Ecopetrol S.A. (NYSE:EC) Q3 2025 Earnings Call Transcript

Ecopetrol S.A. (NYSE:EC) Q3 2025 Earnings Call Transcript November 15, 2025

Operator: Good morning. My name is Natalia, and I will be your operator today. Welcome to Ecopetrol’s earnings conference call, in which we will discuss the main financial and operating results of the second quarter of 2025. [Operator Instructions] Before we begin, it is important to mention that the comments in this call by Ecopetrol’s senior management include projections of the company’s future performance. These projections do not constitute any commitment as to future results, nor do they take into account risks or uncertainties that could materialize. As a result, Ecopetrol assumes no responsibility in the event that future results are different from the projections shared on this conference call. The call will be led by Mr. Ricardo Roa, CEO of Ecopetrol; Rafael Guzman, Executive Vice President of Hydrocarbons; Camilo Barco, CFO; and Bayron Triana, Executive Vice President of Transition Energies.

Thank you for your attention. Mr. Roa, you may begin your conference.

Ricardo Barragan: Welcome to Ecopetrol Group’s Third Quarter 2025 Earnings Call. Over the last 9 months, we have been focusing our efforts on reinforcing our core business operation, maintaining a strict financial discipline, and advising profitable on strategic projects, driven by energy transition and security for the country. These pillars have enabled us to effectively navigate and successfully face volatility in crude oil market, the sites, exchange rates fluctuations, mitigating external pressures, remaining strongly aligned toward achieving our 2025 strategy objectives. Let’s move on the next slide, please. From the operations side, we continue to demonstrate robust operational performance across all business segments, sustaining elevated production levels, consolidating the recovery in refining following first half maintenance, as well as delivering outstanding results in transportation.

Over the last 9 months, the average production was 751,000 barrels per day, placing us near to the top up of our annual guidance range. This was driven by the strong contribution from strategic actions in Colombia, such as Cano Sur and CPO-09, as well as the Permian Basin in the U.S. and targeted actions to mitigate different production in Cano Limon oil fields. Exploration activity exceeded expectations with 10 oils drilled and 3 currently underway for the remaining of 2025 reinforcing Colombia’s natural gas potential. In transportation, we have achieved an average throughput of 1,098,000 barrels per day as of September, supported by a cutting-edge operational solutions to effectively mitigate external disruptions. Key strategic milestones include the Covenas-Barrancabermeja connection via the reversal of the Covenas-Ayacucho system and regulatory approvals from the Environmental Authority for LNG reception and regasification infrastructure in Covenas, hence advancing the country’s energy security agenda as well as enabling profitable system adaptation.

Refining operations rebounded strongly, reaching 413,000 barrels per day over the 9-month period following the completion of major maintenance programs. Finally, we launched a multi-model logistics initiative between Barrancabermeja and Cartagena to export solid asphalt monthly with projected annual benefits ranging from $1 million to $2 million. Let’s move on to the next slide, please. Our solid operating performance and a disciplined cost management strategy drove a clear recovery versus the previous quarter with an 11% increase in EBITDA to a margin of 41% and a 42% growth in terms of net income. On the commercial term, we have sustained a highly competitive crude differential, enabled by a productive marketing strategy that captures value in a low price environment.

Q&A Session

Ecopetrol continues executing its efficiency and profitability agenda, which contributed with COP 4.1 trillion by the end of the third quarter. These results reflect our ability to reduce and control costs, generate revenue and ensure disciplined CapEx execution. Year-to-date, investment reached nearly $4.2 billion, representing 72% of our annual target, fully aligned with the strategy growth map communicated to the market. Let’s move on to the next slide, please. We are making consistent progress on our sustainability agenda while positioning Ecopetrol as 1 of the best companies to work for in the energy sector. As part of our decarbonization strategy, we have successfully reduced greenhouse gas emission by 379,000 tons of Tier 2 equivalent as of September, an impact comparable to the annual energy consumption of 300,000 Colombian households.

Our renewable energy capacity has reached 234 megawatts, driven by commissioning of the La Iguana Solar Farm at the Barrancabermeja refinery. This milestone strengthens much the competitiveness and sustainability of our energy supply. To deliver these initiatives, we have invested over COP 321 billion in our sustainable territorial development portfolio, generating inclusive economic and social growth in the regions where we operate. Our commitment with sustainability has been recognized by the Global Compact Network Colombia, which highlights our best practice and sustainable development. Additionally, we obtained the ISO 37001 certification, reflecting Ecopetrol’s dedication to ethical business conduct and compliance with international anti-bribery standards.

We are also proud of the progress made in strengthening our organizational culture. The Great Place to Work, institute rate us at the very satisfactory level, with our Workplace Environment Index improving from 60 to 68, reflecting our focus on employee wellbeing, sustainable growth and long-term value creation. These achievements confirmed our strategic commitment to energy transition, operational excellence and value generation for our shareholders and stakeholders. Now I give the floor to Rafael, who will talk to us about the Hydrocarbons line. Note without first, thanking him for his results during the 2 years as Executive Hydrocarbon Vice President. His contributions to reaching these achievements were fundamental for the consolidation of our strategy.

