Good morning. My name is Hilda and I will be your operator for today. Welcome to the Ecopetrol’s Earnings Conference Call in which we will discuss the main financial and operations results for the Fourth Quarter and Full Year 2020 and the 2021 through 2023 Business Plan. All lines have been muted. There will be a Q&A 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 in this conference call. The call will be led by Mr. Felipe Bayón, CEO of Ecopetrol; Alberto Consuegra, COO; and Jaime Caballero, CFO. Thank you for your attention. Mr. Bayón, you may begin your conference. Felipe Bayón: I'd like to welcome everyone joining us today. We will present the operational and financial results for the fourth quarter and for the year 2020 as well as providing an update on the business plan for the next three years; 2021-2023. 2020 is set to go down in history as one of the most difficult years the world has faced in the last decades. We struggled with a supply and demand crisis in the midst of efforts to contain a pandemic. In Ecopetrol, we set up crisis committees and maintained our operations with a minimum number of people, securing the supply of the fuels required by the country. We rapidly designed and implemented an action plan to gradually reactivate our operations under strict biosecurity protocols. We work with innovation and technology, thanks…

Thank you, Felipe. On exploration, we drilled 18 wells during 2020, of which three were successful, six were declared dry, and nine are in appraisal phase. At the end of December, four additional wells were being drilled and will be completed during 2021. Given the success of the exploratory and appraisal wells, Gato do Mato is expected to achieve commercial viability by 2022 to enable the incorporation of the first reserves in the same year and start production by 2025. The [Indiscernible] well, will continue with the production tests and gas sales to [Indiscernible] and in the case of the [Indiscernible] Sidetrack 1 well, the limitation activities and the declaration of commercial viability will be carried out in case of sales by the end of 2021. The cumulative production of exploration assets increased as compared to the previous year reaching 4.3 thousand barrels of oil equivalent per day. Ecopetrol group's production in 2020 was 697,000 barrels of oil equivalent per day according to the established production goal. Natural gas contributed 17% of the annual production rate exhibiting an increase of 3% in the volume produced as compared to the previous year. In 4Q 2020, production was 694,000 barrels of oil equivalent per day, which is 13,000 barrels of oil equivalent per day higher than the production achieved in the previous quarter. The gas business contributed over 30% of the EBITDA of that upstream segment accumulated to December. Similarly, its EBITDA margin remains at levels above 50% as a result of commercial strategies that allowed us to maximize sales volumes. We highlight the reduction of flaring to a level of 21.7 million cubic feet per day as of December 2020 contributing to the commitment of a 20% reduction of emissions by 2030, with an estimated reduction of 600,000 tonnes of CO2…

Thanks Alberto. Lower sales volumes related to the historic demand contraction combined with the negative effect of lower oil prices resulted in a 29% reduction in revenues when compared to 2019. The Ecopetrol Group generated an EBITDA of COP16.8 trillion and a net income of COP1.7 trillion, positive returns that stand out admits a challenging environment for oil and gas companies worldwide. These results also compare favorably against the last price crisis of the 2015-2016 period. In addition to obtaining a positive financial result, we highlight the lower return production volumes and research, demonstrating the growing resilience of the group among different market conditions, underpinning its value generation capacity in the long-term. Let's move on to the next slide to deepen into the net income results. Ecopetrol Group's fourth quarter net income was COP675 billion. Although even better improvement in market and operational indicators, it is lower as compared to the third quarter of the year due to lower EBITDA generation of COP218 billion related to lower margins in imported food oil and gasoline sales and an increase in operational activity, previously restricted by the lockdown measures. Likewise, the fourth quarter includes the effect of foreign non-recurring events. First, higher exploration expenses of COP312 billion, mainly due to the recognition of the exploration activity in the NAFTA 1 well and a higher provision for dismantling of non-commercial wells. Second, the write-off of certain assets that were considered as ongoing projects given the completion of economic feasibility studies for COP208 billion. Third, higher labor expenses COP130 billion, reflecting the accounting impact of the admission of 182 employees into the voluntary retirement plan for a total of 421 persons during the year. This will represent a positive cash effect of approximately COP2.4 trillion into the future. Fourth, other extraordinary items related to…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] We have a question from Barbara Halberstadt from JPMorgan.

