Good day, ladies and gentlemen, and welcome to the Ecopetrol SA First Quarter of 2015 Earnings Conference Call. At this time, all participants are in a listen only mode. We will have a question-and-answer session later on and the instructions will follow at that time [Operator Instructions]. As a reminder, this conference is being recorded. Now I would like to welcome our host for today’s conference Ms. Maria Catalina Escobar Head of Corporate Finance and Investor Relations.

Good afternoon, everyone, and welcome to Ecopetrol's first quarter earnings conference call and webcast. Before we begin, it is important to mention that the comments by Ecopetrol's senior management in this call can 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 develop. As a result, Ecopetrol assumes no responsibility in the event that future results are different from the projections shared on the conference call. The call will be led by Mr. Juan Carlos Echeverry, CEO of Ecopetrol and other participants include, Héctor Manosalva, Vice President of Development and Production; Pedro Rosales, Vice President of Refining and Processes; Adriana Echeverri, Vice President of Growth and Strategy; Magda Manosalva, CFO; Max Torres, Vice President of Exploration; Rafael Guzmán, Technical Vice President; Bernardo Castro, Interim Vice President of Commercial and Marketing; , Financial Controller; and Thomas Rueda, CEO of Cenit. We will begin the presentation with the main achievements of the first quarter, followed by the highlights by business segment and the financial results on a consolidated basis under International Finance Reporting Standards or IFRS. We will close with the outlook for the second quarter of the year 2015. I will now turn the call to Mr. Juan Carlos Echeverry, CEO of Ecopetrol.

Thank you, Maria Catalina. Good afternoon to you all. As you know, I became CEO of Ecopetrol on April 6, so I’ve been in charge of the Company a little over month. I would like to begin this session by mentioning two elements that had a profound impact on our results in the first quarter 2015 were handed by crude and the other one the behavior of the exchange rate. The price of crude oil was particularly low as a result of restructuring balances between the global supplier demand and OpEx decision not to reduce its production level, as you all know. In fact Brent and Maya crudes, the main benchmarks for Ecopetrol, fell around 50%, affecting the Company's revenues. Coupled with this the Colombian peso on the sharp devolution against the U.S. dollar since the end of 2014 from approximately COP$2,180 per $1in the last quarter of 2014 to COP$2,480 in the first quarter of 2015. The depreciation of exchange rate had two different effects on the company’s financial statements; one, a positive effect given that most of our operations revenue is dollar denominated while many of our operation expenditures are peso dominate, and two, an adverse effect in the non-operational line due to our net liability position in the balance sheet meaning the difference between and our liability and assets in dollars. Let’s go to the next slide to see the company’s main achievement in the first quarter of 2015. Despite the weakening of crude oil prices in the first quarter of 2015 the group showed positive financial results thanks to a solid operating performance and significant improvement in the environment for operations. Production levels grew during four consecutive quarters attaining an average of 773,000 barrels of oil equivalent per day. This is 1% more production compared to…

Thanks Rafael. During first quarter of 2015 when wildcat exploration well was drilled in Columbia by subsidiary call the Bullerengue-1 well located in the lower Magdalena Valley in Colombia. And was successfully completed at the gas discovery an important highlight operator Anadarko goes by the two wildcat wells in the Columbia and Caribbean deep waters, known as Kronos and Calasú in block Fuerte Norte and Fuerte Sur. Ecopetrol is a partner with 50% working interest Ecopetrol confirmed the discovery of hydrocarbons in the Nueva Esperanza prospect located in CPO-09 block in the Llanos basin with wells Nueva Esperanza -2 and Nueva Esperanza-3. The significant and volume discovery were confirmed over the drilling of Nueva Esperanza well, where Ecopetrol holds 55% working interest and Talisman 45%. Additionally, four appraisals and one stratigraphic well were drilled. Now I will leave you with Thomas Rueda that will comment on the result with midstream.

Thank you Max. During the first quarter the transported volumes increased by 73,000 barrels per day equivalent to 6.1% versus the same period of 2014 reaching 1,274,000 barrels per day. Crude oil pipeline transportation increased by 7.1% compared to the same period of 2014 mainly due to the increase in the volumes transported through the Caño Limón-Coveñas and Transandino pipelines, as a result of the lower impact of the attacks against the transportation infrastructure. Transportation of refined products increased by 2.2% versus the first quarter of 2014, mainly due to the increase in the naphtha volumes transported in the Pozos Colorados’ Galán-Apiay system for heavy crude oil dilution and the increase of the volumes transported through the Cartagena-Barranquilla system due to product inputs through the Cartagena port intended to cover local demand. Regarding our projects under execution during the first quarter we continued with the construction of the crude oil storage tanks in Covenas in order to increase the total storage capacity by 1,200,000 barrels and we have advanced in the San Fernando-Monterrey project in order to increase the system capacity to 300,000 barrels per day during the second quarter of 2015. With this I hand over to Pedro Rosales who will comment on the downstream results.

