Claudia Trujillo - Interim Investor Relations Officer Javier Gutiérrez - CEO of Ecopetrol Héctor Manosalva - Vice President of Development and Production Pedro Rosales - Vice President of Downstream Adriana Echeverri - Vice President of Growth and Strategy Magda Manosalva - CFO Rafael Guzmán - Technical Vice President Max Torres - Vice President of Exploration Alberto Vargas - Financial Comptroller Thomas Rueda - Interim CEO of Cenit..

Daniel Guardiola - LarrainVial Gustavo Gattass - Banco BTG Pactual David Gamboa - Tudor, Pickering, Holt & Co. Jose Bernal - BBVA.

Good day, ladies and gentlemen, and welcome to the Ecopetrol fourth quarter and 2014 year-end earnings call. I’d like to turn the call over to Claudia Trujillo, Acting Head of Investor Relations. Please go ahead..

Good afternoon, everyone, and welcome to Ecopetrol's Fourth Quarter and Full Year 2014 Earnings Conference Call and Webcast. Before we begin, it is important to mention that the comments by Ecopetrol's senior management could 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 develop. As a result, Ecopetrol assumes no responsibility in the event that future results are different from the projections on the conference call. The call will be led by Mr. Javier Gutiérrez, CEO of Ecopetrol.

And also participating will be Héctor Manosalva, Vice President of Development and Production; Pedro Rosales, Vice President of Downstream; Adriana Echeverri, Vice President of Growth and Strategy; Magda Manosalva, CFO; Rafael Guzmán, Technical Vice President; Max Torres, Vice President of Exploration; Alberto Vargas, Financial Comptroller; and Thomas Rueda, Interim CEO of Cenit.

We will begin the presentation with the milestones of the fourth quarter and full-year 2014, followed by the highlights by business segment and the financial results. We will close with the outlook for the year 2015. I will now turn the call to Mr. Javier Gutiérrez, CEO of Ecopetrol..

Thanks, Claudia. Good afternoon to all of the participants to this conference call. I would like to begin by highlighting our achievements in 2014.

In Exploration, during the fourth quarter, we announced the discovery of Orca and Nueva Esperanza, which are in addition to Tibirita, Golosa and Cacica wells in Colombia; and Leon, operated by Repsol; and Rydberg, operated by Shell, located in the U.S. Gulf of Mexico.

In production after two consecutive quarters of growth, we averaged 765,000 barrels equivalent of production per day in the fourth quarter. Average production of the year reached 755,000 barrels equivalent, a reduction of 32,000 barrels compared to 2013, mainly the result of environmental security conditions and water management constrains.

Deferred production was 64,000 barrels per day. We also closed out the year with 13 enhanced recovery pilots under execution. Proven reserves of crude oil and gas where 2,084 million barrels, with 146% reserve replacement index. The average life of reserves increased to 8.6 years. Let's move on the next slide.

We continued strengthening the Midstream segment, which showed strong financial results, thanks to consolidation of the new transportation business model. In the fourth quarter, we finished increasing the capacity of the Ocensa Delta 35 project and began the operation of an additional 23,500 barrels per day of the Santiago-Porvenir system.

In Refining, we moved forward towards the completion of the Cartagena refinery expansion project. The segment reported better results, positive EBITDA, thanks to the higher margins and improved operational performance. In commercialization, we were affected by the sharp drop in the price of the crude oil.

Also, there was an important rise in internal fuel demand, thanks to the Colombian economic growth. And we continued increasing the participation of Asian markets in our exports. The next slide please. Low prices, low production and increasing costs and expenditures due to external and non-operational factors reduce the company’s financial results.

The fourth quarter of 2014 was affected by higher exploratory expenditures, deterioration of oil investment and assets, higher financial expenditures and higher effective tax rate. All of these factors caused us to close out period with net income of COP 7.8 trillion, 41% below that of 2013.

EBITDA was 39%, a competitively well compared to other companies in the industry. In 2014, we successfully issued debt in the amount of US$3.2 billion, and agencies Moody’s, Fitch and Standard & Poor’s confirmed our risk rating in foreign currency of Baa2, BBB and BBB, respectively.

