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.

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 to the previous advances in our digital transformation agenda. We updated our 2020-2022 business plan responding to the crisis in a timely manner. We committed more than COP88 billion to social investment for the benefit of our fellow Colombians in attention to the social and health emergencies brought by the pandemic. We prioritized the protection of reserves and production. We accelerated the implementation of TESG within the company and in our strategy. We progressed in the consolidation of gas as a key lever for the energy transition by increasing our operations in Montenegro and we reached an agreement with Shell to work together in the Colombian Caribbean offshore gas province. We signed the first Special Contract for Research Project, CEPI, with their national hydrocarbons agency enabling the start of the licensing and enlisting stage for the development of the comprehensive research pilot project, Proyectos Piloto de Investigación Integral for the unconventional resources. This project, named Kalé, will take place in Puerto Wilches, Santander. Ecopetrol was able to face these challenges, thanks to the commitment of all of our employees. We proved our resilience and flexibility to adapt to an adverse and volatile environment, displaying a responsible gradual recovery in operational and financial terms, while prioritizing the commitment to safety in our operations. In 2020, Ecopetrol reached an EBITDA of COP16.8 trillion and a net profit of COP1.7 trillion, standing out for its positive financial results in a year distinguished by significant losses across the oil and gas industry. In terms of market conditions, 2020 was characterized by high volatility; the average price of Brent decreased $21 per barrel as compared to 2019 and traded below $20 per barrel during the worst part of the crisis. The average basket for Ecopetrol was $39.6 per barrel in 2020, a 35% decrease as compared to the prior year. However, our solid commercial strategy supported by the diversification of destinations and the better global balance of supply and demand for crude observed in the second half of the year allowed for a sustained recovery in prices. In the first quarter of 2021, we expect a recovery in volumes of around 12.5% in an environment of gradual economic recovery where uncertainty still persists. I will now open the floor to Alberto Consuegra, who will tell us about the main operational achievements of the year.

