Q1 2022 Ecopetrol SA Earnings Call
Good morning, My name is Hilda and I will be your operator today.
Welcome to Ecopetrol earnings conference call in which we will discuss the main financial and operational results for the first quarter 2022.
All lines have been muted.
There will be a question and answer session at the end of the presentation.
Before we began it is important to mention that the comments on this call by Ecopetrol Senior management include projections of the company's future performance.
These projections do not constitute any commitment astro future results.
Do they take into account risks or uncertainties materialize.
The 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. Felipe <unk> CEO of Ecopetrol.
Back to <unk> CLO and.
Hi, My couple of Yale CFO .
Thank you for your attention.
Mr. <unk> you may begin your conference.
Good morning, everyone and welcome to our conference call on the results for the first quarter 2022, I am proud to announce that during this quarter. We continued to deliver historical financial results underpinned by some of the following issues first positive industry conditions with an average rent of 98.
<unk> per barrel in the quarter, which is 60% higher.
On the price we are observing the first quarter of 2021 second the company's efforts to capture efficiencies and savings that helped us mitigate inflationary pressures and third our focus on sustainable value generation for our stakeholders with a clear commitment with our key ESG goals. Additionally, I would like to highlight.
The recent approval in the AGM a dividend of 11 five trillion persons equivalent to 280 <unk> per share, which represented a dividend yield of 10, 4% for our shareholders and a payout of 69% of the net income of year 2021.
Meeting the AGM. Some changes were approved in the company's bylaws aimed at strengthening of our corporate governance and are giving continuity to the 2040 strategy announced a few months ago, which we have named energy that transforms the changes introduced to the by loss included amongst others. The extension of the board.
Members period from two to four years in terms of production and after some operation and on public order challenges faced at the beginning of the current year, we continue to take decisive steps on the recovery path. The production for the first quarter of the year was 692000 barrels of oil equivalent per day, whilst in March we reached.
An average production of 705000 barrels.
In April 708000 barrels equivalent per day, all of this aligns with the production target for the year between 700007 hundred 5000 barrels of oil equivalent per day, although we are facing challenges in terms of hard costs and working capital requirements associated with the increase in the account receivable relay.
Get it to the fuel prices stabilization fund or epic and studies with evolution or the impact will be explained in detail by Jaime later on this call. It is important to note that none of this compromises the fulfillment of our business and investment plans for 2022, let's go on.
To the next slide we started the year with important milestones in our four pillars of our 2014 strategy and the strategic pillar of growing with the energy transition I want to highlight the following first the success declaration of the linear two exploratory well located in the Buckhead Unblock Alima, Colombia second we were.
Were awarded six new exploratory blocks located in the Santos basin in Brazil.
With our exploratory efforts in high potential basins sure the authorization by the board of directors for the divestment of 51, 8% of our participation in that of course as part of our active portfolio management with the objective of reallocating capital within our strategy.
Congestion in the pillar of value generation for key ESG technology, environmental social and governance I want to highlight the following first we joined the one <unk> initiative by the World Economic Forum to contribute to the protection of biodiversity in the fight against climate change committed to protect <unk>.
Hector's of forest compensate 2 million tons of steel to equivalent.
No.
Millions of trees by 'twenty sturdy section where were included for the second consecutive year in the S&P Global sustainability yearbook 2020 to be standing out from peers on our commitment to advancing ESG issues.
In line with our commitment to the disclosure of sustainability information and anticipating what will be required both locally and internationally, we reduced our integrated sustainable management report and the second factor you report in the ladder, we significantly increased the number of reported metrics from 156 and 2022 five.
<unk> hundred 14 in the 2021 report for the consolidation of our low emissions portfolio align with the delivery of value and the objectives of the energy transition I would like to highlight the operational startup of the first green hydrogen production pilots in Colombia located in the Cartagena refinery with a 50 <unk>.
What electrolyzed here with a capacity to produce some 7300 kilograms of hydrogen per year.
The energy for that equipment coming from 217 solar panels. This will allow us to assess the technical environmental feasibility on performance of Green hydrogen generation technology. The hydrogen producing the pilot is being used and will continue to be used to improve the quality of the fuel produced at the refinery.
Today, we use great hydrogen finally in March we announced our pledge to be water neutral by year 2045 by reducing 66% of the capture of freshwater.
Using our operations the elimination of these charges into water bodies on the compensation of 34% of the rupee remaining water captured in the cutting edge knowledge pillar, we mainly highlight first the alliance with Accenture and Amazon Web services, with whom we are developing an open data platform for an efficient.
Water use of management in the oil and gas industry veterans with the support of the launch of the seventh version of innovative program that six two years technology and innovation to strengthen the social economic environmental and governance efforts in the territories in which we operate third the startup of the project to create innovation.
And technology center of the Caribbean, and Cabana, which will approach solutions to the challenges of the energy transition and the petrochemical industry with hydrogen as one of our key items in such a century fourth we make progress in the consolidation of the energy Tech ecosystem with the signing of an Mou with technology Europe .
Flagship research and technological development sensor finance in the competitive returns pillar I would like to highlight a few things first the financial results obtained in our operations in the Permian with an EBITDA of amounting to $111 million in the first quarter and an EBITDA margin of 87%.
Second the first commercial operations close by Ecopetrol trading Asia, locating in Singapore, where 109 million barrels of crude oil Eric the efficiencies for 358 billion pesos, resulting from initiatives in workovers maintenance improvement in product in Petcare margins dilution strategies.
Optimization of the lifting costs amongst others and I wanted to take the opportunity to each.
Each and every employee in the equitable for achieving these outstanding milestones in terms of efficiencies, let's now move to the next slide where I want to discuss the challenges and opportunities with current lease fee in the market environment and what these represent two ecopetrol, although the higher international prices of crude oil.
Contributed to our results. The price scenario has also generated pressures in terms of inflation increase of energy cost and challenges in international logistic change, which generate pressures on our operating costs and some delays in the execution of our projects. We are actively work to mitigate the impacts of the situation focusing our.
Courts outside from efficiencies, maybe one of the following measures the continuous strengthening of our commercial strategy seeking to maintain our realization prices at attractive levels, even under a competitive price scenario the consolidation of our operations in the Asian market through the consolidation of new relationships with clients in the region.
Strengthening commercial relationships in that content as well as developing the crudes trading strategy for third parties.
