Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Ecopetrol's Fourth Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. We will have a question-and-answer session later and the instructions will be given at that time. [Operator Instructions] Now I’d like to welcome our host for today's conference, Ms. Maria Catalina Escobar, Director of Corporate Finance and Investor Relations. Please go ahead.

Good morning everyone, and welcome to Ecopetrol's earnings conference call and webcast in which we will discuss the main financial and operational results of Ecopetrol for the fourth quarter of 2015 and full-year 2015. Before we begin, it is important to mention that the comments by Ecopetrol's senior management in this call could 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 this conference call. The call will be led by Mr. Juan Carlos Echeverry, CEO of Ecopetrol; other participants include Felipe Bayón, Executive Vice President; Maria Fernanda Suarez, Vice President of Strategy and Finance; Max Torres, Vice President of Exploration; Hector Manosalva, Vice President of Development and Production; Juan Pablo Ospina, Vice President of Commerce and Marketing; Thomas Rueda, CEO of Cenit; Tomas Hernández, Vice President of Refining and Processes; Rafael Guzman, Technical Vice President and Alberto Vargas, Financial Comptroller. We will begin the presentation with the main achievements of 2015, followed by the highlights by business segments and the financial results under International Finance Reporting Standards. We will close with the outlook for 2016 and a Q&A session. I will now turn the call to Mr. Juan Carlos Echeverry, CEO of Ecopetrol.

Thank you, Maria Catalina. I would like to start this presentation by discussing the behavior of oil prices. Between June 2014 and December 2015, the price of Brent crude fell about 65% mainly as a result of the imbalance between supply and demand. Different analysts estimate that these imbalance for 2015 was between 0.7 and 2 million barrels per day bringing crude prices to their lowest level since the end of 2003. The excess supply dropped to an inventory accumulation of 1.8 million barrels per day in 2015 according to – estimated by the International Energy Agency. It is expected that lower prices begin to affect the availability of unconventional crude which is highly sensitive to price and our conventional crude when cost to investment and exploration and production become affected. Large expectations indicate that supply and demand could get closer at some point in the second half of 2016. However, first it will be necessary to drain the excess inventory to see a change in the incremental that could point to its recovery in the price of crude. The drop in price drastically affected oil companies’ results and leased a period of radical changes in the industry which is seeking greater efficiency. Lower costs and strict capital disciplines to preserve cash and long-term financial sustainability. For Ecopetrol, the crude sales basket shrank by US$43 per barrel from 2014 to 2015. The Company reacted swiftly and decisively implementing its software transformation plant throughout its entire value chain by while it maintained its solid operational performance without affecting reliability and safety. On the next slide we will discus some of the factors that had a particular impact on Ecopetrol in 2015. In 2015, the Company faced order situations that challenge its ability such as El Niño phenomenon, the closing of the…

Thank you, Dr. Echeverry. For the production segment in 2015 Ecopetrol exceeded the production target achieving an average cost 761,000 barrels of oil equivalent per day. This is the second highest annual production in the history of the Company. The production result was higher than 2014 by about 5,000 barrels of oil equivalent per day, which is an increment close to 1% year-on-year. This result was mainly due to a production increase from our direct operations in the Orinoquia region. Specifically Castilla showed an increment of 17% compared to 2014 and a record production of 126,000 barrels of oil per day during the last quarter of 2015. This effort was complemented by Chichimene were production was 39% higher than in 2014 reaching an average of 78,000 barrels of oil per day in 2015. We should also mention an increase in the production of our affiliates specifically Equión with a 16% increment and Ecopetrol America with an increase of 9%, These upturns allow us to compensate the natural decline of our assets, changes in our participation in some of the association contracts between the current price level, reductions in the drilling activity mainly in assets operated by partners, environmental permit limitations and impact due to structure effects during the third quarter. The resulting balance is a positive one in a year with a difficult global price environment. The level of production was achieved in line with our strategy of value over volume. In that regard it is important to note that during 2015 all of our field showed positive margin and no closures represented. Thanks to the optimization efforts in our activity. The Company also continues pursue sustainability in the medium and long-term. The increase recovery factor program is a main driver for this strategic objective in the production segment. During…

