EC

Good morning. My name is Natalia and I will be your operator today. Welcome to Ecopetrol's earnings conference call, in which we will discuss the main financial and operating results of the second quarter of 2026. There will be a question-and-answer session at the end of the presentation. Before we begin, it is important to mention that the comments in this call by Ecopetrol 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. Ecopetrol assumes no responsibility in the event that future results are different from the projections shared on this conference call.

The call will be led by Juan Carlos Hurtado, Acting Chief Executive Officer of Ecopetrol, Camilo Barco, CFO, and Carlos Mauricio Ávila, Acting Executive Vice President of Hydrocarbons. Thank you for your attention. Mr. Hurtado, you may begin your conference.

Welcome to Ecopetrol Group's second quarter 2026 earnings conference call. This is Juan Carlos Hurtado Parra, Acting Chief Executive Officer of Ecopetrol Group. During the second quarter, Ecopetrol Group successfully capitalized on a favorable international crude oil and fuels market environment, supported by the strength of our integrated business model, differentiated commercial strategy, and disciplined operational execution. We delivered COP 40.2 trillion in revenue, COP 17.7 trillion in EBITDA, and COP 6.1 trillion in net income, representing increases of 35%, 59%, and 235%, respectively, compared with the same period last year. These results reflect our ability to capture value across the entire value chain and were primarily driven by three factors. First, a favorable pricing environment, with Brent averaging $97 per barrel and a strong recovery in international refining margins.

Second, differentiated commercial management, which enabled us to improve our crude oil differentials by $3.67 per barrel compared to the first quarter, despite a challenging environment for heavy crude grades. Third, strong operational execution in transportation and refining, with the latter making a significant contribution to value creation during the quarter. Regarding investments, we continue advancing according to plan. As of June, we had executed $2.9 billion, maintaining our focus on production, energy security, strategic infrastructure, and energy transition projects that support the group's competitiveness and future growth. During the first half of the year, we complied with the dividend payment schedule approved by the general shareholders' meeting, reaffirming our commitment to the value creation for all shareholders.

With respect to the Fuel Price Stabilization Fund, during the quarter, we received COP 1 trillion statement corresponding to the accrual of the second quarter of 2025. Furthermore, higher international prices resulted in an accumulation of approximately COP 6 trillion during the first half of 2026, the management of which we will continue to pursue with the national government. Let us now move to the next slide to review the key operational highlights of this quarter. From an operational standpoint, we continue advancing our strategic priorities and strengthening the capabilities that support the Group's sustainable growth. In exploration, we drilled three wells during the quarter, bringing the total to eight wells during the first half of the year. We highlight the progress at Copoazu-1 at the offshore Caribbean, and following the quarter's close, the Sandia-1 discovery.

These milestones continue strengthening the region's gas potential and enhance the Group's resource incorporation outlook. On the inorganic growth front, we advanced with the process related to Brava Energia. Following the authorization granted by Securities and Exchange Commission, CVM of Brazil, to assume the public tender offer. We will communicate this to the market and the decisions in due course. In commercial activities, we continued strengthening our international platform through market expansion, the onboarding of new customers, and the development of trading capabilities. Initiatives such as the new petcoke's commercial strategy, the implementation of time charter schemes, and the diversification of port and destinations enabled us to capture higher margins and generate additional value for the Ecopetrol Group. In our gas and energy transition business, we continued contributing to the country's energy security.

As the Ecopetrol Group, we supply approximately 62% of Colombia's natural gas demand, while continuing to develop solutions to expand supply availability for the market. In 2026, we have offered 293 GBTUd of firm long-term natural gas. Meanwhile, the transmission and toll roads business maintained positive momentum, securing new contract awards totaling $428 million, strengthening the growth and value creation of ISA and its subsidiaries. In production, we reached 706,000 barrels of oil equivalent per day. These results reflected environmental and electrical disruptions affecting certain strategic and growth assets. The most significant was a 76-day blockade that impacted operations in fields located in the Meta department and delayed the execution of key projects aimed at expanding processing facility capacity. Looking ahead to the second half of the year, we are implementing specific actions to recover these volumes.

We also continue to closely monitor risks associated with the operational and weather conditions, including the potential impact of the El Niño phenomenon. In transportation, volumes transported increased by 4% compared with the same quarter last year, driven by the optimization of logistics corridors and higher deliveries of refined products. Finally, in refining, we achieved the highest quarterly throughput in our history, reaching 439,000 barrels per day, representing a 6% increase compared to the second quarter of 2025. Supported by high operational availability and a favorable margin environment, this segment consolidated its position as one of the Group's main value drivers during the quarter.

With that, I will hand it over to Camilo Barco, who will provide further details on the financial results.

Thank you, Juan Carlos. Our second quarter of 2026 results reflect the strength of Ecopetrol's integrated business model. Our ability to maximize value in a favorable price environment and the flexibility of our assets, all of this underpinned by rigorous financial and capital discipline. During the quarter, the Ecopetrol Group generated EBITDA of COP 17.7 trillion, representing a 59% increase compared to the second quarter of 2025, with an EBITDA margin of 44%, approximately six percentage points higher than the same period last year.

This performance was driven by the outstanding contribution from the refining segment, which delivered record margins and throughput levels for the second quarter. In addition, higher transportation volumes and effective commercial management enabled us to capture market opportunities more effectively. As a result, we continued strengthening our financial position. The gross debt to EBITDA ratio closed at two times at the group level and 1.3 times excluding ISA debt, while interest coverage maintained its favorable trend relative to the previous quarter.

