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Oct. 25 (Bloomberg) -- Ecopetrol SA, Colombia’s largest oil company, said third quarter profit more than doubled on record production and rising prices.
Net income climbed to 4.15 trillion pesos ($2.2 billion) from 1.79 trillion pesos a year earlier, as production rose 16 percent, the Bogota-based company said yesterday in a statement after the market closed.
State-controlled Ecopetrol is taking advantage of higher crude prices with an $80 billion spending plan until 2020 that will increase output to 1.3 million barrels a day. The company’s rising output has made Colombia the third-largest oil producer in South America after Venezuela and Brazil.
“They are on track with their goal,” Mauricio Restrepo, an analyst at brokerage Bolsa y Renta said today by phone from Medellin, Colombia. “They’ll keep having good profit performance.”
Restrepo doesn’t own Ecopetrol shares. Bolsa y Renta rates the stock a “buy.”
Ecopetrol rose 40 pesos, or 1 percent, to 4,050 pesos at 9:33 a.m. in Bogota. The stock has slipped 2.2 percent this year as of yesterday, less than a 10 percent drop by Colombia’s benchmark Colcap index.
Quarterly production of oil and natural gas rose to 731,500 barrels a day from an average 632,400 barrels a year earlier. Ecopetrol aims to increase production to 1 million barrels in 2015.
“We’re seeing the results of big investments,” Samuel David, a stock analyst at brokerage Valores BanColombia, said by phone Oct. 20 in Bogota. “They are spending a lot on drilling, and expanding fields and transport infrastructure.”
Protests in eastern Colombia last month at the Rubiales field, Colombia’s largest, probably trimmed Ecopetrol’s output last quarter, he said. Pacific Rubiales Energy Corp. holds a 40 percent stake in Rubiales, while Ecopetrol owns the rest.
This quarter, rainfall in Colombia that can trigger mudslides and flooding may weigh on production by hampering transport of oil by truck from Ecopetrol’s fields, David said.
Colombia is in its rainy season, and above-average precipitation may return in December through March, the state- run Institute for Hydrology, Meteorology and Environmental Studies said last week.
President Juan Manuel Santos plans to sell as much as 10 percent of the government’s stake in Ecopetrol over four years to pay for repairs to infrastructure after flooding from storms last year. The sale is pending approval by the nation’s Congress, Santos said Aug. 12.
The plan is separate from Ecopetrol’s sale two months ago to raise funds for its expansion plan. The company sold 2.4 trillion pesos in stock amid a market rout in August, falling short of its target of 2.5 trillion pesos.
Crude oil for December delivery increased $1.89, or 2.1 percent, to $93.16 a barrel at 9:45 a.m. on the New York Mercantile Exchange.
Inroads against guerrillas that increase security have drawn investors to Colombia including billionaires Eike Batista and Carlos Slim. Slim’s Grupo Carso SAB bought a stake this year in Geoprocesados SA’s Tabasco Oil Co., which owns rights to explore in eastern Colombia near fields owned by Ecopetrol.
The number of oil rigs, a measure of investment in new production, rose to 68 in September from 45 a year earlier across Colombia, according to Baker Hughes Inc.
--Editors: Jessica Resnick-Ault, Dale Crofts
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