Good day, ladies and gentlemen, and welcome to Ecopetrol's First Quarter of 2016 Earnings Conference Call. [Operator Instructions]I would now like to introduce your host for today's conference, Ms. Maria Catalina Escobar, Investor Relations Officer. Ma'am, please go ahead.

Good morning, everyone, and welcome to Ecopetrol's earnings conference call and webcast in which we will discuss the main financial and operational results of Ecopetrol for the first quarter of 2016. Before we begin, it is important to mention that the comments by Ecopetrol's senior management in this call 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 shared on this conference call. The call will be led by Mr. Juan Carlos Echeverry, CEO of Ecopetrol. Other participants include Felipe Bayon, Executive Vice President; Maria Fernanda Suarez, Vice President of Strategy and Finance; Max Torres, Vice President of Exploration; Hector Manosalva, Vice President of Development and Production; Juan Pablo Ospina, Vice President of Commercial and Marketing; Thomas Rueda, CEO of Cenit; Tomas Hernandez, Vice President of Refining and Processes; Rafael Guzman, Technical Vice President; and Alberto Vargas, Financial Controller. We will begin the presentation with the main achievements of 2016, followed by the highlights by business segment and the financial results under International Finance Reporting Standards. We will close with the outlook for 2016 and a Q&A session. I will now turn the call to Mr. Juan Carlos Echeverry, CEO of Ecopetrol.

Thanks, Maria Catalina. Good morning to all participants on this conference call. It is satisfying for me to present the results of Ecopetrol for the first quarter of 2016. In this period, we achieved net income attributable to shareholders of Ecopetrol of COP$363 billion, 127% higher than the first quarter of 2015. The good results are proof of the strength of the company and its ability to respond to the current market situation in addition to efforts to improve competitiveness and efficiency in all business segments. During the first quarter of 2016, Brent oil price averaged $35 per barrel and reached $28 per barrel, at its lowest level in the last 12 years. This caused a reduction in the price of Ecopetrol basket of crudes and products of 43% and 40%, respectively, within the first quarter of 2015 and of 2016. Given this complex price scenario, the Company redoubled its efforts to reduce costs, increase efficiency, produce profitable barrels, and prioritize investments. But in the quarter with the lowest price in more than a decade, the Company - in addition to increasing its profits - maintained stable levels of EBITDA; and, in comparison with the first quarter of 2015, improved its EBITDA margin. These results demonstrated once again Ecopetrol's ability to maintain a strong performance and navigate this price environment without jeopardizing its financial sustainability. Let's move on to the next slide to see some factors that impacted Ecopetrol in the first quarter of 2016. In the first quarter of 2016, in line with the behavior of international prices, Ecopetrol's crude basket fell $19 per barrel, and - almost $27 per barrel. The differential of the basket against Brent improved by $0.70 on the $1.00, thanks to incremental exports to the United States, where the WTI/Brent differential has been reduced…

Thank you, Dr. Echeverry. It is important to note that as a result of the behavior of oil prices and our emphasis on value over volume growth, Ecopetrol has been rationalizing its investments. This is reflected in lower upstream activity and, therefore, production levels. During the first quarter 2016, the production of the Group reached 737,000 barrels of oil equivalent per day, representing a decrease of 37,000 barrels of oil equivalent per day, corresponding to 4.8% down in comparison with the same period of 2015. These results are mainly explained by the effect of the streamlining of the activity, the natural decline of the fields, and the temporary closure of some fields due to low profitability and judicial decisions. However, it is important to remark that the production levels achieved during the first quarter are in line with the objectives set by the Company for this year - thanks to the positive results in the Castilla field, where production reached a record of 128,000 of oil per day, an increase of 9% compared to the same period of last year. Similarly, we see an increase of 29% of production in Cupiagua as a result of higher gas sales. The main decreases were in the Rubiales, Guajira, La Cira-Infantas, and Casabe fields for Ecopetrol S.A. There is a significant reduction of production for Hocol in the Ocelote field as a result of the recent court ruling. Compared with the last quarter of 2015, the drop in production is mainly observed in our assets with partners in the Rubiales and Quifa fields. The Company continues working to ensure its sustainability in the medium and long term, where the increased recovery factor program is the main driver for the production segment. During the first quarter of 2016, the continuous steam injection pilot was…