Thank you, Felipe. In our exploration efforts, we drilled 18 wells in 2020, with three successful, six declared dry, and nine currently appraising. By the end of December, we were drilling four additional wells that will be completed in 2021. Due to the positive results from exploratory and appraisal wells, Gato do Mato is projected to reach commercial viability by 2022, allowing us to incorporate initial reserves that year and commence production by 2025. The successful well will continue production tests and gas sales, and if sales are realized by the end of 2021, commercial viability for the Sidetrack 1 well will be declared. Our cumulative production from exploration assets rose compared to the previous year, reaching 4.3 thousand barrels of oil equivalent per day. Ecopetrol group's total production for 2020 was 697,000 barrels of oil equivalent per day, in line with our production targets. Natural gas accounted for 17% of our annual production, with a 3% increase in volume from the previous year. In the fourth quarter of 2020, production was 694,000 barrels of oil equivalent per day, an increase of 13,000 barrels from the preceding quarter. The gas sector contributed over 30% to the EBITDA of the upstream segment by December, maintaining an EBITDA margin above 50% due to effective commercial strategies that maximized sales volumes. We also achieved a reduction in flaring to 21.7 million cubic feet per day as of December 2020, supporting our commitment to a 20% emissions reduction by 2030, with an estimated reduction of 600,000 tonnes of CO2 equivalent annually. Additionally, 771 users were connected in 2020 through the gas OCR program. The transported volume of crude and refined products in the fourth quarter of 2020 showed an increase compared to the same quarter in 2020, indicating a recovery in consumption levels, with volumes even above pre-pandemic levels. However, the annual volume experienced a reduction of 12% due to lower production in the country and decreased demand for refined products. In 2020, we didn't require reversal cycles for the Bicentenario pipeline thanks to the operational strategy for the Caño Limón - Coveñas pipeline, marking the first year since its commissioning in 2017 that this contingency was unnecessary. The Refining segment displayed strong performance despite the sector facing significant challenges, thanks to the operational stability across business units. We made notable progress in fuel quality, producing gasoline with lower average sulfur content ahead of upcoming regulations. In 2020, our Cartagena refinery produced gasoline with less than 30 parts per million of sulfur, with production below 50 parts per million commencing in November. The refining operations improved throughout the fourth quarter, achieving a consolidated processing capacity of 355,000 barrels per day, the highest for the year. This reflects our ability to maintain reliable operations amid the challenges encountered in 2020. Moving to reserves, as of the end of 2020, Ecopetrol's proven reserves stood at 1,770 million barrels of oil equivalent, which is a 6.5% decrease from the end of 2019. These reserves consist of 71% liquids and 29% gas. The decline in prices led to a reduction of roughly 215 million barrels equivalent in proven reserves, which was partially offset by new drilling projects adding around 114 million barrels of oil equivalent, along with production optimization contributing an additional 30 million barrels. Moreover, discoveries in the Guajira field and progress in the Mexican Gulf and Andina fields contributed to 43 million barrels of oil equivalent. Enhanced oil recovery initiatives yielded an additional 113 million barrels of oil equivalent in 2020, mainly from ongoing water injection processes in various fields. We concluded 2020 with a reserve replacement ratio of 48% and an average reserve life of 7.5 years. Our investment plan is designed to regain growth and achieve a 100% reserve replacement ratio by 2022 through various recovery activities, financial optimization, and investment projects. In the fourth quarter of 2020, we were awarded a Special Research Project Contract for the Kalé pilot project, which will involve constructing a 4.5-hectare platform and drilling a well, utilizing multistage hydraulic fracturing techniques with horizontal drilling, while adhering to strict environmental standards. The community will also participate in monitoring and oversight efforts. The project is currently in its initial phase, focusing on securing environmental licensing and engaging local stakeholders. Regarding the Permian Basin, after resuming operations in July, we ended 2020 with 22 producing wells and another 22 in progress, expected to be completed in the first quarter of 2021. We also finished the year with production of 5.2 thousand barrels per day of oil equivalent net for Ecopetrol before royalties, and an investment of $185 million. Throughout 2020, the Permian Basin generated cumulative EBITDA of $20.7 million, with an EBITDA margin of 43%. Notably, we achieved a record drilling performance with the fastest well completed in 9.7 days, an average drilling time of 14 days for wells with depths of 19,800 feet, and executing 18 fracturing stages in a single day. For 2021, we plan to drill around 90 wells, targeting average production rates of 12,000 to 14,000 barrels per day of oil equivalent net for Ecopetrol after royalties, and an approximate investment of $600 million. During 2020, we continuously monitored costs, ensuring we remained flexible enough to navigate the challenging parts of the year while securing resources for a safe, profitable reactivation as prices began to recover. Our total unit costs were $27.4 per barrel in 2020, a considerable 23% reduction from 2019, resulting in around COP1 trillion in savings in operating costs. We anticipate that in 2021, operational costs will rise with the reopening of wells and growing Brent prices observed since the start of the year. Nevertheless, we remain committed to cost control, aiming for savings and efficiencies between COP1.5 trillion and COP2.2 trillion over the next three years, allowing us to maintain total unit costs around $30 per barrel at a Brent price of $45 per barrel. I will now hand over to Jaime Caballero for an overview of the main financial results for Ecopetrol Group.