Thanks Rafael. In exploration, we highlight as of 2015 accomplishments, the exploratory success of Kronos discovery in deepwater offshore Colombia considered to be one of the major discoveries worldwide and also exploratory success in SSJN-1 and CPO-09 on the onshore Colombia. On this project incorporated contingent resources that replace more than 100% of Ecopetrol’s production. During the fourth quarter 2015, the exploration well Calasú 1 in the block Fuerte Norte was drilled in deepwater offshore Colombia and operator Anadarko with Ecopetrol 50% participation. This will prove the presence of an active petroleum system and is considered to be a sub-commercial discovery. The exploratory well Muérgana Sur 1 located in Llanos Orientales basin and operated by Ecopetrol was plugged and abandon as a dry hole. Additionally, in December the exploratory well Payero located in Niscota block in the Piedemonte basin was spudded. The partnership is composed by Hocol 20%, Total 50% and Repsol with remaining 30%. This well is operated by Equión and is currently drilling ahead. In addition to our affiliate Ecopetrol America, the drilling of the appraisal well Leon 2 in the deepwater Gulf of Mexico operated by Repsol, we have 60% participation on Ecopetrol with remaining 40% was ongoing. This well reached TD on the February and it’s currently under evaluation. Finally, as a result of participation of Ecopetrol America in Lease Sales 235 and 246 in November 2015. Three blocks known as Atwater Valley 009, Mississippi Canyon 978, and East Breaks 685 were awarded by the BOEM. Also during 2015 a total of 10 blocks in the Gulf of Mexico were awarded to Ecopetrol America. Now, I leave you with Maria Fernanda who will comment on reserves.

Thank you, Max. Good morning to all participants in today’s conference call. Let’s first review the Company’s 2015 reserve balance. Ecopetrol’s one key reserve were 1,849 million barrels of oil equivalent which represent an 11% reduction compared to 2,084 million barrels of oil equivalent reported by the end of 2014. The main driver for the decrease in reserve was the significant drop in oil price, the SEC price used for the valuation of reserves in 2015 was US$55.57 per barrel compared to US$101.80 per barrel in 2014. The Company estimates that as a resource of lower oil prices closed to 404 million barrels of oil equivalent were deducted from proved reserves. Nevertheless, optimizations and efficiencies achieved during 2015 addition approximately 275 million barrels of oil equivalents, partially offsetting the impact from low oil prices. Moreover, 154 million barrels of oil equivalent were added as a result of new drilling campaigns primarily in Castilla and Rubiales as well as positive revisions in some of the fields, as was the case for Chichimene. Another favorable aspect to highlight is the incorporation of self-consumption natural gas as proved reserves for a total of 47 million barrels of oil equivalent. I now hand the presentation over to Thomas Rueda, who will comment on midstream results.

Thank you, Maria Fernanda. Good morning, during 2015 total transported volumes increased by 27,000 barrels per day equivalents to 2.2% versus 2014 reaching 1,232,000 barrels per day. Crude oil pipeline transportation increased by 2.5% compared to 2014 mainly due to the increase in the volumes transported through the Caño Limón-Coveñas and Transandino pipelines as a result of the lower number of a tax against the transportation infrastructure throughout the year. Approximately 71% of the volumes transported belongs to Ecopetrol. Transportation of refined products increased by 1% during 2015 compared to the previous years mainly due to an increase in the volumes transported through the Cartagena-Barranquilla pipeline. This increase corresponds to imported products to fulfill the demand of the Central Region. Approximately 17% of the refined products transported belongs to Ecopetrol. Midstream’s financial results were very positive during 2015 in terms of EBITDA as it can be observed in the graph. Mainly as a result of important optimizations implemented for our operating and maintenance costs for an amount of approximately COP$400 billion. The positive impact of the exchange rate on our crude oil pipeline revenues, which tariffs are established in U.S. dollars also explains these results. As a result of these factors transportation costs per barrel decreased by 16% during 2015 versus those of 2014. Finally, I would like to highlight that aligned with the CapEx discipline initiatives that 2016 to 2020 CapEx for the Midstream segment has been optimized in approximately COP$2.1 trillion. These initiatives have been executed without comprising reliability, integrity or safety of the operation. With this I hand over to Tomas Hernández, who will comment on the downstream results. Adolfo Tomas Hernández: Thanks, Thomas. In 2015, the gross margin of the Barrancabermeja Refinery was US$16.80 per barrel to US$20 higher than in 2014. As a result of…

