Ecopetrol S.A. Q1 FY2026 earnings call

Exploration & Production

• Successfully discovered new independent gas accumulations at the Copoazú-1 well in the Caribbean offshore GUA-OFF-0 block, expanding the block's total resource potential and supporting Colombia's energy security. Initial testing is underway, with a first resource estimate expected by end-2026.
• Advanced upstream portfolio optimization via farm-in agreements in the Magdalena Medio region: the Parex partnership will bring $250 million in fully partner-funded investment to add 94 million boe of gross reserves and extend the life of the Casabe and Llanito assets; the Gran Tierra partnership will bring $92 million in fully partner-funded investment to add 30 million boe of gross reserves to the Tisquirama and San Roque fields. Both agreements aim to boost medium-term production, lower unit costs, and unlock value from mature fields.

Refining, Transportation & Commercial

• The Barrancabermeja Refinery achieved one of its highest ever throughput levels, while the Cartagena Refinery maintained solid operational performance despite a March 2026 operational event. Operational and energy efficiencies kept cash costs controlled amid broader inflationary pressures.
• Reversal of the Coveñas Ayacucho pipeline system enabled bidirectional flow, supporting crude imports for the Barrancabermeja Refinery and mitigating the impact of lower domestic production. The segment gained 27,000 bpd of third-party transported volumes.
• Implemented new logistics strategies, including contracting time-chartered vessels, to secure crude and product transportation capacity amid volatile freight markets, improve supply reliability and reduce long-term logistics costs.

Strategic Growth & International Expansion

• Progressing toward the planned acquisition of a controlling stake in Brava Energia in Brazil. The transaction includes a private purchase of ~26% of Brava's equity and a subsequent voluntary tender offer to reach a maximum 51% controlling stake. Brava holds 459 million boe of 1P reserves and produces ~81,000 boepd, with 2025 EBITDA of ~$806 million. Closing is subject to tender offer success and regulatory approvals.
• ISA, Ecopetrol's transmission subsidiary, won new transmission project awards in Brazil and continued domestic Colombian transmission expansion aligned with national energy demand.

Energy Transition & Gas Security

• Advanced natural gas import and regasification infrastructure development to address domestic supply shortfalls: signed a comprehensive regasification and logistics services contract for the Caribbean Puerto Bahía project, which will deliver 126-307 million cubic feet per day of imported gas to the national grid starting in 2026; launched a competitive tender for LNG supply for the Buenaventura Pacific regasification project, with contract signing and first cargo expected in H2 2026.
• Completed construction of the 50 MWp Quifa Solar Farm and began energization; executed a framework trust agreement with AES Colombia for the 259 MW combined JK1/2 Jemeiwaa wind projects in La Guajira; awarded the transmission line construction contract for the Windpeshi wind project.

Financial & Corporate Milestones

• Group Q1 2026 total revenues were COP 28.6 trillion, with EBITDA of COP 13.5 trillion (47% margin) and net income of COP 2.9 trillion. Gross debt-to-EBITDA remained at a healthy 2.3x (1.6x excluding ISA), with improved interest coverage following recent liability management transactions.
• The general shareholders' meeting approved the merger with Parque Portón del Sol, a step to capture tax benefits for renewable energy projects under Colombian Law 1715, and reaffirmed commitment to shareholder returns. Dividends were paid to shareholders in late April 2026.
• 23% of the full-year 2026 investment plan had been executed as of quarter-end, with 73% of organic CapEx allocated to growth opportunities. Full-year 2026 organic CapEx remains budgeted between $5.4 billion and $6.7 billion, with execution tracking toward the upper end of the range. The Fuel Price Stabilization Fund (FEPC) had a Q1 end balance of COP 4.2 trillion, including a COP 1.2 trillion quarterly accumulation plus carried over 2025 balances.

1. Hydrocarbon Exploration & Production Segment: Q1 2026 production reached 725,000 barrels of oil equivalent per day (boepd). Domestic crude oil production was 527,000 barrels per day, up 6,000 bpd sequentially from Q4 2025. The segment generated EBITDA of COP 11.2 trillion, representing 83% of Group total EBITDA, with EBITDA of $27 per barrel and a margin of 40%. Total unit costs fell 13% year-over-year to COP 166,601 per barrel, while lifting costs decreased 11% year-over-year to COP 45,916 per barrel ($12.2 per barrel including FX effects).
2. Refining Segment: Q1 2026 consolidated throughput reached 417,000 barrels per day, a 5% increase year-over-year. Valuable product yield rose 2 percentage points to 73%. Gross refining margin increased 60% year-over-year to $17.3 per barrel. The segment delivered EBITDA of COP 1.9 trillion, which is 14% of Group total EBITDA (up from 4% in Q1 2025).
3. Transportation Segment: Q1 2026 throughput was 1.122 million barrels per day, a 2% year-over-year increase. EBITDA declined year-over-year due to unfavorable foreign exchange impacts, but improved sequentially quarter-over-quarter. The new Naphtha Cusiana pipeline project generated $3.15 in revenue per barrel, reducing dilution costs compared to land transportation.
4. Energy Transition & Gas: Ecopetrol held a 52% market share of contracted gas volume in Q1 2026. Renewable energy generation assets are on track to add 347 MW of capacity in 2026, reaching a total 1,298 MW by year-end. Q1 2026 energy optimization across operations delivered COP 24 billion in savings.