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 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 in 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 compared to the third quarter of the year due to lower EBITDA generation of COP218 billion related to lower margins in imported 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 tax provisions and environmental contingencies for COP52 billion. The aforementioned impacts were partially offset by a financial result of COP408 billion, mainly due to the positive effect of exchange rate differences and FX hedges. Finally, during the fourth quarter, we updated the impairment calculation recognized by the company in the first quarter of 2020 for COP1.2 trillion, resulting in a recovery of COP450 billion net of taxes of the total amount recognized in that period, given better expectations and market variables. On an annual basis 2020, net income was positive and closed at COP1.7 trillion. As compared to 2019, there is a lower EBITDA of COP14.3 trillion, mainly affected by the drastic falling prices, lower demand under recognition of the voluntary retirement plan provision. Likewise, higher financial expenses and other items of COP1.6 trillion were generated, offset by lower income tax of COP5.2 trillion associated with lower results. It is important to highlight the effect of three non-recurring events that occurred between the end of 2019 and during 2020 with a net impact of COP1.6 trillion as follows: first, an extraordinary revenue in the fourth quarter of 2019 of COP1.5 trillion related to the expectation of future recovery of historical tax losses in the United States. Second, the recognition of an extraordinary revenue in the fourth quarter of 2019 for COP1 trillion from market valuation given the increase of stake and change of control. The above was partially offset with the business combination gain recognized in 2Q 2020 associated to the acquisition of the offshore gas assets. Finally, during 2020, a net impairment of long-term assets for COP530 billion was recognized, lower by COP748 billion after taxes when compared to 2019. It's important to highlight that this amount includes the previously mentioned recovery compared to the first quarter estimate. The breakdown across business segments is as follows; in upstream, an impairment of COP163 billion was recognized, mainly due to the decrease in the price projections. In the midstream, an impairment recovery of COP240 billion was recognized related to higher volumes within cash generating units in the Sandino pipeline and the Caño Limón pipeline. In downstream, an impairment of COP670 billion was recognized as a result of lower refining margins in Cartagena and a lower book value of the assets associated with the modernization plan of the refinery considering the likelihood of future utilization. With regards to the performance of our main financial indicators, for the fourth quarter was COP4.3 trillion, while the EBITDA margin stood at 30.5%. As previously mentioned, the fourth quarter was mainly affected by lower margins and imported crude oil and gasoline sales and increase in operational activity and the effect of some non-recurring events. EBITDA per barrel stood at $18.5 due to lower sales volume and lower crude and product basket price. The net income breakeven was affected by the lower revenues, mainly due to lower throughput and crude spread. The main leverage ratio gross debt to EBITDA reached 2.8 times, a significantly improved performance versus the 3.5 times stated as the 2020 target. Finally, the 2020 CapEx execution amounted to $2.7 billion within the target range of $2.5 billion to $3 billion previously announced. 78% was invested in Colombia and 22% internationally, mainly in the United States and Brazil. In addition, of the total investment, 76% corresponds to the option segment and the remaining 24% midstream and downstream segment. It's important to highlight that 66% of the investment was focused on research and production growth opportunities and the remaining 34% to operational continuity activities. Let's move on to the next slide to discuss the cash position. By the end of 2020, Ecopetrol maintained a robust cash position of COP8.1 trillion. During 2020, the main sources of cash were operating activity and finance, which allowed disbursements towards preserving the investment plan, honoring the dividend policy despite the crisis, and maintaining a disciplined debt service. We highlight the change in the free cash flow trend during the second half of the year, which allowed the prepayment of short-term obligations for a total value of COP1.6 trillion. I now give the floor to the President, Felipe Bayón, who will present the 2021-2023 business plan.

