Operator: 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's 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.
Juan Carlos Parra: Welcome to Ecopetrol Group's Second Quarter 2026 Earnings Conference Call. This is Juan Carlos Hurtado Parra, Acting Chief Executive Officer of Ecopetrol Group. During the second quarter, 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 4.2 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 a challenging environment for heavy crude grades. And third, strong operational execution in transportation and refining 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 complied with the dividend payment schedule 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, bringing the total to 8 wells during the first half of the year. We highlight the progress at Copa Sul-1 at the offshore Caribbean and following the quarter's close, the Sandia-1 discovery. These milestones continue strengthening the region's gas potential and enhance the group's resource incorporation outlook. On the inorganic growth front, we advanced with the process related to Brava Energia following the authorization granted by the 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 trading capabilities. Initiatives such as the new pet coke 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 GBtud 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 ISA and its subsidiaries. In production, we 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 439,000 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.
Alfonso Camilo Munoz: 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 17.7 trillion, representing a 59% increase compared to the second quarter of 2025 with an EBITDA margin of 44%, 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 record margins and throughput levels 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 debt-to-EBITDA ratio closed at 2x at the group level and 1.3x, excluding ISA's 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 continue to be a structural driver of value creation, contributing COP 2.6 trillion during the first half of 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 in 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 to 3.4x the 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, execute its investment plan and meet its 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 the higher commodity prices, FEPC 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 COP in free cash flow, demonstrating the business ability to sustainably fund its growth. Among the main cash outflows during the period were COP 6 trillion in dividend payments, both to Ecopetrol shareholders and to noncontrolling interest 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, FEPC, as of June 2026, the outstanding receivable stood at COP 8 trillion. This 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 FPC receivable balance will range between 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.
Carlos Mauricio Saldarriaga: Thank you, Camilo. Let us 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. By the end of the first half of the year, we had drilled 8 exploratory wells, resulting in 2 successful discoveries. In March, we announced the discovery of the Copa Sul-1 well located in the Guajira Offshore 0 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-1ST2 located in the Llanos 123 E&P contract and operated by GeoPark with a 50% interest in partnership with our subsidiary, Hocol, which holds the remaining 50% was rapidly brought into production after being incorporated into the commercial area of the Saltador discovery. As I mentioned at the beginning, together with our partner, Petrobras, we have announced the discovery of the Sandia-1 well located at the Guajira Offshore Zero block. This discovery further expands the area's gas resource potential. Regarding the Sirius project, contracts were signed with our subsidiary, Hocol, for the engineering and permitting of the gas processing facilities in Baena. We also made significant progress in the prior consultation process with 1203 communities. These milestones allow us to maintain the planned schedule for filing in the environmental impact assessment during the first quarter of 2027. In the Llanos Foothills, we completed the drilling of Florena N18YST1, reaching the target depth in June. We are now evaluating the zones of interest to assess that potential. During the quarter, we also filed environmental impact assessments for the Tinamu, Magnus and Quimera discoveries located in the CPO-9 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 Zero block, located 42 kilometers off the Colombian coast and reaching a total depth of 5,440 meters. Located 18 kilometers from Sirius and 9 kilometers from Copa Sul, 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 the region. 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, driven by 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 surface operations in the Meta department and power supply events at strategic growth assets such as CPO-09, Chichimene, Castilla and Rubiales. In particular, temporary restrictions at CPO-09, Castilla and Chichimene resulted in deferred production of up to 23,000 barrels per day. Operations are currently progressing toward a 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 4,000 and 5,000 barrels per day of incremental production from late 2026 through 2027. two, bringing the Llanos-10 development well in the Llanos Foothills into production while maintaining production levels at Gibraltar; three, implementing a comprehensive production assurance plan focused on enhanced recovery, additional drilling campaigns, particularly in Cano Sur, increased 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 a gradual production recovery and strong cash generation through 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 and the refining gross margin of USD 29.8 per barrel compared with USD 12.5 per barrel in the same period last year. This performance demonstrates our ability to capture favorable conditions through outstanding operational execution, high plant availability and operational flexibility. These factors enabled us to strengthen Colombia's energy supply while reducing import requirements. At the Barrancabermeja Refinery, we achieved record throughput and refining gross margins. Meanwhile, the Cartagena Refinery increased throughput 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 sulfur. 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 to incorporate new volumes imported crude and optimize logistics corridors and inventories, thereby offsetting lower domestic production. These results reflect the segment's ability to maximize the utilization of existing infrastructure and respond quickly to the system's requirements. Key achievements included the optimization of strategic routes and enhanced logistics capabilities to supply our 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 2026, the Hydrocarbons 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 segment to absorb inflationary pressures and partially offset the impacts of lower productions 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.