Thanks, Rafael. In reference to the exploration activities first quarter 2016; I will mention that during the first quarter 2016, the drilling of the appraisal well Leon 2 BB4 in the block KC-686 in the Keathley Canyon area in the deepwaters Gulf of Mexico was completed. The project is currently operated by Repsol, with 60% working interest. The well is currently temporarily suspended, pending on the results of the evaluation of the information. In Ecopetrol Brazil, the acquisition of 830 square kilometers at 3D was completed on block POT-M-567 in the Potiguar Basin. In Colombia, the well Payero-1 in the Niscota block in the Piedemonte region is currently drilling ahead, where the operator is Equion and Hocol holds a 20% working interest. For the second quarter 2016, the perspectives are: to complete the drilling of the exploratory well Payero-1; to acquire 228 kilometers of 2D seismic in the Cardon block in the Caguan Putumayo Basin. The operation is estimated to be completed in two months under normal conditions. The seismic acquisition contract was signed with a petroseismic. Now I leave you with Thomas Rueda, who will comment on the midstream segment.

Thank you, Max. Good morning. During the first quarter of 2016, overall transported volumes were 1,216,000 barrels per day. This is 4.5% less than the same period of 2015. Regarding crude oil pipeline transportation, volumes decreased by 6.7%, mainly due to lower volumes delivered by the shippers and repairs associated with attacks and illegal valves on the Cano Limono, Covenas and Transandino pipelines. With respect to refined products, transported volumes increased by 4.5%, mainly due to more activity on the Cartagena Barranquilla and Galan Culacepo Pipelines. This increase is associated with imports to supply the central and the Venezuela border regions, and with an increase of naphtha transported to the Llanos Orientales region. Approximately 20% of the refined products transported belonged to Ecopetrol. Regarding our projects under execution, I would like to highlight the 40,000 barrels per day of transport capacity increase between the Castilla and the PI stations, which improves the reliability of evacuation of the nearby fields and reduces the use of truck tanks. Finally, from the financial perspective, the midstream's total revenue showed an important increase when compared to the first quarter of 2015, mainly as a result of higher exchange rates. With this, I'll hand over to Tomas Hernandez, who will comment on the downstream results.

Thanks, Thomas. During the first quarter of 2016, the startup process of the Cartagena refinery continued, highlighted by the start of the catalytic cracker, the diesel hydrotreating, and delayed coking units, and the first cargo of petcoke exported from Colombia. As of March 31, 2016, 28 of 34 process units were online. The crude unit throughput during this quarter averaged 96,800 barrels per day, reaching an average of 124,600 barrels per day in March. The gross margin of the Barrancabermeja refinery was $14.10 per barrel, $4.50 lower than the first quarter of 2015, as a result of lower fuel oil exports due to river transportation difficulties caused by the El Nino climate phenomenon, heavier feedstock, and lower product price differentials against crude oil prices. The throughput of the Barrancabermeja refinery during the first quarter of 2016 decreased by 8,500 barrels per day compared to the first quarter of 2015 due to the high fuel oil inventories as a consequence of the aforementioned river transportation difficulties and lower availability of light crude oil. The cash operating costs of refining and petrochemicals decreased by 25% compared to the first quarter of 2015 result, thanks to the implementation of maintenance, operations, and contracted services optimization strategies. Now, I turn the presentation over to Maria Fernanda Suarez, who will comment on the financial results for the period.

Thank you, Tomas. Let's discuss the Group's financial results during the first quarter of 2016. During the first quarter of 2016, the Company's efficiencies and austerity plan continued to generate positive results, which allowed to partially mitigate the impact of the decrease in oil price. The Company achieved a net income of COP$363 billion, despite oil prices falling to their lowest historic level in the last 12 years, which represented 127% increase as compared to the same period in 2015. The EBITDA for the first quarter of the year was COP$4.1 trillion, and the EBITDA margin grew to 39.5% from 38.9% in the same period of 2015. Revenues for the first quarter of 2016 were COP$10.5 trillion. The 15% decrease as compared to the first quarter of 2015 is explained mainly to the combination of the decrease in oil prices and FX depreciation. Additionally, the declining volumes also impacted the revenues in the quarter. The sales breakdown changed during the quarter due to the Cartagena refinery start-up. During 2015, the composition of sales was 55% crudes, 36% products, and 9% gas; while for the first quarter of 2016, the breakdown was 48% crude, 43% products, and gas remains at 9%. For the first quarter of 2016, the cost of sales was COP$7.4 trillion, which means a decrease of 13% as compared to the same period in 2015. Variable costs that represent 74% of total costs decreased 15% while fixed costs decreased 8%. The decrease in cost is a result of lower prices and the positive results obtained from the austerity measures taken and financial discipline implemented by the Ecopetrol Group through its transformation plan. The combination between the decrease in revenue and cost reductions resulted in a gross margin of 29%, a reduction of only 1% when compared to the…

