Seeking Alpha • Apr 03

Ecopetrol: The Rerating Story Is Over

Summary Ecopetrol is facing declining profits despite stable production, driven by taxes, policy pressures, and governance concerns. EC's recent rally has pushed its valuation to 11x forward earnings, but fundamentals have not improved, and earnings remain flat. Heavy fiscal obligations, a COP5.3T tax claim, and governance risks are squeezing cash flows and undermining dividend reliability. I assign EC a Sell rating, as the rerating is complete and downside risk outweighs upside without earnings acceleration or policy relief. Read the full article on Seeking Alpha

Seeking Alpha • Apr 24

Ecopetrol Is The Victim Of Bad Policies

Summary Ecopetrol's diverse operations span hydrocarbons, renewables, and energy transmission, but political influence and a shift to renewables pose risks to profitability. Despite a low P/E ratio and high FCF yield, Ecopetrol's heavy debt and government interference undermine its long-term prospects. The Colombian government's push for renewables and political appointments threaten Ecopetrol's stability and investor confidence. Ecopetrol's high dividend yield is unsustainable amid volatile oil prices and high payout ratios, leading to a hold rating despite attractive valuation metrics. Read the full article on Seeking Alpha

Seeking Alpha • Feb 06

Ecopetrol: Weak Oil Prices Weigh On The Earnings Outlook, Improved Momentum

Summary Ecopetrol is rated a hold due to flat EPS growth forecasts, mixed chart features, and a fair valuation despite low oil prices. Key risks include lower oil prices, weak execution, global economic slowdown, political instability in Colombia, and heightened geopolitical risks. The stock's technicals show mixed signals, with resistance at $10.50 and support at $8.50, but a developing bullish momentum. Fundamentals would improve with oil prices above $80, potentially warranting a positive re-rating for Ecopetrol. Read the full article on Seeking Alpha

Seeking Alpha • Nov 28

Ecopetrol Has Considerable Risks But Also A Lot Of Upside In Case Of Positive Changes

Summary My view on Ecopetrol has shifted from pessimistic to optimistic, despite existing risks, due to its low valuation and strategic focus on oil and gas. Ecopetrol's strategy has evolved, scaling back renewable investments and focusing on profitable fossil fuels, making it a more attractive investment. The company's Q3 2024 results show weaker sales and net income due to lower prices and demand, but oil and gas production reached new records. Significant risks include dwindling reserves, high debt, and dependency on oil prices, but potential policy changes in Colombia could offer massive upside. Read the full article on Seeking Alpha

Seeking Alpha • Sep 29

Ecopetrol: An Attractive Long-Term Investment Beyond High Dividend Yield

Summary Ecopetrol offers a high dividend yield, but its sustainability is questionable, with a likely 20% cut still providing a double-digit yield. The company's financial health is robust, with stable EBITDA margins around 45%, strong cash reserves, and moderate debt levels. Ecopetrol's stock is undervalued, trading at a significant discount compared to peers and historical valuations, making it an attractive value investment. Growth catalysts include Caribbean offshore exploration and investments in energy transition, positioning Ecopetrol for long-term revenue diversification and potential stock appreciation. Read the full article on Seeking Alpha

Seeking Alpha • Jul 19

Ecopetrol Remains An Oil And Gas Company, Great Buying Opportunity

Summary The green transformation doesn't seem to happen as quickly or drastically. Instead, the company invests heavily in oil and gas. The valuation is low, and the dividend is huge. Read the full article on Seeking Alpha

Seeking Alpha • Apr 19

Ecopetrol: Attractive Dividends Plus Upside Potential, Rating Unchanged

Summary 2023 was another strong year for Ecopetrol. Crude oil production rose 3.4%, while LNG rose 5.3%. Cartagena refinery realized 41.3% production growth. Lower Brent prices, narrower refined product spreads, and higher operating expenses resulted in declining profitability and margins. EC has strong liquidity positions and a well-distributed maturity schedule. It holds $3.66 billion in cash and must repay $2.37 billion in 2024. The dividend yields are still attractive at 28.7% TTM. EC still trades at a massive discount compared to the Sector Median and its 5Y average figures. Read the full article on Seeking Alpha

Seeking Alpha • Mar 08

Ecopetrol: Colombian Oil Producer Offers 14.7% Dividend On Stable Oil Prices

Summary Ecopetrol's strong financials offer a great reward against the risks of the leftist government and potential decreasing oil prices. As long as oil doesn't fall too much, Ecopetrol will likely return high returns per share to shareholders. I believe the market is overestimating the risk of the left-wing Colombian leader and the increasing debt levels on Ecopetrol. Read the full article on Seeking Alpha