The systematic monitoring to supply prizes indexes and their impact on the projections of our different segments guarantee they required inventory several for critical Opex and Capex operation and lastly, the adoption of new contractual structures seeking to mitigate volatility with long term contracts limiting the indexation.
<unk> two factors such as inflation, having said all of Easter was in increasing the imports volume associated with a higher domestic demand for fuels and a decrease in the national supply of food products due to scheduled refineries maintenance boating barranca.
This represented a decrease in the volume of exported products in order to supply domestic demand.
Performance of gas it has increased compared to the previous quarter was due to higher economic growth reflected in the increase in gas consumption and the regulated market mainly in households, and small businesses I want to now give the floor to Alberto Consuegra, who will talk about the main operational results for the quarter.
Thank you Philippe.
During the first quarter of 2022, along with our partners, we drilled seven exploratory wells in Colombia.
Sales of the peso whaler two located in the book It on block Department of Tolima operated by pet ankle confirm the extension of the discovery of Leno won in the Guadalupe formation by finding 27 degree API crude oil.
On the other hand, the <unk>, one well was sealed antibody alone.
The cumulative production from exploratory wells and initial on extensive test reached 220000 barrels of oil equivalent at the end of first quarter of 2022, 2000, and 453 barrels of oil equivalent per day on average 33% of the production of the quarter correspondent toil $6.
7% to guests on March 11th <unk> X D 45, well operated by Ecopetrol and located in the paid a month again. It was positive. This is the second exploratory well in the area to search for gas. Unlike crude in the vicinity of that could be our field, we highlight the reactivation of the car.
Beyond offshore exploration in Colombia, with two wells being drilled simultaneously Gorgon tool, what we seek to verify the extent of the gas sense. This cohort and Gorgon one back in 2017, I am 201, after an approximate where a depth of 177 meters and locate.
32 kilometers from the coast of them when we see body of Palomino into department of lot walkie-talkie concerning the international exploratory activity on March 28th Ecopetrol Brasil formalize the concession contract.
S. M 17, all nine block, which represents the first step of our position and strategy in the southern region of the Santos Basin. Additionally, in this same basin during the third permanent offer cycle of the A&P held on April 36 offshore blocks were awarded to a copay.
Brazil, our subsidiary we will have a 30% stake in the shale. The operator will have the remaining 70% with <unk> participation in Copa Tony's now partner in 12 blocks in Brazil.
Please move to the next slide.
In order to meet that $20 40, Ecopetrol group's strategy and new operating model for the upstream segment exploration and production projects and drilling including the creation of the upstream Vice presidency, which seeks to guarantee and integrated vision for the segment greater regional economy more synergy with.
The subsidiaries higher at fixed currency and the Capex execution and reduce time to market from exploratory findings to first commercial hydrocarbon production. We have some challenges at the beginning of the year due to the maintenance of the <unk> gas plant.
The impacts associated to some blockades, mainly aimed at getting cut back just on CPI suit oriented fields by March and April production has been stabilized at over 700000 barrels of oil equivalent per day.
<unk>, we are now in line with the goals set out for the year.
It's important to highlight that the organic investments in the segment for the quarter amounted $603 million.
And these are in line with our plan and in accordance with the project activity hit the gas on the LPG business is progressing and the fulfillment of that balanced plan with a significant contribution to the total production of the Coca Cola group, reaching 22% during the first quarter.
On average production of 152000 barrels of oil equivalent per day, let's go to the next slide. Please in the Permian Basin results were achieved in line with the gears activity plan. We reached total gross production of more than 60000 barrels of oil equivalent per day up more than 30000.
One barrels of oil equivalent per day net to capital before Roy Joseph from an environmental perspective, 2.1 million barrels of water recycled in completion operations on up to 35% of the diesel use themed activity was replaced for compressed natural gas, reducing the greenhouse emissions.
The project with regards to unconventional reservoirs in Colombia beyond that Brandon the environmental license for the <unk> project on March 25th the licensee suspected to be enforced by the second half of the year.
The viral mental authority has reviewed the claims presented by the third parties involved with respect to the ruling of the first quarter of Barrancabermeja that suspended the license Ecopetrol filed on our people within the corresponding legal term concerning the lateral project. We are waiting for the dates of the hearings.
In relation with environmental impact study, which was presented back in February of this year in Ecopetrol. We are convinced of the importance of unconventional reservoirs in terms of energy security for the country varies quite we will advance in the activities related to the pilot projects include.
The communication of scenarios with the communities and other stakeholders to disclose the progress and result of doubts and concerns regarding the projects. Please move on to the next slide.
The volume of crude oil transported increased by 24000 barrels per day as compared to the first quarter of the previous year, mainly associated with the entry of crude oils from their Naughty Association into they've asked colonial Ron covered it may have refinery system on the capture of additional barrels.
Entering from the <unk> pipeline.
The other hand, they transported volume of refined products of the first quarter increased by 9000 barrels per day as compared to the same quarter of 2021 to increase the operational storage capacity at the puzzles Colorado's terminal the construction of a tank with a nominal capacity of 260000 bar.
<unk> was completed in March of this year these tank.
By using the hoist bring system.
Geodesic roof of 61 meters in diameter 13 meters high being the largest geodesic tank built in Colombia. The construction of the tank involves the active participation of 62 women, representing 42% of the workforce with the transport of refined products through.
And the pipeline and the construction of the FBI truck gathering station. The Golar transporting 3300 barrels of fuel per day to a meta department was exceeded with the possibility of reaching up to 5500 barrels per day due to the increasing demand in the area.
Finally, the co dilution projects seem at Pim Oceana enabled the use of LPG as a diluent for crude oils through facilities assembled that within the plants. These service generated significant economic benefits to Ecopetrol group bank clients, representing savings seen dilution costs during the first quarter.
2022, let's move to the next slide please.
<unk> stream segment reached record results on its quarterly EBITDA of one six trillion pesos the highest EBITDA margin since 2016, reaching nine 6% on the highest integrated gross margin of the refineries in the last five years at $13 $9 per bottle.
These results were leveraged on a stronger basket versus Brent inventory optimization and efficient commercial strategy integrated planning of the logistics chain financial discipline and cost control during the first quarter of the year scheduled shutdowns where performs in both refined.
To ensure operational availability and increase the reliability of the assets along with outstanding HSE performance. We currently reach that successful execution of six 2% of the 2022 maintenance plan do you see in Tennessee, its shutdown cycle kind of N T.