Thank you, Maria Fernanda. In 2016, operational excellence, cash flow protection, and capital discipline will remain central to our business management. In the second quarter of this year, the Company expects to start all of the 34 plants that make up the Cartagena refinery of Reficar and have a stable load between 150,000 and 165,000 barrels per day as of the second half of this year. We currently have reached a load of 140,000 barrels per day. In December of this year, the bioenergy project will come to completion. It comprises 20,000 hectares of sugarcane, an industrial facility for producing ethanol. The completion of bioenergy at Reficar marks the transition for major investment projects in the downstream undertaken during this decade to the new focus on exploration and production. The company will also advance plans for the takeover and operation of the Rubiales and Cusiana fields, whose association contracts expire on June 30 and July 3, respectively. Rubiales is expected to contribute approximately with 60,000 barrels per day of crude to the Group's total production. Achieving the goal of additional savings for COP$1.6 trillion in 2016 will be critical to navigate the price environment and produce profitable barrels. Specifically, in the second quarter of 2016, savings in the oil dilution process are expected thanks to pipeline transportation of crudes with higher viscosity, which began in February. Even if oil prices rise again, the company will maintain efficiency measures and cost reductions in order to generate value in its operation and enable its portfolio of projects. As I have mentioned in other occasions, the future is not only built on saving. The exploration and production portfolio continues to be strengthened with the decrease in breakevens, mitigation of technical risk, and incorporation of price that ensure the future growth of the company. Given expectations of lower crude oil prices for the coming years and the announced adjustments to the 2016 investment plan, we are in the process of updating our 2020 plan according to the external conditions and higher levels of efficiency. Once again, Ecopetrol demonstrated its ability to reinvent itself, to focus on operational and financial excellence, and to generate net income. The company will continue to ensure profitable growth under the current oil price environment, with strict capital discipline and focus on exploration and production. With this, we open the Q&A session. Thank you very much.

[Operator Instructions] Felipe Santos, JPMorgan.

Thank you, everyone. Thank you for the call. First, I have two questions - actually, I have more, but we are limited to two questions. First one, you mentioned receiving Rubiales in the end of second quarter and the total contribution, about 50,000 barrels a day. How is the Company's management view on Rubiales going forward? What are you thinking of doing there to keep the production up, or at least maintain the production for a couple of years? Second question is you gave the guidance of 750,000 barrels a day. Considering flat gas production and declining oil, would you have a target of exit production by the end of this year? And what would be the idea going forward in terms of the production of the Company? Are you going to be producing less until oil prices recover and surpass your breakeven, or we should see this more balanced going forward? Thank you.

In the case of Rubiales, that we will start the operation - heavy oil operation in July 1. We are considering now to reinitiate our well drilling campaign. We plan to drill 35 wells in the second half of this year. We already have the money; we already have the rigs in place, actually. And there, as well as in Castilla, we are reinitiating our drilling campaign. We expect with the current price, or the expected price that we are seeing, although it is kind of uncertain, we expect to have the cash to have these two drilling campaigns in place for the second half and that we will keep up production in these two crucial oil fields. In terms of the production and the broad guidance, I will give the floor to Rafael Guzman to answer the second question.

Perhaps to add on the first question, we already have a new Vice President in place that will manage the Rubiales field. We have plans to continue to reinitiate and have continued drilling in that field. As I mentioned perhaps in the last call, we have more than 1,000 wells to drill in that well. That will add production and try to maintain production at a level of 150, 160 in the long term for the Rubiales field. Now for the guidance for 2015, we have - 2016, sorry, we have this production target of 715. At this point, we don't want to give out guidance for December. It will depend, of course, on the level of investments that we have, and as we have mentioned, that that will depend on the oil price. We, of course, will have a decline from what we see today. As you can see, our first quarter was higher than the 215. So we essentially have a decline on the year, but at this point we don't want to give guidance on the end rate for the year.

Okay, thanks so much.

We couldn't hear your second question appropriately. I don't know if we have covered the two points that you wanted to touch base on or if you can please clarify your second question.