Seeking Alpha • Jan 19

Ecopetrol: Still My Top Pick For Oil Stock

Summary The Middle East crisis has multidimensional consequences, affecting supply chains, oil production, and transport. EC operates in Latin America, the region with the lowest geopolitical risk and abundant oil reserves. EC issued $1.85 billion in bonds at the beginning of the year. The bonds have an 8.45% yield and will mature in 2036. The company pays dividends with impressive yields while maintaining a payout ratio below 30%. EC trades at low multiples compared to its local competitors (except PBR) and Global Energy stocks. The price is on the verge of breaking above significant resistance. Read the full article on Seeking Alpha

Seeking Alpha • Jan 05

The Sell-Side Appears Too Negative On Ecopetrol

Summary EC is the most dominant oil producer in Colombia. Its CAPEX plan highlights continued capital discipline. The sell-side is too negative on EC and the company's business model is resilient to lower oil and gas prices. Read the full article on Seeking Alpha

Seeking Alpha • Oct 27

Ecopetrol: Oil Stock For Adventurous Dividend Seekers

Summary Ecopetrol is an excellent alternative to US oil majors. The company owns assets in the Caribbean and Pacific shelf. Since the oil crash in March 2020, the company has recovered its profitability while maintaining balanced leverage. EC pays dividends with solid yield, too. Companies extracting fossil fuels in the Latin American region will become more attractive to investors. The continent has been the most peaceful for over a century, with zero interstate wars. Ecopetrol distributes dividends with a respectable yield of 7.85% while maintaining EV/EBITDA at 3.3. Given both indicators, it is one of the top five enterprises in the region. Read the full article on Seeking Alpha

Seeking Alpha • Oct 20

Ecopetrol: A Beneficiary Of Rising Oil Prices, Macro Risks Still Apparent

Summary Global oil prices remain high amid geopolitical tensions, offering risks and opportunities for Energy sector stocks and dividend investors. I am upgrading Ecopetrol from sell to hold due to its decent operating performance and stabilizing earnings. The company faces risks from debt, volatile oil prices, and political instability in South America. I outline key price levels to watch on the chart ahead of Q3 earnings due out next month. Read the full article on Seeking Alpha

Seeking Alpha • Jul 31

Ecopetrol: Likely To Benefit From Strengthening Oil Prices And Colombian Peso

Summary Ecopetrol stock is a buy based on discounted cash flow analysis, benefiting from oil price increases and a strengthening Colombian Peso. There is a growing supply-demand mismatch in the oil market, indicating potential for high future oil prices. Ecopetrol's financials show favorable dynamics in revenue and operating income, with a net income decline due to increased cost of sales. Read the full article on Seeking Alpha

Seeking Alpha • Jun 21

Ecopetrol: Too Risky, Don't Focus On The Dividend Yield

Summary Ecopetrol is a South American energy company with operations in oil and gas exploration, production, refining, and distribution, as well as electric power transmission services. EC's future strategy includes way more renewables, hydrogen, CO2 storage and so on. The dividend looks high on paper, but is likely to be significantly lower next year. Read the full article on Seeking Alpha

Seeking Alpha • Jun 05

Ecopetrol's Recent Weakness Spells Opportunity

Summary Ecopetrol's share price has been punished by crude oil prices, despite an announced repayment of owed government money. The company is continuing to spend billions annually on growth spending, which has enabled strong production growth. Going forward, we expect the company's cash generation and unique position in a growing economy to support stronger shareholder returns. Read the full article on Seeking Alpha