We wish you success in your new role within the Ecopetrol Group.

Rafael Guzmán: Thank you, Ricardo. During the third quarter, we achieved key milestones in exploration and production that strengthened the competitiveness of our portfolio. Among the main developments we find, the drilling of 10 exploratory wells, 8 funded by the Ecopetrol Group, 2 drilled under a sole risk scheme by our partners and 3 currently in progress. The declaration of commerciality of Toritos and Saltador discoveries in Llanos 123 block, enabling the incorporation of proved reserves and continued resources, achieving 4 commerciality declarations so far this year. The ANH approved a 4-year extension of the Piedemonte exploration and production agreement, allowing the drilling of a new exploratory well and opening opportunities in areas nearby existing infrastructure.

Throughout the current year, the business case, the limitation phase of the discovery was successfully completed, marking a key milestone in the projects development. Regarding feasibility activities, the prior consultation process is underway with the 120 certified communities for the submarine, pipeline and beach crossing. This process, led by the National Authority for Prior Consultations, DANCP, has reached 52% progress. On the production front, we reached a total accumulated production of 751,000 barrels of oil equivalent per day, in line with the target range of 740,000 to 750,000. This result reflects the strength of our diversified production portfolio with the highest levels of domestic crude production since 2021, and a record international production.

Domestic crude production contributed with 519,000 barrels of oil per day, driven mainly by Caño Sur and CPO-09, which together added 24,000 additional barrels per day compared to the previous year. International production was supported by operations in the Permian, which reported an average annual net production of 106,000 barrels of oil equivalent per day before royalties. This represents 14% of the Ecopetrol Group’s total production. Additionally, we achieved an accumulated EBITDA of $691 million, with a margin of 78% and capital savings of approximately 17% compared to the annual investment plan. Thanks to mitigation strategies for deferred production in the Cano Limon field. We achieved an incremental production of 4,400 barrels of oil per day compared to the previous quarter.

On the cash front, the Florena UP16 development well began production on October ’19, reaching an estimated sales volume of 12 million cubic feet per day. Enhanced recovery continues to be a key component of Ecopetrol Group’s current and future production, representing 41% of total output as of September with 308,000 barrels of oil equivalent per day. Technologies such as tertiary recovery through air injection in the Chichimene field have enabled the addition of approximately 915 million barrels of oil equivalent in gross contingent resources. Let’s move to the next slide. For the third quarter of 2025, the midstream segment reaffirmed its operational recovery, supported by increased transported volumes and financial stability. We transported an average of 1,118,000 barrels per day, representing a 1% increase compared to the third quarter of 2024 and a 3% increase versus the second quarter of 2025.

This performance reflects 2 key drivers: First, the normalization of operations in Llanos Norte; and second, the recovery of the deliveries from refineries following the first half maintenance. Financially, the business remains robust with a growing EBITDA trend and a stable net income throughout the year. Key achievements during this quarter include the strategic advances that maximize infrastructure utilization and enhanced system efficiency and flexibility, such as the commissioning of the connection between Covenas and Barrancabermeja refinery through the reversal of the Covenas-Ayacucho system. This initial phase enables the import of 6,000 barrels of oil per day at a competitive tariff, expanding the crude basket available for refining and generating additional transported volumes for the segment.

We record historic utilization levels in the Vasconia-Barrancabermeja refinery system and the Colombian oil pipeline, ODC. Finally, in the area of diversification and sustainability, the segment received environmental approval from ANLA to develop LNG receiving and reclassification infrastructure in Covenas. Continuing with the refining segment results, performance was strengthened by the successful completion of the scheduled maintenances, increased unit throughput, strong margins and sustained improvements in operational efficiency. Consolidated throughput reached approximately 429,000 barrels of oil per day, making this the second highest quarterly level in the segment’s history. This result reflects the positive impact of completed maintenances, efforts to increase throughput, profitability and a reduction in fuel oil production.

From January to September, the integrated gross refining margin grew by 22% compared to 2024, driven by an increased throughput in a favorable price and demand environment. This performance also reflects a strategic focus on maximizing high-value products. EBITDA continued its upward track, reflecting cost efficiency and a greater operational stability. Notable achievements include the recovery of electric reliability in Cartagena with completion of 30% on key milestones, solid asphalt exports and the launch of marine fuel blended with biodiesel, aligned with our sustainability strategy. Let’s move to the next slide. The efficiency program has strengthened its role as a key driver of value creation in the Hydrocarbons business line. We have executed targeted actions that have been crucial in maintaining a competitive unit cost.

As of September 2025, the total unit cost in the Hydrocarbons business line stood at $45.5 per barrel, reflecting a reduction of $1.8 compared to the same period last year. Lifting costs reached $11.8 per barrel. That is $0.44 lower than in 2024, successfully meeting the target announced to the market. Despite the impact of exchange rate fluctuations on dollar denominated cost, the trend in local currency confirms our operational control, financial discipline and commitment to driving a structural shift in key performance indicators. In refining, the conversion index at the Barrancabermeja refinery continues its trend upward, demonstrating that operational efficiencies also contribute positive to business profitability. This progress has been enabled by initiatives such as reducing fuel oil output through diversification into products like asphalt and [ artar ], which have allowed us to redirect streams toward higher-value products such as diesel.

