Ecopetrol S.A.

Good morning. My name is Hilda and I'll be your operator for today. Welcome to Ecopetrol's earnings conference call in which we will discuss the main financial and operational results for the fourth quarter and full year 2020 and the 2021 through 2023 business plan. All lines have been muted. There will be a Q&A 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. Felipe Bayón, CEO of Ecopetrol, Alberto Consuegra, COO, and Jaime Caballero, CFO. Thank you for your attention. Mr. Bayón, you may begin your conference.

I'd like to welcome everyone joining us today. We'll present the operation on our financial results for the fourth quarter and for the year 2020, as well as providing an update on the business plan for the next three years, 2021-2023. 2020 is set to go down in history as one of the most difficult years the world has faced in the last decades. We struggled with a supply and demand crisis in the midst of efforts to contain a pandemic. In Ecopetrol, we set up crisis committees and maintained our operationals with a minimum number of people, securing the supply of the fuels required by the country. We rapidly designed and implemented an action plan to gradually reactivate our operations under strict biosecurity protocols. We work with innovation and technology thanks to the previous advances in our digital transformation agenda. We updated a 2020-2022 business plan responding to the crisis in a timely manner. We committed more than 88 billion pesos to social investment for the benefit of our fellow Colombians in attention to the social and health emergencies brought by the pandemic. We prioritized the protection of reserves and production. We accelerated the implementation of TESG within the company and in our strategy. We progressed in the consolidation of gas as a key lever for the energy transition by increasing our operations in the Pied de Monte llanero and we reached an agreement with Shell to work together in the Colombian Caribbean offshore gas province. We signed the first special contract for research project, CEPI, with the National Hydrocarbons Agency, enabling the start of the licensing and enlisting stage for the development of the comprehensive research pilot project, Proyecto Piloto Investigacion Integral, for the unconventional resources. This project, named CALE, will take place in Puerto Wilches, Santander. Let's move on to the next slide, please. Ecopetrol was able to face these challenges thanks to the commitment of all of our employees. We proved our resilience and flexibility to adapt to an adverse and volatile environment, displaying a responsible gradual recovery in operational and financial terms while prioritizing the commitment to safety in our operations. In 2020, Ecopetrol reached an EBITDA of 16.8 trillion pesos and a net profit of 1.7 trillion pesos, standing out for its positive financial results in a year distinguished by significant losses across the oil and gas industry. Now let's move on to the next slide, please. In terms of market conditions, 2020 was characterized by high volatility. The average price of Brent decreased $21 per barrel as compared to 2019 and traded below $20 per barrel during the worst part of the crisis. The average basket for Ecopetrol was $39.6 per barrel in 2020, a 35% decrease as compared to the prior year. However, our solid commercial strategy supported by the diversification of destinations and the better global balance of supply and demand for crude observed in the second half of the year allowed for a sustained recovery in prices. In the first quarter of 2021, we expect a recovery in volumes of around 12.5% in an environment of gradual economic recovery where uncertainty still persists. I will now open the floor to Alberto Consuegra, who will tell us about the main operational achievements of the year.

