United States securities and exchange commission logo
September 9, 2020
Jaime Caballero Uribe
Chief Financial Officer
Ecopetrol S.A.
Carrera 13 No. 36-24 Piso 7
Bogot , Colombia
Re: Ecopetrol S.A.
Form 20-F for the
Fiscal Year ended December 31, 2019
Filed April 1, 2020
File No. 001-34175
Dear Mr. Caballero Uribe:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F for the Fiscal Year ended December 31, 2019
General, page 1
1. We have identified
various disclosure concerns pertaining to your oil and gas exploration
and producing
activities based on the requirements of Subpart 1200 of Regulation S-K,
pursuant to Instruction
2 to Item 4 of Form 20-F, and FASB ASC 932, pertaining to the
supplemental
information provided in Note 34 to your financial statements.
Please submit along
with your response to each comment in this letter the incremental
disclosures or
revisions that you propose to address these concerns.
Jaime Caballero Uribe
FirstName LastNameJaime Caballero Uribe
Ecopetrol S.A.
Comapany 9,
September NameEcopetrol
2020 S.A.
September
Page 2 9, 2020 Page 2
FirstName LastName
Business Overview
Exploration and Production
Exploration Activities in Colombia, page 12
2. Tell us how the number of exploratory wells drilled during 2019 as
mentioned in the
narrative on page 12 reconcile to the number of exploratory wells
shown in the
accompanying tabulation for this period.
Production Activities
Crude Oil Production, page 17
3. Expand your disclosure of crude oil production on pages 17, 22 and 24,
to present the
production figures based on final product sold, e.g., in terms of
crude oil/condensate and
separately of natural gas liquids, consistent with your disclosure of
the proved reserves
relating to these individual products. This comment also applies to
your disclosure of the
average sales prices by final product sold on page 102. Refer to Items
1204(a) and
1204(b)(1) of Regulation S-K.
4. Expand your disclosure of natural gas production using barrels of oil
equivalent on pages
19, 22, and 25, to present the production figures based on final
product sold, e.g. in terms
of standard cubic feet, consistent with the units of measurement used
in your disclosure of
natural gas reserves. This comment also applies to your disclosure of
the average sales
prices of natural gas sold on page 102. Refer to Items 1204(a) and
1204(b)(1) of
Regulation S-K.
Development Wells, page 20
5. Refer to the definition of a drilled well in Item 1205(b)(4) of
Regulation S-K, and tell us if
the figures for the wells in the tabular presentations on pages 20,
23, and 25 are limited to
wells that were drilled and completed during each fiscal year
presented.
To the extent that the figures shown include wells that were drilled,
e.g. reached total
depth, but were not otherwise completed during the year, revise
your disclosure to
comply with Item 1205(a)(2) of Regulation S-K.
6. Expand your disclosures on pages 20, 23, and 25, to clarify whether
all of the
development wells shown are productive wells. If these disclosures
combine productive
and dry wells, or exclude dry wells, revise your disclosure to
separately quantify the net
number of dry wells. Refer to Items 1205(a)(2), 1205(b)(1), and
1205(b)(2) of Regulation
S-K.
7. Expand your disclosure to address your present activities by
geographical area, including
the number of gross and net wells in the process of being drilled,
completed, or waiting on
completion and any other related activities of material importance as
of December 31,
2019. Refer to Item 1206 of Regulation S-K.
Jaime Caballero Uribe
FirstName LastNameJaime Caballero Uribe
Ecopetrol S.A.
Comapany 9,
September NameEcopetrol
2020 S.A.
September
Page 3 9, 2020 Page 3
FirstName LastName
Production Acreage, page 21
8. Expand the disclosure on pages 21, 23 and 26, to provide the
expiration dates of material
concentrations of your undeveloped acreage by geographic area as of
December 31, 2019.
Refer to Item 1208(b) of Regulation S-K.
Production Activities Outside Colombia, page 24
9. Expand your disclosure of production by final product sold relating to
subsidiaries outside
of Colombia to indicate the geographic area, e.g. country or
countries, in which the
production occurs. Refer to Items 1204(a) and 1201(d) of Regulation
S-K.
Reserves
Changes in Proved Reserves
Revisions of Previous Estimates, page 32
10. Your explanation of the changes in total proved reserves related to
revisions of previous
estimates appears to include changes from two or more unrelated
factors as well as both
positive and negative changes summed into a single quantity without
further explanation.