Thanks Thomas. During the first quarter of 2015, the throughput of the Barrancabaermeja refinery increased by $1,600 per day, compared with the same period of 2014, due to the availability and operational stability of the process units. The gross margin of this refinery was $18.2 per barrel, $1.9 higher than the period of 2014, as a result of higher yields of middle distillates due to the operational stability of the units and process improvements. Additionally, there was a positive effect caused by higher oil price reduction compared to the decrease in product prices. At the end of the first quarter of 2015, the expansion and modernization of the Cartagena refinery reached 97.1% coverage. Cost reduction activities are focused on closing pending works and reached 97.4% progress. Regarding for commissioning and commissioning activities with an advance of 29%, nine out of 30 milestones have been completed. In consequence we expect to have the refinery in full operation during the second half of this year. Now I turn the presentation to Magda Manosalva who will comment on the financial results for the period.

Thank you, Pedro. Please turn to the next slide to see the financial results for the first quarter. This quarter for the first time we reported an IFRS for the sake of comparison the financial results of the first quarter of 2014 and also presented under that standard. As ruled by law 1314 of 2009 it will be possible to make adjustments until December 31, 2015 which is a date of full application of the new standard. Looking at our financial statements in the first quarter the revenues declined COP$8.2 trillion due to the fall of more than 50% in the crude oil prices. This drop was offset by the positive effect of the 23% evaluation of the Colombian peso against the dollar over the value in peso of both the exports and the transportation services provided to third parties. In the first quarter of this year, we produced 8,000 once more than in the same quarter of 2014. This led to 1% rise in the volume sold, mainly from gasoline, fuel oil and crude oil. Thus we closed the quarter with revenues of COP$12.3 trillion minus 32% in comprising with the first quarter of last year. On the other side, the cost of sales decreased 21% from COP$10.8 billion to COP$8.5 billion. Variable cost which represents 75% of the total cost of sales declined 26% mainly due to the lower purchase price of crude oil, gas and products. This fact compensated the [lead] growth in this period by the higher exchange rates over the value of imports and purchases and by the higher amounts of crude oil and gasoline acquired. Fixed cost went down 1.5% mainly because of the optimizations achieved in the maintenance plans and contracted services, in line with the initiatives aimed to reduce cost and expenses.…

Thank you. [Operator Instruction] Our first question comes from the line of Frank McGann from Bank of America.

I was just wondering if you could discuss the cost trends that you expect to see as you go through the second quarter and the rest of the year. Obviously with lifting cost particularly you have tremendously positive effect from the devaluation. I was wondering how much of that is sustainable and how much you may see begin to be diluted by adjustment to contract prices?

There are two types' trends in terms of cost. One is based on interventions that we are undertaking right now mainly changes in contract while entering a round of renegotiations of big contract at Ecopetrol that the subsidiaries have, and that will advance in the upcoming month. Precise reductions in cost that we have already achieved, I will give Adriana Echeverri the floor to comment on which confidence we have our in place.

We have under gone a series of different initiative that we have to take into account for this year given the new oil price. For the upstream segment our principal initiatives are diluted of crude oil that you know is our principal cost. Then we have the transportation cost through a different initiative power, maintenance and some other services of that segment. Also you are undergoing certain subsoil and subsurface maintenance initiative that have let's say moderate result. In addition to that we are undergoing different other initiative in other segment such as chemicals and catalyzers for the refineries, energy which will is used for not only option but also downstream operations. And that then taking into account all that as well the renegotiation of contract that the first information before we expect to have some savings of around at least $500 million for these year, for whole company. We have been very successful in this different initiative because as you see in the variable cost that had drop very, very sharp in those exercise. So at the end these cost initiative and there is savings will be tending on many different aspect but that is more or less the target that we have. There are also many other initiative such as drilling and construction of facilities, but those are not so important in this moment since they depend on the negotiation of future or some other petroleum services and other companies that have not finish the negotiation of the contract. So that’s what so far we have for now.

Half of that target, half of we did in -- we achieved. So we’re -- and because we have moderate 6 billion casualties in contracts this year. So there is still lot of room to go, but just half of that had been already secured. Thank you.