Thank you, Tomas. I will now discuss the Group’s financial results during the fourth quarter of 2015 and full-year 2015. Ecopetrol’s 2015 results were impacted mainly by three variables. Crude oil prices, exchange rates, and first time adoption of International Financial Reporting Standards, IFRS. Brent crude which is our main extra reference decreased 42% during the fourth quarter of 2015 in comparison to the same period in 2014 completing an annual decline of 46% between 2014 and 2015. Ecopetrol’s crude basket differentials versus Brent declined by US$2.3 per barrel going from US$12 per barrel in 2014 to US$9.7 per barrel in 2015. Additionally, the average exchange rate devaluated 41% during the fourth quarter of 2015 and 37% during 2015 in comparison to the same period last year. The Company closed the fourth quarter with total revenues of COP$12.7 trillion, 10% less than total revenues reported in the same period of 2014. In 2015 revenues reached COP$52 trillion, 21% less than 2014 revenues. Therefore, the Colombian as devaluation partially offset the negative effect of lower sale prices. The substantial decrease in revenues impacted the Company’s financial results. 2015 EBITDA was COP$18 trillion, 26% less than 2014 EBITDA. Fourth quarter 2015 EBITDA was COP$3 trillion approximate to 2014 EBITDA. Furthermore, fourth quarter 2015 EBITDA margin improved and reached 24% versus 23% in the same period of 2014. I would like to highlight that 2015 EBITDA margin was 35% just 3% less than the reported EBITDA in 2014. The Company’s 2015 capital expenditures was US$6.5 billion versus an initial target of US$7.9 billion. This optimization reflects the Company’s capital this been approached and optimization throughout the different segment which were achieved without affecting operational results nor the reliability and safety of our activity. Cash balance at the end of 2015 was COP$6.6 trillion.…

Thank you, Maria Fernanda. Before I finish this presentation I would like to discuss the process of organizational consolidation we carried out as a result of the change in the strategy defined by the Board of Directors in 2015. Ecopetrol had outsourced a great number of activities which led the number of indirect employees to reach 48,000 by the end of the 2014. Nowadays that number has been reduced to 23,000 employees, implying a 25,000 labor cost optimization during last year. Additionally, one of the key elements of this process was the renewal of most of the management team, which has been actively engaged in the consolidation of projects needed to achieve Ecopetrol’s transformation. Ecopetrol is working with its labor unions to develop relationships of trust based on principles of mutual respect and recognition, taking the well being of its workers, retirees and their families, always within a framework of efficiency and sustainability. Let’s go the next slide, so we can see the outlook for 2016. The oil pricing in 2015 are still in place and will demand greater adjustments by this Company. 2016 represents a transition period for the business segments in the corporate group. Transportation and capital discipline will continue driving the Company’s decision to our 2016. We will continue to consolidate austerity measures, as well as efficiency and cost reduction in order to generate additional savings of COP$1.6 trillion this year. These additional savings will help us navigate the current price environment and produce profitable barrels. That being said the Company’s future cannot solidly be built upon services. As we have already done. We’ll further strengthen our exploration and production portfolio, targeting lower breakevens, technical risk mitigation, and the identification of additional projects that guarantee future growth for the Company. It is important to emphasize that in…

Thank you. [Operator Instructions] And our first question is from the line of Luiz Carvalho from HSBC. Please go ahead.

