Ecopetrol announces the agreement to purchase Repsol's 45% stake in block CPO 09

Rhea-AI Summary

Ecopetrol (NYSE: EC) has successfully negotiated the acquisition of Repsol's remaining 45% stake in block CPO-09, located in Colombia's Meta department. This strategic transaction makes Ecopetrol the sole owner of the asset, which spans across multiple municipalities in the Piedemonte Llanero region.

The acquisition is expected to add 41 million barrels to Ecopetrol's reserves and increase daily production by 7,000 barrels of oil. The deal, executed under Ecopetrol's right of first refusal within the Joint Operating Agreement, follows Repsol's previously announced transaction with Geopark on November 29. The completion of the transaction requires approval from the National Hydrocarbons Agency and the Superintendency of Industry and Commerce.

Positive

• Acquisition adds 41 million barrels to company's reserves
• Daily production expected to increase by 7,000 barrels of oil
• Becomes sole owner of strategic CPO-09 block
• Strengthens position in Llanos Orientales basin

Negative

• None.

Insights

Oil & Gas Industry Analyst

This strategic acquisition marks a significant expansion of Ecopetrol's operational footprint in Colombia's Llanos Orientales basin. The addition of 41 million barrels to reserves and 7,000 barrels daily production boost represents approximately 3.5% production increase based on current output levels. The transaction leverages Ecopetrol's right of first refusal to consolidate 100% ownership of the CPO-09 block, eliminating joint venture complexities and enabling streamlined decision-making for future development.

The timing is particularly strategic given current oil market dynamics and Colombia's push for energy security. Full ownership of CPO-09 provides Ecopetrol complete control over production scheduling, capital allocation and field optimization strategies. The Llanos basin is known for its relatively low operating costs and established infrastructure, which should support favorable economics even in moderate oil price environments.

From a financial perspective, this asset consolidation aligns with Ecopetrol's vertical integration strategy while potentially unlocking operational synergies. The proximity to existing infrastructure and the company's deep understanding of the basin's geology reduces execution risk. However, the transaction's full value will depend on successful regulatory approvals and the undisclosed purchase price relative to the asset's current market value and future development costs.

Energy Market Strategist

This acquisition demonstrates Ecopetrol's commitment to maintaining its dominant position in Colombia's energy sector while balancing conventional hydrocarbon growth with energy transition goals. The CPO-09 block's strategic location in the Piedemonte Llanero region offers significant operational advantages and synergy potential with existing assets.

The deal's structure through the exercise of right of first refusal indicates a defensive move to prevent competitive entry into a core operating area. By securing full control, Ecopetrol gains improved capital allocation flexibility and eliminates potential partner misalignment in future development decisions. The 7,000 barrel daily production increase, while modest relative to Ecopetrol's total output, provides immediate cash flow contribution and creates a platform for future growth through enhanced operational control.

Looking ahead, this consolidation strengthens Ecopetrol's ability to optimize production and costs across its Llanos basin portfolio. The transaction also reinforces Colombia's energy security agenda by keeping strategic assets under national control, particularly relevant given current global energy market uncertainties and regional geopolitical considerations.

BOGOTA, Colombia, Dec. 30, 2024 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) (the "Company") announces that on Sunday, December 29, 2024, Ecopetrol successfully concluded negotiations with Repsol to acquire the remaining 45% of its stake in block CPO-09, located in the Meta department. With this transaction, Ecopetrol becomes the sole owner of this strategic asset in the Piedemonte Llanero.

This block is located in the municipalities of Villavicencio, Acacías, Guamal, Castilla La Nueva, San Martín, Lejanías, El Dorado, El Castillo, and Granada. The transaction was carried out under the right of first refusal granted to Ecopetrol within the framework of the Joint Operating Agreement (JOA) and is the result of the previously announced transaction between Repsol and Geopark on November 29.

With this acquisition, Ecopetrol expect to add approximately 41 million barrels to its reserves and estimates an increase in its daily production by approximately 7,000 barrels of oil. This operation strengthens Ecopetrol's position in the exploitation of the Llanos Orientales basin and consolidates its presence in the region.

To complete this transaction, it will be necessary to carry out the corresponding procedures before the National Hydrocarbons Agency and the Superintendency of Industry and Commerce, which we expect to undertake in the coming days.

Ecopetrol reaffirms its commitment to the country's energy future, highlighting the importance of hydrocarbons as a key resource for energy sustainability, while steadily advancing towards a fair and responsible energy transition.

Ecopetrol is the largest company in Colombia and one of the main integrated energy companies in the American continent, with more than 19,000 employees. In Colombia, it is responsible for more than 60% of the hydrocarbon production of most transportation, logistics, and hydrocarbon refining systems, and it holds leading positions in the petrochemicals and gas distribution segments. With the acquisition of 51.4% of ISA's shares, the company participates in energy transmission, the management of real-time systems (XM), and the Barranquilla - Cartagena coastal highway concession. At the international level, Ecopetrol has a stake in strategic basins in the American continent, with Drilling and Exploration operations in the United States (Permian basin and the Gulf of Mexico), Brazil, and, through ISA and its subsidiaries, Ecopetrol holds leading positions in the power transmission business in Brazil, Chile, Peru, and Bolivia, road concessions in Chile, and the telecommunications sector.

For more information, please contact:

Head of Corporate Communications
Angela Maria De la Pava Londoño
Email: investors@ecopetrol.com.co 

Head of Press
Juan Pablo Pacavita
Email: juan.pacavita@ecopetrol.com.co

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SOURCE Ecopetrol S.A.

FAQ

How many barrels of reserves will EC gain from the Repsol CPO-09 acquisition?

Ecopetrol (EC) will add approximately 41 million barrels to its reserves through the acquisition of Repsol's 45% stake in block CPO-09.

What is the expected production increase from EC's CPO-09 block acquisition?

The acquisition is expected to increase Ecopetrol's daily production by approximately 7,000 barrels of oil.

What regulatory approvals does EC need for the CPO-09 acquisition?

Ecopetrol needs approvals from the National Hydrocarbons Agency and the Superintendency of Industry and Commerce to complete the transaction.

What percentage stake will EC own in CPO-09 after the Repsol acquisition?

After acquiring Repsol's 45% stake, Ecopetrol will become the sole owner (100%) of block CPO-09.

Where is the CPO-09 block that EC is acquiring located?

The CPO-09 block is located in the Meta department of Colombia, spanning across municipalities including Villavicencio, Acacías, Guamal, and others in the Piedemonte Llanero region.