Investment Rating - The report provides a "Buy" rating for Chevron, ExxonMobil, Shell, TotalEnergies, GALP, OMV, and Cenovus Energy, while BP and Eni are rated as "Neutral" [10]. Core Insights - The report highlights a positive outlook for major oil companies, driven by expected increases in free cash flow and production growth rates. The average expected production growth for 2025-2027 is projected at 7% for the global sector [10]. - The report emphasizes the importance of refining margins, with European composite margins expected to stabilize around 5.00 in 2025, while US composite margins are projected to be around 15.67 [7][10]. - The macroeconomic assumptions indicate a gradual recovery in commodity prices, with Brent crude oil expected to average $65.99 per barrel in 2025, reflecting a slight increase from previous years [7]. Summary by Relevant Sections Company Ratings - BP: Current price at 380.7, target price 400, with a 5% upside, rated as Neutral (CBE) [10]. - Chevron: Current price at 144.97, target price 177, with a 22% upside, rated as Buy (CBE) [10]. - ExxonMobil: Current price at 109.73, target price 130, with an 18% upside, rated as Buy (CBE) [10]. - Shell: Current price at 2,615, target price 2,900, with an 11% upside, rated as Buy (CBE) [10]. - TotalEnergies: Current price at 54.74, target price 60, with a 10% upside, rated as Buy (CBE) [10]. - Eni: Current price at 13.86, target price 13.0, with a -6% downside, rated as Neutral (CBE) [10]. - Cenovus Energy: Current price at 14.42, target price 25, with a 73% upside, rated as Buy [10]. Financial Metrics - The report provides various financial metrics for the companies, including EV/DACF, FCF Yield, and P/E ratios, indicating strong financial health and potential for growth in the coming years [10]. - The average expected free cash flow yield for the sector is projected at 7.4% for 2025, reflecting robust cash generation capabilities [10]. Market Trends - The report notes a trend towards increased investment in renewable energy sources among major oil companies, which may impact their long-term strategies and market positioning [10]. - The refining sector is expected to see improvements in margins, particularly in the US and Europe, as demand recovers post-pandemic [7][10].

Core Viewpoint - S&P Global Ratings has maintained Ecopetrol's global credit rating at BB+ with a negative outlook, while also lowering its Stand Alone Credit Profile (SACP) rating from bbb- to bb+ due to lower oil prices and exchange rate volatility impacting financial performance [1][2]. Group 1: Financial Performance - Ecopetrol's debt/EBITDA ratio is expected to remain above 2.0, indicating ongoing financial pressure [2]. - The company has faced challenges from lower oil prices and exchange rate fluctuations over the past year [2]. Group 2: Strategic Positioning - S&P highlighted Ecopetrol's strategy focused on growth prospects, reserve replenishment, and strengthening its investment portfolio through business diversification and profitability margins [2]. - Ecopetrol is the largest company in Colombia, responsible for over 60% of the country's hydrocarbon production, and holds leading positions in petrochemicals and gas distribution [3]. Group 3: Operational Scope - The company has expanded its operations through the acquisition of 51.4% of ISA's shares, participating in energy transmission and various infrastructure projects [3]. - Ecopetrol has international drilling and exploration operations in the United States (Permian basin and Gulf of Mexico), Brazil, and Mexico, and holds significant positions in power transmission in Brazil, Chile, Peru, and Bolivia [3].

Group 1: Company Overview - Ecopetrol S.A. is a Colombian majority state-owned energy company that plans to continue exploring natural gas in the Caribbean deepwater despite Shell's exit from Colombia [1] - Shell confirmed its withdrawal from three offshore blocks in Colombia, including COL-5, Purple Angel, and Fuerte Sur, which were jointly operated with Ecopetrol [1] Group 2: Gas Demand and Exploration - Ecopetrol will proceed with exploratory drilling in offshore blocks due to significant reserves and high potential returns, driven by rising domestic gas demand [2][3] - Colombia's gas reserves are dwindling, leading to increased dependence on energy imports, prompting Ecopetrol to focus on developing new gas resources [3] Group 3: Regulatory Environment - The Colombian government, under President Gustavo Petro, has halted the issuance of new oil and gas exploration contracts, impacting upstream production strategies [4] Group 4: International Interest - International players, including Petrobras, are showing interest in Colombia's gas projects, with potential acquisitions in the blocks previously held by Shell [5] - Ecopetrol and Petrobras had previously collaborated on gas exploration, achieving a breakthrough with the Sirius-2 well in the Gujaira Basin, which could enhance natural gas production if economically viable [5]