If I could just follow up maybe just on the Rubiales field itself and the process between now and the middle of next year as you move towards taking over the operation of the field. How you see that process going and what's trends you would expect to see in production as you move between now and the middle of next year from that field?

First in the decision making process this is a decision by the Board of Directors is not anything assumed by the administration. What we have to provide the board with the guaranty that we can operate the field and the field has produced over 150,000 barrels per day and the idea is that we can't operate -- we of course very close in the same area we're managing, we’re operating two fields that produce more than 200,000 barrels per day, so we have the capacity to do it but the decision of who will operate -- at the end of the day who will operate Rubiales will be issued by the board of directors. Maybe I ask Rafael Guzmán to comment on this in detail. Rafael Guzmán: Yes in addition to that fact we’re currently working with our partners to secure that both the operation we’ll go smoothly, that will continue to go smoothly. In addition to that we have long term plans for investment in this field both with activity that will performed with our current partners until the mid-year in 2016 and investments that will continue on after that above the current contract. This will allow us to maintain the production at the current levels and continue out investments to increase our recovery factor of the field.

And our next question comes from the line of Paula Kovarsky from Itaú BBA.

I would like to touch on CapEx and try and get a better understanding on what exactly are the plans for 2015 in view of a forced scenario of lower profitability caused by lower oil prices. So I mean I know there is no formal guidance yet, but perhaps you could point to the direction the company is willing to take for us to understand how exactly the cash position and possibly what are the plans regarding dividends?

Paula thank you for your questions, of course our focus for this year is basically securing the cash flow for our operation and for the cash level already in our 2015 budget. As you may understand we are heading towards hopefully high CapEx for next year but for this year of course we have defensive year in terms of our strategy. Let me give you the word to Adriana Echeverri to give you the details on how are we going to grow this year.

We haven’t really had our communication to the market last year on how the CapEx plan was going to be deployed. That plan is going on so far so good and we have no problem until now. In terms of what the distribution of that plan is, what the uptick, the principle application were -- they were the exploration plans, we really only included the contractual commitments that we already had with different agencies in Colombia but also in the United States and that was the most part of the cut of the CapEx that we performed last year. And the other point was regarding the actual projects that are being developed as well as the different sites that we were already taking care of. We have no [expectations] for the main field that is to see that is Castilla and Chichimene, all that. However what we have seen in this first months of the year is that certain of our principle joint venture partners is that they have performed additional CapEx cut which of course affected the production of certain fields which is the case of Rubiales and the case of La Cira Infantas and also our CapEx plan is undergoing but our partners have cut their CapEx plans obviously.

And if I may follow up then do you still feel -- including those CapEx cuts do you still feel comfortable about your production targets for this year and shall we take a more conservative approach to that?

We are currently trying to update that different effects that we are having with our partners with the direct production field, so we expect to be in case of Ecopetrol under the 710,000 barrels per day as we announced at the beginning of the year for Ecopetrol. And for our subsidiary is the same case so that next group production will be 760,000 barrels per day.

Paula recall that the target of 750,000 barrels per day is now below what we have already achieved so far, with the CapEx we have this year for production we can secure the 760,000 -- I mean we can also try to surpass that but our target is just that number, so the 760,000, so we don’t need additional CapEx for that, we’re just having a compensatory effect depending on the CapEx of our partner.

Okay. Can you possibly comment on the dividend policy for the year or what’s the idea?

The dividends, you mean?

Yes.

Well, no, we have to produce income first and the Board of Directors decided what to do in terms of dividend. So that’s not our concern. We are very distributed, they very distributed -- into last year. So this year we are not -- we’re really focusing on the production and so the income for this year and there will be decision of the Board of Directors is at the beginning of next year.

Okay. Thank you.

Our next question comes from the line of Pavel Molchanov from Raymond James.

Obviously given the current outspending of cash flow leverage metrics are on arise almost 50% debt cap as of Q1, what does management view as the highest level of leverage that can be sustained safely?

Thanks. I am going to forward it to Magda Manosalva for the answer.

In turn so far leverage what we have seen we see the year 2015 as the year of transition as we are going to have lower EBITDA that we have been having in the last year. Concerning the absolute number of leverage we have at this point we considered this like normal level of leverage for our company, like Ecopetrol and remember that in the last year we have been under leverage. So at this time we kind of been in normal level but we don’t have the intention to increase this level more such as the investments including whether we change our investment grades qualification.

Okay. And if I can also ask about the middle month of May now, I remember a year ago the objective was to begin commercial development in 2016 given the commodity landscape in present conditions, is that still realistic?

Exactly to what assets you’re referring in middle Magdalena?

Sure. The unconventional, the shell acreage.

