2025, as shown in the top left graph.

On a semester basis, the throughput reflected the impact of increased maintenance activity in the first quarter, showing a 5% decrease versus the same period of the previous year. In terms of integrated gross refining margin, the segment reached $12.5 per barrel, mainly driven by operational improvements that boosted availability and by better international gasoline and diesel differential. This represents an increase of 37% compared to the second quarter of 2024 and 15% versus the first quarter of 2025, as illustrated in the top right charts. For the first half of 2025, the integrated gross refining margin was $11.7 per barrel, slightly below the figure for the same period in 2024, a decrease of 2%. This was due to the maintenance cycle and the unexpected power outage at the Cartagena refinery, lower availability of light crude due to external events, and other market-related factors.

As shown in the bottom left graph, the segment's EBITDA grew 38% compared to the first quarter of 2025 and 53% compared to the second quarter of 2024, reflecting efficient management, lower fixed stock costs, and better product differentials. However, on a semester basis, the indicator was impacted by external events and the scheduled maintenance plan. Looking ahead, Ecopetrol projects to maintain its competitiveness through an integrated strategy based on four pillars: maximization of high-value products, portfolio diversification, operational efficiency, and reliability and sustainability. During the second quarter, the following key milestones were achieved in support of this sustainability plan. Contributing to operational reliability, progress was made on the Cartagena refinery's electrical reliability plan, with nine out of 16 planned milestones completed by June 2025.

In the maximization of high-value products, progress in transforming low-value bottoms supported the export of higher quality refined products with better margins, such as the first export of IFO-380 marine fuel to the United States and a record in liquid asphalt exports from the Barrancabermeja refinery. Likewise, on July 15, the first direct export of liquid paraffin to Brazil was completed, with expansion projected into other Latin America markets. Finally, on July 10, an alliance with the Civil Aviation Authority of Colombia was formalized to promote the development of sustainable aviation fuels, SAF, in Colombia. Let's move on to the next slide, please. In 2025, the hydrocarbons business line continues to deliver on its integrated efficiency and competitiveness strategy, contributing trillion pesos by the end of the second quarter of 2025, 12% higher than the same period in 2024, as shown in the top left chart.

64% of these efficiencies had a direct impact on EBITDA through initiatives that reduced and optimized operating costs with COP 684 billion in open savings and generated additional income of COP 668 billion. Among the implemented initiatives, the following stand out: tariff optimizations in new service contracts, energy efficiency projects in operations, lower crude evacuation costs due to the startup of the Caño Sur Odeyre pipeline, synergies captured in the transportation system, and producing assets to integrated operations, production and commercialization of higher quality, higher margin products, improved margins in refined product purchases and imports, and include exports, among others. In addition, new investment cost optimizations were incorporated, accounting for 30% of total efficiencies, along with working capital improvements, which had a positive cash flow impact of COP 108 billion, achieved through inventory management and savings in financial expenses.

Regarding lifting costs, it stood at $11.59 per barrel in the first half of the year, reflecting a decrease of $0.45 per barrel compared to the same period in the previous year, thus maintaining the target announced to the market, as shown in the top right chart. This result was supported by a favorable exchange rate effect and capture efficiencies, primarily in optimization of the operation and maintenance model in non-industrial areas, reuse of materials in subsurface operations, improved maintenance contract rates, efficient energy management, with a gradual and structural decrease in energy intensity per barrel, despite a significant increase in the total volume of fluids produced, as shown in the bottom right slide.

The efficiency plan allowed to double this contribution to lifting costs compared to 2024, partially mitigating the impact of inflation, higher costs associated with labor reform, accelerated scheduling of subsurface and surface maintenance activities, and increased treatment costs due to higher total production volumes. Meanwhile, the cost per barrel transported and the refining cash cost increased by 2% and 3%, respectively, due to lower transported volumes and reduced refining throughputs, as previously explained. These increases were partially offset by efficiencies captured in each of the segments. Now, I will turn it over to Bayron, who will share the main milestones from the energy transition business line.

Speaker 1

Thank you, Rafael. It is a privilege to address you in my first earnings call as Executive Vice President of Transition Energies. I thank the Ecopetrol Group for the trust placed in me to lead this business line and to continue driving its growth. By the end of the second quarter of 2025, we are pleased to report the successful execution of the commercialization process for major gas fields and regasified natural gas in the Colombian Pacific region. Through this process, we secured the sale of 58 GWh per day on average of gas from major fields over the next four years, with full allocation of the offered volume, prioritizing essential demand. Moreover, for the first time in our history, we assigned 60 GWh per day of imported gas via the Colombian Pacific Coast under a five-year long-term contract subject to pre-sale conditions.

This entire volume was allocated among 18 market agents, with deliveries scheduled to begin in the second semester of 2026. These achievements reaffirm our commitment to strengthening the country's energy security and position Ecopetrol as a key player in supplying the fuel for the energy transition. In parallel, we continue to explore alternatives to use Ecopetrol Group's existing infrastructure in the Caribbean region. Our objective is to develop facilities for the reception, storage, and regasification of liquefied natural gas, with operations projected to be between 2026 and 2027, subject to technical and contractual requirements. Let's move on to the next slide, please. In the energy segment, the Ecopetrol Group consumed 23.3 GWh per day of electricity, equivalent to 11% of the demand of the national interconnected system. This demand was met 58% through self-generation and 42% through purchases from the wholesale energy market.