By the end of the first half of the year, we executed $2.9 billion in organic investments, in line with our plan. Investments were primarily allocated to Colombia, which accounted for 71%, followed by Brazil, 22%, and the U.S. and other countries, 7%. This level of execution reflects a disciplined capital allocation strategy focused on high-value projects, operational continuity, and profitable growth while preserving the Group's financial flexibility. By business segment, approximately 63% of investments were allocated to hydrocarbons, followed by transmission and toll roads with 29%, and energy transition initiatives, 8%. Efficiency gains continue to be a structural driver of value creation, contributing COP 2.6 trillion during the first half of 2026, the highest level recorded for this period. Of this amount, 63% positively impacted EBITDA, 20% CapEx, and the remaining 17% working capital. Let us now move to the next slide.

As of the end of the first half of 2026, the Ecopetrol Group reported net income of COP 9 trillion, matching in just six months the net income generated during all of 2025. The year-over-year variation in net income is primarily explained by three factors. First, market-related factors contributed a positive net effect of COP 5.6 trillion, supported by effective commercial execution that allowed us to capture the benefits of this favorable price environment. The increase in the average Brent price from $71 to 88 per barrel, together with the net effect of crude and product differentials, contributed a combined positive impact of COP 7.6 trillion. This effect was partially offset by the impact of a lower exchange rate and inflationary pressures on costs and expenses, which accounted for COP 2 trillion.

Second, tax-related factors impacted results by COP 1.2 trillion, mainly explained by the income tax surcharge, which increased from 0% in 2025 to 10% in 2026, in line with the Brent price outlook for this year, as well as the recognition of the new wealth tax. Third, financial and other factors had a net negative impact of COP 300 billion, primarily associated with a liquidity management transaction related to tax credits. During the second quarter of 2026, net income maintained its upward trend and reached COP 6.1 trillion, equivalent to 3.4 times the level reported in the same period of the previous year and the highest quarterly result recorded since the fourth quarter of 2022. Let us now move to the next slide.

As of June 2026, the Ecopetrol Group reported a consolidated cash position of COP 11.3 trillion, maintaining strong financial capacity to support operations, execute its investment plan, and meet its commitments to creditors and shareholders. During the first half of the year, operating cash flow reached COP 14.1 trillion, driven by the positive impact of the higher commodity prices, FEPC collections and working capital management through the offsetting of tax credits and inventory management initiatives. Cash flow from investment activities represented an outflow of COP 8.4 trillion, mainly associated with capital expenditures at Ecopetrol S.A., Brazil, ISA, and Permian Basin. As a result, the group generated COP 6 trillion in free cash flow, demonstrating the business ability to sustainably fund its growth. Among the main cash outflows during the period were COP 6 trillion in dividend payments, both to Ecopetrol shareholders and to non-controlling interests in subsidiaries.

Additionally, net cash flow from financing activities and other items amounted to COP 1.1 trillion, primarily related to debt service payments. Regarding the Fuel Price Stabilization Fund, FEPC, as of June 2026, the outstanding receivable stood at COP 8 trillion. This balance includes approximately COP 2 trillion corresponding to 2025 and an accrual of COP 6 trillion during 2026. By company, 79% of the balance corresponds to Ecopetrol and the remaining 21% to the Cartagena Refinery. By year-end 2026, we estimate that the FEPC receivable balance will range between COP 8 trillion and COP 12 trillion, subject primarily to the evolution of Brent prices and exchange rates. During the second quarter of 2026, we continued strengthening our financial position through active liquidity management.

This included the offsetting of tax credits totaling COP 3.3 trillion, and the movement of funds within the group amounting to COP 716 million, initiatives that contributed to optimizing liquidity and enhancing the company's financial flexibility. Let us now move to the next slide.

Thank you, Camilo. Let us now continue with the hydrocarbon segment. In exploration, we continue to execute our activities in line with the plan. Today, we are pleased to share very positive news for Colombia regarding the Sandia-1 well located in the Colombian Caribbean offshore. By the end of the first half of the year, we had drilled eight exploratory wells, resulting in two successful discoveries. In March, we announced the discovery of the Copoazu-1 well, located in the GUA-OFF-0 Block.

Today, we can confirm that during initial testing, the well reached a maximum rate of 35 million cubic feet per day, constrained by the maximum capacity of the testing facilities. Bisbita Sur-1 ST2, located in the Janus-123 ENP contract and operated by GeoPark with a 50% interest in partnership with our subsidiary, Hocol, which holds the remaining 50%, was rapidly brought into production after being incorporated into the commercial area of the Saltador discovery. As I mentioned at the beginning, together with our partner, Petrobras, we have announced the discovery of the Sandia-1 well, located at the GUA-OFF-0 Block. This discovery further expands the area's gas resource potential. Regarding the KGG project, contracts were signed with our subsidiary, Hocol, for the engineering and permitting of the gas processing facilities in Ballena. We also made significant progress in the prior consultation process with the 120 certified communities.

These milestones allow us to maintain the planned schedule for filing the environmental impact assessment during the first quarter of 2027. In the Llanos foothills, we completed the drilling of Floreña N 18 Y ST1, reaching the target depth in June. We are now evaluating the zones of interest to assess their potential. During the quarter, we also filed environmental impact assessments for the Tinamú, Magnus, and Chimaera discoveries located in the CPO-09 block, as we continue advancing these resources towards potential further development phases. Let us go to the next slide, please. Going into further detail, together with Petrobras, we confirmed a new natural gas discovery with the drilling of the Sandia-1 well in the GUA-OFF-0 Block, located 42 km off the Colombian coast and reaching a total depth of 5,440 m.

