Exhibit
99.1







|                                        |                              |                          
|--------------------------------------- | ---------------------------- | -------------------------
|TBPE REGISTERED ENGINEERING FIRM F-1580 | FAX (713) 651-0849          
|                                        | 1100 LOUISIANA    SUITE 3800 | HOUSTON, TEXAS 77002-5235





|January 23, 2012
|----------------



Mr. Oscar Valbuena

ECOPETROL

Cra. 13 No. 36-24

Edificio Principal, Piso 7

Bogotá, D.C., Colombia



Mr. Valbuena,



At the request of ECOPETROL,
Ryder Scott Company (Ryder Scott) has prepared an audit of the proved reserves attributable to certain properties of ECOPETROL,
as of December 31, 2011. The subject properties are located in the country of Colombia.



For the purpose of
the audit, Ryder Scott estimated the reserves based on the definitions and disclosure guidelines of the United States Securities
and Exchange Commission (SEC) contained in Title 17, Code of Federal Regulations, Modernization of Oil and Gas Reporting, Final
Rule released January 14, 2009 in the Federal Register (SEC regulations). Our third party study, completed on January 4, 2012 and
presented herein, was prepared for public disclosure by ECOPETROL in filings made with the SEC in accordance with the disclosure
requirements set forth in the SEC regulations.



The properties evaluated
by Ryder Scott account for a portion of ECOPETROL’s total net proved reserves as of December 31, 2011. Based on information
provided by ECOPETROL, the third party estimate conducted by Ryder Scott addresses 37.0 percent of the total proved developed net
liquid hydrocarbon reserves and 22.7 percent of the total proved undeveloped net liquid hydrocarbon reserves, of ECOPETROL. Ryder
Scott review also addresses 17.8 percent of the total net proved developed gas reserves and 21.3 percent of the total proved undeveloped
net gas reserves, of ECOPETROL



The estimated reserve
amounts presented in this report, as of December 31, 2011, are related to hydrocarbon prices. The hydrocarbon prices used in the
preparation of this report are based on the average prices during the 12-month period prior to the ending date of the period covered
in this report, determined as the unweighted arithmetic averages of the prices in effect on the first-day-of-the-month for each
month within such period, unless prices were defined by contractual arrangements, as required by the SEC regulations. Actual future
prices may vary significantly from the prices required by SEC regulations; therefore, volumes of reserves actually recovered may
differ significantly from the estimated quantities presented in this report. The results of Ryder Scott’s estimates are summarized
below.





|SUITE  600,  1015  4TH  STREET, S.W. |  | CALGARY,
    ALBERTA T2R 1J4 |  | TEL (403) 262-2799 |  | FAX (403) 262-2790 | 
|------------------------------------ |  | ---------------------------- |  | ------------------ |  | ------------------ | 
|621  17TH STREET, SUITE 1550         |  | DENVER, COLORADO 80293-1501  |  | TEL (303) 623-9147 |  | FAX (303) 623-4258 | 



















ECOPETROL

January 23, 2012

Page 2



SEC PARAMETERS

Estimated Net Reserves

Certain Interests of

ECOPETROL





|As of December 31, 2011   | 
|------------------------- | 
|                          | 
|                          | 
|Net Remaining Reserves    | 
|Oil/Condensate – MBarrels | 
|Sales Gas – MMCF          | 



Liquid hydrocarbons
are expressed in thousand standard 42 gallon barrels. All gas volumes are reported on an “as sold” basis expressed
in millions of cubic feet (MMCF) at a temperature base of 60 degrees Fahrenheit and pressure base of 14.696 psia. These proved
reserves volumes are exclusive of royalties. Further, they include ECOPETROL’s participation interest in properties operated
by Equion.



Reserves Included in This Report



The proved reserves
included herein conform to the definition as set forth in the Securities and Exchange Commission’s Regulations Part 210.4-10(a).
An abridged version of the SEC reserves definitions from 210.4-10(a) entitled “Petroleum Reserves Definitions” is included
as an attachment to this report. The various proved reserve status categories are defined under the attachment entitled “Petroleum
Reserves Definitions” in this report.



No attempt was made
to quantify or otherwise account for any accumulated gas production imbalances that may exist. The provedgas volumes included
herein do not attribute gas consumed in operations as reserves. Non-hydrocarbon or inert gas volumes have been excluded from the
reserves reported herein.