Paid that impact on the throughput level for the first quarter as well as for the current quarter. The Cartagena refinery recorded a historical quarterly EBITDA Records, reaching 745 billion pesos with a gross margin of $86 per barrel February 18th we celebrated.
100 anniversary of the Barrancabermeja refinery strategic state assets, which has been supplying the demand for clean fuels within the country supply and the production of petrochemicals for the national industry and acting as a leading force of the national economy.
Cynthia the positive trend in results continues due to the realization of margins between polypropylene and refinery grade propylene the increase in the level of raw material deliveries by the refineries on the distribution of final products and regions quite values higher let's move to the next one.
Please during the first quarter of the year efficiencies of 358 billion vessels were achieved within our comprehensive strategy focused on mitigating the inflationary effects that the global economy is experiencing as previously mentioned by Philippe inflation has mainly impacted the purchase of <unk>.
Two yields all services infrastructure maintenance on the cost of energy the group's competitiveness and efficiency strive to use have managed to mitigate the impact of inflation on EBITDA by more than 70% at the end of the first quarter of 2022, we have achieved savings with a positive.
On EBITDA for 318 billion pesos as compared to the impact of falling and I'm 40 billion pesos associated to inflation, the lifting cost experienced an increase of 15% mainly associated with increasing operations. After the release of restrictions related to the COVID-19.
Pandemic and increasing the energy targets, which grew by 18% in relation to the cost per barrel transported.
Increasing prices were offset by a lower unitary cost due to the higher volumes transported as well as the effect of a higher exchange rate by re expressing cost in pesos to dollars. Our total unit costs naturally reflects the effect of higher Brent prices on crude oil and product inputs.
Also reflects the effect of the increased activity on the fixed component of our costs I now give the floor to Jaime Caballero, who will talk about the main financial results of the Ecopetrol group when you sort of export for the first quarter 2020 to the group's net income closed at $6 six trillion vessels a record.
High quality result, compared to the fourth quarter 2021 results. The following aspects standout firstly, a two two trillion pesos increase in EBITDA in line with a stronger price environment outstanding refining margins.
<unk> contribution excellent operating and financial results for the Permian and 358 billion pesos in operating efficiencies all of that despite.
Ongoing maintenance in some units in both refineries higher product imports strong in fashion area pressures a rise in working capital requirements, mainly driven by the increase in the accounts receivable from the fuel price stabilization fund our feedback for its Spanish acronym and higher global competition.
On the supply of crude oils address to Asian, secondly, nonrecurring events of <unk> three trillion in Texas due to the write off of the Rydberg projecting Ecopetrol America as a result of the decision to relinquish its development following the technical and economic feasibility analysis and thirdly higher income tax provision.
Due to stronger results and an increase in the nominal rate taxation from 31% to 35% as a result of the tax reform approved last year.
Fleet mix move onto the next slide you see the main financial Kpis amongst the metrics for the oil and gas business, which exclude EPS contribution.
EBITDA per barrel stands out closing at 57, $2, which represents an increase of $19 $3 per barrel versus first quarter of 2021.
Explained by higher sales prices of crude and products basket.
On the other hand the.
Net income breakeven closed at $35 $2 per barrel.
Greg stream, an increase of $1 $8 per barrel, mainly due to a higher volume of purchased products lower throughput in refineries and an increase in financial expenses.
<unk> thesis Kpis, the EBITDA margin, excluding construction stands out closing at 83, 5%.
As a result of higher operating revenues driven by the positive impact of macroeconomic variables in Brazil, and Colombia, the entry into operation of energy transformation projects. Following the first quarter of 2021 and our growth in operating costs below the variation in operating revenues among others.
Return on equity for the first quarter of 2022 was 11% in line with the plan.
<unk> represent a reduction in contrast, the first quarter of 2021 as the latter incorporate a nonrecurring benefit associated to the periodic tariff review and adjustments to the basic network existing system in the Brazilian subsidiary.
Finally, I would like to highlight some results at a consolidated level, a historic EBITDA margin driven by higher realization prices in our crude oils and products at <unk>.
Consolidation, our royalty, which continues to be above double digit levels closing at 14, 5%. The best result recorded.
First quarter in the company's history. This result is explained by a higher operating income partially offset by an increase in taxes and capital employed.
Thirdly.
On the EBITDA contribution by segment. The downstream results are particularly noteworthy setting a historical record thanks to positive market differentials for products specialty gasoline diesel and jet and likewise, the growing participation of the electric power transmission and toll road concessions segment, providing greater stability the groups are.
Operational cash generation.
Firstly I'd like to highlight the gross debt to EBITDA ratio, which closed at one eight times explained by stronger EBITDA performance. These provides ecopetrol with greater financial flexibility and remains aligned with indicator below two five times by year end. Please let's go to the next slide to discuss the cash position.
At the end of the first quarter of 2022.
Total registered a cash position of $16 five trillion versus the most relevant movements of the year so far.
Firstly operating cash flow of $3 eight trillion vessels.
That excludes the pending balance of $6 3 billion vessels associated with the account receivable from feedback generated during the first quarter of 2022 second the outflow of $3 four <unk> vessels, mainly due to higher organic investments highlighting the increase in drilled development wells and workovers within the.
<unk> carbon business with a larger investment level versus the first quarter of 2021 with capex efficiencies for $40 billion.
Debt payments, mainly related to interest and Amortizations for one two trillion pesos and lastly dividend payments four three trillion versus made by our subsidiaries to noncontrolling shareholders regarding the dividends approved by the general shareholders meeting on March 32022 for 280 <unk>.
Sure we can confirm that in April the following payments were made 100% of the minority shareholders for one 232 trillion pesos and the first installment to the nation for 158 trillion vessels. Please let's move to the next slide to discuss the fuel price presentation fund and its current effect on the company Scott.
Position. This fund was created in 2007 and is a mechanism that the government uses to mitigate the potential impacts that market volatility within the international crude and product prices.
Half on Colombian households, and businesses. The current accumulated balance is due to a sudden rise in international prices as a consequence of the conflict between Russia and Ukraine.
Bind to the inflationary scenario in Colombia caused by the post pandemic economic reactivation and the international supply crisis. The implementation of this mechanism allows the group to axis reallocation prices and can get it margins out of international references by recognizing the gap or differential between the international price and the local prices.
Fuels, such as gasoline and diesel because the application of an established formula periodically reviewed by the Ministry of mines and energy <unk> seeks to stabilize fuel prices for Colombian consumers mitigating the impact that fluctuations in international prices may generate an operating cost inflation.