Hi, good morning everyone. My first question is regarding the goal of leverage reduction for this year in the next that you could provide a little bit of color on what will be driving this reduction? Is it only on the cash generation and expansion or if the company is also thinking about liability management for this year taking into consideration also the potential debt funding for the ISA acquisition? That would be the first question. Felipe Bayón: Barbara hi, and thanks for taking part in the call today. I'm going to ask Jaime to take this first one. And then depending on the nature of your following questions, we'll see who addresses them. So, Jaime, if you can give us our views and share some color around leverage levels and how we see these going forward.

Sure. Thanks Felipe and thanks for your question, Barbara. So, I think when we speak about leverage, there's two scenarios in mind. There's the a standalone business, if you will, which is our current oil and gas business, and then there is how we see ourselves in a success case with the planned acquisition of ISA, right? So, when we look at that organic business, which is where we are today, the starting position is we closed the year in a great place, we closed with a with a debt to EBITDA ratio of 2.8 times significantly lower than what we expected originally. And it's a very healthy metric, if you say, compared to our peers and the rest of the industry. As you stated, our -- one of our goals in the plan is to reduce this leverage ratio to under 2.5 times, right? We feel more comfortable in our range of 2 to 2.5 times. And we believe that we have visibility towards that. What's going to be underpinning it? It's going to be a combination of two things. On one hand, we expect a growing contribution of EBITDA over the coming years, starting this year, and that will in effect immediately affect the -- that ratio. And the other component is that we see that we don't have any need for new debt to fund our organic plan, right? There's a caveat here that we might choose to tap the markets opportunistically as a function of taking advantage of the low rates that we see right now, the low cost of debt that we see right now. So, we might choose to tap the markets on that mind. Or we might choose to do that within the context of our efforts to optimize the capital structure of…

Yes, no, absolutely. This is very, very helpful. Yes, my second question would be in terms of the CapEx advances in areas where you had more tensions with local communities, if you could give more color on how that's going on, if there are any updates and how the company is dealing with this situation? And what actions can really be implemented taking into account all of these different interests from stakeholders. We know that the ESG front is very important for the company, so just wanted to get a little bit more color on this front. Thank you. Felipe Bayón: Thanks Barbara. And I'll take this one and then I'll ask Alberto to provide a bit more color. But one thing I would say having gone through the last 12 months of COVID-19 and the crisis is that we've seen the need to work in something that's fundamental, and its rebuilding trust with communities. And during the month of March and April last year, we have some 40 to 45 work fronts working in the country. Today, we have close to 350 work fronts, which is sort of the number that we had before pandemic hit. So, we've had to actually rebuild trust with communities and it's been a sortie that collectively we've been doing with communities, with authorities at the regional and local level, and at the national level as well. That's point number one. Second thing and I was 10 days ago in Puerto Wilches in Santander talking to communities around the pilot projects for fracing. And that exercise was around -- we spent, I don't know, most of the day listening to communities, their apprehensions, their worries and big, big themes are around water management. But some of these things are the unresolved needs that have…

Yes, Felipe. Good morning Barbara. And it's about the actually we've been successful in some areas like Rubiales, also areas in which we have previous problems and those have been successfully resolved. And then we can go full steam ahead that with CapEx deployment. As we get closer to election year, we see the potential for additional social unrest, especially in the Middle Magdalena Basin and the Janos, but as Felipe was mentioning, we are putting together a plan that includes our green and executing social investment plans, with governors and mayors in production regions, creating opportunities for entrepreneurs in the regions, increasing local employment, increasing local participation in goods and services and involving central government in the prompt Resolution of blockades when these are present. And Felipe also mentioned that that's the reason why we are deploying such an aggressive plan in terms of social and environmental investment, the COP1.7 trillion, which is to support the exploration and production, another segment capital plan.

Thank you. That's a very helpful.

Thank you. Our next question comes from Bruno Montanari from Morgan Stanley.