Seeking Alpha • Dec 19

Ecopetrol: A Second Look At The Geopolitical Risk

Summary Ecopetrol has attractive valuation metrics. The stock sold off this summer because of the Colombian presidential election and expectations that the new administration would pursue anti-fossil fuel policies. President Gustavo Petro indeed has an ambitious social and environmental agenda, but he will face both budgetary and institutional constraints. Macro indicators suggests that the geopolitical risk perceptions may have peaked in October. Equity markets should follow, re-rating the shares higher. Investment thesis Ecopetrol S.A. (EC) is Colombia's national oil company (or NOC) and also the largest company in the country. The government owns 88.49% of the stock. The 11% float is traded in Colombia and on the NYSE via ADR listing. The investment story is simple and is a trade-off between two factors: On the positive side, Ecopetrol is currently one of the most discounted oil producers, and its large dividend stands out relative to other NOCs too. The negative is the geopolitical risk associated with Colombia's new, leftist president. The concern is that the government may push the company into unprofitable initiatives to fulfill social objectives, or may otherwise take actions against the interest of minority shareholders. As the valuation side is fairly obvious, the article focuses mostly on the geopolitical aspect. My thesis is that the political risk priced into the stock is exaggerated for three reasons: President Petro has a minority in Colombia's congress, so policy changes are only possible via broad coalition building. However, the broader the coalition, the smaller the changes from the status quo can be. To fulfill the social aspects of his agenda, Mr. Petro will need significant government revenue to finance the spend. So rather than killing the proverbial "golden goose" (that is, Colombia's hydrocarbons sector) through aggressive environmental reforms, a more logical choice would be to avoid disrupting the income potential of Ecopetrol and rather go for symbolic "quick wins" on the environmental front. At a macro level, Colombia's sovereign credit default swaps (or CDS) and the spreads on Ecopetrol's own USD listed debt suggest that geopolitical risk perceptions may have peaked in October. If the presumably more sophisticated bond market is correct, the equity market should follow and re-rate Ecopetrol's shares higher. In the meantime, investors can benefit from the massive dividend. Company background Ecopetrol is Colombia's NOC. Its separation from the government began in 2003, when the company ceded its administrative role as hydrocarbons regulator to the National Hydrocarbons Agency. The initial public offering was in 2007, when Ecopetrol's common shares were listed on the Colombian Stock Exchange. The American Depositary Shares were listed on the NYSE in 2008. In recent years, Ecopetrol has expanded beyond Colombia. In 2017, the company entered into Mexico, where it received interest in two offshore blocks. In 2018, Ecopetrol entered the Brazilian pre-salt oil region, in partnership with other NOCs and majors. In 2019, Ecopetrol also started operations in the Permian through an alliance with Occidental Petroleum (OXY). In 2021, the company bolstered its marketing presence in Asia through a new trading entity in Singapore. As a snapshot, EC produces about 700,000 boe/d and its refining capacity can absorb half of that. The company also owns significant electric transmission infrastructure. The transmission business may have possibly been "pushed" onto the company by the government, but nonetheless it seems to generate good ROE: Ecopetrol Q3 Presentation The Permian operation is becoming more prominent, and Ecopetrol is also expanding its marketing presence in Texas: Ecopetrol Q3 Presentation In my view, the fact that Ecopetrol now has material U.S. assets, which can theoretically be targeted in lawsuits, could also act as an important guarantee for Ecopetrol's minority shareholders. Valuation considerations At 2.2x forward earnings and a 15+% dividend yield, Ecopetrol looks quite attractive from a valuation perspective: Seeking Alpha Ecopetrol is also one of the few energy stocks out there that is down year-to-date. A comparison to the S&P 500 energy sector (XLE) is enough to show this has almost everything to do with the presidential election and not much with oil prices: Data by YCharts Compared to the Majors, Ecopetrol trades at quite a discount: Seeking Alpha; Company SEC Filings; Author's Calculations The discount is larger relative to the two U.S. Majors, ExxonMobil (XOM) and Chevron (CVX); the European ones, Total (TTE), Shell (SHEL) and BP (BP) have a smaller premium over EC, perhaps because with the recent windfall taxes, Europe is also perceived as politically risky for energy companies. Infamously though, NOCs trade at lower multiples. When the government is a majority shareholder, there is always a risk that national priorities may come into conflict with the interests of minority shareholders. Ecopetrol's valuation is in line with the metrics of other NOCs: Seeking Alpha; Company SEC Filings; Author's Calculations The NOC panel includes companies from other countries undergoing political turmoil such as Petrobras (PBR). The situation in Argentina (YPF) is also not very good. Nonetheless, Ecopetrol's dividend still stands out. Compared to how the market valued it in the recent past, Ecopetrol also looks discounted: Data by YCharts Trailing EBITDA multiples have been in the 4x to 6x range. The higher ratios in 2021 were driven by the unusually low 2020 results. However, the 2.5x ratio in place now is unusually low; it only briefly touched that point before in March 2020 during the peak COVID lockdowns and OPEC+ price war. Meanwhile, the company is reporting record profits: Ecopetrol Q3 Presentation Nine-month EBITDA YTD equals the prior two fiscal years combined. As a high-level target, I think the stock price could eventually return to the March-April levels, implying a 50% to 100% upside from here. Such repricing would also bring the valuation metrics more in line with their historical norms. However, that will not happen before the market gets comfortable with the political situation. Reassessing the geopolitical risk A common narrative in the media has been that Petro, a former guerrilla and Colombia's first leftist president, would be very negative for the country's oil sector: U.S. Global Investors To quote from the article: Despite the fact that crude is Colombia’s number one export, Petro vows to be hostile toward the oil and gas industry and has pledged to stop awarding new exploration contracts. He allegedly wants to turn Ecopetrol, the country’s primary petroleum producer and biggest company of any kind by revenue, into a wind and solar provider. As Bloomberg reports, the Colombian government, owns 85% of Ecopetrol, so there’s little to stop Petro from accomplishing this. The selloff in the Colombian peso, CDS spreads and equities with exposure to Colombia are all consistent with the narrative. I have also personally heard a couple of stories about expats moving their funds out of the country. However, in my view these narratives are a bad take. They seek the journalistic sensationalism and ignore the reality that what a politician (Petro) wants isn't always what they get. Winning elections isn't governing To be clear, the point isn't that Petro wouldn't want to implement the agenda he has campaigned on. I don't know what he really wants, but I am happy to assume that his platform reflects his goals. The point is, however, that once elected politicians step into office, their incentives change. Voters judge incumbents less so on their platform and more so through the prism of the voters' own economic