Reserves are those
estimated remaining quantities of petroleum that are anticipated to be economically producible, as of a given date, from known
accumulations under defined conditions. All reserve estimates involve an assessment of the uncertainty relating the likelihood
that the actual remaining quantities recovered will be greater or less than the estimated quantities determined as of the date
the estimate is made. The uncertainty depends chiefly on the amount of reliable geologic and engineering data available at the
time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed by placing reserves
into one of two principal classifications, either proved or unproved. Unproved reserves are less certain to be recovered than proved
reserves, and may be further sub-classified as probable and possible reserves to denote progressively increasing uncertainty in
their recoverability. At ECOPETROL’s request, this report addresses only the proved reserves attributable to the properties
evaluated herein.



Proved oil and gas
reserves are “those quantities of oil and gas which, by analysis of geoscience and engineering data, can be estimated with
reasonable certainty to be economically producible from a given date forward.” The proved reserves included herein were estimated
using deterministic methods. If deterministic methods are used, the SEC has defined reasonable certainty for proved reserves as
a “high degree of confidence that the quantities will be recovered.”





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS













ECOPETROL

January 23, 2012

Page 3







Provedreserve
estimates will generally be revised only as additional geologic or engineering data become available or as economic conditions
change. For proved reserves, the SEC states that “as changes due to increased availability of geoscience (geological, geophysical,
and geochemical), engineering, and economic data are made to the estimated ultimate recovery (EUR) with time, reasonably certain
EUR is much more likely to increase or remain constant than to decrease.” Moreover, estimates of proved reserves may be revised
as a result of future operations, effects of regulation by governmental agencies or geopolitical or economic risks. Therefore,
the proved reserves included in this report are estimates only and should not be construed as being exact quantities, and if recovered,
the revenues therefrom, and the actual costs related thereto, could be more or less than the estimated amounts.



The proved reserves
reported herein are limited to the period prior to expiration of current contracts providing the legal rights to produce, or a
revenue interest in such production, unless evidence indicates that contract renewal is reasonably certain. Furthermore, properties
in the different countries may be subjected to significantly varying contractual fiscal terms that affect the net revenue to ECOPETROL
for the production of these volumes. The prices and economic return received for these net volumes can vary significantly based
on the terms of these contracts. Therefore, when applicable, Ryder Scott reviewed the fiscal terms of such contracts and discussed
with ECOPETROL the net economic benefit attributed to such operations for the determination of the net hydrocarbon volumes and
income thereof. Ryder Scott has not conducted an exhaustive audit or verification of such contractual information. Neither our
review of such contractual information nor our acceptance of ECOPETROL’s representations regarding such contractual information
should be construed as a legal opinion on this matter.



Ryder Scott did not
evaluate the country and geopolitical risks in the countries where ECOPETROL operates or has interests. ECOPETROL’s operations
may be subject to various levels of governmental controls and regulations. These controls and regulations may include, but may
not be limited to, matters relating to land tenure and leasing, the legal rights to produce hydrocarbons including the granting,
extension or termination of production sharing contracts, the fiscal terms of various production sharing contracts, drilling and
production practices, environmental protection, marketing and pricing policies, royalties, various taxes and levies including income
tax, and foreign trade and investment and are subject to change from time to time. Such changes in governmental regulations and
policies may cause volumes of proved reserves actually recovered and amounts of proved income actually received to differ significantly
from the estimated quantities.



The estimates of proved
reserves presented herein were based upon a detailed study of the properties in which ECOPETROL owns an interest; however, we have
not made any field examination of the properties. No consideration was given in this report to potential environmental liabilities
that may exist nor were any costs included for potential liabilities to restore and clean up damages, if any, caused by past operating
practices.



Estimates of Reserves



The estimation of reserves
involves two distinct determinations. The first determination results in the estimation of the quantities of recoverable oil and
gas and the second determination results in the estimation of the uncertainty associated with those estimated quantities in accordance
with the definitions set forth by the Securities and Exchange Commission’s Regulations Part 210.4-10(a). The process of estimating
the quantities of recoverable oil and gas reserves relies on the use of certain generally accepted analytical procedures. These
analytical procedures fall into three broad categories or methods: (1) performance-based methods; (2) volumetric-based methods;
and (3) analogy. These methods may be used singularly or in combination by the reserve evaluator in the process of estimating the
quantities of reserves. Reserve evaluators must select the method or combination of methods which in their professional judgment
is most appropriate given the nature and amount of reliable geoscience and engineering data available at the time of the estimate,
the established or anticipated performance characteristics of the reservoir being evaluated and the stage of development or producing
maturity of the property.





