Ecopetrol S.A.

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 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 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 Hurtado, Acting CEO of Ecopetrol, Carlos Mauricio Avila, Acting Executive Vice President of Hydrocarbons, Camilo Barco, 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 Ecopetrol 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 COPASUL-1 well in the Caribbean offshore. This confirms new gas accumulations independently from Syria's 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 advance with the optimization of our upstream portfolio through agreements with Perixx and Gran Tierra in the Magdalena-Medio 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 Cobeñas-Atacucho 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 Bermeja 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 advanced the agreement to acquire a majority stake in Brava Energia in Brazil. Upon closing, this investment is expected to strengthen our presence in the strategic geography, 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 advance 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 and a beta of 13.5 trillion pesos and a net income of 2.9 trillion pesos. we highlight the expansion of the EBITDA margin to forty seven per cent driven by disciplined cost execution and a stronger contribution from refining business the price environment showed mixed dynamics brett strengthened toward the end of the quarter however the appreciation of the columbian peso put pressure on revenues while differentials widened versus the previous year additionally higher the 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 Portón 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 close the quarter with a balance of 4.2 trillion pesos in the Field 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 U.S. 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 Brava Energia S.A. 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 BRAVA 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... I1P reserves production of approximately 81,000 barrels per day in 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 Perixx and Gran Tierra allows us to accelerate the development of mature assets by incorporating strategic partners that bring capital and capabilities with Perixx. We are enabling an investment of about $250 million, fully funded by the partner, to execute activities with the potential to add approximately 94 million barrels of oil equivalent gross, while extending the economic life of the Casabe and Janito assets. With Gran Tierra, we are progressing into Esquidama 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 of enabling higher production, additional reserves, and lower unit costs in the medium term, unlocking greater value from our assets. Now I hand over to Carlos Avila to provide further detail on hydrocarbon segment results. Thank you, Juan Carlos. On the exploration front, we continued 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 Copueso 1 well, located at the Guaafo Zero block, about 9 km from the Sirius 1 and Sirius 2 wells. This well confirmed the presence of gas in two accumulations separate from Sirius, expanding the block's discovered 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 are making progress with planning an exploratory wells on BL1, which drilling is expected in the second half of the year. Regarding serious, 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 in Capachos, the strong performance in the Castilla field, and the addition of a development well in Putumayo under our agreement with Perixx. 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 the several key operational enablers. To continue our drilling campaign, focusing on CP-009 and Caño Sur, advance the in-situ combustion pilot in Chichimene as part of our enhanced oil recovery blend, expand processing facilities in Rubiales, and ensure that premiums 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 Gran Tierra in the Tizquirama-San Roque fields and another with Perixx in the Casabe and Llanito 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 an annual weather phenomenon. Finally, the financial performance of the hydrocarbon segment reflects improved profitability, with the bid-up 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 hybrid crude market conditions. This performance is supported by disciplined capital allocation and efficient cost management. Let's move on to the next slide, please. Let's talk about refining and transportation. On the refining front, strong operational execution and timely commercial decisions allowed us to capture better international market crack spreads. During the quarter, we highlight first consolidated throughput of 417,000 barrels per day, 5% higher compared to the first quarter of 2025. which was less. Second, we improved our valuable product yield by two percentage points, reaching 73% during the quarter. Third, we optimized our crude slate by prioritizing higher-value barrels, enhancing overall refinery economics, and finally, refining gross margin increased 60% year-over-year to $17.3 per barrel. As a result, the segment delivered a strong performance with the bidder reaching 1.9 trillion pesos, nearly 2.9 times higher than the first quarter in 2025. This was supported by operational and energy efficiencies that allowed us to maintain refining cash costs under control and strengthen competitiveness in the current