We would also highlight the signing of a collective agreement with our unions for a period of four years, and Ecopetrol’s confirmation as part of the Dow Jones World Sustainability Index for four years in a row.

The new price reality has let us to design and adjust the investment budget of US$7.86 billion and drove up our cost and expenditure optimization strategy for the year 2015 for a total of US$3.6 billion. Finally, the company continued making progress in revising its corporate strategy, focused on generating value and sustainability.

Let's go to the next slide please for a discussion of our investments. Ecopetrol’s investments and its participation in the investments of the companies of the globe in 2014 were US$8.7 billion. 50% of the investment went to production, mainly drilling development campaigns and construction of facilities at the fields of the Llanos Orientales.

21% was for refining, primarily for modernization of the Cartagena refinery and the Barrancabaermeja Industrial Services Master Plan. 60% went into exploration for the drilling of 28 A3 wells, nine appraisal wells and six stratigraphic wells, an acquisition of 6,600 kilometers of seismic.

11% for Midstream for a number of projects to increase the transportation capacity of crude and refined products and storage, and the remaining 2% into corporate projects. Now, I would like to turn over the discussion to Max Torres, our Vice President of Exploration, who will comment on the main results of his segment..

Thank you, Dr. Gutiérrez. In Exploration, during 2014, 21 wildcat exploration wells were drilled in Colombia. Out of these, 17 wells were drilled by Ecopetrol and four wells were drilled by Hocol. The success rate is 24% with five discoveries.

The highlights in 2014 are; the first, hydrocarbon discovery in the deepwaters of the Colombian waters with the Orca-1 well, which is located 40 kilometers north of the Coast of La Guajira and Ecopetrol holds a 40% working interest.

A significant current discovery in the Nueva esperanza-1 well in the CPO-9 Block in the Llanos Basin where Ecopetrol has 55% working interest and Talisman has 45% working interest.

Other discoveries made in Colombia during 2014 are Golosa well in the Demares Block in the Middle Magdalena Valley, the Tibirita 1-A well in the Block Caño Sur and the Cacica well in the Block Cuisinde in the upper Magdalena Valley.

The international activities for Ecopetrol during 2014 consisted of seven exploratory offshore wells; five in the Gulf of Mexico and two in Angola. The success rate for the international operations are 28% with two successful wells.

The two successful important wells are the Leon, well operated by Repsol 60% and Ecopetrol 40%, and the Rydberg well operated by Shell with 57.2% in partnership with Nexen 14.3% and Ecopetrol 28.5%, both located in Gulf of Mexico in the U.S. Now, I would leave you Rafael Guzmán, who will comment on the Production results..

Thank you, Max. Looking into Production results, it shows a decrease of 4.2% in the average production of the group during 2014, reaching 755,000 barrels of oil equivalent per day. The main factors affecting these results were, first of all, the limitations in water disposal essentially in Rubiales. Second the effects to infrastructure.

Third, the temporary reduction in production in the gas fields of Guajira due to GACE IV project. And finally, the operational difficulties associated with communities blockage which delayed the entry of new facilities and new wells.

Despite these restrictions, we managed to reverse the decrease in tendency in production, recovering from the fall experienced at the beginning of the year and getting back to our growth in the last two quarters of 2014.

This was done mainly by the results in fields like Chichimente, where we reached production records and the production of Guajira field. In addition, we made progress in the Akacias project, taking it to a production level above 10,000 barrels per day. In addition, we successfully executed the GACE IV project in Guajira.

Our subsidiaries increased more than 7.9% their production, supported mainly by the growth of Ecopetrol América’s offshore production in the Gulf of Mexico. With regards to the technical activities in Ecopetrol, we drilled a total of 761 development wells. We also executed 259 workovers.

In drilling, we are focused in the improvement of capital efficiency. Through this initiative, we have reached savings up to 30% in drilling cost. Another important milestone reached during the year was the increase with oil price of our original oil in place by 4.1%, reaching 53.3 billion barrels of oil equivalent.