And the economic growth the payment of this differential implies a periodic settlement and if there is a balance in favor of Ecopetrol group. The payment will be made from the national budget available funds for this purpose currently the regulations not establish specific payment date, but historically the government has honored this obligation in periods of less than one year.
The last payment is furnished by the government was in December 2021 of the outstanding accounts of the first and second quarters of 2021 assets today, the balance of the account receivable amounts $14, one trillion pesos, including seven eight trillion of the outstanding balance of the second half of 2021.
Currently under review by the Ministry of mines for its liquidation for the first quarter of 2020% to 50% of the sales volume corresponded to export and 20% to national territory sales exempt of subsidy that percentage of sales base why didn't the accumulation of the bank receivable is therefore 30 per se.
Corresponding to total local sales of gasoline and diesel of each barrel sold by Ecopetrol of gasoline and diesel the company recognized a cash income of about 50% and 37% of accrued income respectively. While the rest went to the account receivable given the current price levels of both products in Colombia to end consumer.
Ecopetrol has been working together with relevant government entities with a clear objective of having the balance of the bank recognized unpaid Additionally, and with the goal not compromising the current investment plan, we have activated a contingent financing plan.
Potential temporary liquidity mismatches any module that will comply with the maximum leverage metrics released in the 2040 strategy. We considered that this liquidity situations statutory to the extent that the national government announced on April 20th at full commitment to pay the steps it using different sources and tools.
Such as exits funds of the niche you'll find this budget estimates.
Debt service higher Ecopetrol dividends and those estimated international journal of budget and <unk>.
Inclusion of the outstanding some of the accounts receivable in the 2023 budget. In addition, the government announced its intention to publish a draft decree with a new proposal for our pricing methodologies payment terms on our convergence path for prices. Finally, it is important to note that ecopetrol is carrying out analysis of additional operational.
Turning to face that time protect cash such as controlling certain sales in frontier areas and certain restrictions on imports I now pass the floor to Philippe for his closing remarks, thanks, Hemant before concluding I would like to emphasize some points about our strong corporate governance practices and our commitment to the definition.
And implementation of corporate governance policies has been fundamental to the professional management of the Ecopetrol group is a world class organization. These are policies that transcend governmental cycles and are aligned with the company's strategy Ecopetrol group corporate governance policies are designed for the long term and have several layers of protection.
Allowing its key strategic elements to maintain in this way the protection of the value to every shareholder and other stakeholders is the cornerstone for making decisions. All the time, it's part and it's an integral part of our decision making process the corporate governance mechanisms enable the consistency of this strategy.
<unk> seen as a whole can ensure its reliability and stability I would like to highlight the following mechanisms.
Does the succession policy on the matrix of skills and experience for the board of directors second the nomination of directors by the oil and gas producing departments and by the minority shareholders Burt Hicks.
Historic Clos to maintain at least three directors in the next board term toward independence of board members greater than that required by law.
Succession policies for the CEO and six the succession program and talent match for the first line of senior management. Please turn to the next slides for the closing remarks.
This year began with record financial results along with the expectations set out in the 2014 strategy along with our social responsibility in all the regions in which we operate both in Colombia and in the other countries in which we are present in a view of the current situation. Our objected goes beyond the generation of profits for the committee.
<unk> with its shared value for all of our stakeholders. The Ecopetrol group continues to demonstrate its resilience and technical financial and operational strength, we are committed to capturing value from the opportunities in the macro environment, while proactively managing different initiatives to meet the challenges of changing environment.
We continue to work to enhance our competitiveness with our continuous focus on the targets outlined in our business plan. Thank you again for joining US today in this conference call. Thank you for your interest in Ecopetrol and I will now open the floor to the Q&A session.
Thank you.
We will now begin the question and answer session.
You have a question. Please press star one on your Touchtone phone.
If you wish to be removed from the queue. Please press <unk>.
Two.
If you are using a speakerphone you may need to pick up the handset first before pressing the numbers.
Once again, if you have a question. Please press <unk> one on your Touchtone phone.
We have a question from Bruno Montanari from Morgan Stanley . Please go ahead.
Hi, everyone. Thanks for taking my questions I have three questions first one is about production I understand you are reaffirming the targets for the year.
I'm curious to what the plan is to catch up to the small shortfall now in the first quarter I'm also thinking that social unrest could be sustainable and a persistent impact which is clearly out of your control.
So wondering if there is a plan b to grow and reach the target.
Second question is about the refining margin.
The company had an impressive refining margin, even with some maintenance at TVT.
And I believe the crack spreads continued to increase after the quarter end. So the question is can we expect even better refining margins now in the second quarter.
And then the third one about Quebec.
I was wondering if there is a maximum time for the government to pay in the law or if there is a risk that a decent government could leave those receivables open indefinitely. Clearly these government is committed to pain.
But the question here you see a less.
Less well intentioned government could use these as a source of funding for the sovereign and the expense of the company. Thank you very much.
Thanks, Brian and thanks for being here today, and I'm going to ask <unk> to take the first one on production in the one on the refining margin.
And then hi, Matt to talk about the Quebec.
Please bear in mind, but we know that to April we had 708000 barrels. So the trend is very important as well.
So we do maintain overall.
Sort of the range that we've signaled to the market. So investor view can provide a bit more context and details. Please go ahead.
Philippe good morning Bruno.
When we look at production.
I will insist that we are.
We're seeing that we're going to be compliant with that with the guidance of 700 to 700, a hall pass on Boes per day.
We see them take contribution to start matching up will come from Greenfield projects at the end of the year, such as gardening splitter. Unlike Fcs.
We are going to be in line with our ongoing water floating projects in the main mature fields such as the <unk>.
A lot of activity coming from Canada.
Having five trials.
Great and this model three development agreeing to doing exploration wells. So we expect that some production forward at all.
Oil and gas coming from this activity and also premier will be continued contributed to the productions.
We recognize as well that there are risks.
Where I'm coming from maintenance activities that were going to have in scanner entergy, many solar about complying with the times when the planet right now the other one is our outlook.
Whether it is.
It's something that is affecting Brian now some of our operations, particularly our plans in terms of.
The LPG production.
I'm the only one that you mentioned it has to be with social unrest something that is not in our control but.
We believe that <unk> TPU aided and managing the Alex you can do something to prevent.
That is upheavals kind of affect our production levels. So that's kind of where you see the picture in terms of production.