Group 1: Company Insights - Ecopetrol S.A. (EC), Expand Energy Corporation (EXE), and RPC, Inc. (RES) currently hold a Zacks Rank 2 (Buy) indicating positive market sentiment towards these companies [1] - Diversified Energy Company operates as an independent oil and natural gas producer in the U.S., focusing on the production, transportation, and marketing of natural gas and natural gas liquids, benefiting from rising demand for cleaner-burning fuels and increasing commodity prices [2] - Expand Energy, formed from the merger of Chesapeake Energy Corporation and Southwestern Energy Company, is positioned to benefit from the growing demand for natural gas in the energy transition, with recent price increases expected to enhance profitability [3] - RPC generates stable revenues through a variety of oilfield services, including pressure pumping and rental tools, and is committed to returning value to shareholders via consistent dividends and share buybacks, making it appealing for investors seeking steady returns [4] Group 2: Industry Trends - The demand for natural gas is rising as it is recognized as a cleaner-burning fuel, which is expected to positively impact the financial performance of companies involved in its production and marketing [2][3] - The energy transition is increasingly highlighting the role of natural gas, suggesting a favorable market environment for companies like Expand Energy that are focused on this sector [3]

Core Viewpoint - Ecopetrol S.A. has entered into an asset purchase agreement with Statkraft for the potential acquisition of a renewable energy portfolio in Colombia, which includes solar and wind projects totaling up to 1.3 GW [1][3]. Group 1: Acquisition Details - The portfolio includes one company focused on solar and wind asset development, six special purpose entities with solar projects (614 MW), and three special purpose entities with wind projects (750 MW) [1][2]. - The acquisition is contingent upon fulfilling certain conditions and legal requirements [1]. Group 2: Strategic Importance - If completed, this acquisition would significantly advance Ecopetrol's decarbonization and energy transition goals, particularly the aim of achieving 900 MW of renewable self-generation capacity by 2025 [3]. - The transaction is expected to enhance low-emission energy generation for Ecopetrol's self-consumption, thereby reducing reliance on spot market purchases and diversifying the company's energy matrix [3]. Group 3: Company Overview - Ecopetrol is the largest company in Colombia and a major integrated energy player in the Americas, responsible for over 60% of the country's hydrocarbon production [5]. - The company has a diverse portfolio that includes energy transmission, real-time system management, and international operations in strategic basins across the Americas [5].

Core Points - Statkraft has signed an agreement to sell its Colombian renewables portfolio, Enerfín Colombia, to Ecopetrol, the national oil company of Colombia [1] - The transaction includes staff, eight projects under development, and the 130 MW Portón del Sol solar plant, which was the first utility-scale solar plant in Colombia [1] - The sale is expected to be completed in the third quarter of 2025, pending regulatory approvals [2] - Barbara Flesche, Executive Vice President for Europe, expressed satisfaction with the divestment, highlighting the skilled team and attractive portfolio built by Enerfín in Colombia [3] - Statkraft acquired its Colombian renewables portfolio as part of the Enerfín transaction in May 2024, which significantly strengthened its position in Spain and Brazil [4] - The acquisition added a portfolio of 1.5 GW of wind and solar power projects in operation and under construction, along with a pipeline of projects under development [4] - Statkraft's strategy focuses on growth and building scale in selected markets in the Nordics, Europe, and South America [4]

Core Insights - Statkraft has signed an agreement to sell its Colombian renewables portfolio, Enerfín Colombia, to Ecopetrol, the national oil company of Colombia [1] - The transaction includes staff, eight projects under development, and the 130 MW Portón del Sol solar plant, which was the first utility-scale solar plant in Colombia [1] - The sale is expected to be completed in the third quarter of 2025, pending regulatory approvals [2] Company Strategy - The divestment of Enerfín Colombia is part of Statkraft's strategy to streamline its operations outside core markets, confirming the company's ability to build a skilled team and an attractive portfolio in Colombia [3] - Statkraft's acquisition of the Colombian renewables portfolio in May 2024 significantly strengthened its position in Spain and Brazil, making it one of the top 10 wind power producers in those countries [4] - The acquisition added a portfolio of 1.5 GW of wind and solar power projects in operation and under construction, along with a pipeline of projects under development, aligning with Statkraft's strategy to grow in selected markets in the Nordics, Europe, and South America [4]

FINANCIAL RESULTS 1st Quarter Legal Disclaimer Financial Results This document was prepared by Ecopetrol S.A. (the "Company" or "Ecopetrol") with the purpose of providing the market and interested parties certain financial and other information of the Company. This document may include strategy discussions and forward-looking statements regarding the probable development of Ecopetrol's business. Said projections and statements include references to estimates or expectations of the Company regarding its futu ...

