Statement: Ecopetrol announces US$4.8 billion investment plan for 2016

Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC; TSX: ECP) reports that its Board of Directors approved the Ecopetrol Group 2016 Investment Plan for US$4.8 billion.

The approved investment budget is in line with the new corporate strategy, and is attuned to the challenging situation of the international oil market.  Accordingly, investments budgeted for 2016 will be 40% less than those that were planned for 2015.

The plan focuses on achieving greater efficiencies and profitability in all of the Ecopetrol Group’s areas, with an emphasis on capital discipline, cost reduction and efficiency.

Progress achieved in the Business Transformation Program will yield optimizations and projected savings ofUS$760 million in 2015.

These savings will be maintained for 2016 and additional cost reductions will be sought in dilution of heavy crudes, renegotiation of contracts, efficient management of corporate expenses and a culture of savings and austerity.

Ecopetrol Group investment plan will allow for maintaining average daily production of around 755 thousand barrels of oil equivalent (MBOED), of which 690 (MBOED) come from Ecopetrol S.A., figures similar to those reached in 2015.

Of the total investment approved of US$4.8 billion for the Ecopetrol Group, US$2,782 million will be invested in projects of Ecopetrol S.A., and US$2,018 million in projects of its affiliates and subsidiaries.

96% of the investments will be made in Colombia, and 4% abroad through affiliates of Ecopetrol S.A. The largest part of the investments will be allocated to more efficient production of crude oil and gas, evaluate recent exploratory discoveries, startup of the new Cartagena refinery, and strengthening transport capacity.

The investments that have been approved are broken down by segment below:

The funds required for Ecopetrol S.A.’s US$2,782 million investment plan and the company’s contribution to investments in affiliates and subsidiaries in the amount of US$ 1,035 million, will come from internal cash generation, divestment of non-strategic assets and financing mechanisms. The Company has borrowing capacity, an investment grade rating, and access to capital markets in Colombia and abroad.