Thank you very much for taking my questions. First one is about the production curve. It could give us an update on what's going on with production now, in the first months of the year, for both Colombia and the Permian. And then going forward, if we look at the 750,000 barrels a day target for 2023, how much of those do you plan to get in the Permian as well? The second question is about the business plan oil price assumption. I know we're still doing February, but isn't using $45 per barrel, perhaps a bit too conservative? So thinking here, what upside could we see to production returns and other relevant metrics? If oil prices stay at $65, or even goes towards $70? Another week one, just looking at the complex range, right, you provided between 2021-2023, there is a $3 billion range. So what explains the top of the range? Is it may be accelerating shale drilling in Colombia or in the U.S. or is it more inflation driven? Higher oil price driven? So, those are my questions. Thank you very much. Felipe Bayón: Bruno. Thanks. And I'm going to ask Alberto to take the first one on production and give us a bit more color around split between Colombia and particular the Permian on how do we see that progressing? And then I'll Jaime to give us some thoughts on the margins questions, and what are the ranges in terms of CapEx going forward? So, Alberta, please go ahead.

Bruno, thanks for your question. Good morning. In terms of exit rates past year, in Colombia was about 685,000 barrels and what we believe is in this first quarter, we're going to be getting closer to 700,000. But depending on whether we can tackle one impact that we're seeing in the Castilla field, which is because of this expansion of the disposal of the water disposal structure. So, once we resolve that we can get back on track and get over in that range of 700,000 barrels. But in the case of Permian, the exit rate was 4.5 thousand barrels per day last year. And as we start completing wells -- the 22 wells that we drilled last year, we're going to get into the range of 9,000 barrels net Ecopetrol, and then a at the end of the year with a new phase of drilling and completion, we will end production at around 12,000 to 14,000 barrels per day net Ecopetrol. So, that's kind of the situation with Colombian Permian. And then the expected growth in terms of 2021 to 2023 to get the production to 750,000, you will see a growth in projects such as Llanito, [Indiscernible] and Middle Magdalena Basin, [Indiscernible], gas production in the Caribbean onshore and Permian, of course, which will account for about 20,000 barrels during that period.

Hi Bruno, thanks for your questions. I'm going to address them -- I'm going to first address your question or comment on price and then we're going to link back to the CapEx ranges conversation. I think what have we said in terms of price, our planning price for 2021 is 45 and 2022 is 50, 2023, 54. It's a pathway where we see a gradual recovery of balance between supply and demand over the coming years, right? And admittedly when you look at it today in the light of the current prices, it might sound conservative, but we continue to believe that risks remain, right, risks remain and we prefer to a create the financial framework of the company with a view that is conservative and that therefore drives efficiencies and drives capital discipline, that's the philosophy that we like to operate in. What are the risks that we see remaining in the market? There's three fundamental risks. There is a -- there is still a risk around the evolution of the COVID pandemic. There is still a risk around vaccines and the pace in which they are deployed, and the effectiveness that that may have over the coming months. And we also believe that there is a risk around opal plus [ph], particularly when you look at it from the fiscal stability of several countries that make part of the group. So that's how we're looking at it. Now we do agree, when we look at it today, and if you look at our very short term planning scenarios, we do agree that it is significantly more likely to have a brand price between 50 and 60 nowadays for 2021, we do agree with that. And I'll give you some broad sensitivities around it, understanding that the low-end…

Thank you, Alberto. I'm very clear. Just can you -- to make sure I got the right number, when you were discussing the range of the oil price, you mentioned royalty between 1% and 4%. What was the EBITDA range?

Yeah. So this is all incremental. These would all be incremental to what we've shared as part of the baseline plan. So EBITDA $1 billion to $2.5 billion, EBITDA margins, 1% to 4%, royalty incremental 1% to 4%. Again, this is all incremental on top of the baseline numbers that we've shared today.

Thank you. Our next question comes from Frank McCann from Bank of America.

Thank you very much. I just wanted to follow a little -- up a little bit more on that last question. In terms of the -- the range is fairly wide. It seems anyways for 2023, in terms of where you're going to go. And I just -- it's clear where the Permian will be a major contributor that in some of the areas that you mentioned, I was wondering which areas or might you be concerned with in terms of potentially disappointing or where you're already expecting declines? And it's just a question of how difficult it is to sustain production in those, what would be the kind of the variable production that would drive how high you can get as you get close to 750? And then secondly, just briefly, in terms of lifting costs, which went up both year-over-year, and versus the third quarter, what is your feeling on the overall on cost levels, as you look at 2021? Thank you. Felipe Bayón: Thank you, Frank. And I'll give you some context on the first one, and then I'll ask Alberto to talk a bit in more detail and then to talk about cost and the transfer lifting costs, which is, I mean, it's a fundamental point that we need to ensure that we keep sort of in control under our belts. In terms of production, there's a couple areas that are very, very strategic one, gas, we've said we want to become a gasier company and in that sense, ensuring that we can continue to increase two things. One, production in terms of gas and the levels of gas that we've seen, we were able to very quickly react during the COVID or have been able to react during COVID, but also in terms of appraising…

