Ecopetrol S.A. (ECOPETROL) Earnings Call Transcript & Summary

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. As a result, 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 Mr. Juan Carlos Hurtado, acting CEO of Ecopetrol; Camilo Barco, CFO; and Carlos Mauricio Avila, 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 the Ecopetrol Group. During the second quarter, the 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. As a result, 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 3 factors. First, a favorable pricing environment with Brent averaging USD 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 USD 3.67 per barrel compared to the first quarter despite the challenging environment for heavy crude grades. And third, strong operational execution in transportation and finding 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 USD 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. Additionally, during the first half of the year, we comply with the dividend payment scale 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 payment 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 3 wells during the quarter, bring the total to 8 wells during the first half of the year. We highlight the progress at [indiscernible] at the offshore Caribbean. And following the quarters closed, this [indiscernible] discovered. These milestones continue strengthening the region's gas potential and enhance the group's resourcing cooperation 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 rating capabilities. Initiatives such as a new pet cost commercial strategy, the implementation of time charter schemes and the diversification of ports 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 the Colombia's natural gas demand while continuing to develop solutions to expand supply availability for the market. In 2026, we have offered 293 BTU of firm long-term natural gas. Meanwhile, the Transmission and Toll Roads business maintained positive momentum, securing new contract awards totaling USD 428 million, strengthening the growth and value creation of is and its subsidiaries. In production, we've 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 Nino 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 139,000 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 7.7 trillion, representing a 59% increase compared to the second quarter of 2025 with an EBITDA margin of 4%, approximately 6 percentage points higher than the same period last year. This performance was driven by the outstanding contribution from the Refining segment, which delivered rec margins and throughput left 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-to-EBITDA ratio close to 2x at the group level and 1.3x, excluding ESAs 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 USD 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 United States 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 by -- with 29% and energy transition initiatives, 8%. Efficiency gains continued to be a structural driver of value creation contributing COP 2.6 trillion during the first half 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 just 6 months, the net income generated during all of 2025. The year-over-year variation in net income is primarily explained by 3 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 USD 71 to USD 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 the 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 of 3.4x 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 acuities investment plan and meeting 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 higher commodity prices, 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 SA 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 that outflows during the period were COP 6 trillion in dividend payments, both to Ecopetrol shareholders and to noncontrolling 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 for PEC. As of June 2026, the outstanding receivable stood at COP 8 trillion. These 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 CapEx receivable balance will [indiscernible] 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 USD 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's 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. But by the end of the first half of the year, we have drilled 8 exploratory wells, resulting into successful discoveries. In March, we announced the discovery of the Copoazu, well located in the [indiscernible] Zero 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 E&P contract and operated by GeoPark with a 50% interest in partnership with our subsidiary, Hocol, which also the remaining 50% was rapidly brought into production after being incorporated into the commercial area of the [indiscernible] discovery. As I mentioned at the beginning, together with Petrobras, we have announced the discovery of the Sandia-1 well located at the Guajira offshore 0 block. This discovery further expands the area's gas resource potential. Regarding the serious project contracts were signed with our subsidiary, Hocol for the engineering and permitting of the gas processing facilities in [indiscernible]. We also made significant progress in the prior consultation process with [indiscernible] communities. These milestones allow us to maintain the plan of filing the environmental impact assessment during the first quarter of 2027. In the Janus Fort Hills, we completed the drilling of [indiscernible] 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 [indiscernible] 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 the new natural gas discovery with the drilling of the Sandia-1 well in the Guajira Offshore 0 block, located 42 kilometers of the Colombian coast and reaching a total depth of 5,440 meters. Located 18 kilometers from series and 9 kilometers from [indiscernible], 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 Darin. 