well-being. If you can't pay your bills or afford groceries, you blame the guy in charge. This puts some pressure on politicians to drop less prudent aspects of their platforms once voters perceive them as being in charge. In fact, a political science study, suggestively entitled "Neoliberalism by Surprise in Latin America," found systematic evidence that left-leaning Latin American politicians tend to move to the right on policy during their term. The study concludes that, ultimately, neoliberal (unpopular) policies work best for constituents and that is precisely why elected officials have the incentives to pursue such policies. One better known example is perhaps the Peruvian presidential election in 1990, which was won by populist Alberto Fujimori against the conservative Mario Vargas Llosa. Once in office, Fujimori pivoted to the right and "stole" much of Vargas Llosa' platform, effectively implementing neoliberal reforms. The bottom line is that, looking across the region, the arrival of a leftist leader in office doesn't automatically imply a Venezuela scenario. In fact, what went on in Venezuela seems to be much more of an exception than the rule. Political institutions matter too Policy making doesn't happen in a vacuum either. Colombia's "Congreso", has two chambers, not unlike the House and Senate in the U.S. Neither of these bodies are controlled by Petro's party, which in turn means that the legislative process can only move forward with a broad winning coalition behind it. In other words, the system has a number of "veto players", who due to the distribution of political power and policy preferences, can block changes from the status quo. Petro needs to avoid any veto players blocking him, but that will naturally drive policy towards the center. This is exactly what seems to have happened with Colombia's tax reform, which underwent a few months of negotiations: On 6 October 2022, the economic commissions of Colombia's Senate and the House of Representatives approved the tax reform bill. Now the modified bill will be discussed in second debate by the plenary of both houses before it can become law. The tax reform approved in first debate includes several changes, agreed between the Government and a group of congressmen, based on the preliminary comments to the tax reform bill submitted by the Colombian Government on 8 August 2022. Petro is not Chavez and doesn't automatically get what he wants. On the contrary, his position is probably more similar to that of Joe Biden, who has to negotiate his agenda with Congress. So what is politically possible? A report from Colombia Risk Analysis, a geopolitical risk consultancy focused on the country, attempted to rank Petro's proposals by priority (for Petro) and the likelihood they would be accepted: Colombia Risk Analysis While Colombia Risk Analysis classified tax reform (which already passed as noted) as a "quick win," Petro's more radical proposals related to the oil and gas industry are deemed unlikely to pass without radical modification. Quoting from Colombia Risk Analysis (my emphasis): Petro’s policies regarding the extractive sector are some of his most contentious proposals. His vision for ceasing oil exploration and banning fracking addresses his objective to assuage climate change and promotes more sustainable energy sources; however, it is not realistic. Considering the many burdens his administration will confront within the first weeks of the 100 days, Petro will be unlikely to tackle a sector that provides significant funding, meaning he will likely backtrack on his campaign rhetoric to avoid economic fallout. The rapid energy transition he had proposed earlier is likely to cutoff necessary funding for his numerous social programs. Colombia Risk Analysis brings up a very good point; namely, that the government's "purse" will also act as constraint. If Petro were to rush and kill the "golden goose" that oil and gas is for Colombia's economy, as well as scare off foreign investment in the process, his budgetary receipts will fall critically and thwart the social aspects of his agenda (which, naturally involves spending more money): The war in Ukraine has pushed the price of a barrel past 100 USD, which has created a massive windfall for Ecopetrol, taxes, and royalties, even with oil prices currently decreasing. Petro must be particularly savvy in determining his budget and fiscal framework when factoring in oil production, prices, the pace of the energy transition, and regulation of oil exploration permits. Without these cautions, Petro will be unable to deliver on his varied social programs and campaign promises due to a lack of government funds. For Petro, then, the optimal play may be to avoid radical energy reforms and go instead for more symbolic environmental policy wins, in order to preserve the revenue generating power of the energy sector and channel it into the social reforms, which ultimately will determine his popularity. Therefore, despite the rhetoric, ceasing oil exploration may be politically impossible: Colombia Risk Analysis Colombia Risk Analysis also cautions on drawing parallels with Chavez: Although his opposition loves to compare Petro to Chavez, Chavez did have overwhelming support unlike Petro, making their political realities vastly different. Chavez also had hard support from the military and PDVSA, which controlled the Venezuelan economy. Petro will not have the same authority and handle over the economy with Ecopetrol. Although Petro’s base wants to see heads on a spike, and quickly, Petro will have to straddle both ideological camps to advance any legislative changes. Petro’s appointment as finance minister of José Antonio Ocampo, a centrist economist who didn't campaign for Petro during the election, is also seen as indication that Petro won't try to "rock the boat" on economic and energy policy too much. From Colombia Risk Analysis again: Petro’s appointment of José Antonio Ocampo as Minister of Finance signals a shift in Gustavo Petro’s economic vision that suggests a greater allowance and reliance on the extractive sector and free trade. They hope to avoid affecting the investment climate and macro-financial stability, especially considering Petro’s strained relationship with the private sector and trade associations. In summary, Petro, constrained by Colombia's budget and legal framework, will have a rather narrow path ahead: With Petro’s proposed policy to cease oil exploration, Colombia is likely to exhaust its current reserves in six to seven years, meaning the country will likely experience a doubling in gas prices with heavy implications for a country with such a significant poverty rate. To lighten this impact and the government’s dependence on extractives, Petro is likely to encourage other sectors to increase productivity. However, this will be anything but a smooth transition as most legal mines–including the fracking pilots and open-pit mining–have solid legal cases to back their operations, which is most likely to result in a plethora of complex, lengthy legal battles for Petro. To avoid being bogged down in his first 100 days in the extractive sector, Petro is likely to target more straight-forward aspects of the sector, such as illegal mining, where he can cooperate with the private sector. Petro will likely pass a mining and carbon tax, which will increment costs for those dependent on carbon to accelerate a phasing out of the energy source. Some government statements already suggest Petro may have settled on protecting the "purse" first; according to recent reporting: Colombia is targeting a 15% increase in crude oil output by using "enhanced recovery" technologies to take advantage of higher energy prices, even as it pushes to decarbonization, Minister for Mines and Energy Irene Velez said.

