Colombia's state-controlled energy company Ecopetrol SA (EC, ECOPETROL.BO) reported robust first quarter net profits Wednesday that far surpassed market expectations, fueled by higher oil prices and rising production.
Net profits last quarter were 3.4 trillion Colombian pesos ($1.93 billion), a 62% jump from profits of COP2.1 trillion in the first quarter of last year. Analysts surveyed by Dow Jones Newswires forecast Ecopetrol's first quarter 2011 profits would be COP2.9 trillion.
"The results obtained ... were very positive in all segments of the business," said Ecopetrol President Javier Gutierrez Pemberthy in a statement.
The company's earnings before interest, taxes, depreciation and amortization, or Ebitda, was COP6.4 trillion last quarter, a 58% jump from a year earlier, the statement said.
Gutierrez said the strong results came despite torrential rain throughout the country during the first months of the year, which created production and transportation problems for many sectors of the economy.
"The wave of winter put to the test our work teams and allowed us to demonstrate to the country our operating capacity to respond to diverse situations," he said.
Ecopetrol's production rose to 686,000 barrels a day of oil equivalent in the first quarter, a 17% gain from that quarter of last year, it said.
Analysts attribute the higher oil output by Ecopetrol to higher recovery rates in mature fields and new projects coming into line.
Ecopetrol, which bills itself as one of the top 40 oil companies in the world and the fourth-largest oil company in Latin America, also began ramping up investments this year, spending $1.88 billion in the first quarter, more than double than a year earlier, the statement said.
A third of what it spent last quarter went to production-related investments, it added.
The company aims to boost output to 750,000 barrels a day in 2011 by improving the extraction rates at existing fields and from the 51% stake in the Colombian operations of BP PLC (BP, BP.LN) that it recently purchased along with Canadian oil firm Talisman Energy Inc (TLM, TLM.T).
Ecopetrol is involved in production and exploration projects in the U.S. Gulf Coast, Brazil and Peru, where in 2010 it was awarded the rights to several exploration blocks. The company has earmarked $8.5 billion in capital investment for all of 2011.
Shares of Ecopetrol on the Colombian Stock Exchange rose 0.1% Wednesday to COP3,800 while other locally-traded oil companies fell sharply amid a decline in global oil prices.
--By Dan Molinski, Dow Jones Newswires; 57-310-867-6542; email@example.com
--Darcy Crowe contributed to this report.