Let’s move to the next slide. The Exploration and Production segment indicators show tangible progress in key operational efficiency. In the upper left corner, the energy management chart illustrates a gradual and structural reduction in energy intensity per barrels of fluids produced, partially offsetting the increased demand associated with higher fluid volumes. Another key area has been the efficient cost management in subsurface operations, where over the past 3 years we have reduced both the number of maintenance required and the cost per intervention. In dilution, we have identified more cost-effective substitutes for naphtha such as LPG and other additives. Additionally, even Brent prices levels, the value of naphtha decreased by 13% compared to the same period last year.

Regarding investment maximization, we have improved key drilling metrics, including cost per foot drilled and average execution times. Furthermore, synergies in infrastructure have allowed us to fully leverage existing facilities, optimizing resources and generating greater value. Now I will turn it over to Bayron, who will share the main milestones from the energy transition business line.

Bayron Triana Arias: Thank you, Rafael. Good morning, everyone. For the Ecopetrol Group, securing a reliable energy supply is critical to ensuring uninterrupted operations across our value chain. In the third quarter of 2025, our electricity demand increased by 11% compared to the same period in 2023, and by 6% versus 2024. Currently, we account for approximately 10% of the national electricity demand, and this figure is expected to continue growing over the coming years, particularly in the upstream segment. Our strategic focus is not only on warranting energy availability, but also on doing so in a cost-effective and sustainable manner. This is essential to optimize production costs and accelerate progress toward our decarbonization targets.

From a competitiveness standpoint, our demand coverage through self-generation and contracts from the electricity market reached 91% between January and September 2025, up from 80% in the same period of 2024. This higher coverage has contributed to stabilizing our unit cost of electricity supply, enhancing predictability for investment planning and operational decision-making. Notably, the cumulative unit cost of electricity supply as of September decreased by 5% compared to 2024. In terms of renewable self-generation, we commenced energization of the La Iguana solar project in September, adding 26 megawatts of installed capacity. This asset will support cost emission reductions at the Barrancabermeja refinery and thereby upstream periods. With this addition, Ecopetrol’s total operation of renewable self-generation capacity now stands at 254 megawatts, delivering cumulative savings of approximately COP 42 billion year-to-date.

Regarding the Windpeshi wind farm, we shared territorial engagement in July in collaboration with different institutional stakeholders towards strengthened community relations and monitor compliance with the commitments established during the prior consultations. To date, we have completed the follow-up and received more than 50% of the agreements associated with the formalized prior consultations with the communities located in the project area of influence. Additionally, Ecopetrol has fully closed the acquisition of a portfolio of solar projects from Statkraft European Wind and Solar Holding. With this transaction, Ecopetrol becomes the sole owner of the acquired companies. This milestone reaffirms the group’s commitment to the energy transition and the development of renewable solutions to strengthen its operations.

Moving to the next slide. First, I’d like to highlight the announcement of the commercialization of natural gas from the offshore Sirius field by Ecopetrol and Petrobras, with volumes of up to 249 million cubic feet per day and an estimated production start in 2030. Sales contracts are scheduled to be signed no later than December 12, 2025. We’re also advancing the gas supply optionality strategy in the Caribbean region through the Covenas LNG regasification project. This initiative includes the development of a natural gas hub featuring a flooring storage and regasification unit to receive and process imported LNG. Our midstream subsidiary, CENIT, will adapt existing infrastructure to enable efficient gas transportation to inland markets. The tender process for logistics and regasification services was launched on October 14, and is expected to conclude in January 2026.

In October, we implemented a contingency plan to safeguard the national gas supply during scheduled maintenance at the SPEC regasification terminal located in the Caribbean. Measures included strategic demand side management across upstream assets and refineries, as well as substitution with thermal energy sources. This enabled the release of 71 GBTUD to the market with average deliveries or 37 GBTUD between October 10 to 14 and 43 between October 15 and 16. We continue to strengthen Colombia’s gas supply through commercialization of natural gas from the Florena field and LPG sourced from our refineries and production sites. Lastly, in August, we broke ground on the Coral hydrogen project, a key component of our low carbon strategy. As of today, the project has reached 55% completion.

The green hydrogen produced will be integrated into the Cartagena refinery and will be used in the production of sustainable fuels. Commissioning is expected in Q2 2026. I now hand over to Camilo Barco, who will walk us through the financial performance for the period.