Hello everyone, good morning. I basically had three questions here. I think the first one might be addressed by Juan Carlos. You mentioned during the presentation that the net debt-to-EBITDA is close to 3 and the maximum level would be 4 times. So, can we expect that the leverage would increase during 2016 or, it's more something in the long term? And how do you think that the rating agencies will see that? The second question will go to Max, on the exploration side. You mentioned Kronos as a contingent as sources are ready. Do you have I mean through the exploration plan any timeline that you expect that Kronos might turn 1P reserve? And when we're going to get let’s say the impacts on the public reserves of the Company? And the third question would go to Maria Fernanda, on the divestment front. You mentioned that part of the divestment is not included or US$500 million, it's not included to the cash generation for 2016. But I would like to know if you could give us a color about what will be the impact from the asset sale on the cash generation? In summary, if you sell those assets, what's – let’s say the impact to the cash generation that those assets are currently generating? Thank you.

Thank you, Luiz. This is Juan Carlos Echeverry. In terms of your first question, the idea for us is to maintain a very conservative view towards the depth. We want to secure our solid basis for the investment grade to keep the investment grade, and of course, this year has been challenging in terms of cash because of the price of oil. Opportunities evolving north, but nobody can guarantee what will come in the near future – and we have to prepare for that. So we are in more or less in a ratio of 3 debt-to-EBITDA, we have considered that during this year that can evolve and we have set for as an indicative maximum for us. And the idea is that in upcoming years as we have balancing the divestments of non-strategic assets and also in the plan – in our growth plan we should able to go back to below three hopefully - as soon as we can but the idea is to maintain a very conservative stance in terms of debt issuance of course that implies a very delicate balance between cash and investments.

Hi, Luiz, Max Torres here I will comment on your questions about Kronos timelines and impact on the future of the company. Our plans are to drill Kronos 2 maybe its going to be September and October. The drill ship Anadarko will return from West Africa, who is drilling three wells there for them. So as soon as that campaign is finished that drill ship will return to offshore Colombia and we are planning to drill our appraisal well first in the Kronos structure. As you said we already have announced contingent resources in excess of 200 million barrels as a result of the Kronos 1. My impression and my guess is that obviously Kronos 2, which is an appraisal is going to improve that number or is going to give us a better perspective of what the Kronos discovery is. Based on that well we will design further appraisals campaign probably third well and a fourth well and based on that assessment we will define the development plan. Right now the impact of Kronos is probably 2022, 2023 depending on what kind of development plan and what kind of market we’re targeting. So there is the impact that we expect at least on our timeline as you requested from Kronos. We will continue our exploration campaign in offshore Colombia, we also planning to drill Arauca 2, which is the appraisal well from the Arauca discovery with Petrobras, late 2014, and also that is going to have an impact around the same time 2023, 2022. So and also we will continue drilling an additional exploration wells with partners like Shell, Repsol additional wells with Anadarko. So in summary I think the impact of the offshore Colombia exploration campaign should have rate impact on the future of the Company and also on the resource base of the company will have for the future.

Hi, Luiz. So the question regarding divestments, this is part of our plan for these transitions that we are experiencing during 2016 but we expect regarding the impact on cash generation of the divestments that we have already announced is less than 10% of the cash generation of the total amount that we are announcing, so if at the end we sell US$500 million you can expect that the cash generation will be 10% of that amount.

Okay. Well very clear. Thank you very much all.

And our next question is from the line of Bruno Montanari with Morgan Stanley. Please go ahead.

Good morning, good afternoon everyone. I had three questions. First one, can you update us on your production guidance for 2016 and perhaps long-term for 2020, as well? And if you could share with us the production level of the Company's most important use for these years, such as Castilla, Chichimene, and Rubiales? The second question is, I understand that there is a request from the industry to have lower pipeline tariffs in 2016. So, if you could provide us with an outlook for those tariffs this year that would be great. And then, the final question is on your reserves. Can you provide us with a breakdown of oil versus gas? Or, when we look at the total reserves declining 11%, how much of the decline is only for oil reserves? Thank you very much.

I’m sorry about – can you please repeat your second question? We wouldn’t hear it correctly.