All these achievements were supported by the implementation of a new regional operating model for Colombia. This model will allow us to improve our control on operations, while at the same time give us a close and more effective interaction with the community.

By the end of 2014, we are glad to announce that our net proven reserves reached up to 2,084 million barrels of oil equivalent, which represents a growth of 5.7% compared to end of 2014.

During the last five years, Ecopetrol has increased its net reserves by 22%, reaching an average replacement ratio of 150% maintaining a positive growth year-after-year. The reserves replacement ratio in 2014 was 146%, up from the 139% reported in 2013 and well above the industry average.

Our reserves/production ratio grew to 8.6 years, which means a 5% increase compared to 2013 rate of 8.1 years. The addition corresponds to 271 from revisions, 34 million from our recovery million and 50 million from extensions and discoveries, which added a total of 355 million during the period.

Looking more detail to our improved recovery program, during 2014, close to 34 million barrels of reserves were incorporated, thanks to the results of the pilots we have previously started, in addition to much larger figure of contingent resource.

We want to highlight that from the 21 pilots that have already been initiated within the program after the end of 2014, 11 of them have already shown positive results in pressure, and seven of them are already showing an effective oil production increase.

Feasibility studies for 15 new projects were also carried up, as well as the sanction of Apiay and Suria expansion project for water inject. During this year, we also reached 65% advancement on the construction of the air injection pilot in Chichimene. Finally, we are strengthening our alliances and capacities to continue our recovery program.

For this, during 2014, we signed an agreement with Stanford University for research and development on heavy oil recovery. We also inaugurated our air injection laboratory in Colombia, and it is one of the most advanced of its kind in Latin America. Now, I will leave you with Thomas Rueda, who will comment on the results of the Midstream sector..

Thank you, Rafael. Good afternoon. During the fourth quarter of 2014, the transported volumes increased 34,000 barrels per day, versus the same period of 2013, reaching 1.233 million barrels per day. The transported volumes increased 18,000 barrels per day versus 2013.

Crude oil pipeline transportation increased compared to the fourth quarter of 2013, mainly due to the increase in the volumes transported through the Caño Limón-Coveñas and Transandino pipelines, as a result of the lower impact of the attacks against the transportation infrastructure.

The crude oil volumes transported by pipelines increased by 0.4% compared to 2013, mainly also due to higher availability of the transportation systems resulting from a lower number of attacks during the second semester. Out of the total volumes transported during 2014, approximately 74.5% belonged to Ecopetrol.

Transportation of refined products increased by 12.3% versus the fourth quarter of 2013, mainly due to the increase in the naphtha volumes transported in the Galán-Apiay system for heavy crude oil dilution.

The total volume of products transported by pipelines increased by 5.8% versus 2013, also as a result of more naphtha volumes transported to Apiay for crude oil dilution. During the year, approximately 49.6% of the total volumes transported through multipurpose pipelines belonged to Ecopetrol.

Regarding crude oil and products transportation capacity, during 2014, it increased by 60,000 barrels a day in crude oil pipelines, and by 29,000 barrels per day in products pipelines. With this, I hand over to Pedro Rosales, who will comment on the Downstream results..

Thanks Thomas. During 2014, the throughput of the Barrancabaermeja refinery increased by 12,000 barrels per day, compared with 2013, due to the availability and operational stability of the process units.

The gross margin of this refinery was $14.6 per barrel, $3.7 higher than the period of 2013, as the result of lower crude oil prices and higher spreads. We took advantage of this situation by processing more crude oil.

Furthermore, at the end of the year, the expansion and modernization of the Cartagena refinery reached 96.3% progress, highlighting the partial mechanical completion of 29 units out of 31 included in the project, which allowed starting the pre-commissioning process of this unit.

In this way, commissioning and startup will be made during the first half of 2015 in order to have the refinery in full operation during the second half. Domestic sales increased 44,000 barrels per day, 14% more than in 2013.