Alfonso Camilo Munoz: Thank you, Bayron. This third quarter reaffirms our resilience and discipline in a challenging environment, marked by a nearly 15% decline in Brent prices year-to-date. The Ecopetrol Group demonstrated its ability to adapt, seize opportunities and maintain operational and financial stability. The quarter closed with an EBITDA of COP 12.3 trillion, an EBITDA margin of 41% and a net income of COP 2.6 trillion, surpassing the performance of the previous quarter. This was driven by the recovery in the refining segment, strict OpEx control and improved results from ISA, which offset the impact of exchange rate fluctuations and a low price environment. As of September 2025, cumulative EBITDA reached COP 36.7 trillion, reflecting our strong adaptability through a commercial strategy that leverage favorable product and crude differentials, solid productions and a rigorous efficiency program.

These strategies partially offset the material impact of price declines, inflationary pressures and OpEx and major refinery maintenance and nonrecurring tariffs adjustment in ISA Brazil. The Exploration and Production segment, which is highly sensitive to crude prices, accounted for 53% of EBITDA. Meanwhile, the Transportation, Transmission and Toll Road segment naturally hedged against market volatility, contributed 42%. The remaining 5% came from the Refining segment, which began a recovery path, capturing improved margins in recent quarters. Transmission and Toll Roads contributed COP 2.5 trillion in EBITDA during the third quarter and COP 6.6 trillion year-to-date through September 2025. This was supported by the commissioning of new transmission projects generating revenue, the positive impact of contractual escalators, indexing contract income and stronger performance in the road construction business.

However, nonrecurring events affected year-over-year comparisons, mainly due to the tariff reviews in ISA Brazil during 2024 and 2025, as well as provisions related to [ IDEs ] account receivable. Regarding our efficiency program, we have focused on 4 key levers throughout the year. First, crosscutting cost, where the optimized procurement of goods and services control demand and advance digitalization. Second, maintenance through material reuse, reliability improvements and reductions in operating costs. Third, energy costs, where we promoted energy efficiency, substitute fuels, utilized gases and incorporated self-generated renewable energy to reduce exposure to spot market energy prices. And fourth, the logistics team, optimizing crude lending, liquefied transport and operations.

Thanks to these efforts, we have achieved COP 4.1 trillion in efficiencies this year, 40% above our target for this period. Additionally, the measures announced in the first quarter show 84% progress in cost and expense reduction actions and 77% progress in investment optimization. These measures have a positive effect on lifting cost, cash flow, debt and CapEx and will be an integral part of our 2026 strategic plan. Let’s move on the next slide. We continue to maintain healthy liquidity. As of the end of September, Ecopetrol Group’s cash position stood at COP 14.1 trillion, reflecting an increase of COP 1 trillion compared to the previous quarter. This result was driven by operational activity and the sale of short-term debt securities, which enabled us to reduce short term debt, meet debt service obligations and finance investment plans.

In this regard, the group’s liquidity is secured until the year-end. On the tax front, it is worth noting that between January and September, Ecopetrol SA and the Cartagena refinery accumulated tax credits totaling COP 12.2 trillion. In parallel, COP 5.2 trillion of these credits have been offset against tax obligations through the year. From a cash perspective, the company is actively managing the working capital impact to mitigate their effects. Additionally, we can now affirm that the FEPC fuel price stabilization fund no longer represents a material impact on our working capital. Accumulations during the second and third quarters were below COP 1 trillion, reflecting the government’s effort to reduce this account as well as the influence of international prices and exchange rate on the balance.

We have also made 80% progress toward our internal working capital management goal set in March, thanks to coordination with subsidiaries, optimization of financial expenses and the gradual unwinding of repos on securities received as payment from FEPC. Regarding exchange rate management, we continued executing FX hedging strategies that protected between 11% and 15% of dollar-denominated revenues during the third quarter. We also initiated coverage for the period from May to December 2026. This active management allows us to partially mitigate market risk associated with the Colombian peso’s appreciation. Now let’s move on the next slide. Our financing strategy is built on 3 basic pillars. First, the prepayment of short-term obligations, including treasury loans and repos with a commitment to close the year without incremental debt associated with the organic plan.

Second, the renegotiation of all bank debt currently underway, aiming to reduce dollar-denominated debt cost by up to 105 basis points and local debt cost by 85 basis points. This operation has been already approved by the Ministry of Finance and Public Credit, reaffirming the financial system confidence in Ecopetrol’s strength. Third, new facilities such as the committed COP 700 billion credit line announced with Davivienda, which will serve as a liquidity backstop in challenging environment. We are also advancing the restructuring of financial schemes for the inorganic opportunities in renewable energy, aiming to reduce the group’s energy cost. This comprehensive management allows us to maintain healthy debt levels. As of September, the gross debt-to-EBITDA ratio stood at 2.4x.

Excluding ISA’s debt and the debt related to its acquisition, the ratio was 1.7x below the industry median. A key highlight is the reaffirmation of our credit rating by Fitch Ratings, which emphasizes Ecopetrol’s strategic importance to the country, our financial strength and operational stability. The global credit rating was maintained at BB+ and the stand-alone credit profile at BBB-. Let’s now move on the next slide. The third quarter showed strong investment momentum, with cumulative CapEx reaching $4.179 billion, representing 72% of the annual plan. Investments were distributed as follows: 62% in Hydrocarbons, primarily in Exploration and Production met, strategic refinery projects such as emissions control and fuel quality improvements and ensuring continuity of refinery and transportation network operations; 13% in Energies for the Transition, focused on strengthening the gas value chain in the Caribbean and Piedemonte regions; and 25% in Transmission and Toll Roads, with over $1 billion invested.