The second question is about the pipeline tariffs. We understand that there is a request in the country to lower the tariffs in 2016. So, I was wondering if you could provide us an outlook for the pipeline tariffs this year?

Hi Bruno. Thank you for your question. We have issued a target of CapEx for 2016 of US$4.8 billion. And our target for this year and for the transformation program or in terms of the efficiency and efficient barrels more than volumetric target. Since the first two months of this year we are challenging in terms of price of oil. We have been revising our numbers and we will work in terms of CapEx like in an evolved fashion. So as soon as the price recovers and we have seen a positive development in the last week, but nobody can count on that – we should achieve our target of US$4.8 billion of CapEx, but nothing guarantees that that can be observed by the end of the year. So we will be focusing on balancing the cash generation of the company and the CapEx so that the amount of CapEx actually invested, it will determine the number of wells that we can drill, and that, in turn, will determine the production. So for a time being, we are being very conservative in terms of issuing any target in terms of volume, in terms of volumetric numbers and have to stress the fact that we are pursuing efficient barrels, profitable barrels and of course the target CapEx of US$4.8 billion. And the second question will be about reserves will be answered. I’m sorry about the pipeline. Thomas will answer on that.

Thank you, Bruno. This is Thomas Rueda from Cenit. You are absolutely right; there has been a request by the producers to the Ministry of Mines and to review the pipeline tariffs. Let me give you a better flavor on this. We have been discussing tariffs within the regulation. That’s a very important part. It has to be discussed within regulatory terms, but we have been discussing with the producers for a while now. And we understand that the situation has gotten worse and that there is something that needs to be done. So we have been working within our transportation companies in order to present to the transport, to the producers, very soon in the next few weeks. Something that we think can be win-win situation. I think it’s important to say that our business depends on the volumes and we know that and it’s important to say that we have been – we are working on a proposals that’s going to come very soon.

Hi Bruno. My name is [Fidel Ligal], from the Reserve Department. About our reserve about gas, 610 million equivalent barrels, and it is equivalent 33% of the reserve. The other amount is 1.2 billion barrel of oil. That doesn’t include NGLs. That’s all.

Perfect. Thank you very much.

Our next question is from the line of Pedro Medeiros with Citigroup. Please go ahead.

Okay. Good morning guys. Thank you so much for taking the question. I just have two quick questions, here. The first one is, you mentioned on the conference call that all fields had positive margins in 2015. Considering the cost efficiencies that were achieved today and if you were to mark-to-market the current oil price and currency. Would you give any color of how much of the Company's existing production will be operating with a negative margin at this point? And my second question is if you can reiterate what's the base oil price in the minimal return threshold within the projects inside Ecopetrol's guidance for investing US$4.8 billion in particular, the US$3 billion to be invested in upstream? If you can give a bit more color on the flexibility within this number, as you pointed out that you would evolve the plan according to your operating cash flow you know and the behavior of oil prices. If you don't mind by giving a bit more details about what's the real flexibility within the US$3 billion number and how much of that will be dedicated to exploration? Thank you.

Pedro. Our apologizes that can you please repeat the last question that you had.

Sure. It’s related to CapEx or it's a follow-up to the CapEx of US$4.8 billion. I understand the number might still be under revision. And as was pointed out before, you might workout the number evolving it according to your operating cash flow? What I wanted to understand is inside the number what's the base oil price you are assuming in the minimal return threshold for the projects? And if you don't mind, to give a bit more detail on what's the actual flexibility to workout that number? Like, can we see a much lower number in 2016? Do you have the flexibility to really deliver a much lower number given the contractual position at this point? And just one last detail about it - within the US$3 billion to be invested in upstream, how much of that is dedicated to exploration?

Okay, Pedro thanks for your question. I will answer the one regard in production. As you pointed out during 2015 we had trusted margins for all the fields in Ecopetrol so we didn’t have to close any production. For the prices we have seen in the first week and first month of 2016 we have announced we closed production in two fields Caño Sur [indiscernible] production part of the total for the Group production is less than 1%. But in addition to that I would like to add that we continue to look for improvement both for the operation and the development of this field. This two fields have significant potential for us and we expect that this temporary exposure of the fields will start at some point due to efficiencies will gain. Thank you.

