BOGOTÁ, Colombia, Nov. 22, 2017 /PRNewswire/ --
- Ecopetrol Business Group's production will grow in 2018, it
is estimated to produce between 715,000 and 725,000 barrels of
petroleum-equivalent per day.
- 85% of the investment will be concentrated in exploration
and production.
- 96% will be allocated to projects in Colombia, with a focus on increasing reserves
and production on the onshore.
- The Company will achieve a milestone in refinery products,
with its two refineries processing between 350,000 and 375,000
barrels of petroleum-equivalent per day.
- Once the stabilization stage has been completed, the new
Cartagena refinery will provide a
positive EBITDA of at least COP 500
billion by 2018.
- The volumes transported will be in line with the expectation
of crude production in the country and the higher demand for
refinery products.
- Ecopetrol Business Group's net income will be benefit
from a decrease in the effective tax rate between 7% and 11%, as a
result of the elimination of the wealth tax, the lower nominal rate
of income tax resulting from the tax reform and the best results of
the subsidiaries.
- The investment plan is self-financing. The resources will
come from the internal cash generation, which demonstrates the
efficiency achieved and the robustness of the investment
portfolio.
- The strong cash position and the decrease in the level of
debt confirm the financial flexibility for inorganic growth through
acquisitions.
Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) reports that it
expects to invest USD 3.5 to USD 4
billion in 2018, up 35% to 55% over the projected investment
at year-end 2017.
After two years of a successful transformation plan focused on
cost reduction and capital discipline, the 2018 plan approved by
the Board of Directors is aimed at increasing reserves and
hydrocarbon production, capturing earnings through an improved
international environment for the sector, and advancing along the
path of efficiency.
Given the above, Ecopetrol is continuing to reduce its
break-even price. In 2018 the Company expects that it will have a
positive net income at Brent prices up to USD 35 per barrel.
The plan provides that 85% of funds will be allocated to
strategic investments in the exploration and production segments,
with over USD 1 billion more invested
in those segments than in 2017.
Highlights include drilling over 620 development wells and at
least 12 exploratory wells, using 28 rigs and acquiring over 41,000
kilometers of seismic. This projected 2018 activity represents an
increase of some 140 wells and the use of 16 additional rigs
compared to 2017.
The 96% of the investment will be executed in Colombia, with the remainder allocated to the
Ecopetrol Group's projects in the United
States (Gulf of Mexico),
Mexico, Brazil and Peru.
The investments will allow the Ecopetrol Group to resume its
path of production growth, leveraged on some 20 pilot projects to
implement improved recovery technologies. 2018 production is
projected at 715,000 to 725,000 barrels of petroleum-equivalent per
day.
Investments in the transportation and refining segments,
equivalent to 14% of the plan, will be oriented toward ensuring the
reliability, integrity, performance standards and operating
efficiency of the entire oil pipeline and polyduct network and the
Barrancabermeja and Cartagena
refineries.
Next year Ecopetrol expects to see the materialization of
synergies and benefit from having two complementary refineries, one
located in the middle of the country and the other on the Caribbean
Coast, with capacity to achieve efficiencies in purchasing and
crude mixtures, fuel production and exports.
In 2018, Ecopetrol anticipates stable and safe operations at the
new Cartagena refinery, which will
be capable of self-sustained financing, funding its own investments
and generating profits, with an estimated EBITDA of at least
COP 500 billion.
The investment plan will be financed with internal cash
generation, and currently does not anticipate having to access
financing sources, which demonstrates the efficiency achieved by
the Company and resilience in a low-price environment.
Ecopetrol's solid cash position of USD
4,300 million and a Gross Debt / Ebitda level of 2.1 times
at the end of the third quarter of 2017 confirm the financial
flexibility for inorganic growth focused on the increase in
reserves.
The plan includes the benefits of the 2016 Colombian tax reform,
the effective tax rate will decrease between 7 to 11% as a result
of the elimination of the wealth tax and a lower income tax rate
from 40% to 37% and operating results of the subsidiaries.
The Ecopetrol Group's 2018 priorities will continue to be
operational excellence, its commitment to ethics and transparency,
industrial safety as a pillar of its operations, the care of its
employees, the protection of the environment and growth with
communities in a framework of shared prosperity and safe
operations.
This release contains statements that may be considered
forward looking statements within the meaning of Section 27A of the
U.S. Securities Act of 1933 and Section 21E of the U.S. Securities
Exchange Act of 1934. All forward-looking statements, whether made
in this release or in future filings or press releases or orally,
address matters that involve risks and uncertainties, including in
respect of the Company's prospects for growth and its ongoing
access to capital to fund the Company's business plan, among
others. Consequently, changes in the following factors, among
others, could cause actual results to differ materially from those
included in the forward-looking statements: market prices of oil
& gas, our exploration and production activities, market
conditions, applicable regulations, the exchange rate, the
Company's competitiveness and the performance of Colombia's economy and industry, to mention a
few. We do not intend, and do not assume any obligation to update
these forward-looking statements.
For further information contact:
Capital Markets
Manager
María Catalina
Escobar
Telephone: +571-234-5190
Email: investors@ecopetrol.com.co
Media Relations (Colombia)
Jorge Mauricio
Tellez
Telephone: +571-234-4329
Email: mauricio.tellez@ecopetrol.com.co
View original
content:http://www.prnewswire.com/news-releases/ecopetrol-will-invest-between-usd-35-to-usd-4-billion-in-2018-300560877.html
SOURCE Ecopetrol S.A.