Ecopetrol Q2 Earnings Call Highlights

Key Points

• Ecopetrol’s second-quarter results surged: Revenue rose 35% year over year to COP 40.2 trillion, EBITDA increased 59% to COP 17.7 trillion, and net income jumped 235% to COP 6.1 trillion, aided by higher Brent prices, improved crude differentials and stronger refining margins.
• Record refining and transportation performance offset production disruptions. Refinery throughput reached 439,000 barrels per day and refining gross margin climbed to $29.80 per barrel, while production was 706,000 barrels of oil equivalent per day; management maintained its full-year production target of 730,000–740,000 barrels per day.
• Ecopetrol strengthened its growth and energy-security pipeline: It reported new offshore gas discoveries, continued development of regasification projects and received approvals to pursue a tender offer that could give it 51% of Brazil’s Brava Energia, potentially adding about 42,000 barrels of oil equivalent per day.

Ecopetrol NYSE: EC reported sharply higher second-quarter earnings as stronger crude prices, improved commercial differentials and record refining performance lifted results across its integrated operations.

Acting Chief Executive Officer Juan Carlos Hurtado said the company generated second-quarter revenue of COP 40.2 trillion, EBITDA of COP 17.7 trillion and net income of COP 6.1 trillion. The figures represented year-over-year increases of 35%, 59% and 235%, respectively. EBITDA margin rose to 44%, about six percentage points above the prior-year period.

Hurtado attributed the performance to Brent crude averaging $97 per barrel during the quarter, a recovery in international refining margins, improved crude differentials and operational execution in transportation and refining. Ecopetrol said its commercial management improved crude differentials by $3.67 per barrel from the first quarter despite challenging conditions for heavy crude grades.

Record refining performance offsets production disruptions

Refining was a principal contributor to quarterly results. The company achieved record integrated refinery throughput of 439,000 barrels per day, up 6% from the second quarter of 2025, while refining gross margin reached $29.80 per barrel, compared with $12.50 per barrel a year earlier.

The Cartagena Refinery posted a record gross margin of $31.60 per barrel, supported by improved operating stability and the completion of maintenance work in key units. Ecopetrol also reported record throughput and margins at its Barrancabermeja Refinery.

Midstream volumes exceeded 1.1 million barrels per day, up 3.8% year over year, as the company used optimized logistics corridors, transported imported crude and added refined-product volumes. These measures helped offset lower domestic oil production.

Production reached 706,000 barrels of oil equivalent per day in the second quarter, while first-half output averaged 715,000 barrels of oil equivalent per day. The company said production was affected by environmental and electrical disruptions at assets including CPO-09, Chichimene, Castilla and Rubiales.

Ávila said temporary restrictions at CPO-09, Castilla and Chichimene resulted in deferred output of as much as 23,000 barrels per day. A blockade in Meta Department also halted 16 workover teams for more than 70 days, he said. The restrictions have been lifted, and Ecopetrol said production had approached 730,000 barrels per day by the end of June.

Management maintained its full-year production target of 730,000 to 740,000 barrels per day. Recovery measures include additional workovers, production-facility expansion at Castilla, enhanced-recovery initiatives and an added seven-well campaign in the Delaware Basin of the Permian. The Permian wells are expected to add 4,000 to 5,000 barrels per day beginning late in 2026 and continuing into 2027.

First-half earnings, investments and cash flow

For the first half, Ecopetrol reported net income of COP 9 trillion, equal to the company’s net income for all of 2025, according to Chief Financial Officer Camilo Barco. Higher commodity prices and crude and product differentials contributed a combined COP 7.6 trillion positive effect, partly offset by currency movements and inflation-related cost pressures.

Barco said taxes reduced first-half results by COP 1.2 trillion, primarily reflecting an income-tax surcharge that increased to 10% in 2026 and the recognition of a new wealth tax.

• Organic investments totaled $2.9 billion through June.
• Colombia received 71% of investment spending, followed by Brazil at 22% and the U.S. and other markets at 7%.
• Hydrocarbons accounted for 63% of investment, transmission and toll roads 29%, and energy-transition initiatives 8%.
• First-half efficiency initiatives generated COP 2.6 trillion in gains, with 63% benefiting EBITDA.

The company ended June with COP 11.3 trillion in consolidated cash. Operating cash flow totaled COP 14.1 trillion in the first half, while investment activities used COP 8.4 trillion, resulting in COP 6 trillion of free cash flow. Ecopetrol paid COP 6 trillion in dividends to shareholders and non-controlling interests during the period.

Gas discoveries and energy-security projects

In exploration, Ecopetrol drilled eight wells in the first half and reported two discoveries. The company highlighted the Copoazu-1 offshore well, which reached an initial test rate of 35 million cubic feet per day, constrained by testing-facility capacity.

Ecopetrol and Petrobras also announced the Sandia-1 natural gas discovery in the GUA-OFF-0 Block offshore Colombia. The well is located 42 kilometers from Colombia’s coast and reached a total depth of 5,440 meters. The companies are evaluating gas-bearing intervals to determine the discovery’s resource potential.

The company said it supplies about 62% of Colombia’s natural-gas demand and has offered 293 GBTU per day of long-term firm gas supply during 2026. Its Buenaventura regasification project on the Pacific Coast was 73% complete at June and is expected to start operating in the fourth quarter with capacity of 60 GBTU per day. A floating storage and regasification unit at Puerto Berrío is expected to begin operations in the first quarter of 2027, with capacity of up to 500 million cubic feet per day.

FEPC receivable and Brava Energia process

As of June, Ecopetrol’s receivable from Colombia’s Fuel Price Stabilization Fund, or FEPC, stood at COP 8 trillion, including about COP 6 trillion accrued during 2026. Barco said the company expects the balance to range between COP 8 trillion and COP 12 trillion by year-end, depending on Brent prices, exchange rates and fuel crack spreads.

Management said it expects payments from the fund to continue as they mature, although it has not yet held substantive discussions with Colombia’s incoming government regarding fuel-price policy.

Separately, Ecopetrol said it had received regulatory and stakeholder approvals to proceed with its tender offer for Brazilian producer Brava Energia. Julián Lemos, corporate vice president of strategy and new businesses, said that if the offer closes successfully, Ecopetrol would own 51% of Brava and would expect to consolidate the business beginning in the third quarter of 2026. The company estimated Brava would contribute approximately 42,000 barrels of oil equivalent per day based on Ecopetrol’s planned ownership stake.

About Ecopetrol (NYSE:EC)

Ecopetrol SA NYSE: EC is Colombia's state-controlled integrated oil and gas company and the country's largest oil producer. The company's operations span the upstream, midstream and downstream segments of the hydrocarbon value chain, including exploration and production of crude oil and natural gas, refining of petroleum products, transportation and storage via pipeline networks, and the marketing and sale of fuels and petrochemical feedstocks. Ecopetrol serves domestic demand in Colombia and maintains a portfolio of international investments and partnerships across the Americas.

In upstream activities, Ecopetrol focuses on exploration and development of onshore and offshore fields to sustain and grow hydrocarbon production.

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