BOGOTÁ, Colombia, Nov. 13, 2019 /PRNewswire/ -- Ecopetrol S.A.
(BVC: ECOPETROL; NYSE: EC) ("the Company") informs that
today it completed the joint venture transaction
announced last July 31, 2019. Through this
deal, the Company and Occidental Petroleum Corp (NYSE: OXY)
agreed to form a strategic alliance or Joint Venture ("JV")
for the development of unconventional reservoirs in
approximately 97,000 acres of the Permian Basin in the State
of Texas (US).
For these purposes, Ecopetrol Permian LLC, 100% owned by
Ecopetrol S.A., has acquired a 49% stake in Rodeo Midland Basin
LLC, a company incorporated in the State of Delaware, meeting the capital
requirements of such jurisdiction and whose economic activity
will be directed towards the execution of the joint
development plan under the JV. After the transaction,
which has an already announced value of approximately 1.5
billion dollars (50% in cash and 50% in
carry), Occidental will retain 51% of Rodeo Midland Basin
LLC, through its affiliate Occidental Midland Basin LLC.
For the acquisition and closing of the transaction, Ecopetrol
S.A. made an initial payment of approximately 876.5 million dollars (equivalent to 50% of the
total transaction value) comprised as follows:
(i) approximately 750 million dollars corresponding to
its share of the transaction value of the JV and (ii) 126.5
million dollars corresponding to the estimated expenditures of
the development plan in 2019 between the effective
date of the JV (August 1, 2019)
and the rest of the year.
Presently, there are two rigs in operation in the
area. Two wells have been drilled and are in
completion in order to achieve their first
production by the end of 2019. Activity levels are expected
to continue to increase through next year, with four rigs
expected to be in operation by the end of 2020. The JV is
expected to allow the Ecopetrol Group to incorporate proven
reserves of approximately 160 million boe by the end of
2019.
This transaction is aligned with Ecopetrol's strategic
priorities outlined in the 2019-2021 business plan,
which are focused on reserves and production
growth under strict capital discipline, supported by
exploration activities, enhanced oil recovery, unconventional
resources and the internationalization of operations. It
also strengthens Ecopetrol's relationship with
a respected, strategic
partner, highly experienced in the development of
unconventional resources.
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, please
contact:
Head of Capital Markets (a)
Carolina Tovar Aragon
Phone: (+571) 234 5190
E-mail: investors@ecopetrol.com.co
Media Relations (Colombia)
Jorge Mauricio Tellez
Phone: (+ 571) 234 4329
E-mail: mauricio.tellez@ecopetrol.com.co
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SOURCE Ecopetrol S.A.