pricing environment. Focusing on the transportation segment, it reached 1.1 million barrels per day transported, a 3% increase compared to the same period of the previous year. This improvement was due to the capture of third-party volumes of about 27,000 barrels per day, as well as the implementation of the bidirectional flow of the Correñas-Ayacucho pipeline, enabling the import of 18,000 barrels per day of crude into the Barranca Bermeja refinery. Lastly, we began the NAFTA Cusiana project with shipments of about 42,600 barrels per month from Montevideo, replacing land transportation, optimizing production dilution costs, and generating revenue of about $3.15 per barrel. On a financial perspective, Abenda improved sequentially versus the previous quarter, while declining year-over-year mainly due to external factors such as FX. Let's move to the next slide. During the first quarter of 2026, our efficiency program continued to be a key enabler for cost optimization and control. The idea is to help mitigate pressures from inflation and FX. Hydrocarbon segment EBITDA reached 11.2 trillion, 3.4 trillion higher than in the fourth quarter of 2025 and 0.4 trillion pesos. versus the first quarter of 2025, that is 44.4% growth respectively, confirming a strong sequential recovery. In terms of unit costs we have, the total unit costs in hydrocarbon segment was at 166,601 pesos per barrel, a reduction of 9% quarter over quarter and 13% year over year. Lifting costs in pesos decreased to 45,916 pesos per barrel, down 4% versus the fourth quarter of 2025 and 11% versus the first quarter of 2025. In USD terms, lifting costs closed at $12.2 per barrel and excluding FX, we would have reached $10.8 per barrel. This performance reflects a clear improvement in cost trends in local currency and demonstrates progress in operational discipline and cost management driven by contract optimization, maintenance efficiencies, digital solutions and infrastructure, and energy efficiency and flexibility. While FX Dynamics continues to exert pressure on dollar-denominated metrics, You can see the company's commitment to structural key cost indicators. Now Biden will cover the main milestones in our energy transaction segment. In 2026, at Ecopetrol, we remain committed to contributing to the country's natural gas supply in the short and long term. To this end, regarding current contracts, we reached a volume of 296 GBTUDs in the first quarter, equivalent to 52% of the market's contract and volume share, with the Copetrol being the only player to have offered firm long-term gas supplies. Similarly, our operational efforts enabled us to reduce our own consumption by nearly 8% and increase energy substitution by 10% compared to the same period in 2025. In addition, with the aim of increasing our response to demand, in the first quarter, we offered monthly volumes ranging from 23 to 72 GVTUDs, including both firm and interruptible gas, and we project to market between 18 and 67 GVTUDs monthly from June to November 2026. As to the market of gas imported from the Caribbean, in February and March 2026, we offered volumes from 126 to 370 GBTUDs in the market for up to seven years. Turning to LPG, we offered the market 30,500 tons a month for the period from March to August 2026, up 2,500 tons a month compared to the previous marketing period. Next slide, please. At Ecopetrol, we are strengthening the supply and diversification of natural gas through the re-gasification of import terminals in Colombia Pacific and the Caribbean regions. In the Pacific, we launched an open and competitive tender for the procurement of liquefied natural gas under the delivery X-SHIP modality for Buenaventura. The volumes to be contracted will be allocated to the receiving, storage, and regasification infrastructure with a capacity of 60 GBTUDs to meet the natural gas sales commitments in Buga. We estimate that contract signing and the first LNG cargo will take place during the second semester of 2026. In the Colombian Caribbean, we signed the Comprehensive Logistics and Regasification Services Contract, which will enable the development of the infrastructure required for the receipt, storage, and delivery of between 126 and 307 GBTEDs of imported natural gas into the national transportation system. This alliance with Puerto Vallecas is key since it shortens time-to-time operation and mitigates execution risks. On a complementary basis, we continue to explore alternatives that optimize the group's assets and allow the delivery of natural gas from both imported sources and offshore production to the interior of the country. Next slide, please. During the first quarter of 2026, the group's energy demand reached 2,185 gigawatts-hour, equivalent to 10.9% of Columbia's total demand, growing up to 6% versus comparable quarters of 2025. Therefore, we continue to strengthen the Ecopetal Group's energy coverage, focus on cost efficiency and on mitigating spot market price volatility, particularly given the risk of a potential El Nino phenomenon. During this same period, 88% of demand was met through the combination of conventional and renewable self-generation, as well as energy contracts in the wholesale energy market. Furthermore, the demand met through this market benefited from tariffs that were on average 14.3% lower than the benchmark rates in the regulated and unregulated markets, respectively. This has also resulted in tariff reductions for existing contracts and efficiencies of more than 4 billion pesos. In