No, no, everything was clear. Exactly my questions are fully answered. Thanks so much.

Okay, thank you.

Thank you. Our next question comes from the line of Sebastian Diego with Credicorp Capital. Your line is now open.

Thanks for the presentation. I have two questions, the first one related to imports. We saw a decline of roughly 28% quarter-over-quarter of imports in refined products. And I want to know what can we expect going forward? And if you can also provide the average load for the Reficar during the first quarter, I know you mentioned for March, but I want to know the figure for first quarter. And the second question is related to the production target towards 2020. I know you guys mentioned that there will be an adjustment to the plan, but can we get a little bit of guidance on what to expect towards 2020 on production? Thank you.

Regarding the first question about the imports, actually we are importing almost the same amount of product that we have been importing in the last years. And in the future, we expect to replace the diesel and the gasoline imports with the Reficar production and, I mean, some amount of volume like 17 kbd of diesel and almost 40 kbd of gasoline. If you give me a second, I will review the 28% of imports reduced that you mentioned, because I don't see very clear. Give me a chance, and I will go back with you in a moment.

Let me then, Sebastian, touch upon your second question. We don't have yet the guidance for 2020 because, with this price environment as volatile as it has been in the first quarter, it has been difficult to see which prices will be sustained for next year. So we are crunching numbers; we are adjusting the strategy. We are presenting like a strategy to put into zero but we are not yet there. We expect to be there in the second half of this year and to have an announcement by then. So please be patient and we will have some numbers, some more solid numbers. As soon as we see the forecasts in prices more stable, we will be able to produce new guidance for 2020.

Okay, thank you. If you may allow me to ask another question while you review the theme of imports, I wanted to also know, going forward, we all know what happened with the environmental license surrounding the Macarena area and all the political and media noise that created that topic. But can you provide some color on what can we expect on drilling activities and environmental licensing process and how this can affect going forward? Thank you.

Thank you very much. I was with the President on Saturday, President Santos on Saturday, and I told him about the worries that this event created. In particular, you know Macarena and especially Cano Cristales are emblematic for Colombia. Cano Cristales is like the wonder of - the natural wonder of Colombia. And of course, the media and all the environmental community and the community surrounding that area will worry about the water. There are springs of water there, and that's the source of water for an important part of [indiscernible]. So we have to understand it's a very sensitive and critical area. I think Colombian people find Cano Cristales is a very cherished place. So we have to be very careful. What I told the President is, although that's true, we have to send a message to the oil and gas community that we can still be drilling for exploration and production in many areas that we have already licenses, environmental licensing and already have the blocks allocated. So the President, of course, understood perfectly what the message was and that the industry needed a position from the government soon. And he was willing to react and to send the type of message together with people and to separate the two issues. These environmental issues are not only an issue in Colombia; it's an issue in France, in Spain, in Canada and the US. And we have to be very, very careful in managing the communities and the environment and the small towns and the majors, et cetera. So it is an issue, of course, and we expect that we have not only Ecopetrol, but Hocol also had blocks over there. So we expect to have a response from the government in the sense of separating those delicate environmental issues from our drilling capacities over there. Tomas Hernandez is going to answer something about the previous question.

With respect to your first question, I think the second part of the question was around the average load for Reficar. We averaged in the first quarter close to 100,000 barrels a day. In March, we averaged 125,000 barrels a day and we are ramping up - we're up around 140,000 a day now. So we continue to ramp up the load for Reficar as we continue to start up processing units. But that's where we are right now. That's where we see the load at Reficar.

All right, perfect. Just if you can clarify going forward the number of imports of refined products, the 28% decline quarter-over-quarter, will be nice. But thank you very much for the answers.

Okay, Sebastian. Anyway, we will contact you about the numbers and if we have any clarification we do, okay?

Perfect, thank you.

No, thank you.

Our next question comes from the line of Daniel Guardiola with LarrainVial. Your line is now open.

Hi, good morning. Thank you for taking my questions. I have a couple of ones here. First of all, I would like to touch on your brand [ph]. And in that sense, I was wondering if you could please share with us what's the current breakeven price for both your total production and your heavy crude production. So that's my first question. My second one is basically regarding a potential spillover effect coming from the restructuring process of Pacific E&P. I know you guys have operation in shared fields such as Quifa and Rubiales, and I was wondering if you could give us some color or provide some color on what's the potential effect of these restructuring processes that this Company is going through. Thank you.