The reasons for this growth were related to higher natural gas availability and increased thermoelectric and industrial demand of natural gas. In addition, we sold more crude oil volumes to related companies, taking advantage of transport synergies on more fuels due to the grounds in the automotive sector.

The exported volume decreased 2,400 barrels per day due to lower availability of natural gas, caused by higher local sales, which were compensated by the increase in fuel oil exports.

During the last quarter of the year, a sharp decline in international oil prices impacted the price of our sales basket, which was indexed to Brent 63%, Maya 34% and other indicators 3%. It is important to mention the continued increase of sales to Asia, where we delivered 41% of the crude oil exported volume, and to Europe, where we delivered 15%.

Now, I turn the presentation to Magda Manosalva, who will comment on the financial results for the period..

Thanks Pedro. Please go to the next slide in order to see the main drivers that impacted the financial results for the year 2014. Net income amounted to COP 7.8 trillion, 41% less compared to the year 2013. This decline is explained mainly by lower prices and production and the increase in some of our cost.

In some cases, sales to external factors, and in other, created to the operation. Revenues decreased 7%, mostly due to the production of US$10.6 per barrel in the average price of our sales basket, and to a lower sales volume of 10,000 barrels per day, mainly of crude oil.

This fall was compensated by the positive effect on our revenues in dollars resulting from the 7% devaluation of the average exchange rate in 2014. On the other side, variable costs decreased 2% as a combined result of a lower purchase price of US$8.9 per barrel.

Less purchase volumes mainly to the [indiscernible] and the negative impact of higher amortization and depletion and higher exchange rate devaluation.

Fixed costs had an increase of 18%, mainly result of the transportation cost and that the cheaper freight contracts as part of the implementation of the new transportation model, and greater maintenance cost mainly in production and refining.

It must be noted that additional costs generated by the new transportation model were offset by the operational revenues in our transport subsidiaries.

Regarding operating expenses, the increase is explained mainly by higher exploratory expenses, due to a larger exploratory campaign, which represented an additional charge of COP 646 billion, compared to 2015.

In a scenario of long crude oil prices, it was necessary to revise the value of assets, inventories and oil investments, which reflected an improvement by a total of COP 571 million, which was partially offset by lower provision for pension obligations and the reversion of some legal provisions.

Non-operating income was deteriorated due to the impact from the devaluation of the peso on Ecopetrol’s debt position and highlighted by managerial expenses resulting from the US$3.2 increase in the stock of the company.

Midstream subsidiaries reported good results, while Exploration and Production subsidiaries had lower income due to the unsuccessful exploratory activity in Brazil, Angola and the U.S. Gulf of Mexico.

Further, that we calculate [ph] a net loss as a result of the impairment of assets from the aforementioned factors and the re-commissioning and commission cost of the new one. Going now to the next slide. All of the aforementioned items led to a decrease in our pre-tax net income, and therefore to a lower income tax payment provision.

In addition, mainly due to the impact of the devaluation of the value of our foreign investments, the effective tax rate increased to 40.4% in 2014 from 34.5% in 2015. As a result, net income was COP 7.8 billion and EBITDA margin 39%. I pass now to Mr. Javier Gutiérrez to present the outlook for the year 2015..

Thank you, Magda. Let's go please to the next slide. With structuring of our budget for 2015, we have managed to save approximately US$3.6 billion, thanks to variable cost structure, which has benefited from lower crude prices and a streamlining of cost and expenditures without placing operating and safety standards at risk.

We are now working at realizing additional fixed cost and expenditure reductions of up to 30%, optimization up to 25% in variable costs associated with purchase of the hydrocarbons and to maintain the highest throughput of the Barrancabaermeja refinery as margins make its operation at full capacity profitable.

Let's go please to the next slide to present our outlook for 2015. We are engaged in an offshore exploration campaign, with the drilling of two wells in the Colombian Caribbean and one more on the U.S. Gulf Coast. Additionally, we will consolidate the new structure and processes of that by its presidency.