Financial Data and Key Metrics Changes - The first quarter of 2025 saw stable financial performance despite lower Brent prices, with net income at COP 3.1 trillion and EBITDA at COP 13.3 trillion, resulting in an EBITDA margin of 42% [38] - The refining margin decreased by $3.9 per barrel compared to the same period last year, attributed to various factors including product differentials and scheduled maintenance [22][23] - The company executed investments of $1.2 billion, exceeding the average for the first quarter over the past five years [39] Business Line Data and Key Metrics Changes - In the hydrocarbons line, average production reached 745,000 barrels of oil equivalent per day, marking the highest crude oil production in Colombia in the last five years [17] - The midstream segment experienced a 2% decrease in transported volumes compared to the first quarter of 2024, primarily due to scheduled maintenance [19] - The refining throughput for the first quarter was 396,000 barrels per day, representing a nearly 7% reduction compared to the same period in 2024 [21] Market Data and Key Metrics Changes - Ecopetrol supplied approximately 68% of Colombia's natural gas demand during the first quarter, reaffirming its critical role in national energy security [7][32] - The company reported a significant contribution from the energy efficiency program, generating savings of nearly COP 23 billion and avoiding over 90,000 tons of CO2 equivalent emissions [8][32] Company Strategy and Development Direction - The company is focused on diversifying its customer base and enhancing commercial management to navigate global uncertainties and price volatility [4] - Ecopetrol is committed to increasing its renewable energy capacity, aiming for over 1,000 megawatts of cell generation capacity this year [8] - The company is advancing projects in natural gas and renewable energy, including a regasification project expected to begin operations in Q2 2026 [6][28] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of maintaining operational and capital discipline in response to geopolitical tensions and OPEC supply increases [4] - The company anticipates challenges due to potential declines in Brent prices but has implemented measures to enhance resilience and financial flexibility [45][48] - Management expressed confidence in the company's ability to generate sustainable value despite market volatility [49] Other Important Information - The company has made significant progress in its efficiency program, achieving COP 700 billion in savings across various segments [26] - Ecopetrol's cash balance closed at COP 17 trillion, generating a positive free cash flow of COP 1.4 trillion [40] - The company is actively managing its debt levels, with a gross debt to EBITDA ratio remaining steady at 2.2 times [40] Q&A Session Summary Question: Impact of falling oil prices on EBITDA and revenue - Management confirmed that each dollar change in Brent impacts EBITDA by COP 740 million and net profit by COP 370 million, with a breakeven for production at $55 per barrel [51][56] Question: VAT implications and future payments - Management explained that the new VAT ruling requires ongoing payments, with expectations to recover 93% of the amount through tax returns [66][68] Question: Sensitivity of production to CapEx reduction - Management indicated that 99% of production has a breakeven of $55 per barrel, and priority will be given to investments that create new production [74][75]

Financial Data and Key Metrics Changes - The first quarter of 2025 saw stable financial performance despite lower Brent prices, with net income at COP 3.1 trillion and EBITDA at COP 13.3 trillion, resulting in an EBITDA margin of 42% [37] - The refining margin decreased by $3.9 per barrel compared to the same period last year, attributed to various factors including product differentials and scheduled maintenance [22][21] - The company executed $672 million in investments during the first quarter, achieving 17% progress on its investment plan [18][9] Business Line Data and Key Metrics Changes - In hydrocarbons, average production reached 745,000 barrels of oil equivalent per day, marking the highest crude oil production in Colombia in the last five years [17] - The midstream segment experienced a 2% decrease in transported volumes compared to Q1 2024, primarily due to scheduled maintenance at the Barrancabermeja refinery [19] - The refining throughput for Q1 2025 was 396,000 barrels per day, a nearly 7% reduction from the same period in 2024 [21] Market Data and Key Metrics Changes - Ecopetrol supplied approximately 68% of Colombia's natural gas demand during Q1 2025, reaffirming its critical role in national energy security [32] - The company reported a significant contribution from the energy efficiency program, generating savings of nearly COP 23 billion and avoiding over 90,000 tons of CO2 equivalent emissions [32][8] Company Strategy and Development Direction - The company is focused on diversifying its hydrocarbon portfolio and increasing reserves, with significant investments in exploration and production, particularly in the Permian and offshore Brazil [16][13] - Ecopetrol is committed to renewable energy, aiming to achieve over 1,000 megawatts of solar generation capacity this year [7] - Strategic projects are underway to enhance refining capacity and improve product quality, contributing to the energy transition and reducing fuel imports [25][24] Management's Comments on Operating Environment and Future Outlook - Management highlighted the high global uncertainty and volatility in Brent prices due to geopolitical tensions and OPEC+ supply increases, but expressed confidence in the company's strategies to navigate these challenges [4] - The company anticipates that Brent prices may fall below financial projections for 2025, prompting proactive measures to enhance operational and financial resilience [45][49] - Management emphasized the importance of maintaining capital discipline and operational continuity amid market fluctuations [48] Other Important Information - The company has made significant progress in its efficiency program, achieving cost reductions and optimizing operations across all segments [26] - Ecopetrol's cash balance closed at COP 17 trillion, generating a positive free cash flow of COP 1.4 trillion [40] - The company is actively managing its debt levels and has secured a loan facility to meet operational cash requirements [41] Q&A Session Summary Question: Impact of falling oil prices on EBITDA and revenue - Management confirmed that each dollar change in Brent impacts EBITDA by COP 740 million and net profit by COP 370 million, with a breakeven for production at below $55 per barrel [56][60] Question: VAT implications and future payments - Management clarified that the new VAT ruling will require ongoing payments, with expectations to recover approximately 93% of the VAT through tax returns [68][69] Question: Sensitivity of production to CapEx reduction - Management indicated that while there is flexibility in CapEx, priority will be given to investments that protect production and reserves, with no current plans to cut back on production [76][75]