SAP sued by o9 Solutions over alleged trade secret theft
Ecopetrol's Q3 2025 earnings report revealed a significant miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.52 against a forecast of $1,620 and actual revenues of $14.3 billion compared to a forecast of $28.32 trillion, resulting in a surprise of -99.97% and -99.95% respectively. Despite this, the stock rose by 3.75% to $10.01, reflecting a positive investor sentiment post-announcement.
Key Takeaways
- Ecopetrol's Q3 2025 EPS and revenue significantly missed forecasts.
- The stock price increased by 3.75% following the earnings release.
- The company achieved COP 4.1 trillion in savings through efficiency programs.
- Ecopetrol's renewable energy initiatives and energy transition investments are progressing.
- The company maintained a strong operational performance with high production and refining throughput.
Company Performance
Ecopetrol delivered a mixed performance in Q3 2025, with significant shortfalls in expected earnings and revenue. However, the company demonstrated resilience through operational efficiencies and a strong focus on renewable energy projects. Compared to its peers, Ecopetrol maintained competitive crude differentials and robust electricity demand growth, despite a challenging market environment marked by a 15% decline in Brent prices year-to-date.
Financial Highlights
- Revenue: $14.3 billion, significantly below forecasts.
- Earnings per share: $0.52, missing expectations by a large margin.
- EBITDA: COP 12.3 trillion with a 41% margin.
- Net Income: COP 2.6 trillion.
- Year-to-date EBITDA: COP 36.7 trillion.
Earnings vs. Forecast
Ecopetrol's Q3 2025 results fell short of expectations, with EPS and revenue surprises of -99.97% and -99.95%, respectively. This substantial miss contrasts with previous quarters where the company met or exceeded forecasts, signaling potential challenges in aligning projections and actual performance.
Market Reaction
Despite the earnings miss, Ecopetrol's stock rose by 3.75% to $10.01 post-earnings. This movement might reflect investor confidence in the company's strategic direction and operational efficiency rather than immediate financial results. The stock's performance is within its 52-week range, suggesting a stable long-term outlook amidst short-term volatility.
Outlook & Guidance
Looking forward, Ecopetrol remains committed to resilience and cost control, aiming to reduce lifting costs below $12 per barrel. The company is also focused on energy transition investments, maintaining a dividend distribution between 40-60% of profits. Future guidance includes plans for continued efficiency improvements and strategic partnerships to enhance portfolio value.
Executive Commentary
CEO Ricardo Roa emphasized the company's ability to maintain solid operations amid volatility, stating, "We continue to demonstrate that even amid volatility, it is possible to maintain solid operations, disciplined financial management, and clear strategic vision." Rafael Guzmán, Executive VP of Hydrocarbons, reiterated the commitment to reducing lifting costs and maintaining production in key assets.
Risks and Challenges
- Exchange rate fluctuations could impact profitability.
- Volatile Brent prices present ongoing market challenges.
- Compliance and sanctions risks require careful monitoring.
- The energy transition demands significant capital investment.
- Potential geopolitical tensions could affect operations.
Q&A
During the earnings call, analysts inquired about Ecopetrol's plans for the Permian assets, with executives confirming no divestment plans. Questions also focused on partnerships to maximize portfolio value and strategies to mitigate compliance risks. The management's responses highlighted a commitment to maintaining financial obligations and exploring strategic opportunities.
Full transcript - Ecopetrol SA ADR (EC) Q3 2025:
Natalia, Conference Operator, Ecopetrol: 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. There will be a questions and answers session at the end of the presentation. 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 Guzmán, 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 Roa, CEO, Ecopetrol: Welcome to Ecopetrol Group's third quarter 2025 earnings call. Over the last nine months, we have been focusing our efforts on reinforcing our core business operation, maintaining strict financial discipline, and advancing profitable and strategic projects driven by energy transition and security for the country. These pillars have enabled us to effectively navigate and successfully face volatility in good oil market besides exchange rate fluctuations, mitigating external pressures, remaining strongly aligned toward achieving our 2025 strategy objectives. Let's move on to 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 nine months, the average production was 751,000 barrels per day, placing us near to the top of our annual guidance range.