Regarding breakevens, of course, I think you understand we cannot give you numbers, but I can give you some color on this. The reduction in breakeven price for total production from last year to this year has been achieved in both lifting costs, transportation costs, and efficiencies also in the corporate were now - we have renegotiated lots of contracts, et cetera. And we have achieved between - in our transformation plan in some cases between 20% and 30%. Of course, we are trying those improvements to be structural, and we're working on that. I can't give you a number, but the fact that we achieved good numbers in the first quarter gives you a sense of where our breakevens are. So I expect that this - I know it's a wishy-washy answer, but I expect it to fulfil your doubts. In terms of Pacific, we are partnered with Pacific until the middle of the year in Rubiales. We are partnering with them in the long term with Quifa, which is beside Rubiales, and we are partnering with them also in pipelines. We have also other endeavors with them; especially they have the seaport that we may use near Reficar. We expect that their situation solidifies in the upcoming weeks. We have been tracking this whole situation very closely, and we're happy that it is finding a solution. There are many ways to solve that, and they are finding one to do that. So we are not involved, and our information is via third parties. We don't have special information about that. So we expect the restructuring to be positive for Ecopetrol, of course. I don't know if - we probably can't see anything else. How about that? As of now.

I was just wondering regarding the Pacific situation, if Pacific fails to actually disburse its CapEx commitments in these projects that you're partnering with, will Ecopetrol be able to step in with its CapEx or not?

Take into consideration that all these operations are profitable. So the failure - the eventual failure, and I don't want to say anything about that, but any event of failure will not affect the assets that we share, because both Quifa and the pipelines are really profitable at current prices. So they will stand by themselves and solve their own problems, those assets, by themselves, even notwithstanding what happens in the corporate side of Pacific. But I don't want to say anything else because it can be misinterpreted.

Okay, thank you.

Thank you very much.

Thank you, operator. Before giving way to the next question, I will pass the word to Juan Pablo Ospina, our Vice President of Commercial and Marketing, who will now go back to the question that Sebastian Diego had.

Sebastian, the number that you mentioned belongs to the fourth quarter of 2015 compared with the first quarter of 2016. And the topic is related to the additional imports that we did due the close with the peninsula border and the phenomenal El Nino that happened to us to import a lot of diesel in order to supply some power gens.

Any question? Any additional follow-up question? We will go back to you, sir, if you have any further questions afterwards. Operator, let's please continue with the list of participants that have queued up for questions.

Our next question comes from the line of Bruno Montanari with Morgan Stanley. Your line is now open.

Good morning, everyone. Thanks for taking the question. I have a question on costs. You did a great job on lifting and refining costs this quarter. I'm wondering if you could provide us with the outlook for lifting and refining costs in the coming quarters. Specifically in Q2, we have seen the Colombian peso strengthen a bit. So it was trading at around COP$3,400 and it's now down to COP$2,900. So how should we think about that affecting your lifting and refining costs in Q2 specifically? Thank you very much.

Thanks for your question. I will talk about the lifting costs. Yes, as you can see, we had a significant decrease in lifting costs. Part of that was due to the effect of the exchange rate and, of course, that varies with the exchange rate. So if we see a strengthening of the peso part of it, we will lose. The other thing is we have seen significant decreases, structural reductions in costs. What you can see is that many of the actions we took last year are now in full effect starting first quarter. Those include efficiencies in our procedures and the work we do in the field. We also have significant reductions in the ties we negotiated, renegotiated last year. But in addition to that, for the first quarter, we also saw some delays or some movement forward of some of the activities. So it's a combination of those three: structural reductions, exchange rate, and some delays in some maintenance work in the fields.

As a follow-up to your question on refining costs, yes, we do see a continuing decline in refining costs. We have made some major efforts on transformation, optimization. We don't have any major turnarounds coming up except for one in the second half of the year, and we've made tremendous efforts around reducing our contracted costs, and we continue to focus on that very strongly.

Thank you very much. And if I can ask a second question, has there been any decision or development on the renegotiation of lower pipeline tariffs for Ecopetrol and also for third parties that use the pipelines in Colombia? Thanks again.

The answer is we continue the discussions between shippers and the pipeline owners. That discussion goes until June/July this year. If you recall, the pressure was more around when the price was around $42 per barrel, and now we're seeing a different situation. So the answer is yes, we continue the discussion. However, we will wait until June/July to see where things end up.

Great, thanks a lot.