Juan Carlos Parra: 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 293Btud 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 GBtud. 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 Puerto Bahia with an operational capacity of up to 500 million cubic feet per day. The commercialization process for the domestic market is underway and start-up is expected in the first quarter of '27. Next slide, please. As a part of our commitment to securing Colombia's natural gas supply during the contingency associated with the SPEC's maintenance outage, Ecopetrol implemented coordinated and planned actions across the group that enabled us to deliver an additional 97 TBtu to the market, helping meet essential demand and support the thermal power generation sector. Next slide, please. We maintain a reliable energy matrix and 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 Termocoa and the restoration of the Termocusiana 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 Quifa solar farm, continued progress on the Windpeshi wind project and the acquisition of 49% stake in the JK1 and JK2 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 petajoules towards the annual target of 3.14 petajoules, bringing cumulative savings since 2018 to 26.4 petajoules. These initiatives generated efficiencies of approximately COP 48.5 billion, reducing consumption, lowering exposure to spot market prices and freeing up additional gas to 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 2 gigawatt of self-generation and renewable energy capacity, advancing energy efficiency initiatives and ensuring responsible water resource management. It also incorporates preventive measures to mitigate risk associated with wildfires and other climate-related events that could affect our operations. Through these actions, we continue strengthening the reliability of the national energy system while reaffirming our commitment to sustainable value creation for our shareholders and to a 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 recent 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 a 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 a culture built in trust, respect, fairness and the pride in belonging to Ecopetrol. With that, we will now open the floor to the queue for the Q&A session.
Operator: [Operator Instructions] [indiscernible] you may ask your question.
Unknown Analyst: 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 the same question maybe in 3 parts here. First, looking at 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.
Juan Carlos Parra: 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 the first quarter with the discoveries of Copa Sul 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 our premises that we have called Quifa for the fields next to Puerto Gaitan, Lajuana, which is also providing or supplying energy to the Barrancabermeja and the Casabe fields. And finally, La Cira that supplies the Cira-Infantas feilds in operation that adds 130 megawatts. Another one to highlight is Porton de Sol's operating La Dorada, 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 environmental compliance. If we talk about exploratory compliance, in Sirius, 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 of 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 a 2040 strategy. At this point, we have to highlight that we have been -- 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 other projects that diversify our generation matrix to be more efficient in terms of energy. In the future, there is a door that is opening up and it's the opportunity that we have in light crude light oils. -- and some nonconventional fields in terms of the legal 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-1 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 Meta department in the light crude oils in the Magdalena Medio Middle Magdalena 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.
Operator: The next question comes from Bruno Montanari.
Bruno Montanari: Two on my side as well, one on production and one on the FEPC. 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 FEPC, you mentioned you see a potential COP 8 trillion 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 trillion to COP 12 trillion by the end of the year, what type of Brent and FX rate are you assuming to come up with that range?
Carlos Mauricio Saldarriaga: 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 department. And the situations responded to a very specific event that happened due to some expectations and some work claims that 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, the 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 has to do with managing the maintenance of wells for increasing the production that was affected by these blockades. And we're also working on improving the electric reliability, which has affected us on the last two 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 El Nino phenomenon, we have some estimates of what we could end up having in terms of effects 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 could have effects due to less availability of energy. Of course, in that respect, we continue with what we have been telling the market in terms of maintaining our production levels.
