Mr. Javier Gutierrez reports

ECOPETROL ANNOUNCES ITS RESULTS FOR THE FOURTH QUARTER OF 2014 AND FULL YEAR 2014

Ecopetrol S.A. has released its audited financial results, both consolidated and unconsolidated, for the fourth quarter and full-year 2014, and has prepared and filed them in Colombian pesos in accordance with the public accountancy legal framework of Colombia's General Accounting Office.

Some figures in this release are presented in U.S. dollars, as indicated. The financial results in the main body of this report have been rounded to one decimal place. Additionally, some 2013 figures have been reclassified to be comparable with those of 2014.

                     SUMMARY OF ECOPETROL'S FINANCIAL RESULTS

                                      Unconsolidated                                       
(COP billions)               Q4 2014*  Q3 2014*  Q4 2013*     2014      2013

Total sales                 12,794.4  14,579.9  16,201.3  58,092.6  62,514.2
Operating profit             1,067.6   3,875.6   3,876.7  13,656.9  19,635.2
Net income                   (616.7)   2,355.6   2,629.7   7,812.7  13,352.9
Earnings per share (COP)     (15.00)     57.29     64.00    190.01    324.76
EBITDA                       2,488.0   5,471.9   5,272.2  22,434.9  28,501.3
EBITDA margin                    19%       38%       33%       39%       46%
                                                                                  
                                       Consolidated                                        
(COP billion)            Q4 2014*   Q3 2014*   Q4 2013*      2014       2013

Total sales             14,822.8   18,091.4   17,960.3   68,925.3   70,428.7
Operating profit         1,128.1    4,670.0    4,209.8   16,601.9   21,834.7
Net income               (844.0)    2,279.4    2,426.6    7,510.2   13,106.5
EBITDA                   2,438.6    5,468.9    4,901.4   22,382.2   28,013.7
EBITDA margin                16%        30%        27%        32%        40%
                                                                                           
* Not audited                                                                                                             

In the opinion of Ecopetrol's chief executive officer, Javier Gutierrez: "In 2014, we obtained important achievements, such as the discoveries in offshore exploratory blocks; the strengthening of the transportation segment, which continues the optimizations needed to achieve competitive margins at the level of the best in the industry; and the generation of positive EBITDA in the refining segment as we enter the final phase of the Cartagena refinery project.

"Affiliates of the corporate group contributed to the positive results. Ecopetrol America Inc. reached a production of 7,700 boe/d in the fourth quarter of 2014, thereby beginning to generate revenues that will allow its future sustainability. As far as petrochemicals, Propilco significantly increased its earnings, benefiting from better international prices of raw material and higher volumes of propylene supply from the Barrancabermeja refinery.

"The corporate group's average yearly production was 755,400 boe/d, 33,000 boe/d below that of the previous year, due to operating environment situations (22,000 boe/d), attacks (5,000 boe/d), environmental constraints (9,500 boe/d), offset by the increase in production of affiliates and subsidiaries (3,500 boe/d).

"The average sales price of the basket of Ecopetrol crude, gas and products was $10.60 (U.S.) per barrel lower than in 2013, which, coupled with a 7-per-cent devaluation of the average exchange rate, had a significant impact on our financial results.

"It is important to mention that the exchange rate has two effects on the company's financial results: regarding operations, a higher exchange rate has a positive effect given that 60 per cent of our sales are dollar denominated, although some of our purchases are also dollar denominated, but in a lower share. On the other hand, devaluation has a negative impact on non-operational results due to the Colombian peso valuation of the dollar-denominated debt.

"Our net income in 2014 was 7,813 billion Colombian pesos, 41 per cent below that of 2013. This decline is explained by several factors, starting with the 7-per-cent drop in our revenues, in line with the decrease in production volumes and prices. Cost of sales, specifically variable costs, decreased 2 per cent as a result of lower purchase price of crude, gas and products, offset by higher purchase volumes of naphtha as crude diluent. As for fixed costs, there was an increase of 18 per cent, the result basically of the inclusion of transportation costs based on the ship-or-pay fee as part of the implementation of the new transportation model beginning with the start-up of Cenit in April of 2013 (total fixed costs increased 1.7 trillion Colombian pesos, of which 1.23 trillion Colombian pesos correspond to the SoP fee). It should be noted that these additional costs generated by the new transportation business model are offset by the operating income of our affiliate Cenit. As a result of all of the above factors and variables, gross income decreased 23 per cent.

"Operating income for the year decreased 30 per cent, affected additionally by higher exploratory expenditures resulting from an extended campaign, which in total had a higher cost of 646 billion Colombian pesos more than the prior year. Furthermore, in a downward price situation as seen since mid-2014, it was necessary to revise the value of assets, inventories and oil investments. This analysis reflected adjustments in operating expenditures from oil investments and a decline in the valuation of assets for a total of 571 billion Colombian pesos.

"Non-operating variables also affected results negatively, due mainly to higher expenditures derived from U.S.-dollar-denominated debt interest and higher expenditures because of the difference in exchange rate on the outstanding debt balance.

"Taking into account the above, pretax net income fell 36 per cent, which, combined with a higher effective tax rate at 40.48-per-cent levels (compared to 34.48 per cent in 2013), resulted in net income for the period of 7,813 billion Colombian pesos, a decrease of 41 per cent compared to that of 2013. EBITDA margin was 39 per cent, a very competitive level compared to other companies in the industry.

"In the fourth quarter of 2014, there were several important highlights, among which I will mention the following:

"In production, the field Chichimene set a record in production of 80,000 barrels a day, and we began eight secondary improved recovery pilots, bringing the total pilots under way for the year to 13.

"In exploration, we announced two discoveries: (1) the well Orca in offshore waters of Colombia, offering a promising perspective for this basin; and (2) the well Nueva Esperanza-1, confirming the potential of the CPO-09 block in Meta province. These two discoveries add to others announced in 2014 in Colombia (Tibirita, Golosa and Cacica) and the U.S. Gulf Coast (Leon and Rydberg).

"In transportation, we completed the expansion of the Ocensa delta project and began the operation of 23,500 additional barrels per day in the Santiago-Porvenir system.

"In refining, we obtained 96.3-per-cent completion of the Cartagena refinery modernization project.

"In December, we announced our investment plan for 2015 of $7.86-billion (U.S.), in accordance with the current price situation and in line with the strategy of value generation and emphasis on production.

"Ecopetrol is a company that responds swiftly to challenging situations. For this reason, we have initiated a cost and expenditure optimization plan in pursuit of structural savings and economies of scale that allow us to operate in a cost-effective manner, within a context of low prices, which will continue to affect financial results in 2015, but without compromising the strength and sustainability.

"Regarding the claims of possible illegal payments on behalf of third parties to former employees of Ecopetrol, we want to emphasize that we have a zero-tolerance corruption policy, and therefore we have filed a complaint to the authorities, we have collaborated on a timely basis with the judicial system in order to clarify such events so that those responsible be convicted, as well as imposing internal sanctions and penalties. During the last years, Ecopetrol has strengthened its internal control system, of which the ethics and compliance office is part of, in order to prevent, detect and penalize inappropriate behaviours that affect our ethics and corporate governance. The board of directors, the senior management and all of the employees are committed in this anti-corruption crusade."

The full report is available on the company's website.