Ecopetrol (NYSE:EC) isn't well known among most investors, but this may change soon because the company is in the midst of a plan to transform itself from a national oil company to a player in the energy industry.
IN PICTURES: 7 Forehead-Slapping Stock Blunders

Ecopetrol is the national oil company of Colombia, but it began a transition several years ago to a more mixed ownership format. The company is still 89.9% owned by the government of Colombia.

Ecopetrol has a $90 billion market capitalization and is one of the best performing stocks in the energy sector, up 74% through the first nine months of 2010. The company reported average daily production of 589,300 barrels oil equivalent (BOE) per day in the first six months of 2010. This represented production growth of 17% from the same six months in 2009.

Ecopetrol is active in Colombia, Peru, Brazil and the Gulf of Mexico. The company reported proved reserves of 1.87 billion BOE at the end of 2009. Ecopetrol also owns two refineries in Colombia with capacity of 330,000 barrels per day, and nearly 9,000 kilometers of pipelines.

Strategic Plan
Ecopetrol adopted a strategic plan several years ago that will grow and reorient the company over the next decade. The plan calls for spending $80 billion from 2011 to 2020, with 80% of this devoted to the upstream segment. The company plans to finance most of this through internal cash generation, but will also issue up to $23 billion in debt and sell an additional $6.5 billion in equity to the public.

This ambitious capital spending plan over the next five years will lead to production of one million BOE per day by 2015, and 1.3 million BOE per day by 2020. The company will also add reserves of 6 billion BOE by 2020 if successful.

Ecopetrol is also continuing to invest in Colombia and, along with Talisman Energy (NYSE:TLM), recently purchased properties in Colombia owned by BP (NYSE:BP). The two companies paid $1.9 billion and will get 25,000 BOE per day of production, approximately 65% of which is liquids. Ecopetrol and Talisman Energy also get interests in many exploration areas in the country.

Ecopetrol is also partnering with other companies to develop and explore for oil and gas. In Peru, the company is working with Petrobras (NYSE:PBR) to develop Lot 117 in the onshore area of the country. The two companies are currently acquiring seismic data to help develop and exploration plan for the acreage.

Ecopetrol may be the largest oil and gas company that no one has ever heard but this won't be the case for long if the company can successfully execute its strategic plan over the next decade. (For related reading, take a look at the Oil And Gas Industry Primer.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  2. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  3. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  4. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  5. Professionals

    What to do During a Market Correction

    The market has what? Here's what you should consider rather than panicking.
  6. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI South Africa

    Learn more about the iShares MSCI South Africa fund, which is an NYSE-listed exchange-traded fund offered and managed by BlackRock.
  7. Mutual Funds & ETFs

    ETF Analysis: WisdomTree SmallCap Earnings

    Discover the WisdomTree Small Cap Earnings ETF, a fund with a special focus on small-cap and micro-cap stocks with positive earnings.
  8. Mutual Funds & ETFs

    ETF Analysis: iShares US Regional Banks

    Obtain information and analysis of the iShares US Regional Banks ETF for investors seeking particular exposure to regional bank stocks.
  9. Mutual Funds & ETFs

    ETF Analysis: Vanguard Mid-Cap Value

    Take an in-depth look at the Vanguard Mid-Cap Value ETF, one of the largest and most popular mid-cap funds in the U.S. equity space.
  10. Technical Indicators

    Key Financial Ratios to Analyze the Mining Industry

    Discover some the most important financial ratios used by investors and analysts to evaluate companies in the metals and mining industry.
  1. Profit Margin

    A category of ratios measuring profitability calculated as net ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis ...
  3. Brazil, Russia, India And China ...

    An acronym for the economies of Brazil, Russia, India and China ...
  4. Debt Ratio

    A financial ratio that measures the extent of a company’s or ...
  5. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing ...
  6. Net Present Value - NPV

    The difference between the present values of cash inflows and ...
  1. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. When does the fixed charge coverage ratio suggest that a company should stop borrowing ...

    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
  4. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. What is the difference between the return on total assets and an interest rate?

    Return on total assets (ROTA) represents one of the profitability metrics. It is calculated by taking a company's earnings ... Read Full Answer >>
  6. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!