Thank you, Jaime. The 2021-2023 plan reflects updated views on prices, reestablishes our growth trajectory with a strong portfolio, and enhances our commitment to sustainability and energy transition. It emphasizes that organic growth and operating as an integrated company remain our top priority. We plan to invest approximately $12 billion to $15 billion, primarily directed towards exploration and production with a focus on strategic assets that will help us restore production and reserves growth. We expect operating cash flow to trend upwards and aim to reduce our gross debt to EBITDA ratio to below two times by 2023. In the midstream sector, investments will be between $780 million and $960 million, focusing on the reliability and integrity of infrastructure, expanding our product pipeline business, and improving the efficiency of heavy crude evacuation in Colombia. In refining, we will invest between $1.2 billion and $1.4 billion to ensure the integrity and competitiveness of our assets. The plan includes initiating a project to connect crude plants at the Cartagena refinery, increasing total throughput to around 420,000 barrels per day by 2023. This plan aims to achieve production levels close to 750,000 barrels per day by 2023. Regarding enhanced oil recovery, we will continue expanding water injection in relevant fields, aiming to contribute between 20,000 and 25,000 barrels per day to total production in 2023. Our gas strategy focuses on strengthening our operations in both Piemonte and Guajira, while also enhancing future growth of reserves in Ecopetrol. Key projects include increasing the recovery factor in current fields, developing the Flamencos field discovery, and progressing with our Near Field exploration program as well as fields from recent international acquisitions like Gato do Mato and Rodeo. The Ecopetrol Group expects to generate robust operating cash flow of between $14 billion and $16 billion during the 2021-2023 period, with additional non-operational income potentially adding between $500 million and $1 billion. After accounting for debt service, we will have adequate cash to finance our investment plan and provide returns to shareholders. With oil prices above $50 per barrel, this plan does not necessitate additional debt financing. The current Brent price allows for potential liquidity surplus, providing flexibility for organic and inorganic growth, debt prepayment, and dividends. Moving to the next slide, we will invest over $600 million in decarbonization, energy efficiency, and fuel quality initiatives over the coming years. Ecopetrol plans to develop six new solar projects this year, building on the advancements from the Castilla and San Fernando solar farms, aiming for a total installed capacity of non-conventional renewable energy of 400 megawatts by 2023. We maintain a goal of social and environmental investments around COP1.7 trillion by 2024, primarily targeting social gap reduction and community development. In governance, we will enhance our TESG information disclosure standards in line with best practices. In 2021, we will adopt sustainability metrics suggested by the World Economic Forum, referred to as Stakeholder Capitalism Metrics while also integrating TCFD and SASB frameworks into our main reports, as announced last year. Please advance to the next slide as I discuss our strategic considerations regarding the acquisition of 51.4% of Interconexion Electrica SA, ISA. Hydrocarbons will continue to be a primary source of energy for global needs, though their market share is expected to decrease as the world transitions towards decarbonization. The shift has accelerated in recent years, leading to increased oil price volatility and less investment interest in the sector. Change in Colombia is anticipated to be gradual. To adapt, companies globally are exploring new business segments such as solar and wind energy, hydrogen use, and carbon capture. Transmission is becoming essential in the energy value chain to support electrification growth. We believe there are multiple paths to energy transition. Ecopetrol has identified four key areas to navigate this: enhancing oil and gas competitiveness, exploring new energy businesses, focusing on decarbonization, and improving environmental, social, and governance factors. These areas aim to enhance our resilience in the oil and gas sector while increasing involvement in growth opportunities in energy transition sectors. By 2030, we envision a still-growing oil and gas business alongside options like green hydrogen and carbon capture being integrated into our portfolio as they align with our growth and capital discipline criteria. Let’s discuss the benefits of this transaction on the next slide. ISA is a significant electric transmission operator in Latin America, and this investment would position us strategically in a vital sector for energy transition with diversified assets and strong profitability potential. ISA's management and governance would improve our risk profile as it shares similarities with Ecopetrol's regulated linear infrastructure model. Collaborating with ISA would bolster our resilience to crude oil price volatility, with income from this venture accounting for around 40% of our increasing stability. Engaging in transmission is a more promising option than low-emission generation businesses, as transmission provides more stable margins. This acquisition will allow for swift diversification beyond what would usually take years. Moving to the next slide, this potential transaction adds value for our shareholders and debt holders. If market conditions remain steady, the dilution from an equity public offering would be balanced by increased earnings per share. The group's share float will also rise, enhancing market liquidity. Rating agencies have indicated that this transaction would enhance Ecopetrol's credit profile by providing more stable cash flows and mitigating geographic concentration risks. We signed an Exclusivity Agreement with the Ministry of Finance on February 12 to pursue a non-binding offer regarding this potential transaction, expected to conclude by June 30, 2021. During this timeframe, we will conduct due diligence and work on structuring the equity offering and financing options to facilitate transaction closure. Should the necessary contracts be finalized by the end of Q2, we aim to execute the equity offering in the third or fourth quarter of this year, pending all required approvals. Depending on the results of the equity offering and liquidity available, we may also consider debt issuance to gather additional funds for the transaction, which we plan to finalize before the end of 2021. Moving on to the next slide, we'll review a pro forma analysis of this potential acquisition. With this move, Ecopetrol would enhance its presence across the Americas and establish itself as a key player in the regional energy transition. Integrating financials from both Ecopetrol and ISA would reflect the financial strength we anticipate, with ISA contributing around 10% to our income and 15% to EBITDA, reducing revenue and EBITDA volatility. Additionally, we expect improvements in environmental metrics, such as the CO2 emissions to EBITDA ratio, due to ISA's recognized commitment to sustainability. Finally, let’s conclude by reflecting on last year's results that illustrate Ecopetrol's resilience and competitiveness, allowing us to enter 2021 with a strong financial position and optimistic prospects for growth across all business sectors. The 2021-2023 business plan addresses environmental challenges through a sustainability focus, ensuring a strategy that benefits both the business group and the country. We aim to capitalize on a significant growth opportunity through the acquisition of a controlling interest in ISA. We will outline Ecopetrol's TESG strategy in the first half of the year, detailing our key metrics and ambitions. Thank you all for joining us today. I will now open the floor for questions.

Thank you. We will now begin the question-and-answer session. 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.

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.

Thank you for your question, Barbara. When we discuss leverage, we have two scenarios in mind: our current oil and gas business and our potential success with the planned acquisition of ISA. Looking at our organic business, we ended the year in a strong position with a debt to EBITDA ratio of 2.8 times, which is significantly lower than our initial expectations and a healthy metric compared to industry peers. One of our goals is to reduce this leverage ratio to under 2.5 times, ideally in the range of 2 to 2.5 times, and we are confident about achieving this. The basis for this improvement will come from two components. First, we anticipate an increasing contribution of EBITDA in the coming years, starting this year, which will positively impact the ratio. Second, we don't need to incur new debt to fund our organic plans. However, we might choose to take advantage of current low rates by tapping into the markets strategically or optimizing our capital structure, such as adding debt to the midstream segment. In the second scenario involving the transaction, we plan to use a mix of equity and debt, where the amount of debt will depend on the size of our equity offering. We estimate the potential addition to our balance sheet could be around $1.5 billion. After consolidating Ecopetrol post-transaction, we expect our debt to EBITDA ratio to be around 2.7 to 2.8 times by the end of 2020, with a reduction over time to approximately 2 to 2.2 times by 2023 or 2024. This projection assumes the continuity of ISA's business assets and debt, without any prepayments, based on the expected cash flows of the business. I hope this fully addresses your question. Thank you.