Seeking Alpha • Sep 14

Ecopetrol: Political Risks Are High, Shares Remain In A Downtrend

Summary Following a tumultuous June election, Colombia's energy stocks have faced headwinds. Ecopetrol has a very cheap valuation and high yield, but price action suggests more downside. The technicals and momentum outweigh appealing P/E and free cash flow figures for now. With the sector seeing relative strength this year, better to stick with global energy winners that are also cheap. Political uncertainty is very high right now, with the U.S. midterms less than two months away. We have already seen a slew of bills pushed through to shore up positive fervor among voters. Meanwhile, the latest prediction markets show a dead heat in the battle for Congress. Domestic election risk pales in comparison to downright instability in South America, though. Back in June, Colombia's Gustavo Petro won a presidential election race, and that single event helped send many oil & gas company stocks into a tailspin all while the global energy market was selling off. One major Energy sector stock now trades at an extremely low valuation, but is all the risk priced in? Let's dive in. Political Risk Abroad & At Home: Betting Market Trends For Control of Congress Goldman Sachs Investment Research According to Bank of America Global Research, Ecopetrol (NYSE:EC) is Colombia's national oil company. Oil and gas production is currently approximately 692tboe/d (81% oil). The company also has a total of 287 tbpd of refining capacity. Other operating assets include oil and gas pipelines, and Ecopetrol has a growing renewables business. The company has downside risks due to heavy political uncertainty in Colombia. Recent elections back in June may lead to more government interference in the industry, pressuring how much in the way of profits and free cash flow can be returned to equity holders. The $23 billion market cap Oil, Gas & Consumables industry stock within the Energy sector trades at a cheap 3.2 trailing 12-month GAAP price-to-earnings ratio and pays a very lofty 13.5% dividend yield, according to The Wall Street Journal. On valuation, BofA analysts see strong earnings growth this year, followed by an EPS drop in 2023. Earnings growth further out is lackluster. Amid so much political risk, the forward operating P/E is depressed, and it is hard to see much cause for it to recover. The upside for shareholders is that its free cash flow yield is high, so for now the dividend should be safe, but it's hard to predict what the political winds will be in the coming quarters. EC: Earnings, Valuation, Dividend Forecasts BofA Global Research Ecopetrol's corporate event calendar is light until the next earnings report, which is unconfirmed to take place on Tuesday, November 8, BMO, according to data provided by Wall Street Horizon. Corporate Event Calendar Wall Street Horizon The Technical Take EC is one of the not too many energy stocks that is caught in a very bearish pattern. After failing to climb above its late 2019 to early 2020 highs near $20 earlier this year, shares began to fall fast. A bearish gap down back in June took place after EC broke trendline support. It was not until the stock dropped more than 50% from its year-to-date high when it found some buyers under $9. Since late July, a bear flag has persisted - a period of corrective price consolidation. The presumption is that new lows will be made from this pattern.

Seeking Alpha • Aug 04

Ecopetrol net income of COP 10.47T, revenue of COP 43.89T

Ecopetrol press release (NYSE:EC): Q2 net income of COP 10.47T. Revenue of COP 43.89T (+125.8% Y/Y).

