Colombian state-controlled oil company Ecopetrol SA will likely report that its net profit more than tripled from the same period in 2009, due to increased production and higher crude-oil prices.
A survey of five analysts polled by Dow Jones Newswires produced a median estimate of a net profit of 2.3 trillion Colombian pesos ($1.2 billion), up from COP762 billion in the first quarter of 2009. Estimates ranged from COP2.1 trillion to COP2.66 trillion.
Ecopetrol is seeing a boost in its oil production thanks to an alliance with Pacific Rubiales Energy Corp and other joint ventures with smaller oil firms.
The gross production of Ecopetrol and its subsidiaries averaged 689,000 barrels per day in the April-June period, up from 604,000 barrels per day in the same months last year, according to data from government oil-licensing agency, known as ANH.
The rise in production and the higher oil prices will help offset the appreciation of the peso against the dollar. A stronger exchange rate means that Ecopetrol gets fewer pesos when it converts its dollar revenue into local currency.
Oil prices have averaged around $78 per barrel in the second quarter against $53 for the same period last year. “The higher oil prices is the main reason why we’re going to see such a big jump in net profits,” said Edgar Romero, a stock analyst with brokerage firm Ultrabursatiles.
Ecopetrol also calculated its budget for this year at $56 per barrel, which means that the company hasn’t had to finance its investments with loans or debt issues. “This is helping the report higher profits,” Romero said.
Ecopetrol is by far Colombia’s largest company, and is 89.9% owned by the government.
On Monday the Ecopetrol stock in the local bourse rose 2.59% and closed at COP3,165. The company is expected to report its second-quarter earnings on Wednesday after the market closes. (Darcy Crowe / Dow Jones)