Alfonso Camilo Munoz: This is Camilo Barco, I'm the CFO. And I will talk to the question about the FEPC. 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 these payments is, of course, something that happens in three-month quarters or payments that expire on a yearly basis. To give you an example, last year, we had COP 3,000 million that were paid in three installments this year. The first one for COP 1,600 million and the second one for COP 1,000 million and the other one for COP 400 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 SPEC account. The calculations for this year are made with a Brent projection range for 2026 that is around $84 -- between $84 and $90 per barrel. And we are working on this projection with a TRM that is between COP 3,200 and COP 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 fuels and about the -- there have been different alternatives explored. And amongst others, one idea is to increase the price of fuels for the final user. And one more could be the change in the formula for the IPP, which is where we recognize the value to the producers. 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 FEPC installments or payments, of course, as they mature. For next year, we are working with a Brent projection that is around USD 72 per barrel. And the exchange rate is something that we are forecasting to be in the 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 FEPC 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 the Ecopetrol.
Operator: We also have Andres Cardona from Citi.
Andres Cardona: Thank you very much for this Q&A session. 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?
Alfonso Camilo Munoz: 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 declarations they have made about their 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, 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 FEPC account for collecting it. We are expecting that the new government assumes office and so that we can open communications channel with them.
Juan Carlos Parra: Andres, Juan Carlos Hurtado. I am 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 technologies, 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.
Operator: The next question comes from Alvaro Leyva from BTG.
Alvaro Leyva: My question has to do to the future of Permian. And what 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 will be a review on this year or next year.
Julian Lemos Valero: 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 and the conditions of the industry that we saw that time we agreed and we reduced the number of preparation equipment and that a 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 seven wells that were not part of the 2026 planning. And as I said, we are continuously evaluating what options we will have. This will have to do with the price scenario that both partners can see for 2027 and to determine whether we will maintain the same level of activity. And yes, the same number of -- to see if we have the same number of preparation equipment that we would 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 agreement that we make with our partner.
Operator: We also have Andres Duarte from Corficolombiana.
Andres Duarte: I have two questions. The first one has to do with the knowledge transfer in terms of what 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. I understand the Middle Magdalena area was where you had some opportunities. And the second question has to do with the reduction that you can see in the operating cash flow from the second quarter of 2025. Is that FPEC with taxes? Or is there another reason for the cash flow to be reduced?
Juan Carlos Parra: 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 are still people working and they're working at our subsidiary, but together with 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.
Alfonso Camilo Munoz: Thank you for the question, Andres. About the variations of the cash flow in this quarter, the answer is yes. We -- this, of course, responds substantially to the FPEC 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 indeed has to do with the taxes, and there are two components. The first one has to do the wealth tax 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, the surcharge -- the fuel surcharge that apart -- 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 the second -- in the second trimester, we generated COP 2.8 trillion. And it is also worth mentioning that historically, the second quarter is a strong quarter in terms of the cash flow because in the second quarter, several of the amortizations for 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, the nation as the main shareholder and to the other shareholders. And this tax payment, which in other years has been crossed with the FPEC payments, this had an impact on the cash flow and its availability. For the end of the year, we can see a stable cash flow above the minimum provided cash flows that we have 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 private transaction, there won't be any need to carry out new financing operations to pay our obligations and our investment commitments and production commitments.
Operator: We continue with Juan Felipe Becerra from CrediCorp.
Juan Felipe Becerra: Thank you for the presentation. I have two questions on my side. The first one is a follow-up to the guidance, especially in the volumes. You mentioned that you maintain the production volumes in the upstream. I would like to know about the transport guidance in the midstream and throughput in the downstream, given that both would be above the guidance. in this first 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, when would we be expecting to see the consolidation of that transaction in terms of a time line?
Juan Carlos Parra: Thank you. This is Juan Carlos Hurtado, Acting President. In terms of your first question, our forecast is to maintain this line in terms of volumes in the three segments of the traditional business. In terms of volume, we are maximizing throughput to obtain better margins according to what we have in market, increasing and optimizing our transport system, whether it's oil pipelines, multiproduct pipelines to maximize the value. And in terms of value, we are maintaining the volumes that we estimated or had foreseen in the period 2026.
