LONDON, UK / ACCESSWIRE / June 22, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Ecopetrol S.A (NYSE: EC), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=EC. The Company announced on June 20, 2017, that it has won two blocks in the Mexican shallow waters under the latest round of energy market opening in Mexico, on June 19, 2017. Ecopetrol was declared the winning bidder for two blocks in the southeast basins along with Petronas and Pemex. For immediate access to our complimentary reports, including today's coverage, register for free now at:

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The Oil Tender

Mexico recently auctioned two-thirds of the shallow water oil and gas blocks on June 21, 2017, where 10 of the 15 blocks were taken up in the auction. The auction was populated by Italy's Eni, Ecopetrol, and Capricorn Energy, a unit of Edinburgh-based Cairn Energy, who were at the forefront of bidding for the 15 blocks in the southern Gulf of Mexico.

Eni took hold of one of the blocks by itself while holding the other two in consortium with other Companies. While one compromised Capricorn and Citla Energy, a Mexican oil firm, the other block was acquired solely with Citla. For the ninth block, Citla and Eni made the highest possible offer, where Citla emerged as the winner in a tie-breaker. France's Total SA and Royal Dutch Shell PLC, also acquired a block, and so did Russia's Lukoil.

The potential output from the blocks auctioned is expected to be 170,000 barrels per day of crude equivalent, where the net investments could eventually reach $8.2 billion, according to the Mexican government. Crude production in Mexico has fallen to 2.01 million barrels per day from a peak of 3.38 million in 2004.

This auction is viewed as Mexico's latest attempt to attract more private investment to the industry, soon after Congress changed the constitution in late 2013, which signified the end of 75-year production and exploration monopoly of state oil Company, Pemex.

Ecopetrol Blocks

Ecopetrol won two blocks in the southern Gulf of Mexico, where the first one was Area 6 of 559 square meters. The Company partnered with PC Carigali Mexico, a Petronas subsidiary, and agreed to pay government 65.19% of operating profits and an additional investment factor of 0.1, which is equivalent to one well.

The second block, or Area 8, which Ecopetrol acquired, spanned about 586 square kilometers, where the strategic partner was Pemex de Mexico, and the operating profit offered to the government was 20.10% with an additional investment factor of 0. Ecopetrol holds 50% ownership in both the blocks and will expand its footprint in Mexico and other countries through a similar expansion strategy.

Ecopetrol Growth Prospects

Ecopetrol views this agreement as a step to strengthen and diversify exploration and production activities in Colombia and abroad, thus elevating hydrocarbon reserves. Ecopetrol is entering the market through the Mexican Government's strategy of attracting foreign investment, with the decision to implement high standards of operations, industrial safety, and corporate responsibility.

Last Close Stock Review

At the close of trading session on Wednesday, June 21, 2017, Ecopetrol's stock price marginally fell 0.23% to end the day at $8.70. A total volume of 1.71 million shares were exchanged during the session, which was above the 3-month average volume of 1.18 million shares. The Company's shares are trading at a PE ratio of 25.29 and have a dividend yield of 1.84%. At Wednesday's closing price, the stock's net capitalization stands at $17.78 billion.

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