With regards to refining margin outlook.
Very strong.
I have to tell you that in the first quarter of this year we have.
<unk> completed about 60% of our plant maintenance activity that means that during the rest of the year, we are going to see a higher.
Throughput in both refineries, which will help us to maintain very strong markets.
Together with the forecast in terms of crop prices for gasoline or diesel.
It will help to maintain very strong margins I would expect that in the next few quarters.
Thank you Albert I'm going to pick up.
Where you are left with the setback question.
And Bruno.
Good to hear you.
To cover your question, a little bit holistically to give to give some.
A broader view of how we're approaching this.
Lastly, as I mentioned in my remarks, the balance due at the end of the first quarter of this year is 14.1.
Trillion pesos that covers essentially.
The balance of the second half of last year, <unk> <unk> and the first fire of this year.
We are accruing at a rate of about 222 trillion pesos per month give or take that's the accrual rate that we are having so far.
<unk>, which is going to take us by the end of the year to a balance that's going to end up being anywhere between 25% to 30 trillion pesos. We are fully confident about the recovery of this balance.
Why.
Basically we have been in discussions with the Ministry of finance over over the last number of months.
The Ministry has been vocal and publicly has recognized the balance due so far as well as the protection that I'm, stating here. So so this is of public knowledge. They made public statements about it.
Particularly I think there is three elements that that gave a lot of clarity of how this is going to be addressed the first thing is that.
There are there is clarity around the mechanisms for funding the bonds essentially and I mentioned them in my remarks.
We're talking about.
Surpluses from the existing budget of this year, where the government hunting accusal under execution versus client set.
Secondly, they are also having.
Much higher.
Tax revenues down those that they were anticipating thirdly, there is a some surplus in terms of ecopetrol dividends versus your original plan that they had and fourthly.
There is a window of opportunity to include the accrued balance of this year into the budget of next year's plan. So so the avenues by which this is this can be addressed by the government are very clear.
The other element that gives us a lot of confidence is that the government has announced a joint roadmap with the ministry of mines and the Ministry of finance for convergence of prices between international prices and domestic price.
That's something that's being worked we are part of that conversation in terms of providing.
Providing technical options to address that.
We think that effort is well underway and third.
Thirdly, the government also announced its intent to release a decree with detailed regulation that is going to achieve.
With greater clarity.
The sources of funding into the future as well as the timelines of pace now.
Now all.
All of these we believe <unk> is very good news. We believe that these are very clear signals from the national government as to how this is going to be approach and with regards to your specific question about <unk>.
Maximum timeline, we're basically working the regulation that we have currently is not specific our own around timelines, but there is a historical practice that historical practice.
And I want to recall here that the bank has been in place for over 14 years now has been that the balances are recognized within 12 months periods.
In line with this I am actually happy to announce that the detail accounts for the three third quarter of 2021.
We agreed with the Ministry of mines earlier this week.
Again, that's another strong signal that this is progressing.
Therefore, we're expecting recognition in the very near future of that balance.
Half of last year, consistent with that historical practice.
I hope I know that I took a kind of a long answer to this but I wanted to give a lot of clarity around where we are on this matter. Thank you. Thanks, Simon I think it's very relevant that we provide as much context and color around the AR.
Subjects that we know.
Absolutely be relevant and timely so thanks for that can we please go to the next question and thanks Bruno.
Thank you. Our next question comes from and Mill from Bank of America. Please go ahead.
Thank you very much.
Gratulation on the good results this quarter.
Want to ask you something a little different maybe on your hydrogen strategy and maybe what your future plans are for investment and production and what we can expect there going forward. Thank you.
Thanks, Dan and good to have you here on the call today, so I'm going to ask Jamie.
Well actually happens to be in Rotterdam.
She is visiting one of the largest hydrogen projects in the world and she came back from Chile, a couple of days ago. So lots of things happening in hydrogen so Jamie can you help us go.
Go ahead.
Hello, and thank you for your question, it's telling them for Pedro again last year, we were defining our strategic plan for the entire group that was approved by our board of Directors and Executive Committee in last December .
They've lived meals is that different companies around the world.
Are we leaned toward with a capital in order to do that I love.
Projects down in Colombia, but also in Latin America, we have been in a program to choose the right partner for a couple of drugs that actually will be a in a couple of weeks.
We are now focused on main three work streams. The first one is related with the card when I've seen our own.
Production of high dividend in our refineries.
Currently we produce around 100 in theory cousens tons of hydrogen per year, 90% of that hydrogen is great and <unk> is actually blue because we are capturing in the field to fill in that field to today.
Interest rates in Colombia, but of course, we want to incorporate technologies low emission technologies that will help us to abate D emissions in our downstream segment.
We're seeing that the sustainable mobility.
Is a growth Avenue for hydrogen in Colombia, and we are willing to help the country to develop got demos.
Demand.
And third a.
And I think this is the most ambitious objective for us within.
We're seeing that in Colombia, there is potential to position on exporting hub in the future.
Hydrogen related projects in theory, how you begin related products.
<unk> ammonia green ammonia and we are working together with other companies located in Colombia that are also targeting these kind of markets. So in summary, we have an investment plan for 2022.
About $6 million.
We deployed the first pilot in our refinery located in Cartagena.
We are actually you know moving very fast to deploy industrial scale really in Colombia. This is something that will be a game changer in the future.
In Ecopetrol, we want to be you know part of this change at that is actually you know our challenge for the energy industry.
Thanks, Jamie Thanks for the for the update and thanks <unk>.
Can we go to the next question please.
Thank you. Our next question comes from Andrew Mccarthy from Credit Corp capital.
Please go ahead.
Good.
Thanks Philippe.
The presentation of the opportunity to ask questions.
Firstly, just wanted to ask on the.
<unk> of the Capex execution.
Yeah.
The business plan you you obviously have the goal of the pool.
$8 billion. This year, just looking at the figure for the first quarter.
And slightly shy of $1 billion, just wondering if that is something we should see sort of.
Seasonal seasonally low number.
Or whether we should maybe read something else into that in terms of maybe some scaling back a little bit the plans.
So this year and then and then just connected with that just.
Thinking about coming up to the halfway point in the year.
Are you seeing any kind of recalibration of where you.
I know, you're focusing that capex between the different segments business. So is that mainly still alive.
You talked about.
In recent months, so hustle bustle in Capex and then just a very brief a quick follow up.
The fuel price stabilization from that how did you mention the.