We will seek to produce 760,000 barrels per day with the greatest efficiency and at the least cost. We expect to undertake a new enhanced recovery pilot, including the starting of air injection at the Chichimene field. We will also go forward with analysis of investment opportunities in Mexico.

In Transportation, our main goals will be the set-up operations of Castilla-Monterrey system, at 300,000 barrels and 1.2 billion barrels increase in storage capacity of Coveñas.

And Refining, we will initiate the process of getting a new Cartagena refinery up and running under stable conditions by the second half of 2015, and we will complete the Barrancabaermeja Industrial Services Master Plan. We will be reporting in accordance with International Financial Information Standards.

Finally, we expect to obtain the necessary approvals to begin the implementation of the new strategy.

Ecopetrol is a solid company that has demonstrated an important capacity for transformation and management of difficult environment, with our diversified asset base and a dedicated team, which gives us assurance that we will emerge stronger from the challenge imposed on us by a low-priced environment to continue making Ecopetrol a profitable and sustainable company.

I would like now to open up the session to questions-and-answers. Thank you very much..

[Operator Instructions] We ask that you please keep to two questions per person. Our first question comes from Daniel Guardiola from LarrainVial. Your line is open..

Hi, good afternoon. Thank you for taking my questions. I have a couple of questions. My first question is regarding leverage. During the quarter, we saw leverage reaching record highs.

And if we assume that in 2015 lower price going to stay or do you see increasing to levels above 2x net debt to EBITDA? And I would like to know at what leverage levels would you guys feel comfortable with? And if you are actually planning to do some asset divestitures in order to improve your capital structure?.

Hello Daniel, can you repeat the answer please - your questions?.

Sorry?.

Excuse me.

Can you repeat the question please, Daniel?.

Okay, of course.

My question is basically I would like to know at what leverage levels would you feel comfortable with regarding net debt to EBITDA levels? And in that sense, I would like to know if you’re planning to do asset divestitures during 2015 in order to improve your capital structure?.

Okay. Magda Manosalva will give you answer.

Please Magda?.

Yes, in relation to the leverage and the….

Yes, Daniel. At this point, by the end of 2014, we have EBITDA of 1.02% [ph] and our ratings agencies they say that it’s like a healthy level, the one around 2x or 3x EBITDA.

So we think that at this point we have kind of space for having more leverage, and we envision that for the year 2015, probably our EBITDA is going to be lower, but we think that we are going to be able to keep this ratio around the level the rating agencies are watching for..

Sorry. Just because, I mean the connection was not good for time being, I just wanted to check something out.

Did you just say that levels of 2x to 3x EBITDA level you should feel comfortable at?.

Yes, that’s the level. Yes, that’s the level that the rating agencies normally watch for, but like the maximum that they usually review in the companies like Ecopetrol.

But then it is important to understand also, Daniel, that rating agencies not only evaluate this kind of ranges, they also have into account other kind of assets like foreign expense, the size of the company, the back-up we have from the government and the kind of management we have.

So it’s not only the financial aspects that the rating agencies basically take into account. They have so many other aspects into account..

Okay. Thank you. And just my second question is regarding Cenit.

I would like to know guys what your thoughts on a possible or partial divestiture of Cenit during 2015?.

Thomas Rueda is taking the answer..

Thank you, Daniel. This is Thomas Rueda speaking here. We are not considering external financing or any strategic investments into Cenit in 2015. The company will continue to maintain its very healthy financial situation, by which it’s self-funded. And there is no need for eternal capital to be invested into the company.

However, how it’s going to look into the future, it’s something that has to be considered that strategically and we’re working really hard on the financial health of the company. To give you some examples, we are working on capital expenditures, rationalizing those figures.

We’re working on operational expenditure, ensuring that the company is working on healthy levels and we have maintenance to keep the company in that situation.

What’s going to happen in the short-term is a big issue that needs to take in light of the review that is being taken, that is been made on a very high level and that’s of course something that as management that I wouldn’t comment on. Just to finalize, I would like to highlight that the financial results of Cenit have been very, very strong in 2015.