Located 18 km from Sirius and nine km from Copoazu, this discovery confirms the gas potential of the Colombian offshore and strengthens the prospects of adding resources that could contribute to energy security in Colombia and the region. Following the completion of drilling and after reaching the target depth on the 29th of July 2026, we are now evaluating the gas-bearing intervals to characterize the discovery and estimate its resource potential. Next slide, please. In production, I would like to highlight the strong profitability of our portfolio with EBITDA margins above 40% up nine percentage points compared to the same quarter last year. A favorable realized prices and the sale of crude oil cargos in transit, which helped offset lower production volumes. During the first half of the year, production averaged 715,000 barrels of oil equivalent per day.

This result was mainly impacted by external events, including disruptions to surface operations in the Meta Department and power supply events at strategic growth assets such as CPO-09, Chichimene, Castilla, and Rubiales. In particular, temporary restrictions at CPO-09, Castilla, and Chichimene resulted in deferred production of up to 23,000 barrels per day. Operations are currently progressing toward a gradual stabilization. Our gas business and international production performed in line with expectations, providing stability and diversification to our portfolio. Looking ahead to the second half of the year, we are implementing concrete actions to restore production growth and strengthen value generation. These actions include, one, accelerating activity in the Permian with an additional seven-well campaign in the Delaware Basin, expected to contribute between 4,000 and 5,000 barrels per day of incremental production from late 2026 through 2027.

Two, bringing the Liria YZ10 development well in the Llanos foothills into production, while maintaining production levels at Gibraltar. Three, implementing a comprehensive production assurance plan focused on enhanced recovery, additional drilling campaigns, particularly in Caño Sur, increased workover activity, and the expansion of production facilities at Castilla. Four, evaluating inorganic opportunities that complement our growth strategy and strengthen the long-term sustainability of our portfolio. While we continue to monitor certain external factors, including weather conditions associated with the El Niño phenomenon and other elements of the operating environment, the actions underway support our outlook for a gradual production recovery and strong cash generation through the second half of the year. Next slide, please.

In refining, we delivered one of our strongest quarters in recent years, achieving a record integrated throughput of 439,000 barrels per day and a refining gross margin of $29.8 per barrel, compared with $12.50 per barrel in the same period last year. This performance demonstrates our ability to capture favorable conditions through outstanding operational execution, high plant availability, and operational flexibility. These factors enabled us to strengthen Colombia's energy supply while reducing import requirements. At the Barrancabermeja Refinery, we achieved record throughput and refining gross margins. Meanwhile, the Cartagena Refinery increased throughput compared with the previous quarter and reached a record gross margin of $31.6 per barrel, supported by greater operational stability and the completion of major maintenance activities in key units. We also continued to expand our sources of value creation by developing new markets for coke and sulfur.

In petrochemicals, performance was supported by higher polypropylene sales and favorable commercial conditions across strategic markets. Looking ahead, we remain focused on the disciplined execution of major maintenance activities, preserving asset reliability, and prioritizing initiatives that strengthen competitiveness, efficiency, and sustainable cash flow generation. Turning now to the midstream segment. It continued to reinforce its role as a key enabler of our integrated business model, transporting more than 1.1 million barrels per day, an increase of 3.8% compared to the same quarter last year, supported by our commercial and operational flexibility, which enabled us to incorporate new volume transport, imported crude, and optimized logistics corridors and inventories, thereby offsetting lower domestic production. These results reflect the segment's ability to maximize the utilization of existing infrastructure and respond quickly to the system's requirements.

Key achievements included the optimization of strategic routes and enhanced logistics capabilities to supply our refineries and Colombia's domestic fuel market. Overall, the segment demonstrated strong operational resilience and efficient execution, contributing to the continuity of the integrated business, value capture across the chain, and the competitiveness of the group. Next slide, please. What do we have in terms of profitability and costs? During the first half of 2026, the hydrocarbons segment continued to improve its profitability through the disciplined execution of operational efficiency and optimization initiatives, consolidating a more competitive and resilient cost structure. This performance resulted in an EBITDA of COP 25.7 trillion, representing a 26% increase compared to the first half of 2025, while the EBITDA margin expanded from 38%-45%. These results further consolidate the positive shift in our cost performance that began to emerge in 2025.

During the period, we delivered COP 1.3 trillion in efficiency gains through operational optimization, energy management, water management, enhanced recovery, and the new technology. Moreover, when excluding the foreign exchange effect, our cost indicators show even greater improvements. This confirms that the progress achieved reflects structural efficiency measures rather than short-term factors. In terms of costs, compared with the first half of the year, lifting costs and refining cash costs increased by 3% and 4% in Colombian peso terms, respectively. Meanwhile, the transportation cost per barrel increased by 8%, mainly due to the additional requirements related to emergency response and external operating conditions. Overall, these results demonstrate the ability of the hydrocarbons segment to absorb inflationary pressures and partially offset the impacts of lower productions caused by external events, as well as higher labor costs.

This was achieved through structural efficiency measures that support margin expansion and the long-term sustainability of our results. I will now hand it over to Juan Carlos, who will discuss the key highlights of the energies for the transition segment.

Thank you, Carlos. During the second quarter of 2026, the Ecopetrol Group reaffirmed its role as a key contributor to Colombia's energy security. We currently supply approximately 62% of the country's natural gas demand, and year to date, we have offered 293 GBTU Ud of long-term firm gas supply, consolidating our position as the market's leading supplier. At the same time, we maintain an LPG supply equivalent to 38% of national demand and continued advancing strategic projects that will strengthen the competitiveness of our growth of our gas business.