Of these purchases, 70% were made under contracts, meaning that nearly 88% of our demand was protected against market price volatility. This coverage represents an improvement compared to the same period in 2024, when coverage stood at 81%. The result? Greater stability in the unit cost of electricity supply. Regarding self-generation from renewable sources, during the second half of the year, this accounted for 5.6% of the group's electricity demand, compared to just 0.6% five years ago. This means we are using nine times more renewable energy. By the end of the semester, the Ecopetrol Group accumulated 630 megawatts in its renewable energy portfolio, of which 208 are operational, 228 correspond to purchase in the wholesale energy market, 95 are under construction, and 99 are in execution. We are on track to meet the goal of 900 megawatts by year's end.

In this way, we continue to strengthen the diversification of the group's energy matrix and reduce supply costs. By the end of the semester, we had accumulated savings of over COP 70 billion, reflecting the impact of our renewable energy strategy. Additionally, we signed the framework investment agreement with AEP, the Power Purchase Agreement with Statkraft, and acquired 100% of the Winpeche project. Additionally, we signed the framework investment agreement with ICE, the Power Purchase Agreement with Statkraft, and acquired 100% of the Winpeche project, all of which will further support the integration of renewable sources in the coming months. Next slide, please. Of equal importance, we continue to deliver positive results in energy efficiency.

In the first half of 2025, we achieved a cumulative optimization of 2.42 petajoules, driven by initiatives such as the replacement of turbocompressors in the PL1 region, optimization of gas injection systems, and enhanced operational control in energy-intensive assets. The energy reduction achieved because of these efficiency measures is equivalent to the electricity and natural gas consumption of more than 1.1 million households in Colombia. In addition, we resulted in savings of over COP 53 billion and a reduction of approximately 171,000 tons of CO2 equivalent. In terms of social gas initiatives, we connected more than 19,000 new low-income households, reaffirming our commitment to universal energy access and improving the quality of life for Colombian families.

Finally, we closed the semester with a production of 161,000 barrels of oil equivalent per day of gas and LPG, and an EBITDA of COP 1.5 trillion, 4.5% higher than the same period last year. With these results, we continue to demonstrate that the Ecopetrol Group's energy transition is not only possible, but also profitable, sustainable, and socially inclusive. I'll now pass the floor to Camilo, who will present results of the transmission and road infrastructure line and the key financial milestones.

Speaker 6

Thank you, Bayron. During the first half of the year, the transmission and road infrastructure segment maintained solid operational performance. The company made firm progress toward its strategic objectives and strengthened its management through the awarding and commissioning of the following projects: ISA Energia Brasil, which was awarded seven reinforcements and improvement projects with a reference CapEx of approximately COP 187 billion. Seven reinforcements and improvements in the ISA Energia Brasil network entered operation with an estimated investment of COP 232 billion. The Agua Vermelha Four project began commercial operation with an investment of COP 70 billion, facilitating the integration of a new solar project in São Paulo and the Triângulo Mineiro. In Colombia, ISA completed the renewal of the Bolívar-San Analara and Bolívar-Termo Cartagena transmission line with an investment of COP 16 billion. On the financial front, two events partially impacted the results for the period.

The first was related to the adjustments made in June to the formula for calculating the financial components of assets in Brazil's existing system basic network, known as RBSE. This decision responded to the market request and had a wide industry impact. This one-time effect had the following impacts on ISA and the group's financial results: a reduction in EBITDA of approximately COP 0.6 trillion, a decrease in net income of around COP 0.1 trillion, and a lower cash collection between July 2025 and July 2028. The second event to mention regards the provision for outstanding receivables from IDE in ISA Intercolombia and Transelca, which resulted in a COP 0.2 trillion impact on EBITDA and COP 0.1 trillion on net income. ISA closes the semester with solid operating results, making progress on its investment plan and remaining committed to meeting its 2025 financial targets.

In addition, it continues to execute the ISA 2040 strategy with discipline, focusing on strengthening its presence across Latin America. Moreover, it continues to be a key pillar within the group's diversification strategy, contributing about 17% to consolidated EBITDA. Let's move on to the next slide to review the group's financial performance in detail. The results during the first half of the year reflected the group's ongoing commitment to capturing structural efficiencies across revenues, costs, expenses, and CapEx. This has enabled us to maintain competitive profitability within the industry and safeguard the financial and investment targets for the year. As of June 2025, we recorded a net income of COP 4.9 trillion, representing a year-over-year decline of COP 2.5 trillion, represented mainly by the following external factors.

Market factors accounted for approximately 78% of the impact, or COP 2.1 trillion, including the net effect of a $12 drop in Brent prices compared to the first half of 2024, partially offset by improved negotiated differentials and a positive impact from a higher exchange rate compared to the same period last year. Local environment included increases of blockades in fields and disruptions to transportation infrastructure, resulting in a negative impact of COP 0.3 trillion. New taxes related to the state of emergency decree and non-deductible value-added tax on fuel imports, totaling an impact of COP 0.2 trillion. Adjustment to ISA's remuneration, previously discussed, with an impact of COP 0.1 trillion. Other net positive events contributed COP 0.2 trillion, including benefits from higher crude production, increased services at ISA, lower income surplus, and higher depreciation.

During the same period, EBITDA reached COP 24.4 trillion, reflecting a variation of COP 3.9 trillion compared to the first half of 2024. This variation is explained by 72% due to the previously mentioned market factors, followed by 15% attributed to the RBSE adjustment effect and 10% from the environment events. EBITDA margin remains strong at 40%, exceeding the annual target of 39%. In terms of EBITDA by segment, the exploration and production business line continues to lead, contributing 54% of total EBITDA. Including the transportation and refining segments, the contribution rises to 83%. The remaining 17% corresponds to ISA's contribution, reaffirming its relevance to the group's diversification strategy.