Our next question comes from the line of Pavel Molchanov with Raymond James. Your line is now open.

Thank you for taking the question. This year, based on the production guidance, you'll be down about 6%. What level of capital spending do you estimate is needed to maintain production?

Pavel, thank you for your question. Well, what we announced, it was the CapEx between $3 billion and $3.4 billion includes our estimation of production for the production that we're going to have this year. I don't know if that answers the question or if you're wanting me to expand on the question?

Right, my question was, with the CapEx that you mentioned, production is down 6%. Do you have an estimate of how much capital spending would have to increase to support stable production?

Perhaps I can add to what Fernando already said. The first thing to say, that we do have many projects in which we could invest in the upstream to sustain, augment and maintain production. Now, the level of investment, of course, will depend on the level of the oil price that we see. And as already mentioned, we are looking at our strategy. We are reviewing that, and we'll give guidance towards the second half of this year. So it is very difficult to answer your question, as how much cash do we need to support production will depend on the oil price. But that will be clear out when we present our strategy in the second half of the year.

Okay, appreciate it.

To complement on that, I will say that we did announce and we announced on December our CapEx and our $4.8 billion on CapEx. That was a CapEx that supported the level of same production that we had in 2015. However, it's not only that we have that CapEx for supporting production, but for our camps to be profitable. So we are very focused on having profitable camps, and it's not just volume, but also being profitable that we combine. I'll pass to Felipe.

Pavel, good morning. Thanks for the question. I think it's important to remind ourselves that 2016 is also a transition year. And in that sense, as you've seen in the presentation, we're going to shift almost 90% of our CapEx going forward to exploration and production activities. Rafael was talking earlier about some of the enhanced recovery pilots that are in place. And that, combined with the ability to invest in the forward years a higher percentage of CapEx into exploration and production, will underpin our ability to continue to create growth and have good results in production. Pavel? Does that answer your question?

Yes, thank you.

Our next question comes from the line of Andres Cardona with BTG Pactual. Your line is now open.

Good morning. Actually, two questions. The first one is about the gas contracts. You flagged on the press release that you signed new contracts by the end of December. I would like to know if it could potentially add some reserves by the end of this year. And the second one is about the [indiscernible] pilot projects. I want to know if some of these projects are likely to end by this year, could potentially add reserves as well. On the media, I saw an interview from the NAH pointing to Castilla pilot project that is close to provide some conclusion. So those are the two questions. Thanks, guys.

Our apologies, but we didn't hear your question. Can you please try another way of speaking into your cell phone or phone and do it slowly so that we can better hear your question, please?

Sure. The first one is about gas contracts. On the press release, it said that the profitability improved because some new gas contracts. I would like to know if this could potentially add reserves by the end of this year. And the second one is about the secondary recovery projects that you are running. The question is if there are some that are close to get conclusions. I read something about the NAH flagging about Castilla project particularly.

Andreas, thank you for your question. I'm going to talk about the gas contracts. In the last process for December of last year, we signed a contract for the major services of gas - that is Guajira, Cusiana and Cupiagua. Due to the Nino effect, the prices were up, so we captured some additional profit there. But we do not expect to improve because of that - the reserves. Related to this year, I will say that Guajilla, we don't have products to offer in the last - in the end of this year in the next season. And Cusiano and Cupiagua will offer just a small amount of product, so we do not expect any big change for this year.

Andreas, I will answer the second question. I'm happy to say that during this year, we are still heavily investing on enhanced recovery in our fields. So we have mentioned we continue most of our pilots, and they are giving us good results. Now, in terms of expansions, we have already some commercial expansions, such as Jabangi [ph], where we are injecting water and we are injecting polymers as well. And in addition to that, we have of course we have of course Casanare and Lasita [ph] that continue on. We do have good results injecting water and water with polymers in Chichimene and again good results of injecting water with Castilla. That's ongoing. Expansions will take some time for those two fields. Regarding Castilla, as you can see, we have reached a peak production this year, and we have continued drilling in this field. So what I can see is the plans for the increased recovery program continue as originally thought, and we will see the result in a couple of years. Meanwhile, we do have many projects of infill for primary recovery, and the fields, of course, the biggest fields we have at Rubiales, Castilla, Chichimene, where we'll see most of the investment in drilling going on this year and next year.

Thank you.

We have a question from the line of Felipe Santos with JPMorgan. Your line is now open.