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS















ECOPETROL

January 23, 2012

Page 4











In many cases, the
analysis of the available geoscience and engineering data and the subsequent interpretation of this data may indicate a range of
possible outcomes in an estimate, irrespective of the method selected by the evaluator. When a range in the quantity of reserves
is identified, the evaluator must determine the uncertainty associated with the incremental quantities of the reserves. If the
reserve quantities are estimated using the deterministic incremental approach, the uncertainty for each discrete incremental quantity
of the reserves is addressed by the reserve category assigned by the evaluator. Therefore, it is the categorization of reserve
quantities as proved, probable and/or possible that addresses the inherent uncertainty in the estimated quantities reported. For
proved reserves, uncertainty is defined by the SEC as reasonable certainty wherein the “quantities actually recovered are
much more likely than not to be achieved.” The SEC states that “probable reserves are those additional reserves that
are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.”
The SEC states that “possible reserves are those additional reserves that are less certain to be recovered than probable
reserves and the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable
plus possible reserves.” All quantities of reserves within the same reserve category must meet the SEC definitions as noted
above.



Estimates of reserves
quantities and their associated reserve categories may be revised in the future as additional geoscience or engineering data become
available. Furthermore, estimates of reserves quantities and their associated reserve categories may also be revised due to other
factors such as changes in economic conditions, results of future operations, effects of regulation by governmental agencies or
geopolitical or economic risks as previously noted herein.



The proved reserves
for the properties included herein were estimated by performance methods, the volumetric method, or a combination of performance
and volumetric methods. The following table summarizes the approximate percent of reserves estimated by each of these methods.



Approximate Percent Proved Reserves Estimated
by the Various Methods





|            |  | Gas       |    |   | Liquid Hydrocarbons | 
|----------- |  | --------- | -- | - | ------------------- | 
|Method      |  | Developed |    |   | Undeveloped         | 
|Volumetric  |  |           | -  |   |                     | 
|Performance |  |           | 29 | % |                     | 
|Analogy     |  |           | -  |   |                     | 
|Combination |  |           | 71 | % |                     | 



These performance methods
include, but may not be limited to, decline curve analysis and analogy which utilized extrapolations of historical production and
pressure data available through November, 2011 in those cases where such data were considered to be definitive. The data utilized
in this analysis were supplied to Ryder Scott by ECOPETROL and were considered sufficient for the purpose thereof. The volumetric
method was used where there were inadequate historical performance data to establish a definitive trend and where the use of production
performance data as a basis for the reserve estimates was considered to be inappropriate. The volumetric analysis utilized pertinent
well and seismic data supplied to Ryder Scott by ECOPETROL that were available through November, 2011. The data utilized from the
well and seismic data incorporated into our volumetric analysis were considered sufficient for the purpose thereof.





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS















ECOPETROL

January 23, 2012

Page 5







To estimate economically
recoverable proved oil and gas reserves and related future net cash flows, we consider many factors and assumptions including,
but not limited to, the use of reservoir parameters derived from geological, geophysical and engineering data that cannot be measured
directly, economic criteria based on current costs and SEC pricing requirements, and forecasts of future production rates. Under
the SEC regulations 210.4-10(a)(22)(v) and (26), proved reserves must be anticipated to be economically producible from a given
date forward based on existing economic conditions including the prices and costs at which economic producibility from a reservoir
is to be determined. While it may reasonably be anticipated that the future prices received for the sale of production and the
operating costs and other costs relating to such production may increase or decrease from those under existing economic conditions,
such changes were, in accordance with rules adopted by the SEC, omitted from consideration in making this evaluation.