On the Pacific Coast, the Buenaventura regasification project reached 73% completion as of June, and it is expected to begin operations in the fourth quarter of 2026 with a capacity of 60 GBTU/d. In parallel, we continue progressing through the competitive process to contract LNG supply, supporting the long-term marketing of imported gas. On the Caribbean Coast, we signed the charter agreement for the floating storage and regasification unit at Puerto Berrío, with an operational capacity of up to 500 million cubic feet per day. The commercialization process for the domestic market is underway, and startup is expected in the first quarter of 2027. Next slide, please.

As a part of our commitment to securing Colombia's natural gas supply during the contingency associated with the SPEC maintenance outage, Ecopetrol implemented, coordinated, and planned actions across the group that enabled us to deliver an additional 97 Gd/Ud to the market, helping meet essential demand and support the thermal power generation sector. Next slide, please. We maintain a reliable energy matrix and an increasingly robust renewable energy portfolio. During the quarter, we covered approximately 90% of the group's energy demand through self-generation and power supply contracts, maintaining competitive costs and generating significant efficiencies for the business. We continued strengthening our self-generation capacity through the startup of Termocoa and the restoration of the Termocuciana generation system. In addition, we consolidated our position as the country's largest renewable energy self-generator, reaching a portfolio of 951 MW.

Among the quarter's main achievements were the startup of the Quifa Solar Farm, continued progress on the Windpeshi Wind Project, and the acquisition of 49% stake in the JK1 and JK2 wind projects. These initiatives strengthen our long-term growth portfolio and support a responsible energy transition. In terms of energy efficiency, the quarter delivered 1.6 petajoules toward the annual target of 3.14 petajoules, bringing cumulative savings since 2018 to 26.4 petajoules. These initiatives generated efficiencies of approximately COP 48.5 billion, reducing consumption, lowering exposure to spot market prices, and freeing up additional gas to the market. Next slide. Given the high probability of an El Niño weather event during the second half of the year, we have implemented a comprehensive plan aimed at strengthening the group's operational resilience and contributing to the country's energy security.

This plan includes increasing the availability of gas and fuels to support national demand, leveraging nearly 2 GW of self-generation and renewable energy capacity, advancing energy efficiency initiatives, and ensuring responsible water resource management. It also incorporates preventive measures to mitigate risks associated with wildfires and other climate-related events that could affect our operations. Through these actions, we continue strengthening the reliability of the national energy system while reaffirming our commitment to sustainable value creation for our shareholders and to a responsible energy transition. Next slide for our closing remarks. During the second quarter, we demonstrated the Ecopetrol Group's ability to translate exceptional market conditions into outstanding results. The combination of favorable prices, differentiated commercial approach, and disciplined operational execution enabled us to deliver one of our strongest financial performances in recent years. Refining was one of the key value drivers this quarter.

We achieved record throughput and margins, supported by our operational availability and our ability to capture opportunities arising from the international fuels market. Looking ahead, we remain focused on recovering the production volumes affected during the first half of the year, maintaining discipline in the execution of our investment plan, and further strengthening the competitiveness of our businesses. We have a solid financial position, an integrated platform that has demonstrated resilience, and a portfolio of opportunities that positions us well to deliver on our 2026 objectives. Finally, I would like to highlight that these results were made possible by the commitment and talent of our people. We are proud that the latest workplace climate assessment, conducted under the international standard of the Great Place to Work Institute, reflected significant progress, with our score improving from 77 points from 68 in 2025, and our rating rising from very satisfactory to outstanding.

For the second consecutive year, we reached the target set by the Great Place to Work Institute, a recognition that reflects a culture built on trust, respect, fairness, and the pride in belonging to Ecopetrol. With that, we will now open the floor for the Q&A session.

[Non-English content] Our first question comes from Tasso Vasconcellos of UBS.

Hi, everyone. Thanks for taking my question here. I think I wanted to take advantage of the recent presidential election in Colombia and the new president, potentially with a different view for the O&S sector. I would like to ask maybe a broader question to management. I'll split the same question maybe into parts here. First, looking at Ecopetrol in the past three to four years, what would you highlight as the main deliveries, the main projects that you enjoy delivering? Second part, which projects you had the biggest challenge in either moving forward or even approving and not being able to evolve? The third part, if we look from now on, what would you like to have as the key priorities for the company, the main projects, the main subsectors to focus on? Those are the three parts of the question. Thank you.

Good morning, Tasso. This is Juan Carlos Hurtado. I am the Acting President. As part of the main success we have is the exploration rate that we have achieved in the last few years, this is, of course, explained in the announcements we have made in this first quarter with the discoveries of Copoazu and Sandia 1. That is added to the diversification of our energy grid that is related to more self-generation systems. We can talk about solar plants that are delivering energy to our premises, that we have called Quifa for the fields next to Puerto Gaitán. La Iguana, which is also supplying energy to the Barrancabermeja and the Casabe fields. Finally, La Sira, that supplies the star fields in operation. That adds 130 MW. Another one to highlight is Portón del Sol.

It's operating La Dorada, Caldas, 128 MW that are remote operation. These additional achievements, we're trying to show the growth in the production of crude oil nationally, mitigating the natural decline of our fields, we can also advance in a higher recovery factor related to secondary recovery and advancing with tertiary recovery projects with improved water. In second place, one of the biggest challenges we have is the environment and all the different processes that we have to do with environmental compliance. If we talk about exploratory compliance, in serious, we have been advancing with the prior consultations to be able to define and close the environmental assessment study, to be able to file this in the first quarter of the next year. Also so that we can have an approval to execute at the end of 2027.