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.

Thank you, Barbara. I'll address this and then ask Alberto to provide additional insights. Over the past year, particularly during the COVID-19 crisis, we recognized the importance of fundamentally rebuilding trust with communities. Last March and April, we operated with around 40 to 45 work fronts in the country. Today, we have nearly 350 work fronts, similar to our pre-pandemic levels. This journey of rebuilding trust has involved collaboration with communities and authorities at all levels. Additionally, I visited Puerto Wilches in Santander, engaging with communities about pilot fracking projects. We spent much of the day listening to their concerns, which mainly revolve around water management. These are long-standing issues related to water use and employment opportunities. Therefore, we need to proactively establish dialogue with communities to continue rebuilding trust. Importantly, fulfilling our commitments is vital. We strive to complete what we start, and if we commit to a project with communities, we must ensure its completion. While challenges may arise in some operations, our approach has led to a significant increase in investments in social and environmental initiatives in those communities. Another key activity is our program that substitutes tax payments with community projects, amounting to over $100 million. Instead of paying taxes, we invest in schools, water infrastructure, and roads. For instance, in Tumaco, an area affected by violence, we used over $3.5 million to provide desks for 45,000 children. A parent shared that the lack of desks was a significant factor contributing to violence, highlighting the potential for conflict in schools with inadequate resources. By addressing these needs, we can quicker connect with communities in need. Ultimately, creating trust, delivering on commitments, and maintaining direct dialogue with stakeholders are essential. Additionally, a few weeks ago, we announced that we're one of 61 companies signing the WEF's stakeholder capitalism metrics reporting system, reinforcing our commitment to transparency and data sharing regarding our business practices. I hope this provides clarity, Barbara. I realize it was a lengthy explanation, but I believe context is important. Alberto, do you have anything to add?

Yes, Felipe. Good morning Barbara. Actually, we've been successful in some areas like Rubiales, also areas in which we previously had problems and those have been successfully resolved. We can go full steam ahead 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 the central government in the prompt resolution of blockades when they occur. This is the reason why we are deploying such an aggressive plan in terms of social and environmental investment, which is COP1.7 trillion, to support exploration and production, alongside another segment of the capital plan.

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 per 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 in 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 go towards $70? Another quick 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 maybe 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.

Bruno. Thanks. I'm going to ask Alberto to take the first one on production and give us a bit more color around the split between Colombia and particularly the Permian on how do we see that progressing? And then I'll ask Jaime to give us some thoughts on the margins questions, and what are the ranges in terms of CapEx going forward? So, Alberto, please go ahead.

Bruno, thank you for your question. Good morning. Last year, the exit rate in Colombia was approximately 685,000 barrels, and we expect that in the first quarter we will approach 700,000 barrels. This will depend on our ability to address a challenge in the Castilla field related to the expansion of the water disposal structure. Once that issue is resolved, we should be able to exceed 700,000 barrels. In the Permian, the exit rate was 4,500 barrels per day last year. As we complete the 22 wells we drilled last year, we anticipate reaching about 9,000 barrels net Ecopetrol, and by the end of the year, with a new drilling and completion phase, we expect to conclude production at around 12,000 to 14,000 barrels per day net Ecopetrol. This outlines the situation in Colombian Permian. Regarding growth from 2021 to 2023 to achieve production of 750,000 barrels, we anticipate growth from projects such as Llanito, the Middle Magdalena Basin, gas production in the Caribbean onshore, and of course the Permian, which will contribute approximately 20,000 barrels during that period.