On another front, and thanks to the group's financial flexibility, we promptly activated the cash management committee to ensure liquidity and support operational and financial targets without incurring an incremental long-term debt, even in a crude price environment below the levels projected in the plan. As of June, we achieved 80% progress in the cost and expense reduction actions announced in the first quarter and defined within the committee framework, with positive effects on EBITDA, cash flow, debt, and CapEx. Aligned with this focus on efficiency, we reached COP 2.2 trillion in savings in the first half of 2025, of which 66% directly benefited OpEx and revenues. In the hydrocarbons segment, we achieved COP 1.5 trillion in optimizations, reflected in improvements such as reduced lifting costs, energy consumption per barrel, and cost per foot drill, as detailed by Rafael Guzmán.

We will maintain our target to reduce lifting costs this year, with a special focus on energy maintenance and contracted services expenses, aiming to consistently stay below $12 per barrel. At the corporate level, we achieved COP 0.4 trillion in efficiencies through digitalization initiatives and demand controlling operations, while commercial management contributed COP 0.2 trillion in optimizations. For the remainder of the year, we will continue advancing cost and expense reduction measures to reach the COP 1 trillion target, while also pursuing efficiencies exceeding COP 5 trillion to mitigate the impact of the external environment. It is worth noting that the efforts we are implementing this year will be reflected in the 2026 planning, which is projected in a challenging price environment.

Regarding performance versus peers, the Ecopetrol Group remains in quartile two, standing out in two key areas: profitability, successfully mitigating the effects of the external environment on key indicators such as ROCE and EBITDA margin, with results that outperform its peers; and OpEx competitiveness, showing a strength in indicators such as lifting costs, cost of sales per barrel, and operating expense per barrel. Let's move on to the next slide. In terms of cash flow, we remain focused on protecting liquidity and optimizing working capital, while maintaining disciplined financial management. As of the end of June, the Ecopetrol Group's cash position stood at COP 13.1 trillion, with a positive free cash flow of COP 3.1 trillion, composed of a strong operational cash flow driven by the early collection of the FEPC, totaling COP 7.6 trillion. Investment activities amounted to COP 13.1 trillion.

Additionally, during the semester, Ecopetrol completed the full payment of dividends to both majority and minority shareholders, totaling COP 8.8 trillion, reaffirming our commitment to generating value for our shareholders. Regarding working capital optimization efforts, we achieved 51% progress toward the COP 2 trillion target announced in the first quarter. Key measures included early collections of the 2024 FEPEC, tax credit compensation totaling COP 3.2 trillion, and trade finance operations in subsidiaries amounting to $100 million. We also implemented additional measures that strengthen cash flow, such as foreign exchange hedging operations totaling $935 million, helping to mitigate the impact on export-related collections. In the short term, we will continue executing foreign exchange hedging operations, as well as rent and differential hedges, with the objective of protecting the cash flow projected in the financial plan.

In line with these efforts, the FEPEC balance was reduced to COP 2.5 trillion as of June, the lowest level since the second quarter of 2021. This improvement, along with a monthly accrual below COP 500 billion, represents a turning point in the management of this account receivable, with a positive impact on the projected operational cash flow for the year. In the coming months, we will continue advancing in working capital optimization measures to reach the annual target of COP 2 trillion, while also strengthening the group's internal liquidity levers. Let's move on to the next slide. In line with our comprehensive debt management strategy, Ecopetrol maintains a healthy level of indebtedness and a maturity profile with low refinancing risk, primarily concentrated in the medium and long term. 2025 maturities include simultaneous operations and treasury loans totaling approximately $1.2 billion, with a temporary effect on short-term debt levels.

It is worth noting that simultaneous operations are backed by cash holding in the portfolio, which will be progressively liquidated over the coming months. The next significant maturities are scheduled for 2029. As of June, the gross debt-to-EBITDA ratio stood at 2.4x, within the long-term target range of below 2.5x. Excluding ISA, this ratio stands at 1.7x. Including the cash balance, net debt-to-EBITDA ratio decreases to 2.2x and to 1.6x, excluding ISA. For 2025, no increase in debt levels is expected related to the organic portfolio activities, thanks to the group's strong liquidity position. We remain focused on optimizing financial costs, both locally and internationally. Currently, a rate reduction for a local loan is being processed with the Ministry of Finance, and negotiations are underway with international counterparties to achieve further reductions during the second half of the year.

Regarding trade ratings, during the second quarter of 2025, Moody's maintained the global and standalone ratings at Ba1 and B1, respectively. Standard & Poor's Global adjusted the global rating to BB and the standalone rating to BB+. Both agencies highlighted Ecopetrol's strategic importance to the country, the portfolio diversification driven by ISA, and the improvement in FEPEC management. In the first half of the year, investments maintained strong momentum, aligned with historical levels and the targets of the annual plan, reaching $2,582 million. Most of the investments executed in Colombia with 62%, followed by Brazil with 17%, and the United States and other countries reaching 21%. 59% of investments were allocated to strengthening energy security, including profitable crude oil production, refinery operations, and domestic supply. The remaining 41% was directed towards initiatives in natural gas, energy transition, sustainability, innovation, electric transmission, and road infrastructure.