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 9 percentage points compared to the same quarter last year. favorable realized prices and the sale of crude oil cargoes 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 service operations in the Meta department and power supply events at strategic growth assets, such as CPO-09, [indiscernible] Castilla and Rubiales. In particular, temporary restrictions at CPO-09 Castilla and [indiscernible] resulted in deferred production of up to 23,000 barrels per day. Operations are currently progressing toward 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 7 well campaign in the Delaware Basin, expected to contribute between [indiscernible] barrels per day of incremental production from late 2026 through 2027. Two, bringing the area wise at 10 development well, the Janus Fort Hills into production while maintaining production levels at Ibralta. Three, implementing a comprehensive production assurance plan focused on enhancing -- on enhanced recovery additional drilling campaigns, particularly in [indiscernible] 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 external factors, including weather conditions associated with the El Nino phenomenon and other elements of the operating environment the actions underway support our outlook for gradual production recovery and strong cash generation during 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 refining gross margin of USD 29.8 per barrel compared with $12.5 per barrel in the same period last year. This performance demonstrates our ability to capture favorable conditions through outstanding operational execution, high land availability and operational flexibility. These factors enabled us to strengthen Colombia's energy supply while reducing import requirements. The [indiscernible] refinery we achieved record throughput and refined gross margins. Meanwhile, the Cartagena refinery increased through 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 continue to expand our sources of value creation by developing new markets for coke and server. 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 incorporate new volumes transport imported crude and optimized logistics corridors and inventories, thereby offsetting lower domestic production. These results reflect the segment's ability to maximize utilization of existing infrastructure and respond quickly to the systems requirements. Key achievements included the optimization of strategic routes and enhanced logistics capabilities to supply 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 2016, the Hydrocarbon 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 EBITDA of COP 25.7 trillion, representing a 23% increase compared to the first half of 2025 while the EBITDA margin expanded from 38% to 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 and 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 decreased 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 segments to absorb inflationary pressures and partially offset the impacts of lower production 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 Mauricio. 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 Btu 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 the 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 bud. 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 [indiscernible] with an operational capacity of up to 500 million cubic feet per day. The mutualization 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 specs maintenance outage, Ecopetrol implemented coordinated and planned actions across the group that enabled us to deliver an additional 97 GBTUD add to the market, helping meet essential demand and support the thermal power generation sector. Next slide, please. We maintain a reliable energy matrix and then 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 start-up of [indiscernible] and the restoration of the Thermo Cusiana generation system. In addition, we consolidated our position as the country's largest renewable energy self-generator reaching a portfolio of 951 megawatts. Among the quarter's main achievements were the start-up of the [indiscernible], continued progress on the [indiscernible] Wind project and the acquisition of 49% stake in the K1 and K2 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 paths toward the annual target of 3.14 [indiscernible] bringing cumulative savings since 2018 to 26.4 [indiscernible]. These initiatives generate efficiencies of approximately COP 48.5 billion reducing consumption, lowering exposure to spot market prices and free additional gas for the market. Next slide. Given the high probability of an El Nino 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 to gigawatt of self-generation and renewable energy capacity, advancing energy efficiency initiatives and insurance responsible water resource management. It also incorporates preventive measures to mitigate risk associated with wildfires and/or the climate-related events that could affect our operations. Through these actions, we continue strengthening the reliability of the national energy system, while we are affirming our commitment to sustainable value creation or our shareholders and to our 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 years and years. Refining was one of the key value drivers in 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 and integrated platform that has demonstrated resilience and the 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 our culture built on trust, respect, furnace and the priority in belonging to Ecopetrol. With that, we will now open the floor for the Q&A session.