Hi Bruno, thank you for your questions. I will first address your comments about pricing and then connect it back to the Capital Expenditure ranges discussion. Regarding pricing, our planned price for 2021 is 45, for 2022 is 50, and for 2023 is 54. We anticipate a gradual balance recovery between supply and demand over the years. Admittedly, given the current prices, these figures may seem conservative, but we believe that there are still risks present. We prefer to establish a financial strategy that is conservative, which promotes efficiencies and capital discipline. The risks we see in the market are mainly three: firstly, there is ongoing uncertainty around the COVID pandemic; secondly, the deployment pace of vaccines and their effectiveness in the coming months; and lastly, potential risks tied to OPEC+, particularly regarding the fiscal stability of several member countries. Now, we recognize that, based on our short-term planning, it is more likely to see Brent prices ranging between 50 and 60 for 2021. We agree with that assessment. I will outline some sensitivities around these numbers, bearing in mind that the low end is 50 and the high end is 60. For instance, with this pricing outlook, we estimate that it could lead to an additional EBITDA of between $1 billion and $2.5 billion, EBITDA margins might increase by 1% to 4%, and Return on Invested Capital could also grow by 1% to 4%. These figures are directly tied to the price range I mentioned. Now, looking at CapEx and whether pricing influences it, our $12 billion to $15 billion range is influenced by four main factors. The first is execution capability, which Felipe and Alberto discussed earlier. This relates to our ability to complete projects at the desired pace amidst ongoing pandemic challenges and social issues in some areas. The second factor concerns the maturity pace of certain projects. While 2021 appears solidly underpinned, there remains some uncertainty about the readiness of projects for 2022 and 2023. The third factor is capital efficiencies, as seen in the fourth quarter where we achieved lower project costs than expected. The fourth factor is about optionality, determining whether certain projects are more appealing at this price point. All the projects we are pursuing in this range can operate at $50 or below. We are not considering projects that require breakeven prices above this due to the competitive opportunities in our portfolio. To clarify our budget, from the $12 to $15 billion range, approximately $12.5 billion to $13 billion is firm and directly linked to the target of 750,000 barrels by 2023. There is an additional $2 billion that is optional, offering potential upside to the 750,000 target. Notably, 75% of that $2 billion pertains to growth CapEx, while the remaining 25% involves continuity activities to maintain our infrastructure. I hope this answers your question. Thank you, Bruno.

Thank you, Alberto. I just want to confirm the numbers you mentioned. When discussing the oil price range, you indicated that the royalty is 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%, ROIC incremental 1% to 4%. Again, this is all incremental on top of the baseline numbers that we've shared today.

Thank you very much. I wanted to follow up on the last question regarding the range for 2023. It appears quite broad. It's evident that the Permian will be a significant contributor, but I am curious about which areas you might be worried about in terms of potential disappointments or expected declines. I'm interested in how challenging it is to maintain production in those areas and what kind of variable production could impact how close you can get to 750. Additionally, could you provide your perspective on the lifting costs, which have increased year-over-year and compared to the third quarter? What are your thoughts on overall cost levels as you look ahead to 2021? Thank you.

Thank you, Frank. 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 a fundamental point that we need to ensure that we keep under control. In terms of production, there's a couple of areas that are 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 additional gas volumes that will be available after 2023. So it's a matter of securing on increasing volumes to 2023 and then appraising options going forward. So gas is one, Perrie Monte which is in Casanare where we have lots of activity focused. The other one is the Permian that you mentioned. Last year, we were able to stop and restart very quickly. We stopped in March, we restarted in June. We ended up the year with 22 producing wells and 22 additional wells that will be tied in in 1Q of this year. This year, 90 more wells and roughly 300 wells in the next three years will purely have a massive impact in terms of production growth and opportunity. I think Oxy, who's our partner and is the operator in Rodeo has demonstrated as Alberto was alluding to operational excellence in terms of delivering through drilling the wells faster and doing more fracs per day. Has been ensuring that operation is profitable. I wanted to give you a bit of context. Alberto, if you want to add anything else in terms of production, and then go to the trend on lifting costs please go ahead.

Yes, Frank. I have two points to discuss. First, we need to manage the declining production rate, particularly in areas like Rubiales and Cusiana, where the decline exceeds 3% each month. This presents a challenge, but we have plans in place to tackle it. There are also projects, such as one involving steam injection, and as Jaime mentioned, if we can reduce the breakeven costs to below $50 per barrel, it becomes quite uncertain how we will proceed with developing those fields. These are the areas where I believe we need to concentrate our efforts in the coming months and years. Regarding lifting costs, we project that they will reach $8.5 per barrel, and we are facing challenges in energy efficiency as our production increases the demand for more energy. However, we also have opportunities to enhance efficiency through the implementation of a zero-based budget initiative that has been in development since late last year.