In exploration and production, $1,290 million were invested, mainly in the Meta region, in assets such as Caño Sur, Rubiales, Castilla, CPO-09, and Chichimene. In Brazil, resources were focused on the development of the Orca Discovery, formerly known as Gato Lomato. In refining, $171 million were allocated to ensure operational availability, while transportation saw $100 million in investments to support operational continuity. The investment portfolio remains focused on growth and future value generation, representing 86% of the total investment, while 14% was directed toward ensuring operational continuity. On the capital discipline front, we advanced in executing measures that allow us to capture full CapEx flexibility, with a target of $500 million to protect production for the remainder of the year. As of June, we achieved 56% progress, ensuring profitability and meeting operational targets.

Our investment plan is designed around a price range that enables us to adapt to different scenarios, maintaining capital discipline and ensuring competitive returns. Let's move on to the next slide. Regarding the value-added taxes charges on gasoline and diesel imports by the National Tax and Customs Directorate, DIAN, a difference in interpretation between the agency and Ecopetrol Group remains. In compliance with DIAN's interpretation, Ecopetrol and Refical have assumed the payment of value-added tax on these imports since January 2025, while simultaneously pursuing legal defense in the appropriate forums regarding charges applied for the 2022 and 2024 period. A comprehensive response has been provided to all requests and appeals submitted by the authority. These claims, including estimated interest, amount to approximately COP 11 trillion for gasoline and diesel. Additionally, there is a potential claim related to diesel imports.

To date, Ecopetrol and Refical do not recognize any payment obligations related to the value-added tax from previous fiscal years and continue to defend their position to safeguard their interest. For 2025, the total estimated value-added tax payments across the group amount to COP 3.6 trillion, of which approximately COP 3.3 trillion is expected to be recovered through refund and deduction mechanisms. In parallel, a technical working group has been established between Ecopetrol and government entities, while the administrative process for the claims and assessments is underway, with an estimated duration of six months. The next stage involving the legal challenge of official assessments could extend up to five years. DIAN may continue with the collection process in accordance with current regulations. However, based on the analysis from external advisors, the company considers that no provision is required at this time that could impact the financial results.

Finally, Ecopetrol and Refical reaffirm their commitment to complying with the tax and customs regulations, as well as respecting decisions made within the framework of applicable law. I now hand over to the President, who will present the closing remarks. Thank you very much.

Speaker 3

Thank you, Camilo. I would like to close by highlighting that Ecopetrol Group continues to execute key investments and strategies aligned with its long-term vision aimed at strengthening operations and ensuring sustainability over time. This quarter's results show improvement across our main business lines compared to previous periods, given the context of high volatility on prices and security challenges in our operations. Efficiency management has exceeded expectations, particularly in initiatives to reduce energy consumption and expense generation from renewable sources, in line with our strategy to diversify the energy matrix. Operational resource efficiencies and commercial management help mitigate part of the impact of the price environment on revenues. We also maintain a clear strategy for cash management and sustainable debt levels. The group will continue to enhance its operational and strategic flexibility with constant monitoring of prices and markets.

The group will continue to enhance its operational and strategic flexibility with constant monitoring of prices, markets, and international developments, allowing us to adapt swiftly when needed. We will keep working hand in hand with the regions, advancing our social and environmental commitments, and contributing to the development of the territories where we operate. We remain firmly committed to protecting our cash position, maintaining capital discipline, and ensuring financial resilience and flexibility, as announced during our first quarter earnings call. We continue to closely monitor market conditions to activate the necessary protocols to preserve the company's strength and to keep generating sustainable value for our shareholders and for the country. With that, we now open the floor for questions.

Speaker 1

Muchas gracias. Comenzaremos.

Speaker 6

We will begin now the Q&A session. We recommend asking two questions at the most so others can ask questions. Let's begin with three questions in Spanish, and then we will have three others in English. Please remember to choose on the interpretation the language that you will use for your question, otherwise, we cannot hear you. Andrés Duarte from Corficolombiana is online with a question. Mr. Duarte.

Buenos días.

Good morning, and thank you for receiving my two short questions. One is on production, and the other has to do with the nation. The one of production, could you please explain a bit how you reach that peak of production and your expectations for the rest of the year? The second question has to do with the nation. This morning, I heard the presentation made for journalists, and you spoke about the milestones in terms of dividends and royalties of the company. Could you please repeat here these figures showing the dividends and royalties and when it comes to taxes, specifying how much is income and the others I referred to last year and the expectation you have for this year? Thank you.

Good morning, Juan.

Good morning, Juan Carlos Hurtado. I am the Acting VP of Hydrocarbons. When it comes to your question of premium, this has to do with an anticipation of the activity and the better performance of the drills regarding processes and their designs. This managed us to have a peak in the semester of 165 barrels per day, and this is based on the performance of these types of fields, and that shows a high peak. That's why our expectation by the end of the year, with the activities that we made so far, we expect an average production of 90 to 190 barrels a day.

Andrés, buenos días.

Andrés, good morning. I am Camilo Barco, and let me take your second question about the milestones. Thank you, sir. Yesterday, with the journalists, we spoke about the transfer made to the transfer known as government takes. Fundamentally, these consist of the three items that you've mentioned, which are dividends, taxes, and royalties. Of these three items, the most important is taxes, which represents 50% of these transfers. Approximately, of course, every year has its particularities. The royalties are 25% and dividends are 25%. Let me take the figure of 2024 to give you figures for this particular case. In dividends, we paid COP 11 billion, in royalties, a bit more than COP 9 billion, and in taxes, about COP 20 billion. This is for a total of COP 40.4 billion transferred to the nation last year.