Challenges, environment, and technical challenges to continue our operations in terms of efficiencies in the production of total fluid, in reducing costs to have a more optimal operation. In terms of the future, we have been working on a 2040 strategy. At this point, we have to highlight that we're focusing on traditional business that is, of course, related to exploration, production, refining, and transportation that has been leveraged, as I said, by some of the projects that diversify our generation matrix to be more efficient in terms of energy. In the future, there is a door that is opening up, it's the opportunity that we have in light crude, light oils. And/or some non-conventional fields in terms of the legal compliance and capital discipline.

We have some pilot projects that were suspended, depending on what the environment establishes and the different scenarios that we have to work on those. We have to continue working on exploratory blocks and the potential that we are declaring with the Sandia discovery is the gas capacity we have in the northern coast to go into the heavy crudes in the east of the country, in the Meta department, in the light crude oils in the Middle Magdalena area, and finally advancing in the exploratory projects on the foothills to be able to develop and mitigate the natural decline of our gas production fields.

Very clear. I appreciate it.

The next question comes from Bruno Montanari. Mr. Montanari, you may ask your question.

Good afternoon. Thanks for taking my questions. Two on my side as well, one on production and one on the CapEx. On production, can you help us bridge the second half of 2026 outlook on the back of the challenges, we saw now in the second quarter. How should we think about the second half of the year for the company to meet the full-year guidance? If you still expect, if you're comfortable with the prior production target. Within that, do you expect to see any challenges or difficulties related to El Niño with the generation of electricity and other disruptions?

On the FEPC, you mentioned you see a potential COP 8 trillion-COP 12 trillion accumulation by the end of the year. Looking into next year, within the new government, do you have an expectation to collect those funds maybe quicker than what we were seeing in the past few years? A quick follow-up on that. When you talk about the COP 8 trillion-COP 12 trillion by the end of the year, what type of Brent and FX rate are you assuming to come up with that range? Thank you very much.

Good morning, Bruno. My name is Carlos Mauricio Ávila. I'm in charge of the Executive Vice Presidency of Hydrocarbons. I am going to answer the first questions about the production. In fact, as we have been revealing in the first half of the year, we had an average of 715,000 barrels equivalent per day. The difference between the guidance that we currently have is associated to what we mentioned in terms of the environment events that we have had, especially in the fields with the largest production, which are in the Meta Department. The situations responded to a very specific event that happened due to some expectations and some work claims that were had in the area, which ended up in a blockade and a stop of 16 teams of work over for more than 70 days.

This, of course, affected the production in around 23,000 barrels per day. However, these blockades were already lifted last month, we're continuing with the production and recovering in these fields that are, of course, the ones that contribute the most to the production of crude in the country, of course, to the production of the group. We feel very comfortable with what we have mentioned in terms of keeping the production target between 730,000 and 740,000 barrels per day. We have deployed the actions that will allow us to recover this production that have to do with managing the maintenance of wells for increasing the production that was affected by these blockades. We're also working on improving the electric reliability, which has affected us on the last two months.

It is worth mentioning that towards the last days of June, we were achieving almost 730,000 barrels per day, which of course, it is good news. We believe that we are going to continue with what was mentioned. In terms of the El Niño phenomenon, we have some estimates of what we could end up having in terms of effects on our production. We are mitigating those through different actions that will allow us to guarantee the electric supply, where we could have effects due to less availability of energy. Of course, in that respect, we continue with what we have been telling the market in terms of maintaining our production levels.

Good morning, Bruno. This is Camilo Barco, I am the CFO, I will talk to the question about the FEPC. I will also add some broader elements about how this stabilization fund works for the prices of fuels in Colombia. First of all, about the probability of recovery and the payment schedule, it is important to mention that the payments have been made on time. The dynamics of these payments is, of course, something that happens in three-month quarters or payments that expire on a yearly basis.

To give you an example, last year we had COP 3 trillion that were paid in three installments this year. The first one for COP 1.6 trillion, the second one for COP 1 billion, and the other one for COP 400 million. About the last quarter, we came to a payment agreement in December, we expect to collect this payment just as the first and third installments were collected this year, and these are short-term titles.

The payments have been made, and we continue to receive them likewise. In terms of the figure for accrual, this rate is a range between COP 8 billion-COP 12 billion. Of course, this will depend on the behavior of the Brent and the TRM. Of course, depends on the crack price of the products, especially diesel and gasoline. Those are the ones that have a largest impact on the accrual of this FEPC account. The calculations for this year are made with a Brent projection range for 2026 that is around between $84 and $90 per barrel. We are working on this projection with a TRM that is between COP 3,200 and COP 3,500 per dollar. For 2027, we will have to wait for the new government to have new guidelines.

We understand that it is a priority of this new government to start closing the gap that has been created, given the subsidy to fuels. About this, there have been different alternatives explored, and amongst others, one of the ideas to increase the price of fuels for the final user. One more could be the change in the formula for the IPP, which is where we recognize the value to the producer. This is a series of alternatives that will necessarily depend on the guidelines and the public policies of the new government. As I said, we have manifested publicly the need to solve that gap, to reduce the balances. In that sense, we trust that we will continue collecting the FEPC installments, or payments, of course, as they mature.