Thank you very much.

Yeah. Good morning, everyone. Congratulations on the results, for the recycling results actually. I just have two doubts from my side. The first one is regarding the ISA transaction, we perceive that the timeline associated with signing the administrative contract. Could these be understood as the first sign of not turning back for this transaction? And the second one, also regarding the ISA transaction, on the regulatory front, are there some regulatory hurdles to bring ISA into full control, especially the laws 142 and 143 from utilities in Colombia?

Thank you, Nicolás. Regarding ISA, it's important to note that we've structured the transaction process with several options for exiting if necessary. We have made a non-binding offer and are currently in the due diligence phase under the exclusivity agreement with the Ministry of Finance. By the end of June, we expect to convert the non-binding offer into a binding one if we agree on pricing and conditions. This process will also initiate the issuance of additional shares, which is crucial for closing the transaction. So, to your question about whether there's no turning back, I would say no; we've built these exit options into the process. On the regulatory side, it’s notable that we self-generate 66% of the energy we use for operations. We are significant energy consumers and aim to maintain this efficiency in energy production and distribution, which is vital for our long-term sustainability strategy. However, this approach may not necessarily apply outside of Colombia, and we will explore other opportunities as they arise. Thanks, Nicolás.

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

Hi. Thank you for the opportunity. I have a simple question here. Well, upstream results this quarter, the fourth quarter was weaker versus the third quarter, part of this is the cost pressure and the lifting costs that you addressed. But any other reason. This leads me to a second question because midstream 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 Cenit and that you would have a kind of a new business model? So could you give us a little bit more color on it? And how it could change 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.

Thank you, Lily, for being on the call today. I will begin with a midstream update and then turn it over to Milena López, our CFO, for more details because there’s important context to discuss. After that, I will ask Jaime to respond to the other two questions regarding the occasional reserve we have and our plans for dividend distributions. We will also talk about the weak performance in the fourth quarter for upstream and the one-off impacts on that quarter. As you correctly noted, midstream has been very stable and has provided a hedge against price volatility, which is essential for Ecopetrol's integrated operations. Two key points to highlight: First, last year we initiated efforts to improve our operating model, aiming to enhance midstream performance. This involves optimizing operations across our various companies that manage different assets and infrastructure to maximize synergies. Secondly, while Cenit owns the infrastructure, Ecopetrol manages its operations. Earlier in 2021, we successfully transitioned over 500 Ecopetrol employees to Cenit, which will lead to significant savings moving forward. This structural change, along with our ongoing focus and reliability, positions us well for future upside in results from the midstream segment. Regarding Frontera, we have reached a settlement with them and two other producers. We are currently waiting for approval from the Procuraduría, which is necessary for the agreement to take effect. This settlement resolves uncertainties surrounding claims and disputes regarding a Ship or Pay contract, terminating existing contracts without any cash settlement apart from $28 million held in escrow. Once the approvals are granted, Frontera will transfer its 43% stake in Bicentenario to Cenit, ensuring that Bicentenario is fully owned by Ecopetrol's subsidiaries. This includes transferring all outstanding dividends from the pipeline and offsetting portions of syndicated debt. Furthermore, the agreement introduces two new transportation contracts—one for the [Indiscernible] pipeline and another for the Bicentenario, as well as the Caño Limón - Coveñas route. It’s crucial to note that in the second contract, Frontera will not incur costs if shipping volumes through an alternative route, which was a major point of contention in the dispute. In terms of financial impacts for 2020, the midstream financials do not account for revenues from the currently disputed Ship or Pay contracts. Therefore, there will be no revenue reduction linked to this contract because these figures are already reflected in what you see today. However, the agreement won’t be binding until we secure all necessary approvals, so there will be no immediate effect on this year’s financials. Next year, upon closing, we anticipate an impact that could reach up to $200 million in revenue. The significant advantage is that once we gain full control of Bicentenario at the Ecopetrol level, we’ll be able to operate the pipeline directly. Currently, we need shareholder approval to reverse the pipeline, but once this process is complete, Ecopetrol will manage operations in both directions without needing further approvals. Lastly, regarding financial statements for Bicentenario, we expect to have around $300 million in cash available for the company by year-end, which we can discuss further at that time. Milena, please provide more details on how the midstream situation may evolve, the potential revenue implications, and our future operational plans.