Of this, 91% went to energy transmission in Brazil, Peru and Colombia, 8% to road infrastructure in Panama and Chile and 1% to the telecommunications sector in Colombia. 62% of investments were executed in Colombia, followed by Brazil with 21%, the United States with 12%, and other countries with 5%. Growth investments accounted for 75% of the total, with the remainder allocated to maintenance needs. In terms of capital discipline, we have achieved 77% progress on measures aimed at capturing CapEx flexibility with a target of $500 million to safeguard production for the remainder of the year. It is important to highlight that our investment plans is designed around the price range that allows us to adapt to various scenarios, maintaining capital discipline and ensuring competitive return.

Looking ahead to 2026, we anticipate a more challenging price environment. Our focus will be on strengthening the group’s resilience and competitiveness. We are committed to keeping the lifting cost low $12 per barrel, ensuring an efficient and sustainable cost structure. We will maintain a strict capital discipline and healthy debt metrics, prioritizing cash preservation to ensure liquidity in adverse scenarios. Additionally, we will incorporate through efficiency initiatives to maximize value and deliver attractive returns to our shareholders. The Ecopetrol Group continues to demonstrate that even amid volatility, it is possible to maintain solid operations, disciplined financial management and clear strategic vision. Now I will turn it over to the President, who will present the conclusions.

Ricardo Barragan: Thank you, Camilo. The results delivered this quarter put us in a strong position to meet our operational and financial objectives for 2025. Finally, we are advancing in the transformation of our infrastructure to support new energy sources and the ongoing integration of nonconventional renewable energy, reinforcing our ability to contribute profitably to Colombians’ energy security. We will continue to prioritize cost optimization, business enhancement, operational agility and monitoring of market dynamics and global developments. These actions have enabled us to reverse adverse trends across all key performance indicators while aligning the growth work for our 2026 financial plan, which will be announced shortly. We appreciate your participation and invite you to continue with the Q&A session.

Operator: [Interpreted] [Operator Instructions] Daniel Guardiola from BTG is online with a question.

Daniel Guardiola: [Interpreted] I have a couple of questions. One has to do with Permian. Given the public discussion there is about a possible sale of this asset, could the administration please clarify if there is a formal instruction or a political request or a government expectation to sell this asset? And if so, are you considering to sell and is management agreeing to sell it? Could you please give us the rationale behind this? And if there is an analysis made that reviews the creation or destruction of the value if this Permian is sold? And my second question is, on the chance that a member of senior management of Ecopetrol will be on the OFAC list, given the recent political setting, has the company evaluated the risk to have a management member on this list? And what do you think would be the impact it would have on Ecopetrol when it comes to financing, accessing markets and defaults, relationships with vendors? Those are my two questions.

Julian Lemos Valero: [Interpreted] Daniel, this is Julian Lemos. I am the VP of Strategy and New Businesses. Let me answer the first question. As we said recently, with regards to the requirements made by local governments, Ecopetrol and its shareholders are not interested in the divestment of Permian. However, any decision that has to do with the portfolio of Ecopetrol will be analyzed with rigor and discussed within the Board of Directors, which is the body in charge of these decisions.

Rodolfo García Paredes: [Interpreted] Daniel, good morning. This is Rodolfo Garcia, the Chief Compliance Officer. Ecopetrol has a corporate governance system and a compliance that’s sound and robust. Within that framework, we make an ongoing monitoring of our setting, and we evaluate this and other scenarios based on risk. So we identify different scenarios and mitigations that can ensure the operation of the company and the compliance of the norms. That’s why in an event like the one you asked about, we have to analyze the specific program in which we have the task to ensure and keeping in mind that within it, we have the motivation, scope and measures.

Alfonso Camilo Munoz: [Interpreted] Camilo Barco. Just to complement the answer given by Rodolfo regarding the [ FAC ]. Well, it’s worth mentioning that aligned with the analysis of scenarios and depending on the program magnitude and scope of eventual sanctions, we have foreseen a mitigation plan. And within it, there are specific measures to reduce or eliminate any risk related to access to capital markets and with a strict compliance of all of our financial obligations.

Operator: [Interpreted] The next question is from Andres Duarte from Corficolombiana.

Andres Duarte: [Interpreted] My first question has to do with the exchange rate. Could you give us more details about the impact it has on the revaluation which you had not foreseen in your recent plans? I have a sensibility of COP 0.7 billion in the devaluation or revaluation in the operating earnings. So how does it affect really the exchange rate? And the other question has to do — yes. The other question has to do with Permian. No, I’m sorry, with Sirius. And then specifically, I’d like to know what assistance is the national government providing to facilitate the advancement of this project? Are you giving priority to this strategic project for the country? Or are you acting as any other company would of large size? I’d like to know how much help and facilitation have we received from the government to expect that by 2026, you have concluded all the consultations needed?