Maybe reaching sort of a range of approximately 25 to 30.
In pesos in the year I was just wondering is that based on taking the carbon balance plus what you're expecting to accrue and the remaining 8 million bumps through the year or was that already.
Some.
And that's with some assumption of amounts that we've already been repaid by the by the government.
That's it for me guys. Thank you very much.
Thanks, Andrew and thanks for being here. Thanks for your question, so I'm going to ask Alberto to <unk>.
The first one on Capex, and then <unk> to expand on epic.
Thanks, Philippe and good morning.
With regard to Capex execution.
Definitely the first quarter as seasonal if something that youll see every year.
Very much in line with the plan for this quarter.
Again at the Ecopetrol group.
When we look at the activity set.
We have delivered.
What we happen to plan for the upstream.
So some let's say some delays some facings in terms of activity in both the downstream on the midstream.
We hope to correct that in the next quarters.
Something to highlight is that we had the highest level of execution in the last seven years during the first quarter.
And it was about 85% of what we have in the plan.
So we project to be in the PCL range between $4 eight on page eight.
In 2022, and we don't see any changes in terms of Capex execution.
<unk> alone or in in every segment.
Thank you Alberto I'm going to I'm going to take Andrew Your question around the back thanks, Good to hear you man.
Couple of couple of things Youre question is basically what's the basis of protection on the 25% to $30 billion trillion range and vessels that I mentioned.
I'm, referring to the 'twenty to 'twenty two accrual right.
Because essentially we are accruing at a rate every month of about two two to $2 five trillion vessels, depending depending on behavior. So that's what that prediction refers to I think that the uncertainty around the projections going forward.
In theory, there is a number of months ahead of us it will depend on three factors I think of course, the evolution of international prices are going to be a factor in the formula.
The exchange rate is a massive factor in the formula It can create a strong behaviors upward or Dave.
And of course, the third element is the degree to which domestic prices are adjusted.
Something that we are expecting it's something that we're expecting as its part of this.
You will conversion spot that.
The Ministry of mines, and the Ministry of Finance has announced to bridge the gap between international prices and domestic prices at the pump I hope that helps thank you. Thanks Jaime.
Thanks, Andrew.
Do we have any more questions.
Thank you we have a question from Luis Carvalho from UBS.
Hi, everyone.
The question.
It's also important is that we can say that presentation. We appreciate the dialogue.
We will provide.
Two questions from my end.
A couple of days ago.
Okay.
Sorry, sorry.
Okay.
Can you hear me, we can barely hear you.
To speak closer to the microphone. So we can get the question sorry about that.
Go ahead.
Can you hear me better now.
Yes, a little bit better go ahead.
Okay.
A couple of days ago, yes.
Hi, Jason.
Jason Welcome.
During the quarter.
The Colombia with needs.
Independence within five years under the policies.
One of the candidates.
And of course.
To echo patrols relevance.
In fact, the company right. So I just wonder if you can provide more color.
Company can protect its government relations from a governance perspective.
Okay.
I don't know if the governor.
Once changed dramatically.
The lift.
The energy industry in the country.
The second one goes on cap limitation.
As you think about dividends.
What's the base case for 2022.
And houses the dividends on the back of the investments that we announced at <unk>.
Acquisition.
Diversification. Thank you.
Yeah.
Thanks, Ray and I'll take the first one so in terms of energy independence and I'll give you some of the context on some of this was already included in the in the material, but I think your point is a very relevant one so the first one is we are seeing.
The increased demand in Colombia in terms of gasoline in terms of detail.
It's in the range of 25% more both in gasoline and diesel compared to pre COVID-19 numbers.
So theres a lot of demand.
We're actually in the first days of putting a crude oil into the.
Expanded cut the hand, a refinery you know, we're taking that refinery from 150000 to 200000 barrels a day. So thermal an official operation will take some weeks, but we're already managed to recruit into that project, which we did.
Under Covid and everything else so.
First point I want to make leases that ecopetrol is fully aligned and synchronized with the needs of the country in terms of fulfilling demand.
And I need to say that I'm very respectful about.
The presidential campaigns and election processes, so I won't comment on that.
But I do want to comment that we have a long term strategy that you guys know that we published a couple of months ago.
The energy that transforms 2040 strategy from that point of view, you'll see that the company will continue to grow even though we're largely present in Colombia.
We now have.
A lot of investments a lot of activity outside of Colombia as well.
Mainly with data, but also in terms of things like fracking in Texas in the U S and things like what I see so we're diversified both in terms of geographies and in terms of businesses as well and then the last thing I want to share with you lease which is probably not that.
Well known is that with the current existing portfolio of exploration opportunities.
We can have eight to 10 years of activity in front of us.
We have more than 250 opportunities identified in what we call the hopper.
Basically with the 68 existing licenses in areas that we have under contract with the government in Columbia I think it's 40, 18, Ecopetrol and <unk> alone we have sufficient.
Runway in front of us and I think that's important so.
We're very confident I think we have a very solid strategy and Thats importantly, we demonstrated with the current results.
We have a sound plan more importantly, a very resilient and consistent delivery in terms of.
How to implement.
That plan, so hi, Matt I think the other one is probably for you. If you can give us a bit color. Thanks.
Philippe Hello, Lisa Thanks for your question.
So let me address capital allocation strategy.
I would start.
Basically by saying that the capital allocation strategy is unchanged.
For trade in.
Strategy to 2040 that we announced earlier this year.
That strategy, a poor trades very clearly what our actavis strategic axis, we have we have prioritized four pillars in it.
Which are well aware of we have an ambition to grow in a sustainable way.
Building, our knowhow and delivering competitive returns and that's what we're all about and now when we look at how this year.
It performing so far it is very clear that we're having an extremely robust year.
It's probably going to be a historical year for Ecopetrol and we are well ahead of the 22 to 2024 plan that creates certain surpluses to the plan.
We see that.
And the way that I would add.
I share with you how we're thinking about it is that we see.
This kind of ranking if you will of priorities firstly.
We need to deliver our investment plan, our existing investment plan, that's where we're focused on right now so that's going to get.
That gets prioritized in any shape or form secondly, we continue to look at further growth opportunities whether they are in the hydrocarbons business score in the <unk>.
The <unk> business.
Thirdly, we are also a conscious around our balance sheet and we.
We continue to look at opportunities to optimize our debt position.
With this excess is Japan and fourthly.
To go to a question dividends right I think that in a in a year like like the one that we're having additional dividend payments.
