Ecopetrol SA - ADR

Record financial performance (good/surprising): Q2’26 delivered COP 4.2tn revenue, COP 17.7tn EBITDA (+59% YoY) with 44% EBITDA margin (~+6pp YoY), and COP 6.1tn net income (+235% YoY)—driven by (i) Brent ~USD 97/bbl and improving international refining margins, (ii) better crude differentials (+USD 3.67/bbl vs Q1) despite heavy-crude headwinds, and (iii) stronger value capture from refining + transportation (refining especially a key driver).

Refining strength is a major value engine (good): Refining achieved the highest quarterly throughput in history: 439 kbpd (+6% YoY). Refining gross margin ~USD 29.8/bbl vs USD 12.5/bbl in Q2’25, supported by high plant availability/operational flexibility, reducing Colombia’s import needs. Cartagena margin reached $31.6/bbl and Barrancabermeja hit record throughput.

Production outlook: comfortable, but disrupted first half (mixed/negative + risk): Reported 706k boe/d for Q2; H1 average 715k boe/d. Main negative driver: 76-day blockade in Meta plus electrical disruptions delayed projects and created deferred production up to ~23 kbpd (CPO-09/Castilla/Chichimene). Management says blockades were lifted and they’re stabilizing, and they remain “comfortable” with full-year production target of ~730k–740k boe/d. They also flagged El Niño risk to electricity/operations and are implementing mitigation actions (electric reliability, planning, ensuring energy supply).