Alfonso Camilo Munoz: [Interpreted] This is Camilo Barco again. To answer your first question on the exchange rate. Well, as you’ve said in your question, it’s well known that our revenue are basically in dollars, and that makes us have an important impact from the exchange rate. When it comes to the sensibility analysis, you’re right that sensibility for every COP 100 of variation in the exchange rate can have an effect of COP 700 billion on the net profit for the entire period of the year. So I would like to refer to the 9 month period we have so far. Compared to that of last year, it does have a positive effect last year. We had an average rate of COP 4,000 — COP 3,970, I believe. But today, the rate is at COP 4,132 and average in the same period.

So for this year and in this specific period, the contribution is positive, and it adds to the net profit, COP 600 billion specifically related with the EBITDA. It has a positive contribution of COP 1.1 trillion. The comment that you made related to the last quarter has made us take additional measures, and our financial plan for 2025 was built with the rate projected at COP 4,150. But today, the level is lower, closer to COP 3,950. That would imply to have to take additional measures to compensate this external factor. It’s worth highlighting that we have a coverage program, which has had positive effects related to the compensation of the exchange rate effect. And very important, in terms — in accounting terms, what we’ve seen is a very good effect from the coverages or the hedge accounts that will allow us to have this exchange to our equity and neutralize the effect on our income statement.

And with this, I would respond, everything has to do with your question with the exchange rate. And again, sorry, I said your name wrong.

Rafael Guzmán: [Interpreted] I am Rafael Guzman, the Corporate VP of Hydrocarbons, and I’d like to answer your question regarding Sirius. Firstly, I’d like to remind you that the operator is Petrobras, and Petrobras leads all the activities for this development. Still, from Ecopetrol, we make an assistance in a close follow-up to help, of course, to meet the program as planned. When it comes to the government, we have ongoing desk with the ACP with the timetable that’s very specific. And we continuously work with them. I’d like to take this opportunity and your question to thank the DANCP. The efforts in collaboration made to carry out this project with a program that has been established. Today, within the plan that we — in which we are ending the consultations of flow by July 2026, and then we will begin the consultations for the connection to the Ballena station in La Guajira.

Again, with these activities made, we clearly have established how to act and meet the timetable and the gas delivered as mentioned.

Operator: [Interpreted] We also have Ricardo Sandoval from Bancolombia.

Ricardo Andres Sandoval Carrera: [Interpreted] I have a question on the process with the DIAN. I’d like to know if you have an embargo beyond everything you have, would it cause a default of the bonds? Is there — are there clauses as well in the prospects of the bonds and the effects of this embargo? Could you please clarify this in this call?

Alfonso Camilo Munoz: [Interpreted] Camilo Barco again. And thank you for your question. First, I’d like to highlight here that recently, the DIAN or the Tax Authority of Colombia stated officially and specifically, this discards any embargo in this controversy on the — that for Ecopetrol. So this is first. And in addition to that statement within the stage of co-active charges, Ecopetrol Reficar have taken all the measures to protect the rights of Ecopetrol and of its refinery that at Cartagena. And within the order of ideas, we have seen tutelas presented that allow to avoid at all costs the possibility of a measure which, for us, in our opinion, has no application in this case. In addition to this tutela, we requested an anticipated intervention to the control agencies, which today are supervising constantly the activities and give us the peace of mind and security that as a measure like this could affect the normal operation of Ecopetrol.

The control entities will be assisting in the protection of this operation. With that said, I’d like to underscore that so far, Ecopetrol has been meeting very timely, all of its financial obligations. We are aware and careful to protect with all of our capabilities, the capacity to serve and meet our financial obligations. And therefore, we still meet our timetable in time and amount. And simply, I’d like to say that anyway, an event or a situation different to what I mentioned, Ecopetrol has also taken measures its projection of its cash flow to serve any contingencies. Of course, any situation like this will depend on the amount determined. We are not aware one we trust that according to the statement by DIAN, this will not proceed. But depending on the amount of these measures, different protections and decisions will be made to ensure the compliance — timely compliance of our obligations with the financial market.

Operator: [Interpreted] The questions next will be made in English. [Operator Instructions] Luisa Belin from Morgan Stanley.

Luisa Belin: So my first question is regarding production. That remains sort of flat both year-on-year and quarter-on-quarter basis. So what would be the perspective in terms of 4Q ’25 production? And how do you envision the production growth profile for 2026 amid the oil price volatility scenario, even if results so far are within the guidance from the company? And my second question is regarding refining margins, which posted a sequential improvement. But what would you believe — it is a normalized level of refining EBITDA per barrel and what would be the steps going forward to reach these levels?