ECOPETROL has informed
us that they have furnished us all of the material accounts, records, geological and engineering data, and reports and other data
required for this investigation. In preparing our forecast of future proved production and income, we have relied upon data furnished
by ECOPETROL with respect to property interests owned, production and well tests from examined wells, normal direct costs of operating
the wells or leases, other costs such as transportation and/or processing fees, ad valorem and production taxes, recompletion and
development costs, abandonment costs after salvage, product prices based on the SEC regulations, adjustments or differentials to
product prices, geological structural and isochore maps, well logs, core analyses, and pressure measurements. Ryder Scott reviewed
such factual data for its reasonableness; however, we have not conducted an independent verification of the data furnished by ECOPETROL.
We consider the factual data used in this report appropriate and sufficient for the purpose of preparing the estimates of reserves
herein.



In summary, we consider
the assumptions, data, methods and analytical procedures used in this report appropriate for the purpose hereof, and we have used
all such methods and procedures that we consider necessary and appropriate to prepare the estimates of reserves herein. The proved
reserves included herein were determined in conformance with the United States Securities and Exchange Commission (SEC) Modernization
of Oil and Gas Reporting; Final Rule, including all references to Regulation S-X and Regulation S-K, referred to herein collectively
as the “SEC Regulations.” In our opinion, the proved reserves presented in this report comply with the definitions,
guidelines and disclosure requirements as required by the SEC regulations.



Future Production Rates



For wells currently
on production, our forecasts of future production rates are based on historical performance data. If no production decline trend
has been established, future production rates were held constant, or adjusted for the effects of curtailment where appropriate,
until a decline in ability to produce was anticipated. An estimated rate of decline was then applied to depletion of the reserves.
If a decline trend has been established, this trend was used as the basis for estimating future production rates.



Test data and other
related information were used to estimate the anticipated initial production rates for those wells or locations that are not currently
producing. For reserves not yet on production, sales were estimated to commence at an anticipated date furnished by ECOPETROL.
Wells or locations that are not currently producing may start producing earlier or later than anticipated in our estimates due
to unforeseen factors causing a change in the timing to initiate production. Such factors may include delays due to weather, the
availability of rigs, the sequence of drilling, completing and/or recompleting wells and/or constraints set by regulatory bodies.





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS















ECOPETROL

January 23, 2012

Page 6





The future production
rates from wells currently on production or wells or locations that are not currently producing may be more or less than estimated
because of changes including, but not limited to, reservoir performance, operating conditions related to surface facilities, compression
and artificial lift, pipeline capacity and/or operating conditions, producing market demand and/or allowables or other constraints
set by regulatory bodies.



Hydrocarbon Prices



The hydrocarbon prices
used herein are based on SEC price parameters using the average prices during the 12-month period prior to the ending date of the
period covered in this report, determined as the unweighted arithmetic averages of the prices in effect on the first-day-of-the-month
for each month within such period, unless prices were defined by contractual arrangements. For hydrocarbon products sold under
contract, the contract prices, including fixed and determinable escalations, exclusive of inflation adjustments, were used until
expiration of the contract. Upon contract expiration, the prices were adjusted to the 12-month unweighted arithmetic average as
previously described.



ECOPETROL furnished
us with the above mentioned average prices in effect on December 31, 2011. These initial SEC hydrocarbon prices were determined
using the 12-month average first-day-of-the-month benchmark prices appropriate to the geographic area where the hydrocarbons are
sold. These benchmark prices are prior to the adjustments for differentials as described herein. The table below summarizes the
“benchmark prices” and “price reference” used for the geographic area included in the report. In certain
geographic areas, the price reference and benchmark prices may be defined by contractual arrangements. In cases where there are
numerous contracts or price references within the same geographic area, the benchmark price is represented by the unweighted arithmetic
average of the initial 12-month average first-day-of-the-month benchmark prices used.



The product prices
that were actually used to determine the future gross revenue for each property reflect adjustments to the benchmark prices for
gravity, quality, local conditions and/or distance from market, referred to herein as “differentials.”  The differentials
used in the preparation of this report were furnished to us by ECOPETROL.  The differentials furnished to us were accepted
as factual data and reviewed by us for their reasonableness; however, we have not conducted an independent verification of the
data used by ECOPETROL to determine these differentials.