I have to say, better-than-expect in 2014. And it’s looking very good for 2015 as well..

Okay. Thank you..

Our next question comes from Gustavo Gattass with BTG. Your line is open..

Hi good afternoon guys. I had a couple of questions here. If I could break it out in three parts, and just to do the first one, which is very quickly. In the Spanish call, you guys mentioned that some part of the reserve growth in last year came from moving away from paying royalty in kind and moving to royalty in cash.

I was just wondering if you could quantify that for us, just so that we could have an idea of how much was coming from that.

The second question that I had was, we’ve been reading a lot of commentary from the government that they would like to have more activity at the fields, more activity on the sector and some kind of, let's say, big action plan was being put together to keep the industry a little bit more active.

And I was wondering if you could talk a little bit about how you see that playing out for Ecopetrol and whether or not, there are some kind of financial benefits coming that could stimulate a little bit more activity? And then my last one, probably more for Magda than anyone else.

The fourth quarter ended up being a loss, and we’re trying to figure out here just where Ecopetrol’s results might have been under the $77 oil on a clean basis. So if we look at impairment, the provision reversals, basically all that happened.

Can you guys give us an idea of where you saw your clean profitability in the quarter and where do you see a base for the results next year? Thank you..

Okay. Gustavo, in relation with royalties, capitalization, Rafael Guzmán is taking the comment about it..

Okay, Gustavo. Well, the [indiscernible] in different categories that we required to publish to put. One of the reserves in the category of evolution, as you mentioned, the capitalization of the cash reserves.

However, we don’t want to disclose in more detail than that what we have given already that it is important to say and you are quite right in saying so that capitalization of the results are a proportion of those reserves that are included in the recent - in the figures of the recently issued..

Okay. Thanks..

Magda is going to comment in relation with the results. The results without impact of some additional factors..

Gustavo, we have into account that at the end of third quarter of 2014, we had net income of COP 8.5 billion. The calculation we have made is that it’s nothing of this things that happened in the last part of the year, we think that the net income would be COP 10.2 billion. So the difference is COP 1.7 billion..

Okay. Thanks..

Responding to your question on what would be the clear side for the year 2014, if nothing of what happens happen..

Okay, perfect..

I don’t know Gustavo this is enough..

No, it is. The difference is what we were looking for..

In relation with the kind of measures, the government is working with the industry to try to incentive the activity.

It is most important for management is that ideas in the projects, as the Minister Gonzalez, Minister of Mines and Energy is working with National Hydrocarbon Agency and some of the measures that are incurred in the act for the national development that wasn’t introduced - that they also presented in the Congress recently and they are mainly oriented to facilitate the activities of the company to certain facilities them for the obligation to fulfill all the requirements in terms of the commitments introduced in the contract.

This is important. Maybe not clearly to make, but 2010 [ph] of the commitment which is part of it. Additionally it is important to mention that back, that we are receiving appropriate government terms how to update the environmental hurdles.

Additionally, it is also important to mention to generate further conditions in the region we are acting in relation with the communities and the level. And additionally it is also important to mention that the government has been totally committed with the activities of the industry.

Additionally, it is also important to mention that maybe we are very positive about the offshore activities that we are going to develop during the present year.

Maybe we are going to develop a campaign for this year of two wells, maybe additional four wells for the next year, especially considering the positive results of the Orca well in the Tayrona block drilled by Petrobras.

Additionally, the government is very positive about the possibility to keep the 1 million barrels of production of oil production drilled at present in considering that will build in that oil price.

In that sense, additionally it is important to mention that conclusion that represents the oil companies, the National Association of Oil Companies is working very hard with the government in how to propose some additional measures to possibly take their activities on the company, which seem [indiscernible] relation with the wells we are developing with the national government to continue with the activities in recent year 2015..

Perfect. Thank you guys..

Our next question comes from David Gamboa with Tudor, Pickering, Holt. Your line is open..

Good afternoon guys. I had two quick ones, more on the operational side of things. So we saw how Chichimene broke records during the last two quarters or last months of the year 2014.

