Ecopetrol S.A. and Parex Resources Inc. have entered into a joint‑venture agreement that gives Parex a 50% participating share in the Casabe and Llanito blocks of Colombia’s Magdalena Basin. The partnership is structured around a $250 million gross capital program, of which $125 million is carry capital, to be deployed over five years.
Under the deal, Parex will execute all future drilling and capital activities while Ecopetrol will continue to operate the existing production facilities. The agreement includes infill drilling, water‑flood optimization and enhanced‑oil‑recovery initiatives designed to increase recoverable resources from the two blocks, which currently produce about 14,900 barrels of oil per day and contain more than 3 billion barrels of original oil in place with a recovery rate below 15%.
Strategically, the transaction expands Ecopetrol’s upstream portfolio in a mature basin without a full acquisition, allowing the company to capture additional production upside. For Parex, the deal leverages its deep expertise in the Magdalena Basin and aligns with its aggressive growth strategy, which also includes the pending acquisition of Frontera Energy’s Colombian E&P assets for $750 million expected to close in Q2 2026.
Ecopetrol’s Q1 2025 financials show a net income of COP 3.1 trillion and an EBITDA margin of 42%, while its Q4 2025 earnings per share were $0.20. Parex reported a Q1 2025 net income of $81 million ($0.82 per share) and an adjusted EBITDA of $135 million. The joint‑venture therefore represents a significant capital commitment for both companies and is expected to enhance their upstream earnings profiles.
The partnership is expected to accelerate development of the Casabe and Llanito blocks, with Parex slated to drill its first well in the second half of 2026. The collaboration also positions both firms to benefit from the Magdalena Basin’s proven production history and the potential for further unconventional exploration in the region.
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