Pedro. Regarding the US$4.8 billion for Ecopetrol it’s hard to investment for this year. We have inflexibility in at least US$1.5 billion coming from refining and transportation, refining approximately US$1 billion and transportation approximately US$470 million. So that part - those two parts are quite inflexible. The remaining parts we have targeted US$2.3 billion per production and US$660 for exploration. These two are an exploration there is crucial target which is the appraisal well for Kronos and also some commitments that we had and we are aiming through to do more exploration onshore in order to target cheaper barrels and barrels that we can get as sooner out of the ground. But of course out of this US$660 depending on price will be a calibrating how much we can explore this year. Taking into consideration the things I just mentioned that are definitely going to happen, of course depending on our dialogue with Anadarko et cetera. In terms of production out of the US$2.3 billion we have in our target we are balancing the availability of costs, with the need of maintaining production in our main oil fields. In Castilla, in Chichimene, we’ll be receiving Rubiales in July at the end of June et cetera. So we are maximizing the cash generation of our production – producing field. And monitoring very, very closely the price on the cash generation in order to invest as much as we can, but these are more or less the split of the US$4.8, US$1.5 million completely and flexible and the other once will be – will manage like a valve. We open the valve it will have more cash higher price and we close it very slowly other way. Recall that 2016 due to these numbers is a transition year for next year the US$1.5 billion of transportation and refining will not be any more important for our CapEx. For next year we will have at least US$1 billion more available for exploration and production. So 2017 looks much more promising – 2017 onwards it look much more promising in terms of growth for both exploration and production.

Okay. Very clear. Thank you, thank you so much for the responses.

And our next question is from the line of Alexander Burgansky with Deutsche Bank. Please go ahead.

Yes, Juan, thank you for the presentation. I just have a couple of questions. First of all, I want to come back to the question on the production guidance versus CapEx. In your December press release, you suggested that your CapEx guidance of US$4.8 billion for 2016 was associated with the production targets of 755,000 barrels per day in 2016. So, I understand that you try to be flexible with CapEx this year, but if you were to spend US$4.8 billion, can you please confirm that you will still be able to reach the 755,000 barrels per day target? So, that's the first question. And the second one, on the oil recovery rates, if you could perhaps elaborate on what oil recovery was assumed in your reserve reports? And how do you expect that oil recovery ratio will evolve over time? Thank you.

Thank you Alex. Yes, the first question we have the answer is yes I mean if we can spend US$4.8 billion in CapEx we will most likely achieve the target of 755,000 barrels per day. These of course happen in January and February was definitely challenged but those two figures are related. In terms of oil recovery I would prefer Rafael Guzman to answer that question.

Alex actually I would like if you could explain a little bit better your answer. I do not really understand it.

Yes, I was - my question is what oil recovery ratio has been assumed in the reserve reports? And what do you expect will happen to the oil recovery in the future years?

Okay. We have a very comprehensive program on the increased recovery factor from all of our fields. The main provider of reserves in the short-term is of course continue our campaign infill drilling in our main fields like Castilla, Chichimene and Rubiales. In addition to that I am thinking of mid-term and longer future we have water injection which we already apply in fields like Castilla, Yarigui and some others. But starting last year we’re also injecting water in Chichimene and Castilla. This water injection will of course increase the recovery factor and that depends on a field-by-field basis but where we have seen already is the decline in production is slower in the areas we are starting to inject and water and we see also increment of production from this field. But in addition to that we go into thermal recovery and other tertiary methods. Overall, we expect to reach a 23% recovery factor with the current reserves and with a program for increased recovery we expect to reach at 28% recovery factors by year 2020. And we will continue looking for opportunities to improve this recovery and continue increasing the recovery factor.

Sorry. Can I please confirm? So, it's 28% by 2020? 23% is by what year?