[Operator Instructions] [indiscernible] you may ask your question.

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 oil and gas sector. And I would like to ask maybe a broader question to management. I'll split the same question maybe in 2 parts here. First, looking Ecopetrol in the past 3 to 4 years, what would you highlight as the main deliveries, the main projects that you enjoy delivering? Second part which projects you have the biggest challenge in either moving forward or even approving and not being able to evolve? And 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 2 parts of the question.

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. And this is, of course, explained in the announcements we have made in this first quarter with the discount of [indiscernible] and Sandia-1. That, of course, in terms of the -- that is added to the diversification of our energy grid that is related to more self-generation systems. We can talk about solar plants where we are delivering that are delivering energy to have premises that we have called IFA for the fields next to [indiscernible] like one, which is also providing supplying energy to the [indiscernible] fields. And finally, [indiscernible] that supplies the start-up fields in operation. That adds 130 megawatts. And now I want to highlight is [indiscernible] 128 megawatts 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, and 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 process that we have to do with the environmental compliance. If we talk about exploratory components, we, 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 and also so that we can have an approval to execute at the end 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. And in terms of the future, we have been working on is -- on a 2040 strategy. At this point, we have to highlight that we have the -- we are 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 -- is opening up, and it's the opportunity that we have in light crude light oils and of some nonconventional fields in terms of the 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 metal department in the light crude oils in the [indiscernible] 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.

The next question comes from Bruno Montanari.

Two on my side as well, one on production and one on the [indiscernible]. 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. So how should we think about the second half of the year for the company to meet the full year guidance? And if you still expect and if you're comfortable with the prior production target. And within that, do you expect to see any challenges or difficulties related to El Nino with the generation of electricity and other disruptions? . And then on the CapEx, you mentioned you see a potential COP 8 million to COP 12 trillion accumulation by the end of the year. But looking into next year and within the new government, do you have any expectation to collect those funds maybe quicker than what we were seeing in the past few years? And a quick follow-up on that. When you talk about the COP 8 billion to COP 12 trillion by the end of the year, what type of brand and FX rate are you assuming to come up with that range?

Good morning, Bruno. My name is Carlos Mauricio Avila, I'm in charge of the Executive Vice President of hydrocarbons. I am going to answer the first question 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. And 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 [indiscernible] and the situations responded to a very specific event that happened due to some expectations and some work claims that we had in the area. And which ended up in a blockade and the stop of 16 teams of workover 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, and we're continuing with the production and recovering. In these fields that are, of course, that are the ones that contribute the most to the production of crude in the country and, 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 we acted by these blockades and we're also working on improving the electric reliability, which has affected us on the latter 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's good news. And we believe that we are going to continue with what was mentioned in terms of the linear phenomenon, we have some estimates of what we could end up having in terms of FX on our production. And we are mitigating those through different actions that will allow us to guarantee the electric supply, the energy supply, where we're going to have effects due to less availability of energy. Of course, in that respect, we continue with what we have been telling in the market in terms of maintaining our production levels.

Good morning, Bruno. This is Camilo Barco, the CFO. And I will talk to the question about the [indiscernible] and 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. And the dynamics of this payment is, of course, something that happens in 3-month quotas or payments that expire on a yearly basis. To give you an example, last year, we had [indiscernible] that were paid in 3 installments. The first one for COP 1,600 million. The second one for COP 1,000 million and the other one for COP 400,000 million. About the last quarter, we came to a payment agreement in December, and we expect to collect this payment just as the first and third installments were collected this year, and these are short-term titles and the payments have been made and we continue to receive them likewise. In terms of the figure for accrual, this rate, it is a range between COP 8 billion to COP 12 billion. Of course, this will depend on the behavior of the brand and the TRM. Of course, it depends on the crack spreads of the products, especially diesel and gasoline, those are the ones that have the largest impact on the accrual of this PEC account. The calculations for this year, made with a brand protection range for 2026. That is around $84 -- between $84 and $90 per barrel. And we are working on this projection with TRM that is between [ $3,200 and $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 fuse and about this -- there have been different alternatives explored. And amongst others, one of the areas to increase the price of fuels for the final user. And one more could be the change in the formula for the [indiscernible], which is where we recognize the view to the producer. So 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. And in that sense, we trust that we will continue collecting the PEC installments or payments, of course, as they mature. For next year, we are working with a brand projection that is around USD 72 per barrel and the exchange rate something that we are forecasting to be in that range between COP 3,200 and COP 3,600 per dollar. And 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 bank account. This is receivable for Ecopetrol, of course. And 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 and 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.