Okay. Yes we have continued looking at the potential and doing studies and stratigraphic wells in mid Magdalena to again assess the potential, however now any decision on development will have to be reviewed given the current oil prices and will be part of the strategy that we’ll be announce shortly. However, what I can say is that we do not see any significant contribution of unconventional before year 2020.

Okay, very clear. Thank you very much.

Our next question comes from the line of Anish Kapadia from TPH.

Hi. Other question just around your cash flow for this year, I was wondering if you could give some expectation in terms of where you say free cash flow in 2015 and related to that, is there a particular level of gearing or however you look at that net debt to EBITDA that you get to where you think that you’ll need to raise equity to short up the balance sheet.

Thank you, Anish. In terms of equity decision, to ordain to the Board of Directors and actually to the owners -- to the shareholders. So we have administration kind of comment on that and to have a view on that. So that will be source of cash flow our [communicate], but I ask Magda Manosalva to elaborate on this.

Yes, Anish for the year 2015 we have that we will have full access to the capital market, so what we’re going to do is it’s more financing, we probably are going to go into markets in the second part of the year in terms of how much we are going need. It is going to depend on the prices of oil but within that we are going to be in the same -- around the same amount in the year 2014.

Okay. And then just a follow up on that, I think the issue at the moment if oil prices stay where they are you’re clearly cash flow negative in this current scenario. So you’ve cut that CapEx you're not growing production and how long do you think you can kind of sustain this scenario of funding the business through debt?

With respect to the oil price in our budget, we have to review with the Board of Directors of our concern with revision for 2015, a price of 53. We have run of course the sensitivity; it is between 45 and 60 because from now high uncertainty on what the price leveled average per level for this year will be. But I think the idea to have a robust position in terms of our cash flow vis-à-vis the revised approach.

Turning on cash flow do you remember we have a high sensitivity through Brazil, as the productivity you mentioned that it was made to $60 to the barrel, and it was announced on the model of December of 2015. Our sensitivity surprise in the cash flow is that for every $1 the oil price goes up or down, we got $200 million in available cash so this current scenario of prices is helping the situation of the cash flow with the company.

Okay just one other question I had was, in terms of your secondary recovery projects, they’re clearly higher, CapEx higher OpEx projects. I'm just wondering what kind of oil price do you need for those to make economic sense to generate a positive returns. It seems to me that kind of $50 to $60 per barrel the secondary recovery projects seems to be an economic. Thank you.

As we have announced before we have a very comprehensive program to increase recall factor in our fields. That include a primary recovery which is basically drilling more wells we did in the space between the wells we also have word injection something that we have done in the past and we continue to do. And then we move on to other techniques like enhance water, adding polymers and thinks like to water and then thermal recovery. But the main focus that we have now and for the near term, foreseeable future in five six years is mostly in field and word injection. And those projects we have done and can be done even at low price scenarios that we currently have. The other things like thermal recovery that might require higher CapEx looked for the longer term future. Is this clear or you want some more clarification?

Anything will be a help, I think you’ve given some numbers in the past in sense of the cost associated with some of the water injection the more kind of secondary tertiary recoveries. So I was just wondering if you had any updates for those cost.

We do not have an update on cost and actually we're currently working efficiency program to reduce the cost. And we have seen efficiencies for example in drilling we have been able to reduce the time of drilling and therefore the associated cost in several if not all of our project. And in addition we also have made reduction in OpEx of working cost that we believe will be sustainable and we help also to launch these other projects we have for production maintenance. So we have not changed to increase those number so that’s what I'm saying, what we’re looking at is the program to actually reduce and become more efficient in developing these field.

And our next question comes from the line of Felipe Dos Santos from JP Morgan.

I have actually three questions. First one is about possible divestment plan, what the company is targeting to divest to roll throughout this low brent price scenario and raise cash to match with needs. The second one is about the dividends, is the company considering reducing the deal and Paul has asked this before. But how is the equation of the dividends considering that the government also needs these dividends from the company. And the third is are you putting in plan -- anything coming up about to reduce your cost, your fixed cost and variable cost and what will be the target to reduce that and increase the company’s margins?