For example, the revisions identified for 2019 include an increase of
36 million boe in
reserves due to 1) a review of the type curves for new development
activities according to
new well results in the Ca o Sur field, and 2) additional gas
processing plant capacity to
extract NGL in the Cupiagua field.
You also disclose that the remaining 17% (or 14 million boe) increase
in reserves, was
due to varying 1) increases and 2) decreases from other fields.
Revise your disclosure under this heading or in Note 34 to your
financial statements to
address the overall change in the line item by separately identifying
and quantifying the
net amount attributable to each factor, including offsetting factors
underlying a significant
change, so that changes related to revisions of previous estimates are
fully explained.
In particular, disclosure relating to revisions in previous estimates
should indicate the
extent to which changes were caused by economic factors, such as costs
and commodity
prices, well performance, uneconomic proved undeveloped locations, or
the removal of
proved undeveloped locations due to changes in a previously adopted
development plan.
This comment applies to your disclosure of changes related to
revisions of previous
estimates for each period shown. Refer to FASB ASC 932-235-50-5.
Extensions and Discoveries, page 33
11. The changes disclosed on page 31 in proved reserves attributed to
extensions and
discoveries appear to be significantly greater than the corresponding
change in the proved
undeveloped reserves disclosed on page 35, exceeding such quantities
by approximately
49%, 30% and 43%, for the periods ending December 31, 2019, 2018 and
2017,
Jaime Caballero Uribe
FirstName LastNameJaime Caballero Uribe
Ecopetrol S.A.
Comapany 9,
September NameEcopetrol
2020 S.A.
September
Page 4 9, 2020 Page 4
FirstName LastName
respectively. Expand your discussion of the changes in total proved
reserves attributed to
extensions and discoveries under this heading or in Note 34 to your
financial statements to
explain the reason(s) for these differences. Refer to FASB ASC
932-235-50-5.
Changes in Undeveloped Proved Reserves, page 35
12. Expand your disclosure to include the reasons for the material changes
in your proved
undeveloped reserves during fiscal 2019. You should address the
overall change for each
line item in the reconciliation presented on page 35 by separately
identifying and
quantifying each factor, including offsetting factors, so that the
changes in net proved
undeveloped reserves are fully explained.
In particular, disclosure relating to revisions in previous estimates
should indicate the
extent to which changes were caused by economic factors, such as costs
and commodity
prices, well performance, uneconomic proved undeveloped locations, or
the removal of
proved undeveloped locations due to changes in a previously adopted
development plan.
Refer to Item 1203(b) of Regulation S-K.
Reserves Process, page 35
13. Expand the discussion of the internal controls used by the Company in
its reserves
estimation effort to provide the qualifications of the technical
person primarily responsible
for overseeing the preparation of the reserves estimates presented in
the filing, i.e.,
Ecopetrol s Corporate Reserve Manger. Refer to Item 1202(a)(7) of
Regulation S-K.
14. The disclosures in Exhibits 99.2 and 99.5 do not provide the
qualifications of the technical
person(s) of the independent petroleum engineering firm primarily
responsible for
overseeing the preparation of the firm s estimates of proved
reserves. Please obtain and
file a revised reserves report, or expand your disclosure in the Form
20-F to provide this
information. Refer to Item 1202(a)(7) of Regulation S-K.
Notes to the Consolidated Financial Statements
Note 34 Supplemental Information on Oil and Gas Producing Activities
(Unaudited)
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil
and Gas
Quantities and Changes Therein, page F-112
15. Expand your disclosure to confirm that all estimated future costs to
settle your asset
retirement obligations have been included in your calculation of the
standardized measure
for each period. If any such costs have been omitted, please explain
to us your rationale.
Refer to FASB ASC 932-235-50-36.
Jaime Caballero Uribe
Ecopetrol S.A.
September 9, 2020
Page 5
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Sandra Wall, Petroleum Engineer, at 202-551-4727 if you
have any
questions regarding the engineering comments. Please contact Karl Hiller,
Branch Chief, at 202-
551-3686 with any other questions.
Sincerely,
FirstName LastNameJaime Caballero Uribe
Division of
Corporation Finance
Comapany NameEcopetrol S.A.
Office of Energy &
Transportation
September 9, 2020 Page 5
cc: Lina Mar a Contreras Mora, Investor Relations
FirstName LastName