Ecopetrol's Sell-Down Creates A Value Investment Opportunity For Long-Term Investors
Caiman Valores • 49 Comments
Caiman Valores • 49 Comments
Wed, May 18, 3:58 PM
- Colombia's Ecopetrol (EC -4.1%) says it has halted pumping on the country's second-biggest oil pipeline following a bombing yesterday attributed to the ELN rebel group.
- EC says the attack on a section of the 485-mile Cano-Limon Covenas pipeline occurred near the border with Venezuela, and is the 14th such attack this year.
- Cano-Limon has the capacity to transport up to 210K bbl/day of crude from oil fields operated by Occidental Petroleum (OXY -2.1%) to the Caribbean port of Covenas.
Wed, Apr. 27, 11:37 AM
- Ecopetrol (EC +1.5%) says it is cutting its 2016 investment plan by $1.4B-$1.8B to $3B-$3.4B from the $4.8B approved in December, citing the low global prices for crude oil.
- The state-run Colombian company says it expects to produce an average of 715K bbl/day of crude this year based on the new investment levels, and plans to continue to divest from non-oil assets to raise funds.
- EC says its financing needs for 2016 remain at $1.5B-$1.9B.
- Now read Ecopetrol: The refinery business hums along nicely, despite the reficar cost overruns
Thu, Apr. 21, 2:56 PM
- The analyst who called the downfall of Pacific Exploration & Production recommends Gran Tierra Energy (GTE +2.1%) as a buy for investors still looking to benefit from Colombia’s oil potential.
- Paradigm Capital's Ian Macqueen says "Colombia is actually a very profitable place to produce, providing you have a reasonable capital structure to begin with,” adding that GTE is a likely suitor for assets that state-run oil company Ecopetrol (EC -0.4%) and others may be selling.
- Parex Resources (OTC:PARXF) is another company with a healthy balance sheet that could benefit as EC sells assets to reduce leverage, Macqueen says.
- Now read To Gran Tierra or not to Gran Tierra, that is the question
Tue, Mar. 29, 10:50 AM
- Ecopetrol (EC -5.1%) has started legal proceedings in a Colombian court against contractor Chicago Bridge & Iron (CBI -0.8%) for $2B over claims related to its Reficar refinery in Colombia.
- EC has said bad management at CBI increased spending on the project by $4B, double the original $3.99B price tag.
- The Reficar refinery, part of EC's operations near the northern coast of Colombia, reopened late last year after an overhaul meant to more than double capacity to 165K bbl/day.
Wed, Feb. 10, 12:38 PM
- Colombia's government is preparing a complaint against contractor CB&I (CBI -3.2%), which directed construction on the newly renovated Reficar refinery, after accusations that poor management sent the project ~$4B over budget, Reuters reports.
- The refinery, part of state-run Ecopetrol (EC +1.8%), reopened late last year after a multi-billion-dollar overhaul meant to increase its capacity to 165K bbl/day from 80K bbl/day to 165,000.
- Colombia's comptroller estimates final costs came in at $8B vs. the original $4B projection, although EC says the total is still being calculated.
Tue, Jan. 19, 11:21 AM
- Ecopetrol's (EC -4.6%) credit rating is downgraded to one notch above junk status, to Baa3 from Baa2, and placed on review for a further downgrade by Moody's, triggered by persisting stressed oil prices.
- The ratings agency says that while the Colombian oil firm has no material debt coming due in the next two years, weaker cash generation and higher leverage, coupled with limited funding availability overall for the oil industry, will hurt the company's ability to continue with its capital spending program.
- EC and Colombia have been cited as likely candidates for primary market issuance in Q1, but bankers think the two borrowers are likely to wait as oil price volatility has soured sentiment.
Dec. 15, 2015, 1:08 PM
- Ecopetrol (EC +8.3%) bounces in a big way from 52-week lows after Deutsche Bank recommends buying the shares and sets a price target of $8.40, saying concerns over the company’s lack of growth and potential dividend cut already are priced in.
- While the firm continues to see some headwinds for EC’s investment case - such as a poor reserves base, lack of growth and expectations for a significant dividend cut - it believes the risks have been discounted.
- EC announced plans yesterday to cut capex by 40% as it attempts to cope with weak crude oil prices.
Oct. 27, 2015, 11:57 AM
- Ecopetrol (EC -3.2%) says it will take over operation of the Rubiales field, Colombia’s largest, from Pacific Exploration & Production (OTCPK:PEGFF -8.5%) at the end of their contract in mid-2016.
- EC had said in March that Pacific’s contract for the field would not be extended, but Pacific said at the time that it could make a new proposal to keep running the prospect; the field provides Pacific with more than a third of its production.