This was driven by the strong contribution from strategy access in Colombia, SASA Caño Sur and CPO9, as well as the Permian Basin in the US and targeted actions to mitigate deferred production in Caño Limón oil fields. Exploration activity exceeded expectations, with 10 oil drills and three currently underway for the remaining of 2025 reinforcing Colombia's natural gas potential. Through transportation, we have achieved an average throughput of 1,098,000 barrels per day, as of September, supported by a cutting-edge operational solution 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 nine-month period following the completion of major maintenance programs.
Finally, we launched a multimodal logistics initiative between Barrancabermeja and Cartagena to export solid asphalt monthly, with projected annual benefits ranging from $1 million-$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 front, we have sustained a highly competitive crude differential enabled by a proactive marketing strategy that captured value in a low-price environment. 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 roadmap 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 one of the best companies to work for in the energy sector. As part of our decarbonization strategy, we have successfully reduced greenhouse gas emissions by 379,000 tons of CO2 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 Laiguana solar farm at the Barrancabermeja refinery. This milestone strengthens both the competitiveness and sustainability of our energy supply. To leverage this initiative, 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 in 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 rates us at the very satisfactory level, with our workplace environment index improving from 60 to 68, reflecting our focus on employee well-being, sustainable growth, and long-term value creation. These achievements confirm 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, not without first thanking him for his results during the two 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, Executive VP of Hydrocarbons, Ecopetrol: 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, eight funded by the Ecopetrol Group, two drilled under a sole risk scheme by our partners, and three currently in progress. The declaration of commerciality of Toritos and Salvador Discoveries in Llanos 123 block enabled the incorporation of proved reserves and continued resources, achieving four commerciality declarations so far this year. The ANH approved a four-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 delimitation phase of the discovery was successfully completed, marking a key milestone in the project's 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 740,000-750,000. 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 CPO9, 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 Caño Limón field, we achieved an incremental production of 4,400 barrels of oil per day compared to the previous quarter. On the gas front, the Florenia UP-16 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 Chichimeni 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 two key drivers: first, the normalization of operations in Llanos Norte, and second, the recovery of the deliveries from refineries following the first half maintenances. Financially, the business remains robust, with a growing EBITDA trend and a stable net income throughout the year. Key achievements during this quarter include strategic advances that maximize infrastructure utilization and enhance system efficiency and flexibility, such as the commissioning of the connection between Coveñas and Barrancabermeja refinery through the reversal of the Coveñas-Aracucho 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 recorded 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 regasification infrastructure in Covenas. Continuing with the refining segment results, performance was strengthened by the successful completion of 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 strategy focused on maximizing high-value products. EBITDA continued its upward track, reflecting cost efficiency and a greater operational stability. Notable achievements include the recovery of electrical reliability in Cartagena, with completion of 70% 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 costs, 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 positively to business profitability. This progress has been enabled by initiatives such as reducing fuel oil output through diversification into products like asphalt and arotar, 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 operational efficiency. In the upper left corner, the energy management chart illustrates a gradual and structural reduction in energy intensity per barrel 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 three 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, given 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, Executive VP of Transition Energies, Ecopetrol: 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 guaranteeing 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 2023. In terms of renewable self-generation, we commenced energization of the Laiguana Solar Project in September, adding 26 megawatts of installed capacity. This asset will support cost and emission reductions at the Barrancabermeja refinery and nearby upstream fields. With this addition, Ecopetrol's total operational renewable self-generation capacity now stands at 234 megawatts, delivering cumulative savings of approximately COP 42 billion year to date. Regarding the Winpeche wind farm, we initiated territorial engagement in July in collaboration with different institutional stakeholders to strengthen 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's area of influence. Additionally, Ecopetrol successfully 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 are 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 half-pressuring offloading 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 maintenances 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 of 37 GBTUD between October 10-14, and 43 between October 15 and 16.