This year, we expect to have the same proportion, 50% in taxes, which we can say as of June 2025, we've paid about COP 6 billion in tax income tax specifically, COP 3 billion in withholdings, and COP 3 billion in income. As of June, in terms of transfers to the nation, we have a total of COP 23 billion, and what we estimate for the rest of the year is a total amount of COP 35 to 40 billion, closer to the mean of that range of the COP 38 billion. I'm sorry. What's the income tax there, keeping in mind the expected rate? The income tax expected this year is about COP 3 billion, which is what we have paid so far as of June. Thank you so much. We're talking about balances of taxes in favor. Next question from Catherine Ortiz from Davivienda. The floor is yours.

Buenos días.

Good morning for all of you, and thank you for this space. I'd like to ask you, yesterday we saw in the media that you spoke about the disinvestment of assets. Could you please expand on this topic and if it relates also to what President Petro said that Ecopetrol should sell its assets in the U.S., and if these assets are part of the disinvestments that you plan? If not, could you please expand this topic and the strategy of the disinvestments that Ecopetrol has? Thank you. Catherine, good morning. I am the Vice President of New Businesses. Let me begin by saying that yesterday our CEO talked about assets in Colombia, but also our company constantly and periodically evaluates all of its portfolios when it comes to assets and affiliates, and it evaluates the performance and the strategic reserves it has.

Given the case that we will make a disinvestment, we will be specifically mentioning these to the market. When it comes to your question in Colombia, what we are seeing partly is how we can replicate positive experiences like the one of Barracks of last year. Seeing different assets in the fields of Colombia and the countryside of Colombia to increase investments and the activity in the hydrocarbons sectors. In some assets which do not compete in our portfolio, because of confidentiality, I cannot mention to you the assets that we're evaluating now, but I can say that we are looking at processes underway, and we have private companies in Colombia. Once the processes of approval within Ecopetrol take place, we will be sharing the information with you. Thank you for your answer. We have Juan José Muñoz from BTG Pactual. The floor is yours.

Thank you, Ricardo Camilo, for your presentation. I have two questions. One, keeping in mind the decrease of the Brent price and the initiatives of efficiencies that you have adopted, where do you expect the cash and the break-even EBITDA will be for the upstream business? That's my first question. Second, relates to the minimums of gas productions in the past 10 years. Is this due to the natural decline of fields or lower explorations made? Juan José, good morning, and thank you for your questions. To talk about the break-even, overall, we refer to two major elements in this analysis, and then we can provide real answers to your questions. Firstly, today, Ecopetrol is a group of integrated energy in which we have, as we said in the presentation, we have ISA playing a major role.

It's a business regulated, a business that's very stable in its flows and EBITDA. In addition to ISA, we have SEMP, which stands out in its period because of its financial results, which are very positive, and good EBITDA margins, which also, because it's regulated, allow us to generate certain independence from the volatility of the market prices. When we talk about the break-even of the group, there are particularities. The break-evens, and as you said in your question, refer specifically or typically more to the activity of oil and gas and specifically to the operation and production. I wanted to give you that first disclaimer. The second refers to something that we mentioned in the previous call, and it's 99% of our fields have break-evens below $50 per barrel.

That's the second important factor when it comes to evaluating the chance of making decisions with a CapEx or investments that can hurt production and reserves. This would only happen in an event in which the prices of crude oil are below $50 per barrel. We are looking at all of the investments that allow us to guarantee the production of these. Keeping in mind these two ideas, let me talk about the break-even that we've announced and disclosed to the market by Ecopetrol. It's a break-even of about $50 per barrel. That's more of net profit. The break-evens of the cash flow are directly related or defined or determined by the investment made for each. Ricardo Roa, hello, Juan José. Let me give you a brief interview.

Speaker 4

Know the reality of what's happening in oil and gas in the market. Our production continues having decline, the highest declining rates. That's a big reality. A second reality, we have been reducing significantly our gas consumption in our processes, substituting this with clean, clean energy in the wholesale market. That is important to keep in mind. That reduced consumption is close to 50 KGBs. Also, there are gas manufacturers that have had problems to reach their nominal productions, and this is why we have lower nomination of gas. Still, we're looking at the development of infrastructure for the imports and exports that we have mentioned, especially with the Buenaventura project. We are still evaluating the projects of NG Bayana and NG Correñas for imports and exports. Also, we are evaluating with our allies, like Fulcor, the possibility to quickly connect more volumes of gas in the Arecifos field.

There are other projects in which we are looking at productions, but they're not connected to the system. These are not connected to the system, and this is important. Now let's give the floor to Juan Carlos, who can give us an explanation of which are the additional reasons why we are reporting lower levels of production of gas. Thank you, President. Good morning, Juan Jose.

Speaker 5

En relación a tu pregunta?

Speaker 4

With regards to your question, there is a natural decline of the fields of gas, yes. It's not throughout the entire territory because, as we have said, there are volumes that we are expecting of CEXTERA. There we will have more supplies of gas for the country. In parallel to develop activities for mitigation, we have made several initiatives. There's a project that stands out to reduce the Copiagua. This began last year. We increased the production of gas there by 14%. There's another initiative in fields where we can apply. In addition, we are carrying out explorations and developing the Florena and B18, which we will reach the goal in the last quarter of this year. Another activity that we have been developing is, for instance, Oribaya, Zulia, which has the possibility to produce gas and seek alternatives.