- Pacific, which was previously named Pacific Rubiales, changed its name earlier this year to reflect a broader Latin America focus.
Jun. 23, 2015, 12:37 PM
- Colombia’s state-owned Ecopetrol (EC +1.7%) reportedly is offering at least $500M of 10-year dollar bonds in the overseas market, its first debt sale on the international market in more than a year.
- EC plans to invest an average of $6B/year as it seeks to preserve margins and boost reserves amid falling crude oil prices, which caused Q1 profit to fall 91% Y/Y.
- Separately, EC says it has suspended pumping of crude through the 300-km (186-mile) Transandino pipeline after a bomb ruptured a stretch of the line near the Pacific Coast, causing crude to gush into a river at high pressure.
Jun. 17, 2015, 12:45 PM
May 26, 2015, 11:47 AM
- Ecopetrol (EC -3.5%) unveils a new strategic plan targeting an average annual production increase of 1%-2% to reach ~870K boe/day by 2020, focusing on preserving margins and boosting reserves instead of high growth.
- EC says it will focus production on major profitable fields as it expects EBITDA of more than $30/bbl, and seeks to boost proved reserves by 1.7B barrels by 2020.
- As part of the new plan, EC says it will continue to divest non-strategic assets including stakes in Empresa de Energia de Bogota and Interconexion Electrica SA, as well as non-strategic E&P assets.
Apr. 8, 2015, 2:49 PM
- Ecopetrol (EC -2.1%) plans to cope with falling oil prices by bolstering exploration offshore, as well as focusing on production of high-yield wells, new President Juan Carlos Echeverry says.
- EC will focus on ~20 oilfields that produce 80% of its onshore crude and have output costs of $7-$17/bbl, leaving wells with higher extraction expenses to other companies, Echeverry says one day after taking the helm at the company owned 88% by Colombia's government.
- The new boss also says EC is prepared to take over operating duties at Colombia's largest oilfield, Campo Rubiales, after deciding not to renew the contract Pacific Rubiales had to run it.
Mar. 12, 2015, 8:32 PM
- Colombian state oil firm Ecopetrol (NYSE:EC) was up 7.2% after hours, adding to gains of 1.9% today, in the wake of news that Colombia arrested seven suspects on charges of a kickback scheme between EC and services contractor PetroTiger.
- The suspects include four current Ecopetrol employees.
- The charges follow the U.S. indictment last May of PetroTiger's former CEO Joseph Sigelman on charges of paying a former Ecopetrol employee $335K in order to win a $39M conttact.
- Ecopetrol says it has suspended the four current employees.
- Previously: Ecopetrol names former finance minister Echeverry as CEO (Mar. 06 2015)
Mar. 3, 2015, 11:58 AM
- Ecopetrol (EC -5.6%) is sharply lower after unexpectedly recording its first quarterly loss since shares began trading in 2007 on rising costs and a decline in crude output and prices.
- The Colombian state-owned oil producer posted a Q4 net loss of 844B pesos ($333M), far below analyst forecasts for a profit of 1.35T pesos and a profit of 2.43T pesos in the year-ago quarter.
- EC's oil and gas production fell 1.8% Y/Y to 765.1K boe/day, while production for the full year fell 4.2% Y/Y to 755.4K boe/day; exploration costs rose 18 % in the quarter.
- EC says the average price of crude, gas and other products was $10.6B less in 2014 than in the prior year.
- ‘EC's "high leverage to oil price movements has contributed to its being one of the weakest performers,” BofA analysts say.
Feb. 4, 2015, 3:59 PM
- Ecopetrol (EC -7.4%) is finding considerable interest in acquiring its 43% stake in the Invercolsa energy investment company for as much as $450M, 4x its book value, Bloomberg reports.
- EC stake sales in Invercolsa, EEB and Interconexion Electrica may raise as much as $1.1B this year as the Colombian state-run oil producer focuses on its core business amid the slump in global crude prices, according to the report.
Jan. 8, 2015, 2:23 PM
- Ecopetrol (EC +3.1%) is exploring a sale of its stake in gas investment company Invercolsa, Bloomberg reports, following a multiyear legal battle over part of the holding.
- EC's 43% stake in Invercolsa, which invests in natural gas transportation and distribution in Colombia, had a book value of ~$112M at year-end 2013.
Ecopetrol SA engages in the exploration, development and production of crude oil and natural gas. It operates its business through three segments: Exploration & Production, Refining & Petrochemicals and Transportation & Logistics. The Exploration & Production segment engages in the oil & gas... More
Sector: Basic Materials
Industry: Independent Oil & Gas