Canaccord.
As you know our our dividend policy states, a very clear range for ordinary dividends, putting extraordinary circumstances. It does accommodate for extraordinary distributions.
At this stage and given where we are in may and even while our working capital situation is on the conversations that we have our own bank in particular, I would say they were pretty mature to determining anything around extraordinary dividends, but.
But I think that depending on how that a cash exposure to setback evolves over the coming months that might be a conversation to be had.
Hope this helps thank you.
That timing and when we go to the next question.
Thank you. Our next question comes from Barbara Halberstadt from Jpmorgan. Please go ahead.
Yes.
Hi, Good morning. Thank you for the very detailed presentation. Some of my questions have already been answered so I wanted to follow up on something.
It's different.
Can you comment in terms of your commercial strategy for the placement of crude internationally, if youre seeing opportunities in new markets.
How youre thinking about that especially with the China and all the volatility we're seeing international demand.
Also if you could comment there's been some headlines of one plan Tinder U S. Dod.
Likely to close in the next two years of refining plant that gives us a lot of the ecopetrol oil and how youre thinking about diversifying the market just to apply too. Thank you.
Thanks, Barbara and thanks for being here today and I'll ask Pedro you can take the question and help us with.
With the answer please go ahead.
Felipe Thank you.
Barbara. Thank you for your question just let me give you some background about above the company commercial strategy, which it continues to be the diversification of destinations and the focus.
To end users our preference is to place our barrels in the base of the diet of the refineries of our customers and we also have contracts in all the main markets globally. So we can move our barrels to the area that provides the best realization for Ecopetrol.
That provides a framework of the strategy that has been very successful in the recent years and continues to be the same now one important information as part of our strategy is that we just started operations in our new commercial office in Singapore.
The Asian market last year, we closed with over 60% of our exports to this region, which is the largest growth region in the world now our exports mainly go to destinations in Asia in places like China, India, Korea, and Japan in Brunei, where we have a very important customer and.
Those are the customers that we have today.
With my team in the last two weeks, Singapore, and Korea, and we're very optimistic about the opportunities in the region given the rapid recovery of those economies and the southeast Asian economies.
Specifically would you are asking about the Houston refining.
Facility, which is our refinery owned by Lyondellbasell in the Gulf in the U S. We've received a form of communications that they're closer to the refinery.
So we have been and we have been supplying this refinery, but since 2008 and is one of our main customers in the U S. Gulf Coast now what are we doing in order to replace its customer base.
Basically focusing on three things. The first one is that the oil demand will continue and will be picked up by other customers in the region given that the demand in the U S is going to continue growing so we're already identifying and having conversations with some of those customers and the possibility to place some of those barrels.
In the U S Gulf Coast.
Our Singapore office is working on expanding our customer base in Asia, and we are confident that some of those barrels will be placed in Asia and the last one is that we just signed the deal with repsol to supply crude to their system in Spain, given the conditions of the market due to the erosion sanctions Europe is that.
<unk> fines or sources of crude oil. So Europe becomes also an area in a market that is a very interesting blood.
Basically that's what we're doing regarding to.
Two questions. Thank you.
Thanks, Ben and thanks Barbara.
Yes.
Can we please move on to the next one.
Thank you. Our next question comes from the Dark L, which I'll call <unk> from Barclays. Please go ahead.
Yes. Thank you so much for taking my question and congrats on all these earnings today. Thanks.
Basically I have two questions on mostly two follow ups.
As you know.
My questions have been answered so the first one is on the stability front.
So thank you for giving us an update on the timing of the Fremont, but just just curious trying to understand.
If we have a new government. There is there is elected in a month or two now in Colombia basically there is nothing in the law.
For bids or let's say limit the capacity or the willingness of the government to make these payments from December to do so.
I'm just trying to play the Devil's advocate here I've seen obviously the progress that you guys have made with the bylaws changing the board members from two to four years, making them more independence.
The clay mentioned the potential enrollments on the sovereign, but just trying to think.
Can the sovereign this Ken Ken Colombia sovereign decides.
One we have a new government.
If I just stopped making these payments or are these payments bye bye bye now.
My second question is regarding your funding strategy I think.
Last quarter or two quarters before you guys were mentioning that you were monitoring market conditions Super luxury come addressed your redemptions, especially you have a $1 8 billion maturing in 2023 I think in September 2023.
Obviously market conditions now being a little bit.
On the negative side then broaden.
Broadly customer fundings being higher so just just curious how are you thinking about coming to markets or potentially doing.
Your debt management, given the cash by the.
The large guys that you guys have but also upcoming redemptions. Thank you so much.
Go ahead Harlan.
Later, thank you for your question.
So I'm going to cover kind of both fronts scripted.
Good to hear you by the way.
First on the stability I think the first thing that I'd say is that.
The fact that piece.
Outstanding accounts are binding is not in question.
Our a binding.
Legally.
<unk>.
The regulation around that the bank is very clear that this money is owed political petrone, Andy has been recognized publicly by the Ministry So.
We don't consider any scenario, where a future government and disregard.
The balances that are due.
I think I think the space or uncertainty if you will in full transparency here is around the timeframes of payment on the methods of payment, but there is no uncertainty whatsoever.
<unk>.
If ebay government hypothetically decided not to honor. These these balances it would be a default on on Ecopetrol would have.
All will be entitled for legal action in that regard.
On a legal action that we are prepared to.
By the way.
It's very clear, it's very clear now unfortunately, the government is not in that place at all as I stated repeatedly over this call.
The government has had a very proactive approach around the.
The balance and the government has identified a on its own the mechanisms by which its going on are both fast balances and those that are accumulating at this stage, but I want to be very clear Gary's no gray area around the fact that D. C has a binding obligation.
With regards to the second point, which.
Which is around our funding strategy.
<unk> well later on and we do have a number of expiries over the coming 18 months they are well spaced.
Which gives us a lot of flexibility to accommodate the different market windows and we're preparing for that we're preparing for that and we have I would say that our fight to quote my team our financing toolkit is very robust.
We have basically the capabilities to use any and all instruments around liability management around short term or long term credit or even bonds and including sustainable bonds by the way, which is something that it's something that we want to do.
Hey.
And we'll take advantage of market opportunities as they arise.
One important point of note is that we have been working this with the ministry of finance as well.
To make sure that we have all the necessary approvals in place to tap the markets and when those opportunities arise.
Thank you very much.
Thanks for the answer and.
