Ecopetrol S.A. (EC) Offers Update on Proven Reserves

Ecopetrol S.A. (NYSE: EC) announced today its proven reserves (1P, according to the international designation) of crude oil, condensate and natural gas owned by the company, including its interest in affiliates and subsidiaries, as of December 31, 2016. The reserves were estimated based on the U.S. Securities and Exchange Commission (SEC) standards and methodology. 99% of them were audited by two well-known specialized independent companies (Ryder Scott Company and DeGolyer and MacNaughton).

Ecopetrol's Proven net hydrocarbon reserves were 1,598 million barrels of oil equivalent (mmboe) at the close of 2016, a 14% reduction compared with 1,849 mmboe at the end of 2015. It is estimated that price was the cause of most of the negative impact on proven reserves (-202 mmboe). In 2016, the SEC price used for the valuation had a 20% decrease compared to 2015, from US$55.57 per barrel Brent to US$44.49 per barrel and a 56% decrease compared to 2014, which was US$101.80 per barrel.

This effect was partially offset by the addition of 186 mmboe, attributable to continued optimization of operating costs, higher efficiencies, new drilling projects as planned in the Palagua-Caipal fields and extensions of the proven area in fields such as Castilla, Rubiales and Chichimene, among others. The reserve replacement ratio, excluding price effect, was 79%. By including the price factor, the reserve replacement ratio stands at -7%. The reserves/production ratio (average life of reserves) was 6.8 years.

Fields operated directly by Ecopetrol as Rubiales and Chichimene, presented positive reviews of reserves due to good performance in production and optimization of their conditions, among others. The 95% of proven reserves are owned by Ecopetrol S.A., while Hocol, Ecopetrol América and Equión and Savia Perú contribute 5%.

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