For next year, we are working with a Brent projection that is around $72 per barrel. The exchange rate is something that we are forecasting to be in the range between COP 3,200 and COP 3,600 per dollar. This, of course, takes us to foresee that for 2027, we will have an accumulation between COP 1 trillion and COP 3 trillion for the FEPC account. This is receivable for Ecopetrol, of course. Of course, these estimations, as I said at the beginning, will be related to the volatility of the spreads, the crack spreads of products, especially diesel and gasoline. The decisions that the government can eventually make about the behavior of the prices or the adjustments to the final user price of these fuels, or to the way the formula is calculated to recognize Ecopetrol.

Thank you very much.

We also have Andrés Cardona from Citi. Mr. Cardona, you may ask your question.

Hi. Good morning. Thank you very much for this Q&A session. You were mentioning that you had a conversation with the new government about the prices of fuels. I would like to explore more about these interactions you have had with the new elected government, we would like you to share with us what could be the most significant changes, both for Ecopetrol and for the sector at large, the oil sector. What have you perceived in this new government? Thank you.

Andrés, good morning. This is Camilo Barco. Thank you for your question. It is worth clarifying that we haven't really had this dialogue with the new government. We recognize that the general declarations they have made about the fuel price policy and the need to close this gap that is created, given the subsidies to diesel fuel, especially. However, we are expecting to have new guidelines and definitions for new policies. We have explored different alternatives, this has not really been very interactive with the new government. This has just been the result of constant work that is done with the authorities at Ministry of Mines and Energy and the Ministry of Finance. These are conversations that come from before, really, and have to do with the management of the FEPC account for collecting it.

We are expecting that the new government assumes office and so that we can open a communications channel with them.

Andrés, Juan Carlos Hurtado. I am the acting president. Related to that, we from the document and all the possibilities we have, we are ready since a couple of weeks ago, to be able to give all the information to the new government as they require. As part of the projections or forecasts that we have and the opportunities we have, we would like to continue working on exploration and consolidating the recovery factor and the development of secondary and tertiary recovery, supported by new technologies, whether they are on-site combustion or improved water. We will continue developing the heavy crudes in the foothills, also working on the different exploration and development projects that we have in the foothills. Of course, thinking about the option of light crude oils related to non-conventional fields, where we already have had some information.

According to the regulations of the company, we have to, of course, comply with all the environmental legal requirements and our capital discipline. Of course, distribution to ensure any information that the new government requires. Thank you.

The next question comes from Álvaro Leyva from BTG. Mr. Leyva, your question.

Good morning. Thank you for this possibility to ask questions. My question has to do to the future of Permian, what is the projection you expect for the next quarters and years? I know that you had announced a perforation campaign or a drilling campaign for this year, I don't know if you can see some declines in production given the deterioration of the productivity, or is it because of the current drilling plan? If it's due to the drilling plan, I would like to know whether there will be a review of this this year or next year. Thank you.

Thank you for your question. I am Julián Lemos, Vice President of Corporate Strategy and New Businesses. I would like to talk to your question about the forecast for production in Permian or the performance that we can see, this is responding to the agreement we have with Oxy and the planning that we did last year. Considering the price environment and the conditions of the industry that we saw at that time, we agreed, we reduced the number of perforation equipment and the number of rigs in that area. This is, of course, a reduction in the production compared to what we saw in the previous year.

Now, according to the forecast, we are above the production. In terms of what comes next, we are regularly monitoring the different market options, of course, the short cycle hydrocarbon allows us a different flexibility. Having agreed with Oxy, we have decided to accelerate or include seven wells that were not part of the 2026 planning. As I said, we are continuously evaluating what options we will have. This will have to do with the price scenario that both partners can see through 2027, to determine whether we will maintain the same level of activity and to see if we have the same number of perforation equipment that we would have in the contract, or whether we will have to increase that.

That will be discussed, that will be part of the analysis of the surroundings or the environment and the agreements that we make with our partner.

Thank you. That was very clear.

We also have Andrés Duarte from Corficolombiana. Mr. Duarte, you may ask your question.

Thank you. I have two questions. The first one has to do with the knowledge transfer in terms of what you do at Permian, according to the joint venture with Occidental. I would like to know how much of what you have learned can be applicable to the development of non-conventional fields, and I understand the Middle Magdalena area was where you had some opportunities. The second question has to do with the reduction that you can see in the operating cash flow from the second quarter of 2025. Is that with taxes, or is there another reason for the cash flow to be reduced? Thank you for taking my questions.

Good morning, Andrés. This is Juan Carlos Hurtado, the Acting President. The plan that we had when we started the joint venture with Occidental, we had personnel that was working together, and there are still people working. They're working at our subsidiary, but together with Occidental, to work on this learning experience to be able to capitalize once we can develop these unconventional reservoirs in the country. We have professionals in terms of reservoirs and production to be the leaders of these projects when they happen. The cash flow question, I give the floor to Camilo.

Thank you for the question, Andrés. The variations of the cash flow in this quarter. The answer is yes. Responds substantially to the FEPC behavior. As we said before, this specifically has to do with the COP 1.6 trillion payment where we came up with a payment agreement with the Ministry of Finance, and this payment was postponed to December. That has an effect for the same amount in the cash flow of the quarter. There are two components. For a total amount that was accrued, that's COP 1.2 trillion, and that has a direct effect on the cash flow. The fuel surcharge that apart from the increase to the market price from USD 80 upwards, this starts creating a surcharge that is equivalent to 10%.

There's a surcharge here and the income tax which has been accrued this year. These are the reasons for the variation. The free operating cash flow is a healthy flow, and we have accumulated almost COP 6 trillion for the year, of which in the second trimester we generated COP 2.8 trillion. It is also worth mentioning that historically, the second quarter is a strong quarter in terms of the cash flow, because in the second quarter, several of the amortizations for debt coincide, payments for taxes, and what's very important is the dividend payment. This year, we paid COP 6 trillion to our shareholders in dividends, both to the Government, the Nation as the main shareholder and to the other shareholders.