Rafael Guzmán: [Interpreted] Luisa, good morning. This is Rafael Guzman, Corporate VP of Hydrocarbons. Let me take your first question on production. And the second, Felipe Trujillo will be answering. He’s the VP of Refining of Ecopetrol. As you say well, we have a production to date of 751 barrels a day — equivalent per day. And we hope that by the end of the year, we will be within the range that we’ve given to the market of 740 to 750. Surely, we’ll be on the higher part of that range. By 2026, we are currently working on the plan, the investment plan. So we have not estimated the production we will have for next year. Undoubtedly, as you’ve mentioned, we have to keep in mind the fall of the oil price, which — that we’ve seen this quarter, and we expect it will happen also next year. But we’re also hoping to be close to the production range that we’re giving for 2025 to keep a similar one for 2026.

Felipe Lopez: This is Felipe Trujillo, the VP of Refining and Production. After a lot of overhauls and stops programmed and scheduled, we have focused on 5 elements that have allowed us to improve the EBITDA and the yields of the refineries. These 5 elements are operating availability, utilization factor, sustained, increase of loads of each refinery, maximization of valuable products. And last but not least, assurance of the decrease of costs. This is the goal for the rest of the year. And for 2026, this should assure in a scenario of good differentials like the ones we’ve seen in the second semester and even for the first semester of 2026 to have good yields when it comes to the refineries.

Operator: [Interpreted] The next question comes from Nicolas Barros of Bank of America.

Nicolas Barros: [Foreign Language]

Rafael Guzmán: [Interpreted] Nicolas, this is Rafael Guzman, Corporate VP of Hydrocarbons, again. As you know well, currently, we have a JV up to mid next year with an investment activity that has been predetermined. Eventually, this JV can be extended or otherwise, we’ll continue working in Permian and specifically in Texas with the JOA we have signed, meaning we can have investments in JV with extension or investments that can be made under the JOA. Currently, we are considering and setting what is more convenient for Ecopetrol and propose this to Oxy at the proper time. When it comes to the expected production for Permian next year, we expect production to be close to what we planned for this year, meaning close to 90,000 barrels per day.

But as you’ve said, it will depend on what’s agreed with our partner, Oxy, either — JV or JOA after the first semester of next year. And I believe that, that answers your second question related to the levels of investment. We are working on them right now, and we don’t have the figures yet. But our interest is to maintain production in the assets of Permian.

Operator: [Interpreted] [Operator Instructions] We continue with Guilherme Costa from Goldman Sachs.

Guilherme Costa Martins: I have two quick ones. The first one on capital allocation, right? We have been seeing some news flow indicating that Ecopetrol could be seeking to divest from specific assets like the Permian. While on the other hand, we saw yesterday the announcement of acquisition of solar plant, right? I just would like to pick your thoughts here on what main assets the company would be seeking to divest from next year? And conversely, which assets do you think would make sense to acquire a stake on? And my second question is on EBITDA, right, specifically for the upstream segment, which came in above what we were expecting, right? EBITDA increase, although oil price remains seasonally stable and the quarter production also came in flat quarter-over-quarter. Could you please help us better understand what were the main drivers for the enhancement in profitability for the upstream segment?

Rafael Guzmán: [Interpreted] Guilherme, this is Rafael Guzman, Corporate VP of Hydrocarbons. I’d like to answer the part of CapEx allocation, and then I’ll ask Julian Lemos to talk about these investments. The distribution of capital is always made by investing in assets of higher profitability. And that’s the exercise that we are undergoing for next year. But in addition, we have other options like the ones we’ve made with partners to provide capital to Ecopetrol’s assets that are not prioritized in our portfolio. You are well aware we have an alliance made with Parex in Putumayo to invest from projects COP 350 million in that area where we do not plan to make investments. We expect this year also to complete another negotiation like this with another partner to give capital to other assets of Ecopetrol. This way, we maximize the value of our portfolio either with our own capital directly in the assets and more profitability and investments made with partners.

Julian Lemos Valero: [Interpreted] Guilherme, this is Julian Lemos, VP of Strategy and New Businesses. Aligned with what Rafael just said, we are analyzing different options in Colombia, in which through different partners, we can together have activities in fields where there is a potential. However, in those fields, we do not have capital assigned to carry out that activity. This is a process that we’ve been working on for the entire year. It’s — they’re plural. While the agreements are made, we will be announcing them to the market. And it’s something that we will continue to do next year. Provided, as Rafael said, we can maximize the profit and production through the incorporation of partners in specific assets.

Operator: [Interpreted] We continue with Joao Barichello.

Alfonso Camilo Munoz: [Interpreted] No, let’s answer the question on margins. How have we managed to keep margins in our assets? I think that there are 3 things. First, efficiency and costs, and you have seen the work we’ve done, for instance, lifting costs. So this year, in 2025, we could have an inflection point. We have stopped increasing cost. We’re — we have more cost — lifting costs despite external pressures like a decrease of the exchange rate compared to the dollar. The other point is the maximization of the utilization of infrastructure. You heard Felipe recently talk about the operating availability, the factor of utilization of refineries. But we’re also doing this in the midstream, as we mentioned, reversing 1 of the lines that we had before to export crude oil.

We reversed this to import it, and that way, improve the utilization in midstream and the arrival of crude oil necessary for the refinery. And third is in the upstream area. And perhaps linked to the other question you made, the optimization of the portfolio of the upstream that I’ve mentioned as well as Julian.