I’m just wondering, how can we think about this field growing in the future? Do you have any estimate of production from Chichimene for 2015, or how can we think about growth in this particular field? If you could also fill out a figure for Castilla, that would be very helpful as well.

And on the second one, you mentioned how 2015 will see incremental exploration - well, I mean exploration offshore well in the Gulf of Mexico and another couple in offshore Colombia? I was just thinking about Angola.

Have you guys relinquished your participation in those blocks entirely, or how are you thinking about exploration in West Africa? Thanks..

Thank you, David. Rafael Guzmán is taking the answer in relation with the production, and Max Torres in relation with the offshore exploratory activities. Please Rafael..

Yes, David, as we reported, we had very good results in the Chichimene field, that includes high production, we reached production target there.

The reason for this incremental oil is that we were able to complete our facilities, the facilities in quarter what we see last year, but for the outlook for this year is to continue investments mostly in Chichimene to maintain the production of the field between 80,000 to 85,000 barrels per day.

Now Castilla will also continue investing, both as to finalize our facilities and also to continue drilling the wells to reach full capacity of the facilities we’re building. So that’s still our plan is to maintain a production rate between 120,000 to 130,000 barrels per day.

So those are the two - one of the two most important field for us and even in the current oil prices continue, we’re going to continue investing throughout the 2015 year to reach and maintain the level of productions I just mentioned..

Thank you, Rafael. Please..

Good afternoon, David. I will comment on the exploration efforts for 2015. You were asking about the offshore wells - international offshore wells. And we are going to drill one well this year in Gulf of Mexico and we are going to drill two domestic offshore deepwater wells here in Colombia.

We currently drilling one well with Anadarko here in onshore Colombia. And essentially the effort that we put together in 2014 was quite successful. We have a 30% chance of success for the wells we drilled. Last year, referring to the Angola wells, we drilled two dryholes in Angola.

Unfortunately it was Statoil, and we have two successful wells in Gulf of Mexico. And also we have a successful well offshore Colombia deepwater. So overall, we want to continue with this [indiscernible] portion. We feel pretty good about our efforts in Gulf of Mexico, so we will continue our work there.

And in West Africa, we are still partners in the Angola blocks with Statoil and we are looking forward the opportunities in West Africa. So overall, we will continue our growth in international operation and busy quarter for West Africa and other parts of the world. Thank you..

Thanks a lot guys..

Our next question comes from Jose Bernal with BBVA. Your line is open..

Hi everybody. Congratulations on the results. My question is more about the EBITDA margins. The EBITDA margins have been declined gradually and more drastically in the fourth quarter. The management mentioned some measures they were going to implement this year to reduce some costs, variables and fixed costs.

I wonder if you have any guidance for the EBITDA margins either on a consolidated basis or for the E&P and Refining business? Thank you..

Thank you, Jose. Magda is taking the answer..

Yes, Jose. The EBITDA margin at the end of 2014 was about 39% vis-à-vis. And also what we can say for the year 2015 was we have been taking many measures to improve the cost we have. The kind of measures we are taking - we announced it in December and we told there that we are going to reduce our costs in the order of US$3.5 billion for the year 2015.

And the main reduction figures are coming - are going to come from purchase of tools. I know it’s also purchase of [indiscernible]. Those, I would say are the main measure targets we are going to have this year.

But the two things that we are going to have - this year, we are going to have a lower prices we have in the first - the price we have in the year 2013. So [indiscernible] want to be very lower than that.

And also we are going to take additional efforts in the reduction of cost because we are trying to not only working over these budgets we announced in December, which is mainly $60 per barrel, but also we are trying to work with guidance of price in the order to $45 to $50 per barrel.

So we think our costs are going to be very much low than the costs we have in year 2014..

Thank you..

Thank you. This ends our Q&A for today. I will turn it back to Claudia Trujillo for closing remarks..

Thank you for all the participants in today’s conference call. If you have any questions, please feel free to contact us at Investor Relations. Thank you..

Thank you for participating in today’s program. This concludes the program. You may all disconnect..