This tax payment, which in other years has been crossed with the FEPC payments, this had an impact on the cash flow and its availability. For the end of the year, we can see a stable cash flow above the minimum provided cash flows that we have foreseen. The second semester will be an accumulation semester, and we consider that we do not have major challenges in the remaining part of the year. In fact, we are foreseeing that apart from the Brava transaction, there won't be any need to carry out new financing operations to pay our obligations and our investment commitments and production commitments.

Thank you.

We continue with Juan Felipe Becerra from Credicorp. Mr. Becerra, you may ask your question.

Thank you for the presentation. I have two questions on my side. The first one is a follow-up to the guidance, especially in the volumes. You mentioned that you maintain the production volumes in the upstream. I would like to know about the transport guidance in the midstream and throughput in the downstream, given that both will be above the guidance in this half of the year. Whether you will maintain the guidance in these sectors, would you expect a decline in the volumes that are transported and refined? That is my first question. The second question is whether you could give us a schedule of what will happen after the Brava public offer, if it's successful, when would we be expecting to see the consolidation of that transaction in terms of a timeline? Thank you.

Thank you. This is Juan Carlos Hurtado, acting president. In terms of your first question, our forecast is to maintain this line in terms of volumes in the three segments of the traditional business. In terms of volume, we are maximizing throughput to obtain better margins according to what we have in market, increasing and optimizing our transport system, whether it is oil pipelines or multiproduct pipelines to maximize the value. In terms of value, we are maintaining the volumes that we estimated or had foreseen in the period 2026.

Juan Felipe, this is Julián Lemos, Corporate Vice President for Strategy and New Businesses. I will answer your second question about the timeline for Brava. The past 15th of June, through our subsidiary in Brazil, we received from the authorities in Brazil an answer to our appeal to continue with the stock market operation. With that favorable resource and some elements, with some prior conditions, we are in the condition to launch tomorrow the auction for this tender offer.

We just wanted to mention that we have green light from the institution in charge, the green light from the bondholders and debt holders for Brava, the green light from the board of directors of Brava. In terms of the terms, we are launching this auction. This is, of course, our due diligence for the tender offer. If everything is successful tomorrow, on the 17th of August, we would be conducting the liquidation of that tender offer, which is basically a disbursement of the resources for the Sellers and the verification of the compliance of all the closing conditions. From there onwards, Ecopetrol would be the owner of 51% of that company. If everything happens in those dates we mentioned, we would see a consolidation of the Brava results in Ecopetrol for the third quarter of 2026.

Thank you very much.

The next question comes from Leonardo Marcondes from Bank of America. Mr. Marcondes, you may ask your question.

Is regarding the offshore assets. Are there any pending environmental or regulatory approvals that could affect the schedule of the development of the blocks? Thank you very much.

This is Carlos Mauricio Ávila, Executive Vice President of the hydrocarbons line. In terms of your first question, has to do with what we are doing to reduce the costs of the upstream. Basically, beyond having a production guidance, in fact, our message is that we have to guarantee the cost indicators that the segment has. In that sense, we are working very strongly on different initiatives that have to do with the efficiencies program, which basically targets the core of those costs that are, of course, the most important for the segment. We are talking about costs related to electricity, where the matrix or the grid, in terms of how much it weighs, is 26%-30%. We are working on that, to be able to optimize those net tariffs that are, of course, created on the segment due to energy consumption. We are also working on water management.

One of the challenges that we have in the assets of Ecopetrol, specifically in Colombia, has to do with the management of production fluids. We are working very strongly to reduce water consumption and to consume less energy as well. We are working to have efficiencies in terms of the costs associated to the services related to the wells, to reduce and implementing new technology. Implementing options to increase the recovery factor, as the president mentioned, recovery with improved water and other alternatives that will allow us to have other alternatives at lower costs. Everything that has to do with the services contracted, where we have implemented a series of strategies so that the costs are reduced in terms of dollar per barrel.

In terms of the environmental approvals or regulatory approvals that have to do, or that are affecting the development of the new blocks, what we are doing here is we're trying to work together with each one of the institutions in the government so that we can effectively obtain, to have all the different permits, the adequate, so that we can actually obtain the service in the times we have foreseen. We have been improving our relationship with all these institutions or entities, and we think we can optimize some of those times for those permits. There are different projects depending on where we develop them in the country. We believe that working with the environmental authorities and others, we can keep our goals in terms of complying with our production, so that they are not affected by these approvals.

That's very clear. Thank you.

Continue with Alejandra Andrade from JPMorgan.

Hi, good afternoon. Thank you very much for taking my question. I have two questions. The first one is, I want to understand in terms of financing for Brava Energia and what you had already insured, I don't know if it was a bridge loan, then the idea would be to refinance that coming from international markets. How is that transaction structured? Related to that, I wanted to understand if you were analyzing possibilities to conduct a liability management exercise alongside the Brava Energia financing. Thank you.

Good morning, Alejandra, and thank you for your question. My name is Camilo Barco, CFO. About the first question related to the Brava Energia financing, this is a typical structure for this operation. As you mentioned in your same question, we are going to do a short-term financing with a bridge loan to finance this acquisition. We are foreseeing that before the year ends, we will do a takeout where we include all the possibilities, or a takeout to a long-term credit, or also a takeout to an operation in the capital market. With that, I go to the second question about liability management and responsibility. Of course, our strategic approach in terms of financing is to optimize costs.