Seeking Alpha • Jul 01

Ecopetrol's Political Risks May Be Overstated

Gustavo Petro’s presidential election win on June 19 signals a more interventionist approach towards Ecopetrol and more broadly to the regulation of the oil and gas sector. Colombia's institutional constraints would make it difficult for Petro's incoming administration to implement policy changes. Ecopetrol is one of the cheapest state-owned oil producers, trading at just 3.3 times its expected adjusted earnings in 2022. Colombia’s political risks continue to unnerve investors in state-owned energy company Ecopetrol (EC). Gustavo Petro’s presidential election win on June 19 signals a more interventionist approach towards the company and more broadly to the regulation of the oil and gas sector. Investor Skepticism It’s a blow for Ecopetrol, which was already struggling to regain investor confidence following the Interconexión Eléctrica acquisition last year. The deal to purchase the state-sponsored electricity transmission and infrastructure company attracted significant controversy, with many analysts suspecting government pressure was the main driver behind the ISA acquisition. Although CEO Felipe Bayón vehemently denies this, the transaction had all the hallmarks of the cash-strapped government using Ecopetrol to relieve its fiscal pressures. ISA, as an operator of high-voltage electricity transmission lines, toll roads and fiber optic cables in Colombia and across the region, was not seen as a natural fit for the integrated energy company. What’s more, the way the deal has come together raised suspicions on its motives. The fact that the Colombian government was a majority owner of both ISA and Ecopetrol enabled it to raise cash in a way which also allowed the government to maintain effective control of ISA following its sale to the petroleum giant. Adding to the skepticism, Ecopetrol refrained from making a public tender offer to ISA's existing minority shareholders, and was instead only interested in acquiring the government’s 51.4% stake in ISA. Ecopetrol, which until recently was seen as a transparent and well-governed company, may nevertheless acted in the best interests of its shareholders. For an energy company to diversify into the utilities space is not something that is unheard of, putting Ecopetrol in a growing club which includes Italy's Eni. Moreover, European oil majors such as BP (BP), TotalEnergies (TTE), Shell (SHEL) and Equinor (EQNR) are making similar moves to invest in low-carbon investments, including renewables. Reserves Replacement Ratio One possible reason why Ecopetrol has been moving faster and further in its diversification efforts than its Latin American peers was concern about its low reserve life. By the end of 2020, its hydrocarbon reserve life had fallen to 7.5 years. The company, which once had a higher market capitalization than Brazil’s Petrobras (PBR), has for years failed to make significant discoveries for new oil in Colombia. Ecopetrol has had to look abroad for growth, and has invested heavily in oil exploration in the Permian Basin in West Texas, as well as in Brazil, Peru and Chile. Roughly 30% of total investments in 2022 will be allocated to projects outside of Colombia, up from less than 5% five years ago. That being said, the situation now looks less dire, as the improving price environment since then has had a very positive effect on its estimated reserves. This helped Ecopetrol to achieve a Reserve-Replacement Ratio of 200% in 2021, the highest level in 12 years. As a result, its reserve life increased to 8.7 years by the end of 2021, exceeding the 2014 figure when the average Brent price was $102 per barrel, compared to an average of $69.2 in 2021. 89% of the reserves comes from oil fields in Colombia, while the remaining 11% belongs to its joint venture with Occidental Petroleum (OXY) in the US. With the price of crude now firmly higher than a year ago, economically recoverable reserves of oil and gas should be significantly higher still. Excluding the price effect, the 2021 replacement ratio would have been 122%. Political Risks Incoming president Gustavo Petro’s proposed moratorium on oil and gas exploration could make it even more difficult for Ecopetrol to replenish its hydrocarbon reserves going forwards. In his election campaign, he pledged not to grant any new licenses for oil and gas exploration, end development of offshore deposits, halt all pilot hydraulic fracturing ('fracking') projects, and speed up Colombia’s transition to clean energy. Investors have been taking Petro’s words seriously, but the new administration would likely find it difficult to achieve these goals due to the country’s strong institutional constraints. Colombia’s presidential powers are limited, and he will struggle to assemble a legislative majority in favor for most of his policies. And even if Petro did manage to get his policies enacted, it would not have much impact in the short to medium term - there is already a ban on fracking, with the exception of a small number of pilot projects. Moreover, he certainly hasn't pledged to stop existing exploration contracts from continuing to operate, meaning there will likely be little material impact on the current plans for most oil producers. In any event, the country’s powerful constitutional court would likely prevent an early termination of such contracts. Colombia’s president is also limited to a single four-year term, which greatly reduces the scope for Petro’s influence on the long term regulation on the industry.

Seeking Alpha • Mar 17

Ecopetrol: Compelling Outlook Clouded By Near-Term Headwinds

Ecopetrol’s gradual transition is a long-term positive, but the planned production ramp-up could disappoint and raises the dilution risk. The ESG transition plan could also change drastically depending on the upcoming election outcome. While the core business still offers attractive economics, the relative valuation premium likely accounts for the positives.