Julian Lemos Valero: Juan Felipe, this is Julian Lemos, Corporate Vice President for Strategy and New Businesses. I will answer your second question about the time line for Brava. The last -- the past 15th of June through our subsidiary in Brazil, we received from the authorities in Brazil, an answer to our appeal to continue with the market operation -- stock market operation with that favorable resource and some elements that with some prior conditions, we are in the condition to launch tomorrow the auction for this tender offer. We just wanted to mention that we have green light from the institution in charge and the green light from the bondholders and debt holders for Brava and the green light from the Board of Directors of Brava. In terms of the terms, we are launching this auction. So this is, of course, due to diligence for the tender offer. If everything is successful tomorrow on the 17th of August, we would be conducting the liquidation of that tender offer, which is basically a disbursement of the resources for the sellers and the verification of the compliance of all the closing conditions. And from there onwards, Ecopetrol would be the owner of 51% of that company. If everything happens in those states we mentioned, we would see a consolidation of the rater results in Ecopetrol for the third quarter of 2026.
Operator: The next question comes from Leonardo Marcondes from Bank of America.
Leonardo Marcondes: [indiscernible] is regarding the offshore assets. I mean are there any pending environmental or regulatory approvals that could affect the schedule of the development of the blocks?
Carlos Mauricio Saldarriaga: This is Carlos Mauricio Avila, Vice President -- Executive Vice President of the Hydrocarbon side. In terms of the -- your first question has to do with what we are doing to reduce the costs of the upstream. Basically, beyond having a production guidance, we, in fact, our message is that we have to guarantee the cost indicators that the segment has. In that sense, we are working very strongly on different initiatives that have to do with the efficiencies program, which basically targets the core of those costs that are, of course, are most important for the segment. We're talking about costs related to electricity with the matrix on the grid in terms of its -- how much you weigh is 26% to 30%. And we are working on that to be able to optimize those net tariffs that are of course, created on the segment due to energy consumption. We're also working on water management. One of the challenges that we have in the assets of Ecopetrol, specifically in Colombia has to do with the management of production of fluids. And we are working very strongly to reduce water consumption and to consume less energy as well. We're working to have efficiencies in terms of the costs associated to the services related to the wealth to reduce and implementing new technology, implementing options for -- to increase the recovery factor as the President mentioned, recovery with improved water and other alternatives that will allow us to have other alternatives at lower costs. And everything that has to do with the services contracted where we have implemented a series of strategies so that the costs are reduced in terms of dollar per barrel. In terms on the environmental approvals or regulatory approvals that have to do or that are affecting the development of the new blocks, we -- what we're doing here is we're trying to work together with each one of the institutions in the government so that we can effectively obtain, to have all the different permits, the adequate so that we can actually obtain those permits in the times we have foreseen. We have been improving our relationship with all these institutions or entities, and we think we can optimize some of those times for those permits. And there are different projects depending on where we develop them in the country. But we believe that working with the environmental authorities and others, we can keep our goals in terms of complying with our production and so that they are not affected by these approvals.
Operator: We continue with Alejandra Andrade from JPMorgan.
Alejandra Andrade Carrillo: I have two questions. The first one is, I want to understand in terms of financing for Brava and what you had already insured. I don't know if it was a bridge loan and then the idea will be to refinance that coming from international markets. So how is that transaction structured? And related to that, I wanted to understand if you were analyzing possibilities to conduct a liability management exercise alongside the Brava financing.
Alfonso Camilo Munoz: Thank you for your question. My name is Camilo Barco, CFO. About the first question related to the Brava financing. This is a typical structure for this operation. As you mentioned in the same question, we are going to do a short-term financing with a bridge loan to finance this acquisition. And this is -- we provide -- we are foreseeing that before year-end, we will do a takeout or we include all the possibilities or a takeout to a long-term credit or also take out to an operation in the capital market. And with that, I go to the second question about our liability management and responsibility. And of course, our strategic approach in terms of financing is to optimize costs. We have seen a positive evolution of the margins of the different securities of sovereign debt and the behavior of the Ecopetrol bonds. And we can foresee good conditions in the second semester. And in the market, we see this type of transactions. We have reduced the financial costs, and we will continue working on this with the purpose of prolonging the maturity, the average maturity of this debt portfolio. We will continue monitoring the different conditions and assessing all the possibilities of both the banking market and the capital market.