Thank you, Felipe. Hi, Lily. Thank you for your question. I’ll give you a bit of background on the Frontera agreement for everyone on the call. As many of you saw in the second half of last year, we published the press release detailing aspects of the agreement we reached with Frontera. This is an agreement for a joint filing of a petition for a settlement. The agreement is subject to two approvals required: that of the Procuraduría, the Colombian Attorney General's office, and the approval by the Administrative Tribunal of Cundinamarca. Once we have these approvals, the agreement is binding. What does this agreement provide for? It eliminates uncertainties related to claims and disputes regarding a Ship or Pay contract. It terminates contracts and provides for no cash settlements except for $28 million currently held in escrow. As a result of this approval, Frontera would transfer a 43% stake it holds in Bicentenario to Cenit, resulting in a fully owned subsidiary by Ecopetrol. It involves transfers outstanding dividends from the pipeline and certain portions of the syndicated debt. The agreement provides for new transportation agreements in the pipeline coverage routes. Importantly, Frontera’s obligations are contingent on this settlement. No impact to financials on this year and projected one-time revenue in 2020 you should expect an impact next year related to this agreement, potentially up to $200 million next year. It’s also crucial to highlight that when we look at Midstream revenue composition, we essentially have two business lines: one is oil pipelines which have dollar revenues that comprise around 80% of revenues and EBITDA; the other, 20% of revenues are peso-based revenues related to the refined product pipelines, which have prices in pesos potentially varied in response to market conditions. The split should remain fairly consistent yearly, influenced by fx movements and other market dynamics. Thank you for your question. I hope it helps clarify.

Thanks, Milena. Lily, I'll cover your questions around upstream performance and the occasional reserve that we constituted. The upstream did close last year with an 18% EBITDA margin. It reflects the challenging conditions particularly over 2Q and 3Q. When you look at 4Q in particular, there are three key factors impacting underlying performance of the segment. In total, these factors amounted to about $300 million. Roughly speaking, each factor I will highlight captures a third of that amount, right? The first one is straightforward; we had project write-offs to the tune of about $55 million associated with unsuccessful projects, particularly in Putumayo. We had one-off abandonment costs exceeding normal cadence; that amounted to about $14 million. Also had environmental provisions made from rulings; this equated to about $15-$18 million. Additional extraordinary costs related to COVID uncertainties were seen as minor in the context. When you add these up, it’s about $110 to $120 million of the $300 million aforementioned. The second component is extra-ordinary items. There was an uptick in the accounting for the voluntary retirement plan. We decided to increase the scope of this program; this had an impact of about $20 million. There was increased depreciation due to the external auditor confirming movements in reserves that led to about $60 million increase. Again, these should not see repetition. The third factor reflects a ramp-up of activities; in 4Q, increased activity with a combination of capacity to execute, as we learned to mitigate the COVID effects, leads to about $100 million. Overall, it is right to expect EBITDA margins for the upstream to hover between 25-30% in line with plan prices and see cash breakevens below $30 per barrel. Regarding the occasional reserve, it’s an accounting reserve, a non-cash reserve that allows the direction and board to pay dividends less than the totality company could afford from an accounting standpoint. It’s protect cash and has been done for several years now. Thank you very much, Lily.

Thank you, very clear, very comprehensive.

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

Alberto, do you want to come to the numbers, please?

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

Do we have any more questions from anyone?

At this moment, I don't see other questions. We have no further questions. I will turn the call back to Mr. Bayón for final remarks.

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 uncertainties thrown at everybody around the world. I think Ecopetrol was able to quickly respond, be proactive, and show that it’s resilient. I think the benefits of being an integrated company and we’ve had some conversation during the Q&A. I think we're very well positioned in terms of closing the year, we’ve dealt with most or all the one-offs we saw at the end of the year. So I think we're set for a very good start to 2021. There's a potential space with the Brent prices where they are, with some of you asking about our view on the $45 Brent, and how we 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 to go back to growth, reserves production, also in terms of EBITDA and cash. That’s very good news. That protects our core business, with the plan we've laid out. We can finance everything we need to do organically in our plan. We've talked about ISA quite a bit in terms of how we see the transaction going forward, the program, schedule, some potential risks, and how we're addressing those. We gave you our views to date. We will continue to work around that transaction fully convinced it's transformational for the company, providing a wider, bigger, and more efficient company in terms of its risk profile, having additional hedge against volatility and regional presence. We will keep you posted on how things progress in terms of ISA. As always, we're open to your questions. If there are follow-on questions through our teams, please reach out, as we value your participation and insights. Very helpful to us. Please stay safe, and thanks again for participating in today's call. Bye-bye.

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