Lastly, given the performance, especially in fields like Yuyupa, we plan to make an intervention to control water there. We have a robust plan within our daily activities to mitigate the topics of reduction, declination, and to develop all the explorations that we are planning.

Speaker 5

Sí, gracias.

Speaker 4

Thank you. The next questions are in English. We remind you all, please, to choose in the interpretation globe the language in which you will ask your questions. Otherwise, we cannot hear you. Bruno Montanari from Morgan?

Speaker 3

Segunda. Señor Montanari, puede preguntar.

Speaker 5

Hello. Thanks for taking my questions. Two questions on my side. I understand you mentioned your breakeven level is around $50 per barrel. If we start to see oil prices going to that level, what would be management's plan? Would you adjust the CapEx? What would you do with the dividends? In that case, would you lower the payout closer to the 40% level, or would the company consider changing the range of the dividend distribution? On downstream, looking at the chart you presented, do you expect the exogenous, external, and operating factors that pressured EBITDA in the first half of the year to be fully resolved now in the second half of 2025? Thank you very much. Bruno, buenos días.

Speaker 4

Bruno, good morning. This is Camilo Barco, the CFO, and thank you for your two questions. Let me begin by answering your question related to the measures that we plan to take if there is a situation in which the prices of crude oil are below the breakeven levels. As I said before, what's important here is that the premise of Ecopetrol is to preserve the production and reserves. That way, the additional measures taken, we will try to affect them as least as possible, especially production and reserves. As it is natural, it is true that if we have a lower price range, we will have to take additional measures when it comes to flexibilizing our investments. Most importantly, our focus is on managing higher efficiencies.

Hello. Good morning. Thank you for your presentation. I have two questions. The first is on the EBITDA margin because in the last two semesters, it has dropped 38.5%, and we're going to 39% for 2025. I'd like to ask, do you see a second semester 2025 that's more profitable compared to the first semester of 2024 to keep this guide of 39%, or have you considered decreasing the guide of the EBITDA margin this year? I'd also like to know if you could shed some light on the profitabilities that you are showing for 2026. That's my first question. Second question is, could you please simplify what you told us about discoveries in the Rincón Górica? Could you please specifically tell us if these two discoveries would have or not an effect on the reserves of 2025 reported in February 2026?

I'd like to know if these two concepts will affect this report or if these are contingent resources. Could you share with us a figure if the reserves will be affected in the report of 2026, how many barrels? It would be great. Thank you.

Speaker 5

Ricardo.

Speaker 4

Ricardo, good morning. This is Camilo Barco, our CFO. Thank you for your questions. Let's look at your question related to the EBITDA margin 2025, specifically the last periods or the last days of this quarter. Indeed, we have an impact, strong impact on the EBITDA margin, especially compared to the historicals displayed close to 6.7%, as you said, 39%. What we should say on this matter is that in the presentation, we saw how there are several elements that have an influence on the performance of that EBITDA margin. One which seems to stay in time, especially with what we're projecting for the rest of the year, and it's the most important related to prices. A decrease of price that we saw, 22%, of course, hurts significantly the EBITDA margin. Possibly, this is something that will penalize us in the second semester.

The second element has to do with surroundings, especially in the first semester. In this second semester, the group of Ecopetrol has been making significant measures to preserve its infrastructure and its operation. It has developed a high resiliency to respond to these types of situations. Today, we are responding in very short terms to the situations that take place, but we have to include the protests that we've seen from communities. The third element is also important with the EBITDA margin and the net profit because of our participation and direct participation with ESENCI PEPIC is the adjustment made of the RBSE, which is the basic network of the existing grid. Here, we have a one-off or a situation that relates to the anticipated termination of a contract in 2014. The origin of compensations were made.

Of these compensations, there was an adjustment requested to recognize financially the capital cost. We hope this is just a one-off event. It will have an impact of COP 600 billion. That's a total impact. We also saw in the cash flow, it will have a more extensive impact. On the EBITDA, we can talk about these three elements. On the net profit, the impact is lower of COP 6 billion. In addition to these factors, it's worth mentioning that there is a topic related to taxes. The tax of Catatumbo, the special contribution made to Catatumbo, has an effect of COP 300 billion for the stamp tax. This could add up to COP 600 billion. With this said, our biggest effort, again, or what we can do is to deepen and accelerate with more efficiencies to compensate somehow the negative effect of these external issues.

We trust that we will have a good effect on compensation, and we will take our EBITDA margins to levels closer to the ones we've seen historically. For 2026, of course, it all will depend on the performance of the market. When it comes to the financial plan that we have, we will make major efforts to have under control and to maintain the inflection that we see in the performance of prices, especially for the lifting cost.

Speaker 5

Good morning, Ricardo.

Speaker 4

Good morning, Ricardo. This is Juan Carlos Hurtado. When it comes to your question and to have more details with the Loreto and Orca projects, Orca is a project that was sanctioned in the first quarter by the company. Later, we carried out the milestone of the approval of the Brazilian authorities for the commercial components. It gave the commercial strength or drive to this. This allowed us to make a progression to reach the reserves we need. With the specifications that we will receive at the end of the year, that's something that we have to keep in mind, the Gato Mato Orca project. When it comes to the Loreto project, we began the development plan in this area, which goes hand in hand with the assets that we have, like IKCS and HMN. That synergy will help us to carry out certain activities of the project.

