EC - Ecopetrol Pays Out 18% Yield With Successful Permian Play And Gas Exploration

2024-03-11 12:00:29 ET

Summary

• Ecopetrol is expanding into the U.S.'s Permian Basin for oil and gas production, providing short-term growth opportunities.
• The company is focusing on natural gas development and Permian Basin expansion to replace reserves and drive revenue growth.
• Ecopetrol is targeting 50% hydrocarbons and 50% diversification by 2040, with a focus on clean energy production and hydrogen exports.

Investment Thesis

Ecopetrol ( EC ) is an exploration and production company controlled by the Colombian government, which owns 88% of the company. EC's strategic expansion into the US's Permian Basin for oil and domestic gas production provides a compelling short-term growth narrative. While we doubt the company's broader strategy to wean off oil production, the political considerations surrounding this will likely be fully resolved by the next Colombian election in 2026....

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