Operator: [Interpreted] Let’s continue with Joao Barichello from UBS.

Joao Barichello: Regarding dividends, year-to-date net income is down by 32% year-over-year, which implies in a lower dividend considering the current policy. That said, do you expect payout to remain at the higher bound of guidance? And given lower oil prices, is there any discussion on potential changes to the policy? And my second one, do you see room for a reduction of lifting costs looking forward? Could we see a return to the $11 per barrel level at some point? And what will be the main triggers for that? That’s it.

Alfonso Camilo Munoz: [Interpreted] This is Camilo Barco. When it comes to the dividends, it’s important to highlight, as you mentioned in your question, that within Ecopetrol, we have a clear policy to distribute dividends that range between 40% and 60% of distributable profit. What we expect for next year and what we’ve been able to see that has been included in the fiscal medium-term policy is that the expectation of our majority shareholder is again to be as it was this year in the range of the dividend distribution policy. So it is possible that this will happen. Our proposal for the distribution of dividends for next year will be within that range, closer to the medium range. But as we have said, the shareholders’ meeting will take the final decision on the dividend to be distributed.

Rafael Guzmán: [Interpreted] Joao, this is Rafael Guzman. And let me answer your second question. And yes, we are committed to have additional reductions of the lifting cost. And we have several activities for this. We’ll continue with our efficiency plan, as you have seen in recent years and this year. But also, we want to take measures with the assets with lower profitability that have high lifting costs. And the activities are turnover of portfolio, which makes — which has to do with the disinvestments of these assets, but also increasing the production of other assets, as we mentioned before, including partners that place the capital and help us also to reduce the lifting costs. So we have these two activities and costs and increasing production of these assets of high lifting costs.

Operator: [Interpreted] Thank you. We have no other questions live. Now we will be reading others. Hernan Goicochea of LatinFinance asks, regarding your financing plans, what do you have to issue bonds in the global and local market of bonds?

Alfonso Camilo Munoz: [Interpreted] Again, this is Camilo Barco. It’s important to repeat, as we’ve said before that Ecopetrol is working right now on its financial plan for 2026. But within this and with the projections and expectations we have regarding the performance of market prices and the efficiencies and savings that we’re focusing on. There, we will know what’s the flow — the cash flow will have available to make investments. And also, we’ll know which are the need to requirements for financing. When it comes to financing, specifically, our goal is to reduce financial costs that we have today. And for that, we’re working on different opportunities when it comes to management to improve the profile, the conditions and specifically the financial cost of these opportunities to finance.

And with this in mind, systematically we monitor the market to see what are the best alternatives. In the capital markets, there are conditions of liquidity and rates that seem to be convenient still. It’s not a decision made yet. And on the short term, it’s not an option when it comes to the capital market. Now we’re working on different alternatives, especially with the financial system, with the banking system. And structuring the financing of projects that will be underway in 2026.

Operator: [Interpreted] Juan Pablo Ramirez from Banco Davivienda asks, could you tell us developments of the possible acquisition of Camacol?

Julian Lemos Valero: Juan Pablo, Julian Lemos, VP of Strategy and New Businesses. We cannot talk about this potential topic because of a confidentiality nature.

Operator: [Interpreted] [indiscernible] asks, could you provide more details on the new 5-year loan facility, what’s the rate? Is it a credit line that’s revolving RCF? Or is it a loan? For this facility, are you profiling an agreement on specific assets or the entire company?

Unknown Executive: [Interpreted] Give me a second, please. I don’t have the name. [ Teo ]. With regards to the line committed, it’s a committed line with a revolving credit at 700 — COP 700 billion. It’s at a rate of IBR plus 2.65. And those are the conditions of that line. As the committed line, we will only use it as far as it is required. But what’s important is that it is available as of now.

Operator: [Interpreted] Jose Ortiz from Bancolombia asks, with regards to the suspension of operations in Tibu, what — how can it be affecting the gas service, and until when this operation will be suspended?

Unknown Executive: [Interpreted] Jose, indeed, we have suspended the operation of the northern part of the field of Tibu, not the entire field. The gas production of this part is less than 1% of the total production of gas we have throughout Colombia. But it is an important source for Norte de Santander. As you’ve mentioned, we are working hard with the authorities of Norte de Santander, the Army, the police, and other authorities to try to reestablish that operation as soon as possible today. The gas has been replaced from other sources. But of course, we’re working to reestablish this operation as soon as possible.

Operator: [Interpreted] Thank you. We have no more questions. Let’s hear Mr. Ricardo Roa, the President of Ecopetrol, for final remarks.

Ricardo Barragan: [Interpreted] Okay. It seems that we have technical issues, but we’d like to give you all special thanks for joining us today and for providing us such interesting questions. We will continue working for the strategic goals of Ecopetrol to guarantee the energy safety of Colombia and to continue advancing in the energy transition of the country. Thank you again. We wish you a very good day.

Operator: [Interpreted] Thank you, all. With this we end our talk of the Third Quarter of 2025. Thank you for attending. You may hang up. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]