Operator: We now continue with from [ Hugo Beltran with Acciones & Valores. ]
Unknown Analyst: I would like to ask if you could expand on the liquidity operation on tax credits. What is the magnitude on the dimension of those balances? And if we expect this type of liquidity operations in the following periods? And finally, how you are moving forward with the litigations with the in terms of the VAT to fuels that was -- that litigation was happen in 2025.
Alfonso Camilo Munoz: Thank you, for your questions. I Camilo, I will answer your questions in the same order. On the same -- the first question related to the tax credits or balances from taxes, as you described, in the second quarter -- sorry, in the first quarter, we carried out an operation as one of the levers for liquidity when we managed to structure the sale of a package of obligations receivables for Ecopetrol. And this operation had a value of USD 500 million, and we were given -- Colombia made a payment around COP 2 trillion. And the financial cost is also reflected in that period with a consistent -- an amount that is consistent to the discount that we received due to the anticipated forward sale of these receivables. And this is an operation that can create a good context or background that can give us liquidity of this debt of receivables that have been growing. So we believe that in effect, this will continue being an alternative mechanism that is possible and that as we need it depending on the cash flow, when it is worth doing it, this will be an alternative to provide liquidity for the company at very competitive costs that are close to the finance -- average financing costs that we have in the rest of the portfolio in terms of that operation for the receivables. In terms of the VAT litigation process, we have -- we continued advancing in the different instances in this controversy with the tax authorities. We have six different processes -- sorry, eight different processes, six by the Barrancabermeja refinery and two by Ecopetrol. And we have made different appeals that are in process. And we have requested some measures in several of these cases. And what we could say is that they are basically undergoing the different discussions in the corresponding instances. But I would like to mention that in the previous quarter, Law 2586 was issued by the Congress of Republic, which is the customs charter. And in Article 113, they have a provision for an alternative mechanism for solving controversies with the tax authority. And this is an alternative that we are assessing that offers very favorable conditions to explore an alternative solution to this controversy that has been created around VAT. While we explore this alternative and we verify and check the benefits that we would have for Ecopetrol, we will continue moving forward with the litigations.
Operator: There are no questions. We will continue with the questions in the chat. Mr. [indiscernible] asks considering resource of the cooperation with Petrobras in developing the gas -- the offshore gas resources is Ecopetrol assessing to extend this model of alliances to the exploration, the offshore exploration.
Juan Carlos Parra: Carlos Hurtado, acting President. At this point, given the announcements we have made recently and those reinforced with the discovery of Sandia-1 block, we can see the capacity of developing some important gas volumes in the offshore component. And we are working with Petrobras to develop these exploration capacities to be able to materialize these resources that we have identified so far and to be able to have the opportunity of discovering other blocks that are within those areas that are shared with Petrobras. Additional to that, we have to understand we have the KGG block at 100%, and we have been maturing as Ecopetrol, but we can see alternatives of involving strategic partners such as Petrobras from now onward to develop the capacities that we would have in terms of volumes. And lastly, being able to move forward with what we have with [ Arauca ] and validating the environmental aspects to continue developing the exploration projects.
Operator: Michel Galvez from Principal Financial Group asks the gross margin, $29.8 per barrel with the [indiscernible] with record $31.6 [indiscernible] $28.4. Depending on the crack spread of the still -- given the disruptions in Norm, what refining margin are we assuming for the second half of the year for 2026 if crack is compressed and how much would the record be for the second half of the year? How much was it structurally given synergies?