parallel, we continue to consolidate our renewable energy portfolio for self-supply. In 2026, we expect to add 347 megawatts of capacity for a total of 1,298 megawatts, of which 432 will be in operation by year-end, pointed to sustained planned growth in competitive low-emission energy. During the first quarter of 2026, the combined operation of the group's renewable generation assets delivered savings of close to 2 billion pesos through tariff reductions. The General Shareholders' Meeting approved the merger by absorption of the subsidiary Portón del Sol into Ecopetrol, with the objective to materialize and maximize the tax benefits under Law 1715. Besides, the construction activities at the Guifa solar farm were successfully completed, with a total capacity of 50 MWPs, and we have begun energization of the assets. In addition, we signed the trust agreement with IS Columbia, which sets the framework for the execution of JK1 and JK2 wind projects in the Jekewa cluster in La Guatina. with a combined capacity of 259 megawatts. Likewise, in the Winpeshi project, the contract was awarded for the construction of the transmission line. In parallel, we have fostered ongoing dialogue with local communities, reaffirming our commitment to a responsible and socially responsible sustainable energy transition. Finally, at the end of the first quarter, we reached energy optimization of 0.7 PJs, with savings of close to 24 billion pesos across the group's operations, which also reduces our smart market exposure and lowers gas demand. Now, Camilo Arco will cover the financial highlights of the quarter. The first quarter 2026 results show reflect our focus on three priorities, financial and operational discipline, liquidity protection, and rigorous capital allocation. In this context, the Ecopetrol Group generated a beta of 13.5 trillion pesos, with a standout performance from the mainstream segment. which maintained a sustained trend of increased contribution to the group's EBITDA. In particular, its share rose from 4% in the first quarter of 2025 to 14% in the same period of 2026, reflecting the capture of more favorable conditions in refined product markets. In terms of profitability, we achieved an EBITDA margin of 47%, a level comparable to some of the best historical quarters of the group. This performance was driven by greater operational flexibility, which allowed us to capitalize on higher brand prices and improved product crack spreads, therefore offsetting lower crude differentials, inflationary cost pressures, and a less favorable exchange rate. From the leverage standpoint, financial discipline was reflected in the gross debt to EBITDA ratio, which remained at 2.3 times at the group level and 1.6 times when excluding ISA. In addition, interest coverage improved versus the previous quarter, supported by operating performance and efficiencies achieved through recent liability management transactions. In terms of investments, we closed the quarter with organic capital Of $1.4 billion in line with the plan, of the total, 73% was allocated to growth opportunities across the three business lines and the remaining 27% to maintenance and reliability. By business line, about 64% was allocated to hydrocarbons, followed by transmission and roads with 28%, and energy transition businesses with 8%. The full year investment range remains in line with the investment plan. between $5.4 billion and $6.7 billion, with execution trending toward the upper end of the range, driven by strict capital discipline and operational flexibility. the company is currently working with the base case scenario of 83 dollars per barrel rent which supports execution toward the high end of the range as i said in terms of efficiencies we achieved optimizations about 702 billion pesos reaffirming our commitment to sustainability contributions across a bit of campus and working capital we received updates to our global credit ratings from rating agencies Standard & Poor's adjusted the rating in line with the sovereign, while Moody's mentioned a lower expectation of government support. It is worth noting that both agencies affirmed the standalone credit profile, highlighting the group's financial strength, strategic relevance, and diversification. Let's look at the next slide. At the end of the first quarter of 2026, we recorded a net 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 rent 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 that impacted results by about $600 billion. half of this impact is explained by the update of the income tax surcharge increasing from zero to ten per cent in line with rent 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, Erecopetrol ECA, 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 interests 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 U.S. dollars and 41% in Colombian pesos. Regarding the FEPIC. 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 payment. 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 Dionne related to VAT on fuel imports for the 2022-2024 period, we 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, 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.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 to the efficiency and flexibility of our integrated model. Looking ahead, our priorities are clear. Deepen structural efficiencies, grow through value-adjusting, 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&A session.

Muchas gracias. Comenzaremos ahora la sesión de preguntas y respuestas.