Thank you, everyone, just a quick follow-up. First one, after all the cost reduction you've made, all the changes you are doing in costs and operational expenses in CapEx side, what is the CapEx barrel - per barrel for new investments that you have for new - future new projects? This is the first question. The second question is how the exploration program is progressing. Are you reducing it just now that the oil price is low and should be speeding up by the end of the year, and we should see this ramping up only in 2017, 2018, and forward?

Okay, Felipe. For the first question, the development cost or dollar per barrel, of course it depends on the field and the technology we use. But to give you a range, it goes from about $5 to $15, depending on the field and the technology.

I'm sorry, beg your pardon, could you repeat the value add? I couldn't hear well.

Yes, it goes from - the CapEx development goes from $5 to $10 - $15 per barrel.

Perfect, thanks so much.

Felipe, Max Torres here, the Vice President of Exploration. To answer your question, we, as you mentioned, we have lowered our activity in response to the lower prices. That is common throughout the industry. And we have sort of changed our focus, or we are focusing more in addressing our understanding of the legacy assets and trying to see if we can find some near-field exploration or bypass pay or, depending new place, dividend NOLs. So that is a new subject that we are tackling this year on exploration. And besides that, we are trying to balance our way forward, continuing our program in the offshore. We are planning to drill an high-visibility well in our Kronos discovery. You know, Kronos discovery, as you know, was done last year with Anadarko. So we are planning to do an appraisal well on Kronos. So that is an important milestone for this year. We have also completed a well in Gulf of Mexico with our partners, Repsol, and we are evaluating the results of that well. That well was recently completed. And also, we are planning to participate on a new well in the Gulf of Mexico with, again, with Anadarko called Warrior that is Myocene-target well. So that is this year. We also have four or five wells in onshore Colombia, also high-visibility wells targeting low-risk, larger volumes that we have here in our portfolio. So, again, we have reduced our activity, but we are targeting larger volumes. And again, we are trying to balance our activity on the onshore and offshore. Looking into the future, our way forward will be to increase our CapEx on exploration and try to intensify our drilling in the offshore, especially in Colombia. I think we see potential there. We have two discoveries. We will…

That's really great color. Just one follow-up, if I may. So ideally, you are focusing more on offshore than onshore in Colombia, right?

No. As I said, I think we're trying to balance our activity. We have a new activity, which is going back to our legacy assets. I think that's an important source of potential reserves in near-field, and as I said, maybe bypass pay or some additional source of reserves in our legacy assets. So that is an important activity for this year in the onshore. And also, we have our traditional portfolio in the onshore. Again, we are balancing our activity, and we are also going to drill the offshore in Kronos-2 with partners Anadarko and early next year Orca-2 with partners Petrobras, Repsol and Statoil. So I think our activity is sort of balanced in Colombia. We still see potential in the heavy oil province in Llanos. We are planning to drill two wells this year in that area. And so I guess we are not losing our faith on the onshore Colombia. I think we are still heavily involved in that. We're also drilling right now - as we speak, we are drilling the [indiscernible] well, which is drilled by one of our affiliates, the Key [ph] company, and that is also high-visibility well. That well is in the foothills, is in the foothills and is targeting an important project. We'll be finishing all soon. So that's another target that we have this year. Thank you.

Excellent, thanks so much.

That concludes today's question-and-answer session. I'd like to turn the call back to Ecopetrol's CEO, Mr. Juan Carlos Echeverry, for closing remarks.

Thank you very much to you all for having participated in this conference call. We're happy to have presented these good results for the first quarter of 2016. This is teamwork. This reflects the shared goals of the new management team, the one that has been talking to you. We are pushing for a new growth strategy based on exploration and production. As Max mentioned, exploration strategy is now balancing a better way a mix between onshore and offshore possibilities. The onshore ones probably aim to produce barrels sooner. The offshore ones probably are longer term in production. We are now re-initiating our drilling campaign in the crucial oil fields in Castilla, in Rubiales, maintaining Chichimene, the other crucial fields. And in the financial front, we have maintained solid position, protecting our EBITDA, keeping cash in mind. Cash is king this year still. And also, we have I think displayed a reaction, a swift reaction to a difficult environment in terms of prices. And we expect to steer the Ecopetrol ship during 2016 in a way that allows us to make the transition to a new type of strategy for 2017 onwards, more based on exploration and production. Thank you very much to you all. Have a good morning.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program, and you may now disconnect. Everyone, have a great day.