This is Camilo Barco, CFO. On your question of taxes, indeed, in the second quarter, we have a compensation from taxes of about $2.2 billion. We've said that for this year, 2025, the total balance of taxes in favor between VAT, income, and others is $9.5 billion pesos total. What we see reflected here is the compensation and return of several sums of these taxes that exceed the capability of compensation. For this year, what we foresee is to obtain an amount of $6.7 billion pesos. Specifically, with the VAT that we've been paying since January, we're talking about $3.6 billion that we will be paying in the period, of which we can compensate or receive returns of 93%. That is $3.3 billion pesos. That's why we have that return. The expectation is to keep increasing these until we reach the $6.6 billion.

With regards to the leverages, let me mention several things. Firstly, the operational cash flow, thanks to the timely payments of Intec, this year, we collected a total from April and May and an available cash flow that's healthy, and it allows us to properly cover our operations and our organic investments. With this, again, and as we stated in our investments plan of 2025, organic investments did not require increases or finances in addition. This has been taking place strictly. As to inorganic investments or acquisitions, we also mentioned that we had the authorizations from the board of directors to increase financing up to $680 million, of which we have disbursed for the first operations $500 million. With this, we believe that we have covered enough our investments plan in organic investments plan, especially for the CPO-09 project.

When it comes to the assets of renewable energy recently announced, it's important to mention, firstly, the value of these transactions this year, which incorporates the value of the tickets. This value fundamentally can be covered with the internal generation of cash flow by Ecopetrol. However, for the following acquisitions or to finance the CapEx of those projects, we are structuring alternatives for financing, like project finance. We already have, and this is quite ahead. When it comes to the dividends, we can say that these will depend on the price context. It really has to do with what we determine in this cycle of planning for 2026. The idea is, as we've said, Ecopetrol has set out to maintain its debt within the limits below 2.5 times its EBITDA. This is a level and indicator that we have been meeting.

We'd also like to underscore that although when it comes to gross debt versus EBITDA, this indicator is close, it's important to say that today, the position of the cash flow is sound and stable and allows us to have an indicator of net debt/EBITDA quite below. We're talking about less than 2.2 times the total EBITDA. If we make the analysis excluding ISA, this will leave us to levels of debt of 1.5 to 1.6 times the EBITDA, which is way below the range of the industry. I hope this answers all of your questions. Thank you. Next question from Andrés Cardona from Citibank. The floor is yours. Thank you. Good morning. I have three questions. First, is top management and the Board of Directors considering that the assets of Permian continue being strategic because you've said this before?

Second question, do you worry about the production of oil in Colombia excluding the incremental of CPO-09? Because for some months, we've seen some drop there. Do you expect these dynamics will continue towards the future? My third question, there seems to be more appetite for M&A opportunities. You've got to sale or with upstreams. Do you continue with that appetite? Today, with capital allocation, what's a bigger priority for you, dividends or the expansion, the inorganic expansion? Thank you.

Speaker 5

Good morning, Andrés.

Speaker 4

Good morning, Andrés. This is Ricardo Roa. From many viewpoints, we've said, as top management, that the project, the assets in Permian are important in terms of reserves, production, the incremental production seen in recent years, and of course, the generation of barrels with profitability. The board of directors has never discussed the valuation of this project. Of course, we are looking at all of our assets constantly. Julian, could you please give us more information about this? Thank you, President. I am Julián Lemos, Corporate VP of New Businesses. When it comes to Permian, I'd like to underscore that the diversification of the group, not only in businesses or acquisitions like ISA, but geographic, led us to increase our position in the U.S. Today, we have that premise still valid with regards to assets.

As I said before, Andrés, we are seeking to drive that sector, looking at favorable experiences like the one we had with Perex that we had in Putumayo, which again allow us to maximize the activities that we make in those assets with lower capital allocation. Next question.

Speaker 5

Good morning, Andrés.

Speaker 4

Good morning, Andrés. This is Juan Carlos Hurtado, the VP of Hydrocarbons Acting. When it comes to the production of oil and crude oil, yesterday with the journalists, we said that if we compare the results of this semester with that of 2024, we have increases. We are showing 517 barrels of crude oil versus those of the first semester of 2024. When it comes to crude oil, we have been working strong to reach growth levels throughout the country, to the point that the production we estimate is at 527,000 by the end of the year, depending on the production that we have today of 25,000 barrels, which we expect that will reach 30,000 by the end of the year. The prior semester, if we compared Caño Sur, we spoke of 48,000 barrels, but today, we have peak productions of 57,000 barrels. That's for Caño Sur.

The idea is to increase our efficiencies and treatments and processing to ensure a higher peak with Caño Sur. In addition, we've been working also with Rubiales with the production peak. There, we're working to have an impact on the supplies of electrical energy. We've had recurrent failures, which have stopped us from having those higher production levels that we seek. In Castilla, Chichimeca, we have also injections of water. There, we will remain at levels with higher production levels of 97,000 barrels. 76,000 Chichimenes has synergies with Acacias and the next developments. When it comes to the structure of crude oil in the country, in the segment, we see increases related to the current fields and the possibilities, as we mentioned yesterday, when it comes to the commercial declaration of Aguamar, so we can in the future look at different projects. Andrés, this is Julián Lemos.