CEO salary percentage	n/a
CEO tenure	3.1yrs
CEO ownership	n/a
Management average tenure	1.3yrs
Board average tenure	1.2yrs

Name	Position	Tenure	Compensation	Ownership
Ricardo Barragan	President	3.1yrs	no data	no data
Alfonso Camilo Munoz	Chief Financial & Sustainable Value Officer	1.8yrs	no data	0% $ 0
Sergio Moreno Acevedo	Vice President of Science	less than a year	no data	no data
Jaime Andres Cuello	Vice President of Administrative & Services	1.7yrs	no data	no data
Rodolfo García Paredes	Chief Compliance Officer & Compliance Officer	less than a year	no data	no data
Maria Toro Restrepo	Corporate Legal Vice President & General Secretary	1.3yrs	no data	no data
Marcela Ulloa	Head of Corporate Communications	no data	no data	no data
Julio Herrera	Vice President of Commercial & Marketing	1yr	no data	no data
Julius Herrera	Vice President of Sales & Marketing	1.3yrs	no data	no data
Victoria Irene Ballesteros	Corporate Vice President of Human Talent	2.3yrs	no data	no data
Lina María Mora	Head of Capital Markets	no data	no data	no data
Cristhian Prado Castillo	Head of Capital Markets	no data	no data	no data

Name	Position	Tenure	Compensation	Ownership
Angela Maria Gomez	Independent Chairman of the Board	2.2yrs	no data	no data
Lilia Tatiana Avendano	Non Independent Director	2.2yrs	no data	no data
Luis Felipe Cardona	Independent Director	1.2yrs	no data	no data
Hildebrando Galeano	Independent Vice Chairman of the Board	1.2yrs	no data	no data
Ricardo Yee	Independent Director	1.2yrs	no data	no data
Alberto Jose Alcocer	Non-Independent Member	no data	no data	no data
William Garcia	Independent Director	no data	no data	no data
Cesar Loza Arenas	Employee Director	less than a year	no data	no data
Carolina Hurtado	Independent Director	less than a year	no data	no data
Juan Gonzalo Valderrama	Director	less than a year	no data	no data

Data	Last Updated (UTC time)
Company Analysis	2026/05/07 17:30
End of Day Share Price	2026/05/07 00:00
Earnings	2025/12/31
Annual Earnings	2025/12/31

Package	Data	Timeframe	Example US Source ^*
Company Financials	10 years	Income statement Cash flow statement Balance sheet	SEC Form 10-K SEC Form 10-Q
Analyst Consensus Estimates	+3 years	Forecast financials Analyst price targets	Analyst Research Reports Blue Matrix
Market Prices	30 years	Stock prices Dividends, Splits and Actions	ICE Market Data SEC Form S-1
Ownership	10 years	Top shareholders Insider trading	SEC Form 4 SEC Form 13D
Management	10 years	Leadership team Board of directors	SEC Form 10-K SEC Form DEF 14A
Key Developments	10 years	Company announcements	SEC Form 8-K

Analyst	Institution
Matthew Thomas	Barclays
Caio Ribeiro	BofA Global Research
Vicente Falanga Neto	Bradesco S.A. Corretora de Títulos e Valores Mobiliários

Ecopetrol Management

Management criteria checks 0/4

Key information

Recent management updates

Ecopetrol S.A. Announces President Changes

Ecopetrol S.A., Annual General Meeting, Mar 27, 2026

Ecopetrol S.A. Announces Board and Committee Changes

Ecopetrol S.A. Announces Board Appointments

Ecopetrol S.A. Announces Board Committee Changes

Ecopetrol S.A. Announces Board Changes

Recent updates

Ecopetrol S.A. to Report Q1, 2026 Results on May 12, 2026

Ecopetrol S.A. (BVC:ECOPETROL) entered into a Share Purchase Agreement to acquire 26.01% stake in Brava Energia S.A. (BOVESPA:BRAV3) from Bloco Somah Printemps Quantum, Jive Investments Consultoria Ltda, Yellowstone and others.

Ecopetrol S.A. Announces President Changes

Ecopetrol: The Rerating Story Is Over

Ecopetrol S.A. Proposes Dividend Distribution for 2025, Payable No Later Than April 30, 2026

Ecopetrol S.A., Annual General Meeting, Mar 27, 2026

Ecopetrol S.A. Announces Board and Committee Changes

Ecopetrol S.A. to Report Q4, 2025 Results on Mar 04, 2026

Ecopetrol S.A. Announces Board Appointments

Ecopetrol S.A. Announces Board Committee Changes

Ecopetrol S.A. Announces Board Changes

Ecopetrol S.A. Announces Executive Changes, Effective November 16, 2025

Ecopetrol S.A. to Report Q3, 2025 Results on Nov 13, 2025

Ecopetrol S.A., Annual General Meeting, Nov 11, 2025

Ecopetrol S.A. Announces Resignation of Mónica De Greiff Lindo as Board of Director, Effective October 15, 2025

Ecopetrol S.A. Announces Board Changes

Ecopetrol S.A. Appoints Guillermo García Realpe as President of the Board of Directors

Ecopetrol S.A. to Report Q2, 2025 Results on Aug 12, 2025

Ecopetrol S.A. Appoints Bayron Triana Arias as Executive Vice President of Energy for the Transition, Effective August 1, 2025

Ecopetrol Appoints Rodolfo Mario García Paredes as Acting Corporate Compliance Director and Interim Anti-Money Laundering Compliance Officer, Effective from June 4, 2025

Ecopetrol S.A. (BVC:ECOPETROL) agreed to acquire renewables portfolio of up to 1,300 megawats of solar and wind energy projects in Colombia from Enerfin Enervento Exterior Sl. and Enerfín Sociedad de Energía S.L.U.