<unk>. Thanks for the question if we can go to the next one please.
Thank you. The question comes from <unk> <unk> from Latin Finance.
Yeah.
Hello can you hear me.
Oh.
Hello <unk>.
Hello.
Yes.
Hello can you hear me.
Hello, Yes, we can.
Oh, Okay, sorry, I wasn't sure.
Well first of all just wanted to say congratulations on the quarter first quarter earnings.
My question is following up.
You mentioned, the interest and the sale of 51, 8% and in better Clarissa.
I had a follow up question on regarding that one.
Cope with the unexpected for the sale to finalize the sale.
Look I'm sorry.
And what will the proceeds be used for.
Thanks, Amanda and now I'm going to ask Nikola Susquehanna.
P of new businesses and strategies to give you an answer but we.
We will not disclose numbers in terms of expected proceeds, but we can talk about the process on the timing and everything else. So the collapse. If you can go ahead.
Yes, Felipe thank you.
And good morning to you all thank you very much for your question.
In terms of the of the timeline, we are going to go through the process, but it's coal low Q2 six in Colombia.
That includes two phases one eats.
The Democratic face on the second one.
And to the rest of the interested parties and that will take us up until the remaining of this year.
The timeline expected four days sale have been bolt on NAFTA Lipa said, we won't be disclosing expected volumes at this point in time. Thank you.
Thanks Nicholas.
Thanks for the question.
Do we have any further questions.
Yes, we have a question from Andres Cardona from Citigroup. Please go ahead.
Hi Felipe.
Just one quick question so the prices of sterilization phone.
Look for the second quarter of the year, how much are you expecting from the God I mean TUI diced.
In the second Q.
Hi, Chris how are you with timing here.
On Capex as I mentioned previously.
We are accruing monthly abandons of about two.
Trillion pesos.
Give or take that's the rate in which.
The balance is accumulating how much.
Of the previous bonds is going to be we amortize to use your language I think that.
As I mentioned previously the balance for the third quarter of last year.
<unk> is well on track for that.
Possibly the balance for the fourth quarter as well.
We lead with it coming in the second quarter of this year or in the third quarter of this year.
I don't know I don't know I think I think it's progressing.
Yes.
But I do believe that it's going to be somewhere over the next few months that the balance of last year is going to be finalized. Thank you.
China.
Do we have any additional questions.
We have one last question.
Mr. Andres Duarte from coffee Columbian.
Thank you for taking my questions.
These are two very short questions on them.
Again congratulations.
Outstanding results for all of the Ecopetrol as employees.
Our questions are related to meet our long term views of the company.
For energy transmission and gas production.
So the first one related to energy transition.
Is that in Colombia, only about a fifth of the final energy consumption is related to power generation.
Steve.
Liquid fuels gas.
Coal and biomass and the sheriff liquid fuels is.
Actually more than 40% sorry.
So I was wondering for the long term view of the company.
Our strategic plan.
Are you expecting that'd be claim on.
On the consumption of liquid fuels at some point before 2040.
The first question.
And the other one related to gas production.
If we assume that the shale pilots thus okay.
From an economic standpoint as of today.
Is the company expecting their future local gas production too.
To come more from the shale production or from the offshore reserves.
Those are the two questions. Thank you very much and again, congrats Carl and graduations.
Yes.
Thanks, Andres and thanks, I will pass those on to the up to the team. So in terms of the overall context on energy transition and I'll give you a.
A few data points that we used when we rolled out the strategy a couple of weeks back to 2040 strategy.
Think about diesel consumption and remember decently mainly use.
Trucks on transportation of goods on roads.
Do you believe there's going to be.
An increasing trend in terms of demand from now until 2040, so the detail will be used and on parts of that we believe is that it is.
Not as straightforward in terms of.
Changing the source of energy for those trucks for a different one and also that's part of the issue there.
There will be some.
Things that will be done in terms of.
Intra city or transportation inside cities, you know, we already see gas trucks, and we already see some electric vehicles and the likes and some of that it may happen, but we do believe detailed we will continue to grow.
Maybe just worth mentioning Andre is that we're actually working with <unk> on the.
Building the first ever hydrogen bus in Colombia.
That's taking place as we speak.
In terms of gasoline.
We expect that there may be a peak around 2031, 32 to 33 and again forecast will change.
That's something we all know and eventually it will stay flat for some years and then come down a bit.
That's basically the sort of some of the underpinning considerations and assumptions that we've made.
The long term strategy and again remember we've said the company will grow its EBITDA by 30% to 50% or note by 40% from $9 billion to $10 billion on a year to $14 billion, and 50% or up to 50% of that EBITDA will come from low emission businesses.
So I think.
I hope that helps in terms of understanding where we are.
In terms of our production coming from unconventional and offshore and I think it's a mix. So if you look at again the strategy.
We have.
<unk>.
Maybe you remember we have a graph, where we show production through 2000, 32040, and we see in that space. If you look at the 2030 milestone we see production in the range of 800000 350000 barrels.
There is a tranche that comes from base production from the production that we have today. There is a transfer that comes from your enhanced oil recovery to give you a sense and <unk> accounted for 38% of our production.
Very relevant and its something where we believe ecopetrol has a lot of expertise.
Total of those two tranches you have unconventional is both in the U S.
And in Colombia, you have offshore exploration in the Caribbean and you have further exploration. So you'll see there is actually a combination of at least five building blocks.
That basically it should go from eight to 850000, so basically 700 to 750000.
By the end of the strategy period, or <unk> or 'twenty 2040, so lots of things in play.
Yes, the amount the reactivation is very important we're putting a lot of capital.
Yes.
It's been a long time since we've had five rigs operating in India and I think it's been 26 years since we have two offshore rigs billing so lots of things happening lots of things happening.
From that point of view on Brazil, So thats, where the question do we have any additional questions.
Thank you Mr. Why Jan we have no further questions do you have any final remarks.
Sure sure and thanks for that so again, thanks, everyone for being here today in our <unk> results conference call, that's where the interest in Ecopetrol. Thanks for your questions as I've said before.
They helped us a lot in terms of understanding what are the areas of interest in what are the things that we need to put a lot of focus on so we really appreciate that please stay safe take care of yourselves and hopefully we will see you soon in one of these next conference call. So if.
Stay safe and have a great day.
Thank you.
Ladies and gentlemen. This concludes today's conference. We thank you for participating you may now disconnect.
Okay.
Okay.
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Yeah.
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Okay.
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