Thank you, Felipe. On exploration, we drilled 18 wells during 2020, of which three were successful, six were declared dry, and nine are in appraisal phase. At the end of December, four additional wells were being drilled and will be completed during 2021. Given the success of the exploratory and appraisal wells, Gato Domato is expected to achieve commercial viability by 2022 to enable the incorporation of the first reserves in the same year and start production by 2025. The Arrecife III well will continue with the production tests. and gas sales to Cerro Matoso. And in the case of the Cayena sidetracked one well, the limitation activities and the declaration of commercial viability will be carried out in case of success by the end of 2021. The cumulative production of exploration assets increased as compared to the previous year, reaching 4.3 thousand barrels of oil equivalent per day. Ecopetrol Group's production in 2020 was 697 thousand barrels of oil equivalent per day, according to the established production goal. Natural gas contributed 17 percent of the annual production rate, exhibiting an increase of 3 percent in the volume produced as compared to the previous year. In 4Q20, production was 694,000 barrels of oil equivalent per day, which is 13,000 barrels of oil equivalent per day higher than the production achieved in the previous quarter. The gas business contributed over 30% of the EBITDA of the upstream segment accumulated to December. Similarly, its EBITDA margin remains at levels above 50% as a result of commercial strategies that allowed us to maximize sales volumes. We highlight the reduction of flaring to a level of 21.7 million cubic feet per day as of December 2020, contributing to the commitment of a 20% reduction of emissions by 2030 with an estimated reduction of 600,000 tons of CO2 equivalent per year, as well as the 771 users that were connected during 2020 through the gas social program in the country. The transported volume of crude and refined products in 4Q20 increased versus 3Q20, demonstrating a recovery of the consumption levels with volumes higher than even those transported prior to the pandemic. In line with the lower production in the country and the contraction in demand for refined products, the annual volume had a 12% reduction. During 2020, no reversal cycles of the Bicentenario pipeline were needed because of the successful operational strategy implemented for the Caño Limón-Coveñas pipeline. This is the first year in which this contingent alternative has not been used since its commissioning in 2017. In turn, the refining segment had a competitive performance amidst the worst scenario of the sector in many years. due to the operational stability of all business units and the strict focus on value. Progress in the fuel quality path stands out, achieving a gasoline production with lower average sulfur content, anticipating to the regulations set to come into effect. During 2020, the Cartagena refinery produced gasoline with a quality of less than 30 parts per million of sulfur. Gasoline production below 50 parts per million in the Barranca Bermeja refinery was set to an early start since November. The segment continued to improve its results during the fourth quarter, and the refineries reached a consolidated load of 355,000 barrels per day, the highest of the year. This shows that we're maintaining the reliability of our operations in the face of the challenges brought about by 2020. Let's continue to the next slide to talk about the reserve balance. At the end of 2020, Ecopetrol's First P reserves were 1,770 million barrels of oil equivalent, revealing a 6.5% debooking versus the reserves registered at the end of 2019. These reserves are classified in 71% liquids and 29% gas. The direct impact of lower prices meant a reduction of close to 215 million barrels equivalent of proven reserves. This phenomena was partially offset by the results of new drilling projects in different fields, adding approximately 114 million barrels of oil equivalent and the good performance in production and optimization of technical-economical variables with positive reviews of 30 million barrels of oil equivalent. Similarly, thanks to the increase of proven reserves in the Rubiales field and the commercial viability of ESOX in the Mexican Gulf and Andina in Colombia fields discoveries, 43 million barrels of oil equivalent were added. The contribution from the incorporation of proven reserves by enhanced oil recovery initiatives in 2020 was 113 million barrels of oil equivalent as was the result of the continuation of water injection processes mainly at Chichimene, Castilla, La Cid Infantas, Apiaesuria, and Yarigui Cantagallo fields. As for gas injection, the assets that contributed to the incorporation by EOR were Cupiagua and Cusiana. We closed 2020 with a reserves replacement ratio of 48% and an average reserve life of 7.5 years. The investment plan aims to recover the growth path and revert to reserves replacement, achieving a reserve replacement ratio of 100% by 2022, thanks to the activities planned for the recovery of reserves, such as technical management, financial optimization of assets, and different investment projects of the company. Let's move on to the next slide. In Q4 2020, we were awarded the Special Research Project Contract, CEPI, for its acronym in Spanish for the Calais Pilot Project. This project comprises the construction of a 4.5-hectare platform circa located 3.6 kilometers from the urban area of Puerto Vilches, where a well will be drilled. We will apply the multi-stage hydraulic fracturing technique with horizontal trailing under rigorous monitoring program and the use of minimal impact technologies and methodologies to ensure the protection of the environment and the health of the communities in the area of influence. The community will also be involved in monitoring and follow-up processes. The project is in its first phase, which consists of advancing in the necessary activities for obtaining environmental licensing before the responsible entities through the monitoring of local and regional baselines on environmental health and seismic issues, as well as the development of a complete relationship plan in the country with the institutions and with the communities. Regarding our activities in the Permian Basin, after reactivating operations in July, we ended 2020 with 22 wells in production and 22 additional drilled wells, which are expected to be completed in first Q21. Likewise, we wrapped up 2020 with an annual production of 5.2 thousand barrels per day of oil equivalent net for ecopetrol prior to royalties and an investment of $185 million. With the production levels and efficiencies obtained in 2020, Permian generated an accumulated EBITDA of $20.7 million and an EBITDA margin of 43%. Similarly, I would like to highlight the following operational performance records. The fastest well in 9.7 days, an average drilling time of 14 days for wells with average depths of 19,800 feet and the execution of 18 fracturing stages in one day. By 2021, we estimate the drilling of approximately 90 wells and average channel production of between 12 to 14,000 barrels per day of oil equivalent net for ecopetrol after royalties and an investment of approximately $600 million. Let's move on to the next slide. During 2020, The company maintained a permanent monitoring of its costs, ensuring flexibility to overcome the most critical moments of the year, while guaranteeing the availability of resources for a safe and profitable reactivation of the operation in the face of price recovery. The total unit cost was $27.4 per barrel in 2020. This is a significant reduction of 23% as compared to 2019, achieving savings of around 1 trillion pesos in the operating costs. We estimate that by 2021, the costs associated with our operation will grow given the reopening of wells and increasing the price of Brent. that we have been observing since the beginning of the year. However, we ratify our focus in cost control by extending our goal in savings and efficiencies between 1.5 trillion Colombian pesos and 2.2 trillion Colombian pesos for the next three years. This will allow us to maintain the total unit cost around $30 per barrel at a rent level of $45 per barrel. I will now open the floor to Jaime Caballero, who will tell you about the main financial results of Ecopetrol Group.