We also have Andres Cardona from Citi.

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, and 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?

Andres, 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 declaration 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, but 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. And these are conversations that come from before really and have to do with the management of the CapEx account for collecting it. We are expecting that the new government assumed office and so that we can open communications channel, but Andres, Juan Carlos Hurtado, 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 knowledges whether they are on-site combustion or improved water and we will continue developing the heavy crudes in the foothills and also working on the different exploration and development projects that we have in the foothills. And of course, thinking about the product -- the option of light crude oils related to nonconventional 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. And with, of course, distribution to ensure any information that the new government requires. Thank you.

The next question comes from [indiscernible] from BTG.

My question as to the future of Permian. And one 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. But 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 would be a review on this year or next year?

Thank you for your question. I am Julian 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. And this is responding to the agreement we have with Oxy and the planning that we did last year. Considering the price environment that we saw the -- and the conditions of the industry that we saw at that time where we agreed and we reduced the number of perforation equipment and that or number of rigs in that area. And this is, of course, a reduction in the production compared to what we saw in previous year. Now according to the forecast of the year, we are above the production. In terms of what comes next, we are monitoring -- regularly monitoring the different market options. And of course, the short cycle hydrocarbon allows us a different flexibility and having agreed with Oxy, we have decided to accelerate or include 7 wells that were not part of the 2026 planning. And as I said, we are continuously evaluating what options we will have. And this will have to do with the price scenario that both partners can see through 2027 and to determine whether we will maintain the same level of activity yes, the same number of -- to see if we have the same number of preportion equipment that we will have in the contract or whether we will have to increase that. But that will be discussed and that will be part of the analysis of the surrounding environment and the agreements that we made with our partner.

We also have Andres Duarte from Corficolombiana.

I have 2 questions. The first one has to do with the knowledge transfer in terms of what do 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 nonconventional fields, and I understand the middle-margin area was where you had some opportunities. And the second question asked with the reduction that you can see in the operating cash flow from the second quarter of 2025, is that [indiscernible] with taxes? Or is there another reason for the cash flow to be reduced?

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

Thank you for the question, Andres. About the variations of the cash flow in this quarter? The answer is yes. We -- this, of course, respond substantially to the [indiscernible] behavior and 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. Of course, that has an effect for the same amount in the cash flow of the quarter. The second part of the answer is that this indeed has to do with the taxes, and there are 2 components. The first one has to do the wealth tax with -- for a total amount that was accrued. That's COP 1.2 trillion, and that, of course, has a direct effect on the cash flow. And additionally, with the surcharge the fuel surcharge that part -- yes, from the increase to the market price from $80 upwards, this starts creating a surcharge that is equivalent to 10%. So of course, there's a surcharge here. and the income tax, which has been accrued this year. These are the reasons for the variation. It is important to mention that the free cash flow -- 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 billion ]. And it is also worth mentioning that historically, the second quarter is a strong quarter in terms of the cash flow because this in the second quarter, several of the amortizations of 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 a nation as the main shareholder and to the other shareholders. And this tax payment, which in other years, has been crossed with the back payments. This had an impact on the cash flow. And it's availability for the end of the year, we can see a stable cash flow above the minimum provided cash flows that we had foreseen, the second semester would 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 our new financing operations to pay our obligations and our investment commitments and production commitments.

We'll continue with Juan Felipe [indiscernible] from Creditcorp.

I have 2 questions on my side. The first one is a follow-up to the guidance, especially in the volumes, you mentioned that you maintained the production have volumes in the upstream, I would like to know about the trends for guidance in the midstream and throughput in the downstream, given that both would be above the guidance in this half of the year. Would you expect then 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. And the second question is whether you could give us a schedule of what will happen after the Brava public offer, given if it's successful, we would be expecting to see the consolidation of that transaction in terms of a time line.