We continue to strengthen Colombia's gas supply through commercialization of natural gas from the Florenia field and LPG sourced from our refineries and production sites. Lastly, in August, we broke ground on the CORAN 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. 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 leveraged favorable product and crude differentials, solid productions, and a rigorous efficiency program. These strategies partially offset the material impact of price declines, inflationary pressures on OPEX, and major refinery maintenance and non-recurring 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, contributing 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, non-recurring 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 four key levers throughout the year. First, cross-cutting costs, where the optimized procurement of goods and services controls demand and advances 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. Fourth, the logistics team, optimizing crude blending, 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 had positive effects on lifting costs, cash flow, debt, and CapEx, and will be an integral part of our 2026 strategic plan. Let's move on to 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 secure until the year end. On the tax front, it is worth noting that between January and September, Ecopetrol 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 impacts to mitigate their effects. Yeah, additionally, we can now affirm that the FEPEC Fuel Prices 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 the FEPEC. Regarding exchange rate management, we continued executing FX hedging strategies that protected between 11%-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 to the next slide. Our financing strategy is built on three 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 Banco da Vivienda, which will serve as a liquidity backstop in challenging environments. We are also advancing the structuring 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 2.4 times.
Excluding ISA's debt and the debt related to its acquisition, the ratio was 1.7 times 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 standalone credit profile at BBB-. Let's now move on to the next slide. The third quarter showed strong investment momentum, with cumulative CapEx reaching $4,179 million, representing 72% of the annual plan. Investments were distributed as follows: 62% in hydrocarbons, primarily in exploration and production in metal, strategic refinery projects such as emissions control and fuel quality improvement, 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 Piedmont 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 plan is designed around a price range that allows us to adapt to various scenarios, maintaining capital discipline and ensuring competitive returns. 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 to $12 per barrel, ensuring an efficient and sustainable cost structure. We will maintain strict capital discipline and healthy debt metrics, prioritizing cash preservation to ensure liquidity in adverse scenarios. Additionally, we will incorporate new 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. 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 non-conventional renewable energy, reinforcing our ability to contribute profitably to Colombia's energy security. We will continue to prioritize cost optimization, efficiency 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. Muchas gracias. Thank you. We will begin now the Q&A session. Please ask only two questions to give space to all the attendees. Daniel Guardiola from BTG is online with a question. Mr. Guardiola? Thank you.
Good morning, everyone. Thank you for the presentation. 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? If so, are you considering to sell or is management agreeing to sell it? Could you please give 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? My second question is on the chance that a member of the 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?
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. Thank you. Daniel, buenos días. Daniel, good morning. This is Julián 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. Thank you. Daniel, good morning. This is Rodolfo García, 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. We identify different scenarios and mitigations that can ensure the operation of the company and the compliance of the norms. That is why, in an event like the one you asked about, we have to analyze the specific program in which we had the task to ensure, and keeping in mind that within it, we have the motivation, scope, and measures. Thank you. Daniel, good morning. Camilo Barco.
Just to complement the answer given by Rodolfo regarding the FAC, 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 the strict compliance of all of our financial obligations. Thank you, Camilo. The next question is from Andrés Duarte from Corpri Colombia. Thank you. Good morning to everyone, and thank you for your presentation and for taking my questions. 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 million in the devaluation or revaluation in the operating earnings.
How does it affect, really, the exchange rate? The other question has to do, yeah, the other question has to do with Permian. No, I'm sorry, with Sirius. 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? A large size. I'd like to know how much help and facilitation have you received from the government to expect that by 2026 you have concluded all the consultations needed. Thank you. Daniel, thank you again. This is Camilo Barco. No, my name is Andrés. I'm sorry. Yes, Andrés Duarte. I do apologize. This is Camilo Barco again. Thank you, Camilo.