23% is what we already have including the reserves, basically what we have produced already is 19% of the total oil, which the reserve to reach that recovery factor of 23% and with I mean what we have produced with the current reserve for us, but we will incorporate as reserves for 2020 we will reach 28%.

Okay. Thank you very much. Very clear.

And our next question is from Daniel Guardiola with LarrainVial. Please go ahead.

Hi, good morning to all. I have a couple of questions here. First of all, I would like to touch on your cost structure. And in that sense, I was wondering if you could please share with us what your current operating netback and if you could provide us with a breakdown of your costs in the E&P segment? And my second question is I would like to know your thoughts and by how much can you further reduce your cost structure without hurting your targets of production for 2016? Thank you.

Daniel, you please repeat the second question I didn’t understand the second one?

Yes. The second question basically I would like to know how much further room do you have to reduce your costs without hurting your production targets for 2016?

Thank you, Daniel. 2015 and what we aim to achieve in 2016 is combined operational excellence with financial excellence. That means, yes. We have to reduce cost, but we’ll have to also improve the portfolio of projects that we have and managed technical risk, adding assets that have better materiality. So in doing that we have reduced costs, the renegotiation of contracts and we are reducing for example the number of days on average to drill our wells and reducing the amount of dilutent that we use for our heavy crude oil and of the lifting costs et cetera. I mean across the whole chain of value, we have achieved efficiencies and implemented our transformation program. In doing that we have had reductions in the cost of refining of transportation and of production. The breakdown of that is difficult to provide here, but if we I mean we can’t help you in understanding, basically all the reductions some of them are in the press release. Let me ask Rafael Guzman to talk on your second question.

Yes, complementing what - saying on the reduced costs, what you can see on the slide of where we presented costs of example drilling. We show the number of days of drilling, but we have achieved and we also show the record well. Our expectation is that we will be closer on closer on the average to the actual, the current record well. But that will be continue decreasing the cost of the wells and that doesn’t imply any additional risk that we are taking for production on any other risks. I’m now referring to the first question on the net back of the cost of the upstream, but we have said in the past is that we can produce cash on average in most of our fields on Brent pricing between US$20 and US$30 per barrel and that’s most of our production is 95%, 98% of our field.

Thank you. And if I may squeeze in another one question, I'd like to know if – I mean bear in mind that you leverage structured to further deteriorate in 2016 as oil prices stay low. I'd like to know if you have considered on partially divesting your stake in Cenit?

Daniel, I’m not sure if I am understanding your question. Can you please repeat the question?

Well, my question is, I see that for 2016 you are planning on raising additional funds from divestitures from non-strategic assets. And in that sense, I would like to know if you're considering on partially divesting your equity stake that you currently have in Cenit, which is a midstream business?

Okay, Daniel I see what is your point. Currently we have target of identified assets to – with the potential of the divested of US$1.4 billion. Out of that the target for this year and next year is between US$500 million, US$900 million. Those resources are not included in our cash generation for this year. So if that because it’s uncertain to date and which some of those assets will be sold, so if those assets are sold that would add to the cash generation for this year, next year with extra source of fund and in those assets spending is not included. So recall that this is a transition year, this the year in which we are spending US$1.5 billion in the mid and the downstream that will be not be present next year. So the cash position and the financial position will be relieved as of 2017 onwards of those expenditures and in the process of achieving financial excellence will not we are considering divesting some assets are not strategic for our current strategy and in a fashion that gives us room in the next 20 months to sell those assets. So I expect that we have answered your question.

Yes, thank you Juan Carlos.

And our next question is from the line of Anne Milne with Bank of America. Please go ahead.

Thank you very much for the call. Thank you for the transparency in your press release and presentation, as well. Two questions, the first one I think you indirectly answered in the last question, or the one before that, and it was you've provided a lot of information on your lifting costs, your reduction in your average cost per well. I was just wondering if you have a range of what your estimate is for 2016, in terms of all-in E&P production costs. I think you mentioned that the fields you currently have or I think you said between US$20 and US$30. So, I would say mid-20s would be maybe your all-in cash costs for this year, is what you're saying? That would be my first question, is just confirming what the all-in cash cost of production would be? The second is that you have a maximum leverage target for this year of four times. I was wondering if you could provide the average oil price assumption behind that and the average FX rate, since those are two very key variables? And then, the final question is if you could just provide an updated figure on the percentage of costs and that you have in both U.S. dollars versus COP, both on the upstream and downstream? Thank you very much.

