Ecopetrol SA (ECOPETL), Colombia’s state-controlled oil producer, fell to a three-year low after the Bogota TV news program CMI reported that Chief Executive Officer Javier Gutierrez would be replaced as soon as next week.
Ecopetrol fell 2 percent to 3,415 pesos at 2:08 p.m. in Bogota, after earlier sinking to 3,330 pesos, the lowest since August 2010. The stock was the worst performer on Colombia’s benchmark Colcap index, which declined 0.8 percent. The shares pared declines as the country’s energy ministry said in a statement that the government “hasn’t given signs” that it wants a change.
“Having Gutierrez in control generates confidence for a lot of people” Juan David Ballen, an analyst at the brokerage Alianza Valores SA in Bogota, said in a phone interview. “We were waiting to see how the market took the news, and the perception for most people is that the stock should fall.”
Ecopetrol’s stock, which tumbled a record 32 percent last year, has lost 8 percent this year amid concern that the company may have to reduce dividends or sell shares to finance its investment plan. In an e-mail, the company’s press office declined to comment on the CMI report or speculation that Gutierrez might be replaced.
JPMorgan Chase & Co. today cut its year-end target price for Ecopetrol’s American depositary receipts to $42 from $49, citing new oil price estimates, a lower 2014 production forecast and updated capital-spending projections. The ADRs fell 2 percent to $35.08 today in New York.
CMI reported yesterday that Gutierrez, who started as CEO in 2007, would leave Ecopetrol after an extraordinary shareholders meeting that the company has scheduled for Jan. 23 to approve new board members.
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