To answer your first question on the exchange rate, as you've said in your question, it's well known that our revenues 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. I would like to refer to the nine-month period we have so far. Compared to that of last year, it does have a positive effect. Last year, we had an average exchange rate of COP 4,000, COP 3,970, I believe. Today, the rate is at COP 4,132 in average in the same period.
For this year and in this specific period, the contribution is positive, and it adds to the net profit of 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 a rate projected at COP 4,150. Today, the level is lower, closer to COP 3,950, and that would imply we have to take additional measures to compensate this external factor. It is worth highlighting that we have a coverage program which has had positive effects related to the compensation of the exchange rate effect.
Very important in terms of the 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. With this, I would respond, everything has to do with your question with the exchange rate. Again, sorry, I said your name wrong. Andrés, good morning. I am Rafael Guzmán, 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 of the activities for this development. Still, from Ecopetrol, we make an assistance and a close follow-up to help, of course, to meet the program as planned.
When it comes to the government, we have an ongoing desk with the ACP with a timetable that's very specific, and we continuously work with them. I'd like to take this opportunity in your question to thank the DANCP, the efforts and collaboration made to carry out this project with the 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. Thank you. We also have Ricardo Sandoval from Colombia. Buenos días para todos. Good morning for everyone. Thank you for your talk. 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? 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? Thank you. Ricardo, good morning. Camilo Barco again. 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 and this controversy on the VAT for Ecopetrol. This is first. 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 of Cartagena.
Within that 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 kindly 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.
I would like to say that anyway, any event or situation different to what I have 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 of one. We trust that according to the statement by DIAN, this will not proceed. 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. Thank you. The questions next will be made in English. Please remember all the analysts to choose on the interpretation, the language in which the question is made. Otherwise, we cannot hear you. Luisa Belén from Morgan Stanley. Hi, team. Thank you so much for this call.
My first question is regarding production that remains sort of flat both year-on-year and quarter-on-quarter basis. What would be the perspectives in terms of for Q25 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? My second question is regarding refining margins, which posted a sequential improvement. What would you believe is a normalized level of refining EBITDA per barrel, and what would be the steps going forward to reach these levels? Thank you. Luisa, good morning. This is Rafael Guzmán, Corporate VP of Hydrocarbons. Let me take your first question on production, and the second one, Felipe Trujillo will be answering. He is the VP of Refining of Ecopetrol.
As you say, 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 740-750. Surely, we'll be on the higher part of that range. By 2026, we are currently working on the plan, the investment plan. 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 that we've seen this quarter, and we expect it will happen also next year. We're also hoping to be close to the production range that we're giving for 2025 to keep a similar one for 2026. Okay, good morning, Luisa, and thank you for your question.
This is Felipe Trujillo, the VP of Refining and Production. After a lot of overhauls and stops programmed and scheduled, we have focused on five elements that have allowed us to improve the EBITDA and the yields of the refineries. These five 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. 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. La siguiente pregunta. The next question comes from Nicholas Barros of Bank of America. Buenos días para todos.
Como el contrato con JB empezó en junio, ustedes están viendo si lo van a extender o no, y si no, cómo va a ser el trabajo con el activo y también con la volatilidad de los precios del petróleo, cómo ven ustedes la reducción del CapEx? Thank you. Nicolás, muy buenos días. Nicholas, this is Rafael Guzmán, 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 studying 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. As you have said, it will depend on what is agreed with our partner, Oxy, either doing under JV or JOA after this first semester of next year. I believe that that answers your second question related to the levels of investment. We are working on them right now, and we do not have the figures yet. Our interest is to maintain production in the assets of Permian. Le recordamos a todos los analistas. To remind all of the analysts, the language in which you are asking the question, otherwise we cannot hear you. We continue with Guillermo Costa from Goldman Sachs. Thank you for getting my question and congratulations on the results. I have two quick ones.