We have seen a positive evolution of the margins of the different securities of sovereign debt and the behavior of the Ecopetrol bonds. We can foresee good conditions in the second semester and in the market to continue this type of transaction. We have reduced the financial cost. We will continue working on this with the purpose of prolonging the average maturity of this debt portfolio. We will continue monitoring the different conditions, assessing all the possibilities of both the banking market and the capital market.

Thank you.

We now continue with Hugo Beltrán from Acciones y Valores. Mr. Beltrán.

Thank you very much. I would like to ask if you could expand on the liquidity operation on tax credits. What is the magnitude or the dimension of those balances? If we expect this type of liquidity operations in the following periods? Finally, how you are moving forward with the litigations with the DIAN in terms of the VAT to fuels that litigation happened in 2025. Thank you.

Thank you, Hugo, for your questions. I will answer your questions in the same order. The first question related to the tax credits or balances from taxes, as you described, in the first quarter, we carried out an operation as one of the levers for liquidity, where we managed to structure the sale of a package of obligations, receivables for Ecopetrol. This operation had a value of COP 500 million. We made a payment around COP 2 trillion. The financial cost is also reflected in that period with an amount that is consistent to the discount that we receive due to the anticipated forward sale of these receivables. This is an operation that can create a good context or background that can give us liquidity of this debt of receivables that has been growing in Ecopetrol.

We believe that in effect, this will continue being an alternative mechanism that is possible. As we need, depending on the cash flow, when it is worth doing it, this will be an alternative to provide liquidity for the company at very competitive costs that are close to the average financing costs that we have in the rest of the portfolio. That in terms of that operation for the receivables. In terms of the VAT litigation process, we continued advancing in the different instances in this controversy with the tax authorities. We have eight different processes, six led by the Cartagena Refinery and two by Ecopetrol. We have many different appeals that are in process. We have requested some measures in several of these cases. What we could say is that they are basically undergoing the different discussions in the corresponding instances.

I would like to mention that in the previous quarter, Law 2586 was issued by the Congress of our Republic, which is the Customs Charter. In Article 113, they have a provision for an alternative mechanism for solving controversies with the tax authority, DIAN. This is an alternative that we are assessing that offers very favorable conditions to explore an alternative solution to this controversy that has been created around VAT. While we explore this alternative and we verify and double-check the benefits that we would have for Ecopetrol, we will continue moving forward with the litigation.

Thank you.

[Non-English content]

Good morning, Diego. This is Cristina Toro, Vice President, Legal Vice President and General Secretary. According to the legislation that is applicable and the social charter of Ecopetrol, the general assembly of shareholders will make decisions about the board of directors, and this is the competent body to elect and remove members from the board of directors.

At the moment, given the resignations of two members, the board of directors can continue deliberating in a valid manner with the members that are still there. Without meaning that the assembly can be summoned to choose all the members. When that happens will depend on the specific circumstances. Once we need to have a full list of candidates, that requires the verification of different requirements and the different conditions established internally. Only once we have conducted those verifications, two weeks after that, an assembly can be summoned. Thank you.

When do you expect to consolidate the results of Brava Energia in the accounts of the Ecopetrol Group? If the acquisition is successful for 51% of ownership, how much do we expect this would contribute in barrels per day of production to the group? This is asked by Harold Ruby.

Thank you very much to Harold for the question. Camilo Barco here again. In the timeline that we have, once the Brava Energia operation is successful, once the tender offer and then the auction that follows, we expect to consolidate the results in our Ecopetrol results in the third quarter of 2026. At a part of the production that we will have, we expect to receive a contribution of around 42,000 barrels of production equivalent per day. That is consistent with the participation of Ecopetrol that is 51%.

Camilo Diaz is asking, could you please tell us what is the daily energy demand in MW for the group, and how much of this demand is covered with self-generation, with renewable energy? That means without purchases of MME and the stock market.

Good morning. This is Ernesto Gomez, General Manager of Cartagena Refinery. Thank you for the question, Camilo. Ecopetrol has a consumption of 24 GW, which corresponds to 9% of what the country consumes. Of that, Ecopetrol is using every day, 54% is done through self-generation sources. Out of that 54%, 49% is conventional self-generation, and 5% is renewable sources. Those are the figures that we have at the moment, you know that we have a portfolio of renewables that is growing, in solar is 414 MW. Thank you for the question.

Another question: Have you thought of a rotation strategy of the assets portfolio to reduce the level of total debt of the Ecopetrol Group? If that is the case, could you give us more information?

Thank you, Camilo, for your question. Julián Lemos, Corporate Vice President for Strategy and New Businesses. I would like to start saying that the debt levels of the group are healthy, as it was previously mentioned by Financial Vice President Camilo, even after the acquisition of Brava, we will continue being within the limits that were previously reported to the market. This portfolio rotation exercise is something that we permanently do in the company. We are assessing different alternatives with that purpose. We will be informing the market when they are executed or when they are about to be executed. Thank you.

[Non-English content] Thank you. We conclude this Q&A session. We now give the floor to Carlos Hurtado, who is the Acting President of Ecopetrol, for final remarks.

Thank you very much. I would like to thank all of you for participating and for your interest in the results of the second quarter and the forecast that we have for 2026 and onwards. Thank you to the team for your participation. Thank you for the results. Have a great day. Thank you.

Thank you, everyone. With this, we conclude our results call for the second quarter of 2026. Thank you for your participation, and the call will end now. Thank you