Yes, Frank. And I guess two things. The first one is that we will have to manage Kalé declining, especially in fields, such as Rubiales and Cusiana, where the declining rate is over 3% per month. So that's a challenge. But we have the plans to do so. And then the others are projects such as [Indiscernible], where we have steam injection, and as Jaime was saying, as the get their breakevens at both $50 per barrel, then they become quite uncertain in terms of how are we going to develop those fields. So that's kind of the areas where I see that that we will have to focus on the next months and years. With respect to leasing costs, what we are saying is that lifting costs over the plan will be $8.5 dollars per barrel, that we see challenges in terms of energy efficiency, as our production from EUR increases, the need for more energy consumption. Also, and then we'll one opportunity that we have on this part of our plan is to increase auto generation with solar power in 400 megawatts. Then we have more well interventions in the plant, more subsurface services needed to maintain the base curve and Kalé decline. But we also have opportunities such as capturing additional efficiencies around the implementation of zero base budget which is a great initiative that we're putting together since the last part of last year.

Okay. Thank you very much.

Thank you. [Operator Instruction] The next question comes from Nicolás Erazo from Credicorp Capital. Nicolás Erazo: Yeah. Good morning, everyone. Congratulations for the results, for the recycling results actually. I'm just having two doubts from my side. The first one is regarding the ISA transaction, we perceive that the timeline associated a consider signing to administrative contract. Could these be understood as the first sign of not turning back for this transaction? And the second one, also, regarding ISA transaction, on the regulation front, are there some regulatory hurdles to bring ISA trickle control, especially the laws 142 and 143 from utilities in Colombia? Felipe Bayón: Thank you, Nicolás. And with respect to ISA, I think it's important to take into account that we've designed the process for the transaction with what we've called a several exit ramps. So as we move forward in the process, we have the ability to basically not continue with the process should that be the case. So we've said, initially that we presented the non-binding offer, we're now into the due diligence process with the exclusivity that we've signed with the Ministry of Finance. And at the end of that process that may be happening probably at the end of June will turn the non-binding offer if we agree on pricing and conditions into a binding offer. So that's point number one. And that also launches the -- basically, the issuance of shares, the process of issuing the shares, the additional shares. We've also said, Nicolás that we want to have a successful process of issuing the shares and in that sense, the equity float is a necessary condition to close the transaction. And I think that's important. So when you mentioned does that take or basically does that means that it's alley for you guys that you're entering into, and there's no way back? I'd say no, we've designed the process in a way that we have these exit ramps. And the second point, in terms of the regulatory front, in Colombia, we are, as Alberto was just mentioning in the prior question, we are a company that self generates 66 two-thirds of the energy that we use for operations. We're a very large user of energy. And we want to continue to do that. Being able to be efficient in terms of energy production, and then distribution in the fields is a fundamental strategic aspect of sustainability long-term. ,: But bear in mind, Nikolas that this does not necessarily apply outside of Colombia. You know, there may be some other opportunities that we will continue to assess going forward. Thanks, Nikolas.

Very clear. That's very clear, Felipe. Thank you very much. Felipe Bayón: Thank you.

Thank you. [Operator Instructions] The next question comes from Lilyanna Yang from HSBC.

Hi. Thank you for the opportunity. I have a simple question here. Well, upstream results this quarter, fourth quarter was weaker versus the third quarter, part of this is the cost pressure and the lifting costs that you address. But any other reason and this leads me to a second question, because mainstream results continue to be strong, they are stronger, actually than upstream. But I wonder if there are any changes that we should expect for the business going forward? I think that in September, you indicated you settle the dispute with Frontera. I think also you indicated that you're centralizing the assets under the Cenit, and that you would have kind of a new business model? So could you give us a little bit more color on it? And how it could be changed in the level of revenues in terms of capacity based dollar versus COP linkage for the segment? And if I may, one other small question on your dividends, right? You mentioned that you have this $1.5 billion in occasional reserves. So can you elaborate on it? You have that to give you more flexibility for the use of resources that you would otherwise distribute maybe in the future towards investments and working capital today. Thank you. Felipe Bayón: Thanks, Lily, and thanks for being in the call today. So I'm going to start with a midstream answer. And then I'm going to hand it to Milena López, our CFO in the midstream, and she can give us a bit more color, because there's some context that I think it's relevant to share with you. And then I'm going to ask Jaime to address the other two questions, both in terms of the reserves [Indiscernible], but we're actually showing or in our project for distributions…