Julio Herrera: I'm, Julio Herrera, I'm Commercial Vice President, and I will answer this question on behalf of the commercial and refining areas, and they will be able to complement my answer. It is true that the refineries of the second quarter benefited from an exceptionally favorable environment given the steel products, given the reduction that there was in Africa and Europe, especially and you saw the prices we had, the crack spread for diesel for the second quarter was $57.60. If you saw this a few days ago, diesel was at $87. And we are not providing a specific guidance for this. But what I can say is in terms of refining we have reached it structural. The benefits have been structural and the margins will continue being determined by external factors, of course, such as the international differentials of fuels and the prices of crude oil, which is what we have at the refinery and the general conditions of the energy market. From the perspective of value creation, it is worth highlighting that, that record performance responded to several factors that take me to say that this was a structural benefit. You heard about the throughputs of the refinery at Barranca, 240,000 barrels per day, Cartagena [indiscernible] barrels per day. And that's not the last thing. We have the optimization of the [indiscernible] and the fact that we're working both in Barrancabermeja, Cartagena with an operational integration, and we have more yields from the operational discipline and the decision to go for more valuable products that is what has led cost. Even though the market margins will be normalized, we continue strengthening the structural capacity of the refining system to sustain that value capture, which will be competitive. If the market continues behaving in that way, we will have those crack spreads in the refining area.
Operator: [ Diego Galvan From Global X ] asks are we planning to make adjustments in terms of corporate governance to regard the Board of Directors of Ecopetrol, in the last four years there were changes that had impacted the election of some of the members of the Board of Directors -- are you planning an extraordinary assembly in the short term?
Maria Toro Restrepo: This is Cristina Toro, Legal Vice President and General Secretary. According to the legislation that is applicable and the charter, charter of Ecopetrol, the General Assembly of Shareholders will make decisions about the Board of Directors. And this is the competent body to elect and remove members from the Board of Directors at the moment, given the resignations of two members, the Board of Directors can continue deliberating in a valid manner with the members that are still there. This, without meaning that the assembly can be someone to choose other members. When that happens will depend on the specific circumstances. However, once we need to have a list, a full list of candidates that requires the verification of different requirements and the different conditions established internally. And only once we have conducted those verifications, two weeks after that an assembly can be summoned.
Operator: When do you expect to consolidate the results of Brava Energia in the accounts of the Ecopetrol Group? If that is success -- if the acquisition is successful for 51% of ownership, how much do we expect this would contribute in barrels per day of production to the group? This was asked by Harold Rubio.
Alfonso Camilo Munoz: Thank you very much to Harald for the question. Camilo Barco here again. In the time line that we have and once this operation is successful, the operation is successful and once the auction -- the tender offer and then the auction that follows, we expect to consolidate the results in our Ecopetrol results at the third quarter of 2026. And as part of the production that we will have, we expect to receive a contribution of around 42,000 barrels of production equivalent per day. That is consistent with the participation of Ecopetrol that is 51%.
Operator: [ Camilo Diaz ] is asking Could you please tell us what is the daily energy demand in megawatts for the group? And how much of this demand is covered with self-generation with renewable energy? That means without purchases at MME and the stock market.
Ernesto Gomez Cabarcas: This is Ernesto Gomez, Vice President [indiscernible] Thank you for the question, Cam. Ecopetrol has consumption of 24 gigawatt hour, which corresponds to 9% of what the country consumes. And of that Ecopetrol is using every day, 54% is done through self-generation sources. Out of that 54%, 49% is conventional self-generation and 5% is renewable sources. Those are the figures that we have at the moment and that we have a portfolio of renewables that is growing and in solar 440 megawatts. Thank you for the question.
Operator: Another question. Have you thought about rotation strategy of the asset portfolio to reduce the level of total debt of the Ecopetrol Group. If that is the case, could you give us more information?
Julian Lemos Valero: Julian Lemos, Corporate Vice President for Strategy and businesses. I would like to start saying that the debt levels of the group are healthy. And as it was previously mentioned by our Financial Vice President, Camilo, and even after the acquisition of Brava, we will continue being within the limits that were previously reported to the market. However, this portfolio rotation exercise is something that we permanently do in the company, and we are assessing different alternatives for that -- with that purpose. And we will be informing the market when they are executed or when they are about to be executed.
Operator: We conclude this Q&A session. We now give the floor Acting President of Ecopetrol for final remarks.
Juan Carlos Parra: Thank you very much. I would like to thank all of you for participating and for your interest in the results of the second quarter and the forecast that we have for 2026. And onwards, thank you to the team for your participation, and thank you for the results. Have a great day. Thank you.
Operator: Thank you, everyone. And with this, we conclude our results call for the second quarter of 2026. Thank you for your participation, and the call will end now. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]