First let me start with what costs, we have been working and since the beginning of the year actually with targets of as Adriana Echeverri mentioned of for the whole year close to COP$1 trillion and as of now we have achieved half of that target and we keep advancing in terms of renegotiating contracts and gaining -- achieving efficiencies in the different segments of our businesses and we’ll continue doing that for the rest of the year. In terms of the divestments there are two different strategies one is divesting non-strategic assets like what we’re doing with the ISA equity, we already got from the ministerial cabinet the goal for that and as in the next 12 to 18 months we’ll be divesting that asset as well as other non-strategic assets for the company and I will ask Adriana Echeverri to comment on that. But there is another divestment which I would like you to know which pertain to exploration in which maybe I will ask Max Torres, the President of Exploration to tell you about because that’s interesting and it’s a completely different front. And in terms of dividends as we said we -- this is basically a decision by the board of directors, what we have now is the full support of the board of directors in terms of that the goal for the company is to have a very solid cash tax position for this and next year. They have discussed that in a truly annual scenario, of course there are no -- definitely done numerical targets on this. But let me assure you that we have full support for the quarter in terms of keeping the company on a very solid cash position. So I will ask Adriana and Max to give you some detail on the divestment front of assets and our exploration front.

So pertaining to the nonstrategic assets, we have and are going to progress the sales the [EEB] participation that we have in turnaround and [indiscernible] of the company so we already have all the approvals that we needed to go under the phase stage that we’ll initiate hopefully in the second quarter of 2015. By the end of the third quarter we expect to review the proceeds coming from this divestment. And the second divestment is ISA, our participation there it’s around -- it’s less than 5% around 5% and we are signaling the initiation of this project for the third quarter of this year so the proceeds of that particular divestment will not come before the last quarter of this year. Between this Q what we are estimating of the proceeds coming from there are around $700 million, with that specific point of plan that I already mentioned. That will continue to financing of the cash flow of the company for this year 2015 and maybe for year 2016. On the strategic divestments for exploration Max will tell you about that.

On the exploration front the plan is to essentially optimize our portfolio and in order to do that we have designed a campaign of divestments in different phases what we call [Round] Ecopetrol and we have recent launched our first round about two weeks ago which was great success, about 20 companies attended the opening of this divestment program. We are currently divesting about eight blocks, five onshore and three offshore and we’re expecting to have some offers by the end of June. In July we are planning to launch our second round and it’s going to be about another 10 blocks mainly onshore blocks. And by the end of the year we are planning to launch our third round. So what are we trying to achieve we are trying to -- besides raising some cash we are planning to lower our risk profile, lower our exposure to some onshore assets and at the end of the day optimize our portfolio and see if we can go into other risk profile exploration ventures.

Let me stress on this last issue because we know one of the reservations of the market is regarding the eventual success on exploration. I think the message from Max is we have been very active in optimizing our portfolio and the idea is that we get as much as would come from every dollar of exploration spend. So this optimization of our assets basically on shore Colombia and off shore Colombia is directed to that and we have got very from appetite from respected partners to work with them in developing many assets or dollars will give us really higher points. It’s not been most the social cash; it’s just an optimization strategy to our storage portfolio. So that is crucial for us.

That's really great, just one follow up then. Of course, then you would be selling prospective assets and assets that have been developed. But, would it be fair to assume that these proceeds from these assets sales would be used to engage in other regions like Mexico?

Many other companies who are well aware of what is happening Mexico, we’re pre-qualified in Mexico. And for the time being our focus is, of course in Columbian territory, offshore Columbia is critical focus, Gulf of Mexico is also critical focus and we’re hoping for new development of course Mexico and maybe also Brazil. But for the time being and with the exploration budget we have right now is basically what Max commented, also in Columbia, offshore Colombia, Gulf of Mexico and optimization of all our assets portfolio.

Our next question comes from the line of Jose Kliksberg - Morgan Stanley.

I do have a question more regarding the refinery segment. What is your expectation in terms of refined product prices towards the future in the Colombian market, given that you have a beneficiary -- the benefit that essentially oil prices declined adjusted, but however refined products haven't adjusted as much? What's your expectation at least for the next two quarters in terms of local prices of gasoline, diesel, and other products?

What affecting is that the actual rules continue applying then our cost refer to the market cost and international prices however referenced, we don’t expect any change in that price policies. In closing [indiscernible] what would be the use of the proceeds from sale of non-strategic assets. The number of that is of course is viable but up to $1 billion of course, that will along the next 12 to 18 months probably and use of that will follow the priorities of dollar hold investment strategies but not only exploration but of course exploration will have a very important place in the use of that, of the proceeds of those sales. But basically when you look at our portfolio the distribution between production, exploration and other uses will be run time maybe, the most important thing for next year is that we will have finalized the Cartagena refinery. So, that will allow us to focus more on the upstream of our business. With this I think we come to an end. We thank you all participating in this conference call. And we give floor back to our coordinator. Thank you.

Just going to say that, if you have any further questions, please do not hesitate to contact our Investor Relations office. Thank you again.