Very comprehensive. Thank you. In terms of like the dollarized revenue stream capacity, it doesn't change much, does it? Milena López: No. So just to give you an order of magnitude, when you look at the composition of revenues of the Midstream segment, we basically have two lines of business. One, which is oil pipelines, which all have the dollar revenues, which compromise approximately 80% of revenues and EBITDA, fairly similar in proportion when you look at revenues or EBITDA. And then 20% of those revenues are actually peso based, which are revenues from the refined product pipelines, which all have tariffs that are denominated in pesos. And the split should be pretty much the same next year, obviously, to the extent to have large movements in the effects that may be altered.

Sure. Thank you so much. Milena López: You’re welcome. Thank you, Lily. Felipe Bayón: Thanks, Milena. Lily, I'm going to cover your questions around upstream performance and the occasional reserve that we constituted. So, the -- going to your question, upstream did close a last year with an 18% EBITDA margin. It's a margin that that reflects the challenging conditions that we had particularly over 2Q and 3Q. But I think that when you look at 4Q in particular, there are three key factors that had a material effect on what you would expect to see as underlying performance of the segment. In total, these factors amounted to $300 million roughly and I would actually say that roughly speaking, each one of the factors that I'm going to speak about captures a third of that amount, right. So the first one is straight up one-off, right, and we had project write-offs to the tune of about $55 million associated to a projects that were undertaken with unsuccessful results, particularly in the in the Putumayo area. We also had a one-off abandonment costs that go above and beyond our normal cadence of abandonment that we should have on an annual basis. That amounted to about $14 million. We also had a -- we decided to make a number of environmental provisions in the light of some rulings that we've had from the judiciary authorities to the amount of about, $15 million, $18 million. And we also had some special I'd say extraordinary costs associated to a dealing with the COVID contingency and those are our minor in that context. But when you add these up, this is about, $110 million, $120 million of the $300 million that I mentioned before. And these are all one offs. These are the non-repeatable events…

Thank you all very clear, very comprehensive. Thank you.

Thank you. We have a question from Bruno Montanari from Morgan Stanley.

Hi, everyone. Just a quick follow-ups. I believe on the prior conference call. This morning, you mentioned that Gato do Mato had I think about 100 million barrels of contingent resources. Just wanted to double check, if that was the correct figures and this is net to Ecopetrol or for the entire area? Thank you. Felipe Bayón: Alberto, do you want to come to the numbers, please?

Bruno, Just to confirm that that's net Ecopetrol.

Thank you. Felipe Bayón: Do we do we have any more questions from anyone?

Mr. Montanari, was your question answers, I am --.

Yes, that's perfect. Thank you.

Thank you. And at this moment, I don't see other questions. [Operator Instructions] We have no further questions. I will turn the call back to Mr. Bayón for final remarks. Felipe Bayón: Well, again, thanks everyone, for being today with us and participating in this conference call, and we value and appreciate the way in which you follow the company provide insights, and actually challenge us in some of the things that we need to do, and how do we need to explain those, and actually, how do we need to address some of the issues that we've seen over the last year or so. Last year was challenging, was tough, was complicated, lots of uncertainty. I think that thrown at everybody around the world. And I think Ecopetrol was able to very quickly respond, be proactive and, and show that it's resilient, that it can be nimble, that it can vary as I was saying it quickly react and demonstrated with the results we see in spades. I think the benefits of being an integrated company and we've had some conversation during the QA in that sense. And, I think we're very well positioned in terms of how we close the year, we've dealt with a most or all of the one-offs that we saw at the end of the year. So I think we're set to a very good start of this year 2021. There's a potential space with the Brent prices where they are, with some of you were asking about our view on the $45 Brent, in terms of our budgeting, and obviously, we will continue to monitor things -- as things progress. But I think we've had a good start to the year, we've presented a solid program for 2021, 2023 that would allow us…

Thank you, ladies and gentlemen, this concludes today's conference. We thank you for participating. You may now disconnect.