The first one on catalogation, right? We have been seeing some new 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 a 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? My second question is on EBITDA, right? Specifically for the upstream segment, which came in above what we were expecting, right? EBITDA increased, although oil price remains essentially stable in the quarter and production also came in flat quarter by quarter. Could you please help us better understand what were the main drivers for the enhancement in profitability for the upstream segment? Thank you.
Guillermo, good morning. This is Rafael Guzmán, Corporate VP of Hydrocarbons. I'd like to answer the part of CapEx allocation, and then I'll ask Julián Lemos to talk about this investment. The distribution of capital is always made by investing in assets of higher profitability. That's the exercise that we are undergoing for next year. 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 Parex $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 of more profitability and investments made with partners. Thank you. Guillerme, this is Julián 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. They're plural. While the agreements are made, we will be announcing them to the market. It is 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. Thank you for your question.
We continue with Joel Arrechel. No, let's answer the question on margins. How have we managed to keep margins in our assets? I think that there are three things. First, efficiency and costs. And you have seen the work we've done, for instance, in lifting costs. So this year, in 2025, we could have an inflection point. We have stopped increasing costs, and we have more 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 one of the lines that we had before to export crude oil.
We reverse this to import it, and that way improve the utilization in midstream and the arrival of crude oil necessary for the refinery. 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 Julián. Let's continue with Joao Barrichello from UBS. Hi everyone. Thanks for taking my question. Regarding dividends, year-to-date net income is down by 32% year over year, which implies a lower dividend considering the current policy. That said, do you expect payouts to remain at the higher bound of guidance? Given lower oil prices, is there any discussion on potential changes to the policies? 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?
What would be the main triggers for that? That's it. Thanks. Joao, buenos días. Joao, good morning. 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 dividends distribution policy. 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.
As we have said, the shareholders' meeting will take the final decision on the dividend to be distributed. Joao, this is Rafael Guzmán. Let me answer your second question. Yes, we are committed to have additional reductions of the lifting cost. We have several activities for this. We will continue with our efficiency plan, as you have seen in recent years and this year. We also want to take measures with the assets with lower profitability that have high lifting costs. The activities are turnover of portfolio, 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. We have these two activities: costs and increasing production of these assets of high lifting costs. Thank you.
We have no other questions live. Now we will be reading others. Hernán Poicocha Finance asks, regarding your financing plans, what do you have to issue bonds in the global and local market of bonds? 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. 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 we'll have available to make investments, and also we'll know which are the needs or requirements for financing. When it comes to financing specifically, our goal is to reduce financial costs that we have today.
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. 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 a 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. Juan Pablo Ramírez from Banco da Vivienda asks, could you tell us developments of the possible acquisition of Camacol? Juan Pablo, good morning. Julián Lemos, VP of Strategy and New Businesses.
We cannot talk about this potential topic because of a confidentiality nature. Deal from Strutgers asks, could you provide more details on the new five-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? Give me a second, please. I don't have the name. With regards to the line committed, it's a committed line with a revolving credit at COP 700 billion. It's at a rate of IBR plus 2.65%. Those are the conditions of that line. As the committed line, we will only use it as far as it is required. What's important is that it is available as of now.
José Ortiz from Bancolombia asks, with regards to the suspension of operations in Tibú, how can it be affecting the gas service? And until when this operation will be suspended? José, indeed, we have suspended the operation of the northern part of the field of Tibú, not the entire field. The gas production of this part is less than 1% of the total production of gas we have throughout Colombia. It is an important source for Norte del Santander. As you've mentioned, we are working hard with the authorities of Norte del 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. Thank you. We have no more questions. Let's hear Mr.
Ricardo Roa, the president of Ecopetrol, for final remarks. Parece que tenemos algunos. 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. Thank you all. With this, we end our talk of the third quarter of 2025. Thank you for attending. You may hang up.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.