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Ecopetrol Missing Sale Target as Orders Total $1.13 Billion on Final Day

Ecopetrol SA (ECOPETL) has received orders for 80 percent of the stock it is seeking to sell in Colombia’s largest planned offering in four years on the last day after a drop in oil prices and global equities pared demand.

The Bogota-based crude producer booked orders for 2 trillion pesos ($1.13 billion) from July 27 through yesterday, according to an e-mail from a company press official who can’t be identified because of corporate policy. The company seeks to sell as much as 2.5 trillion pesos of stock.

Ecopetrol “was hit by the volatility in the U.S. last week and the effect of oil prices,” said Santiago Melo, an analyst at Alianza Valores, by telephone from Bogota. “It’s not a positive market and that punishes the placement.”

Oil has dropped about 12 percent in New York since Ecopetrol began the sale, the largest planned offer by an oil company in Latin America since Petroleo Brasileiro SA (PETR4) raised $70 billion in September. Ecopetrol is “very confident” the company will sell more than 2.5 trillion pesos of stock, Chief Executive Officer Javier Gutierrez told Caracol Radio today.

The company seeks to sell 676 million shares at 3,700 pesos each. Investors paying cash can buy the shares for a discounted price of 3,608 pesos.

The stock rose 5 pesos, or 0.1 percent, to 3,700 pesos at 1:04 p.m. in Bogota. Ecopetrol on Aug. 9 dropped as low as 3,580 pesos. The company has slipped 9.8 percent this year, compared with a 10 percent drop in Colombia’s benchmark Colcap index.

Last-Minute Purchases

Colombian pension funds may buy the remaining shares before the sale ends today, Juan Nicolas Pardo, an analyst at Valores Bancolombia SA, said today in a phone interview from Bogota.

The company seeks to help fund an $80 billion expansion plan this decade. It is spearheading crude production increases in Colombia, where billionaire Carlos Slim’s Grupo Carso SAB and Eike Batista’s OGX Petroleo & Gas Participacoes SA also plan investments.

Crude oil for September delivery rose $1.19, or 1.4 percent, to $87.84 a barrel at 1:21 p.m. on the New York Mercantile Exchange.

President Juan Manuel Santos plans to sell as much as 10 percent of the government’s stake in Ecopetrol over four years in multiple rounds. The sale, which is separate from the current issuance, will finance infrastructure projects pending approval of the plan by the nation’s Congress, Santos said Aug. 12.

To contact the reporter on this story: Heather Walsh in Bogota at hlwalsh@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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