Ecopetrol S.A. Is Evaluating the Strategy to Ensure the Continuity of Gas Projects in the Southern Caribbean

Ecopetrol Is The Victim Of Bad Policies

Ecopetrol S.A. to Report Q1, 2025 Results on May 06, 2025

Ecopetrol S.A. Approves Distribution for 2024, Payable on April 4, 2025, April 29, 2025 and June 27, 2025, Respectively

Ecopetrol S.A. Announces Changes in the Board of Directors

Ecopetrol S.A. Proposes Distribution for 2024, Payable on April 4, 2025 and June 27, 2025

Ecopetrol S.A. Replaces 104% of its Production, Doubling 2023 Incorporation of Proven Reserves

Ecopetrol S.A. to Report Q4, 2024 Results on Mar 04, 2025

Ecopetrol: Weak Oil Prices Weigh On The Earnings Outlook, Improved Momentum

Ecopetrol S.A. Appoints Rafael Ernesto Guzmán Ayala as Executive Vice President of Hydrocarbons

Ecopetrol Announces Changes in Senior Management and the Appointment of A Legal Representative

Ecopetrol S.A. Announces Committee Changes

Ecopetrol Has Considerable Risks But Also A Lot Of Upside In Case Of Positive Changes

Ecopetrol S.A. to Report Q3, 2024 Results on Nov 13, 2024

Ecopetrol S.A. Announces Executive Changes

Ecopetrol: An Attractive Long-Term Investment Beyond High Dividend Yield

Ecopetrol S.A. Announces Board Changes

Ecopetrol S.A. Appoints Alberto José Vergara Monterrosa as Corporate Director of Compliance

Ecopetrol S.A. to Report Q2, 2024 Results on Aug 13, 2024

Ecopetrol Group Reports on Ongoing Negotiations with Occidental Petroleum

Ecopetrol Remains An Oil And Gas Company, Great Buying Opportunity

Ecopetrol S.A. Announces Management Changes

Ecopetrol S.A. to Report Q1, 2024 Results on May 07, 2024

Ecopetrol: Attractive Dividends Plus Upside Potential, Rating Unchanged

Ecopetrol S.A. Announces Distribution for Fiscal Year 2023, Payable on April 3, 2024 and June 26, 2024

Ecopetrol: Colombian Oil Producer Offers 14.7% Dividend On Stable Oil Prices

Ecopetrol S.A. Announces Impairment for Long-Term Assets for the Fourth Quarter 2023

Ecopetrol S.A., Annual General Meeting, Mar 22, 2024

Ecopetrol: Still My Top Pick For Oil Stock

The Sell-Side Appears Too Negative On Ecopetrol

Ecopetrol S.A. to Report Q3, 2023 Results on Nov 07, 2023

Ecopetrol: Oil Stock For Adventurous Dividend Seekers

Ecopetrol S.A. Confirms Glaucus-1 Well Has Verified the Presence of Natural Gas in the Deep Waters of the Southern Colombian Caribbean

Ecopetrol: A Beneficiary Of Rising Oil Prices, Macro Risks Still Apparent

Ecopetrol S.A. Announces Management Appointments

Ecopetrol S.A. Announces Executive Changes, Effective 18 August, 2023 and September 1, 2023

Ecopetrol S.A. to Report Q2, 2023 Results on Aug 08, 2023

Ecopetrol: Likely To Benefit From Strengthening Oil Prices And Colombian Peso

Ecopetrol S.A. Names German Gonzalez Reyes as Secretary General, Effective from July 5, 2023

Ecopetrol: Too Risky, Don't Focus On The Dividend Yield

Ecopetrol's Recent Weakness Spells Opportunity

Ecopetrol S.A. Announces Resignation Carlos Gustavo Cano from Its Board of Directors

Ecopetrol S.A. Announces Felipe Bayón to Lead Ecopetrol Until March 31, 2023

Ecopetrol: A Second Look At The Geopolitical Risk

Ecopetrol: Political Risks Are High, Shares Remain In A Downtrend

Ecopetrol net income of COP 10.47T, revenue of COP 43.89T

Ecopetrol's Political Risks May Be Overstated

Ecopetrol: Compelling Outlook Clouded By Near-Term Headwinds