Thank you, Anne. Regarding your first question, last year we have had a moving target. Last year we issued a plan of costs savings of US$800 million that was around May/June. Then in September/October, witnessing to what’s happening with international price of oil, we issued another order target of additional US$400 million. And in January the prices went down so drastically, we issued another plan of around US$400 million. For this year, we have identified fuel negotiation in contracts expenditure in many areas which we can savings of COP$1.6 trillion and however and we are keeping the program – the programs in which we are saving costs. For example they’re reducing the amount of dilutents for our heavy oils, we are now transporting as of now at 400 CST viscosity our heavy oils and so and so forth. So we are reducing costs to validate all of our oil fields, especially those of heavy oil and high production of water in Llanos Orientales. We have in terms of the price for 2016 while the current prices are below our target I cannot tell you exactly what was the price we use for our calculation, but definitely was above US$13 per barrel, which is what we have within the first two months. We have our leverage as you say of maximum leverage of ratio four and we expect afterwards to reduce that ratio with cash generation, with hopefully with better prices and with more barrels per day production and again we will be seeking financial excellence and trying to protect the debt metrics in order to guarantee that we keep the investment grade rating. I don’t know if I answered your questions properly.

Yes. Just if you have a breakdown of the percentage of costs upstream and downstream, U.S. dollars or foreign currency versus COP?

Yes, for 2016 around 50% of the fixed costs are in dollars and 90% of the variable costs are in dollars.

Great thank you very much.

Thank you. And our last question is from the line of Pavel Molchanov with Raymond James. Please go ahead.

Hi, this is Luana Siegfried in for Pavel. Thank you for the call. I have two quick questions. I would like to confirm that this year's targets for production continues to be 755 MBU per day and apologies if I missed this before. And on a related note, is there a chance of upwards revision in the production targets for this year given the Rubiales revision by June? Thank you so much.

Hi, Pavel. Yes, as we said before this 755 barrels per day target is connected with target investment of US$4.8 billion. As you may understand, of course with the beginning of the year the price of oil was surprisingly low. So we will be calibrating the amount of investment during the year and of course the number of barrels we can stock will depend on that. So yes, the 755,000 barrels per day is not a fixed target it will be adjusted depending on the amount of cash we have and that in turn on the price of oil. There is no revision of those targets depending on Rubiales we have a very close knowledge of Rubiales, we have a weekly meeting with them remember we are partners with Pacific in Rubiales so we know that field very well our engineers have already been preparing a team for one-year for the transition day which is end of June. So that will actually affect the average but taking into account in the numbers I just provided. So probably I ask Rafael to complement on this.

Yes, may be to complement the 755 guidance we gave last year already includes the production from Rubiales additional production we get from Rubiales once the field is operated and fully owned by Ecopetrol. So, there is no change to that number because it was already included there.

Okay sounds great. Thank you so much. End of Q&A

And ladies and gentlemen, this concludes our Q&A session for today. I would like to turn it back to Juan Carlos Echeverry with his final remarks.

Thank you very much to you all for participating in this conference call and for your interest in our Company. I just want to finish this conference call by stressing that 2016 is a transition year. We are aiming for operational excellence and for financial excellence we are monitoring the price of oil because this is a – this are challenging times for oil and gas companies and we are preparing our new portfolio a renewed portfolio for exploration and production I will have a lower needs of cash for transportation and refining assets as of 2017. So next year, we’ll have a platform for growth which is solid and which we restrict to have achieved most of our transformation program already at the end of 2016. So stressing that this is a transition year towards more promising future and thanking you all for having participated in this conference call. Have a good day.

Ladies and gentlemen, this concludes the program and you may all disconnect. Have a wonderful day.