• Full-year 2026 total production guidance is maintained at 730,000-740,000 barrels of oil equivalent per day.
• Full-year 2026 organic capital expenditure guidance is maintained at $5.4-$6.7 billion, with execution currently tracking toward the upper end of the range based on a base case Brent price of $83 per barrel, with an updated projected range of $83-$93 per barrel for the remainder of 2026.
• The tender offer for the Brava Energia controlling stake is expected to launch in Q2 2026. Ecopetrol will only proceed with the transaction if it reaches at least 51% ownership; it will not complete the transaction at a lower stake.
• The Caribbean Puerto Bahía regasification project is on track to begin delivering imported natural gas in 2026. The Pacific Buenaventura regasification project is expected to award contracts and receive its first LNG cargo in H2 2026.
• Copoazú-1 well resource assessment and the Sirius offshore project prior consultation process are both on track to be completed by end-2026, with the Sirius environmental impact assessment submission planned for Q1 2027.

• Persistently volatile global energy prices driven by intensifying geopolitical tensions create uncertainty for full-year profitability and cash flow projections.
• Appreciation of the Colombian peso creates negative pressure on reported revenues and dollar-denominated cost metrics, alongside widening crude differentials compared to 2025.
• Elevated global logistics and freight costs generate margin pressure across the entire hydrocarbon value chain.
• The El Niño weather phenomenon poses a downside risk to domestic production and natural gas supply security for the remainder of 2026.
• The Brava Energia acquisition remains subject to multiple precedent conditions, including successful tender offer completion and regulatory approvals, with no guarantee of closing.
• Reserve volumes reported by Brava Energia under IFRS may require downward adjustment when converted to Ecopetrol's SEC-aligned reserve estimation methodology post-closing.
• The FEPC has accumulated a large structural deficit amid high international fuel prices, requiring future fuel price increases to return to a balanced position.
• Ongoing legal proceedings with the Colombian tax authority (DIAN) regarding VAT on fuel imports for 2022-2024 remain unresolved, with potential for future adverse tax assessments.

Q: What is the purchase structure for Brava Energia, will you walk away if you don't reach 51% ownership, and how will Brava's IFRS-reported reserves be adjusted for Ecopetrol's reporting? / A: The tender offer for a controlling stake will launch in Q2 2026, and Ecopetrol will only complete the transaction if it acquires at least 51% ownership, with no plan to proceed at a lower stake. Brava currently reports reserves under IFRS, while Ecopetrol uses SEC-aligned methodology. After closing, Ecopetrol will conduct a full validation to adjust reserve volumes to align with its regulatory standards.

Q: What is the sensitivity of full-year 2026 EBITDA and net income to changes in Brent prices and the COP-USD exchange rate? / A: The company updates its projections monthly aligned with market consensus, working with a 2026 Brent range of $83-$93 per barrel and an exchange rate range of COP 3,600-4,000 per USD. A $1 per barrel change in Brent and a COP 100 per USD change in exchange rate impact full-year EBITDA by approximately COP 1.6 trillion, and impact full-year net income by approximately COP 800 billion.

Q: How will the Brava acquisition impact Ecopetrol's leverage, and what is the refinancing strategy for the short-term bridge financing used for the purchase? / A: Brava's debt-to-EBITDA is in a healthy 2x-2.5x range, and its strong cash position means pro forma net debt for the combined Group will only increase marginally, to ~2.2x debt-to-EBITDA, which remains within Ecopetrol's target range. The acquisition uses short-term bridge financing, and Ecopetrol is currently evaluating long-term takeout financing alternatives. Only a portion of the transaction value will be refinanced long-term, with part of the funding coming from portfolio rotation and CapEx reallocation.

Q: Can you share details on the commercialization of Caribbean regasification capacity at Puerto Bahía, and what is the current monthly accumulation in the FEPC? / A: The Puerto Bahía developer covers all construction and project risk, while Ecopetrol commercializes the gas capacity. Approximately 250 million cubic feet per day of 7-year contracted capacity has been allocated to 13 major domestic gas distributors and power generators, with most of the base 126 million cubic feet per day baseline capacity already sold, and potential to expand capacity to 300 million cubic feet per day if needed to address El Niño-related supply shortages. As of Q1 end, the accumulated FEPC balance is COP 4.2 trillion, with average monthly deficit accumulation in the billions of Colombian pesos amid elevated international fuel prices.