Let me talk about answer your third question when it comes to M&As. I'd say that this activity is something that Ecopetrol has been doing recurrently for the past years, not only incorporating inorganic reserves, as we saw with Permian and purchasing Chevron in Guajira, but also with the diversification of the business for Ecopetrol, like the acquisition of ISA. I don't think it's contradictory that when we manage our portfolio, we can simultaneously buy and sell upstream assets because the portfolio management should lead us to disinvest in those assets where we have little growth opportunities and low materiality. We should complement this with assets instead that can improve our profitability and that's in the portfolio. Camilo, let's talk about dividends, please. Thank you, Julián. When it comes to capital allocation, let me mention that the aim is to have a reserves index of 3%.

This has to do with the decisions made for capital allocation. Of course, with a very rigorous discipline of capital management, with returns that are sufficient, not only to meet or cover capital costs, but also keeping in mind the risks related depending on projects. Preserving, of course, the production and the reserves, but also in financial terms, prioritizing those investments that can generate immediately or on a short-term basis, meaning those investments that are in operation or have the capability to contribute to the EBITDA and have short-cycle payback cycles. These are some of the criteria that we have in mind. Somehow to this, this goes with our dividends policy. The idea here is to remain within that policy, determined from 40% to 60% of the profit available. That is, capital allocation really shows our commitment to generate value, increase our free cash flow, and to create competitive returns.

Thank you all for your answers. Thank you. There are no more questions. Now, let's leave questions. Let's read questions that arrived in writing. For this year, do you estimate any new investments in clean energies? Good morning. This is Bayron Triana, acting VP of Energies. This year, as everybody knows, we have made an investment in Testacraft and made investments in wind farms in La Guajira as well, and the Winpeche. We're estimating $300 million to $400 million invested in these clean energy projects.

Speaker 5

Buenos días, Bayron Triana.

Speaker 4

Good morning. I am Bayron Triana, Acting VP of Energies. When it comes to investments in clean energies, we have different projects. We're talking about the wind farm of Winpeche. We also have projects that we will begin with ISA as a partner. Overall, what you can see from these investments, plus others that we're analyzing according to the reserves that we have for Ecopetrol, we're talking about investments that are from $300 million to $400 million. Pablo González from Energy News Today asked, "Could you give us an estimate of the end supports necessary of gasoline and diesel necessary for the rest of the year? What's the calendars that you have scheduled for this second semester?" Good morning, Pablo. Thank you for your questions. I would like to answer this question of the imports of gasoline and diesel. I'll ask my colleague to complement me.

From January to this date, we've imported 74,000 barrels of gasoline, regular gasoline. We're talking about 7,500 barrels a day or $3.2 million. The expectation is that the idea is to reduce these imports to 43,000 barrels a day of regular gasoline and 8,000 barrels of diesel. As I said before, leaving behind the main overhauls of Prime D and the operational challenges, we can reach those levels. Felipe, could you give us a hand here? Thank you, Julio. With regards to the stoppages, the news given is that we have no further significant stops scheduled for the second half of the year in our principal units. However, we have minor hydrogen and paraffin treatment plants. In the refinery of Cartagena, we have a plant that makes phenolic water treatments that will be stopping and also for caustic water treatments.

Major overhauls for the second semester are not scheduled that can hurt our balance sheet, no. Next question from Mason Bocanegra from Rublin. He asks, "What does it mean for the Sirius project that the Buenas Suertes One project did not make any statements? Is there a change of expectation over Sirius in terms of time and size?

Speaker 5

Good morning, Nelson. This is Ricardo Hurtado. With regards to the Buenas Suerte drill, there are no consequences regarding Sirius. Why? Because Buenas Suerte is something very different within this project, and it had other geological objectives. No hydrocarbon was really determined, which led us to have a better coverage and to advance with other exploratory drills. Right now, that's why we're more with the Papayola. When it comes to Sirius, we have a schedule and given to Sirius too. We made the tests and we've advanced in the timeline with the prior consultations to advance within the timetable for 2029-2030.

Speaker 4

Thank you. There are no further questions. Now, let's listen to Camilo Barco, our CFO, for final remarks. Thank you, all of you that have joined us today and that have participated in this call. Thank you for those that have been interested in joining us as you have and supporting Ecopetrol. Here, we will continue working constantly to consolidate our fundamentals, the traditional business of hydrocarbons, and our purpose to move on to clean energies and efficient energies. We are committed to our promise to create value for all of our stakeholders, committed to our efficiencies so we can compensate up to where it's possible the challenging setting of market prices and to be able to stabilize and counteract the costs, the lifting costs, and operation costs in terms of efficiency and competitiveness. Thank you.

We will continue working and giving sustainability and continuity to what we've done so far. We wish you a great day. Thank you all. With this, we end our conference call of the second quarter of 2025. Thank you for your participation. You may hang up.

Ecopetrol - Earnings Call - Q2 2025

Transcript

Speaker 4

Speaker 5

Speaker 3

Speaker 1

Speaker 6

Speaker 3

Speaker 1

Speaker 6

Speaker 4

Speaker 5

Speaker 4

Speaker 5

Speaker 4

Speaker 3

Speaker 5

Speaker 4

Speaker 5

Speaker 4

Speaker 5

Speaker 4

Speaker 1

Speaker 5

Speaker 4

Speaker 1

Speaker 5

Speaker 4

Speaker 1

Speaker 4

Speaker 5

Speaker 4

Speaker 5

Speaker 4

Speaker 5

Speaker 4

Speaker 3

Speaker 4

Speaker 5

Speaker 4

Speaker 5

Speaker 4

Speaker 5

Speaker 4

Speaker 5

Speaker 4

Speaker 5

Speaker 4

Speaker 5

Speaker 4