In addition, the following
table summarizes the net volume weighted benchmark prices adjusted for differentials and referred to herein as the “average
realized prices.” The average realized prices shown in the table below were determined from the total future gross revenue
before production taxes and the total net reserves for the geographic area and presented in accordance with SEC disclosure requirements
for each of the geographic areas included in the report.



|Geographic Area |  | Product        |  | Price Reference           |  | Average Benchmark Prices |  | Average  Realized Prices | 
|--------------- |  | -------------- |  | ------------------------- |  | ------------------------ |  | ------------------------ | 
|Colombia        |  | Oil/Condensate |  | WTI Cushing,  Okla - SPOT |  | $96.19/Bbl               |  | $82.92/Bbl               | 
|                |  | Gas            |  | Contract                  |  | Contract                 |  | $4.27/MCF                | 





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS















ECOPETROL

January 23, 2012

Page 7







For the properties
reviewed by Ryder Scott, approximately 94 percent of the future gross income is derived from the sale of oil and condensate and
6 percent from gas sales.



Costs



Operating costs used
in our evaluation were based on the operating expense reports of ECOPETROL and include only those costs directly applicable to
the evaluated assets. The operating costs include a portion of general and administrative costs allocated directly to the leases
and wells. The operating costs furnished to us were accepted as factual data and reviewed by us for their reasonableness; however,
we have not conducted an independent verification of the operating cost data used by ECOPETROL. No deduction was made for loan
repayments, interest expenses, or exploration and development prepayments that were not charged directly to the assets.



Development costs were
furnished to us by ECOPETROL and are based on authorizations for expenditure for the proposed work or actual costs for similar
projects. The development costs furnished to us were accepted as factual data and reviewed by us for their reasonableness; however,
we have not conducted an independent verification of these costs. The estimated net cost of abandonment after salvage was included
for properties where abandonment costs net of salvage were significant. The estimates of the net abandonment costs furnished by
ECOPETROL were accepted without independent verification.



The proved developed
and undeveloped reserves in this report have been incorporated herein in accordance with ECOPETROL’s plans to develop these
reserves as of December 31, 2011. The implementation of ECOPETROL’s development plans as presented to us and incorporated
herein is subject to the approval process adopted by ECOPETROL’s management. As the result of our inquires during the course
of preparing this report, ECOPETROL has informed us that the development activities included herein have been subjected to and
received the internal approvals required by ECOPETROL’s management at the appropriate local, regional and/or corporate level.
In addition to the internal approvals as noted, certain development activities may still be subject to specific partner AFE processes,
Joint Operating Agreement (JOA) requirements or other administrative approvals external to ECOPETROL. Additionally, ECOPETROL has
informed us that they are not aware of any legal, regulatory, political or economic obstacles that would significantly alter their
plans.



Current costs used
by ECOPETROL were held constant throughout the life of the properties.



Standards of Independence and Professional
Qualification



Ryder Scott is an independent
petroleum engineering consulting firm that has been providing petroleum consulting services throughout the world for over seventy
years. Ryder Scott is employee-owned and maintains offices in Houston, Texas; Denver, Colorado; and Calgary, Alberta, Canada. We
have over eighty engineers and geoscientists on our permanent staff. By virtue of the size of our firm and the large number of
clients for which we provide services, no single client or job represents a material portion of our annual revenue. We do not serve
as officers or directors of any privately-owned or publicly-traded oil and gas company and are separate and independent from the
operating and investment decision-making process of our clients. This allows us to bring the highest level of independence and
objectivity to each engagement for our services.



Ryder Scott actively
participates in industry-related professional societies and organizes an annual public forum focused on the subject of reserves
evaluations and SEC regulations. Many of our staff have authored or co-authored technical papers on the subject of reserves related
topics. We encourage our staff to maintain and enhance their professional skills by actively participating in ongoing continuing
education.





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS















ECOPETROL

January 23, 2012

Page 8





Prior to becoming an
officer of the Company, Ryder Scott requires that staff engineers and geoscientists have received professional accreditation in
the form of a registered or certified professional engineer’s license or a registered or certified professional geoscientist’s
license, or the equivalent thereof, from an appropriate governmental authority or a recognized self-regulating professional organization.



We are independent
petroleum engineers with respect to ECOPETROL. Neither we nor any of our employees have any interest in the subject properties
and neither the employment to do this work nor the compensation is contingent on our estimates of reserves for the properties which
were reviewed.



The results of this
study, presented herein, are based on technical analysis conducted by teams of geoscientists and engineers from Ryder Scott. The
professional qualifications of the undersigned, the technical person primarily responsible for overseeing, reviewing and approving
the evaluation of the reserves information discussed in this report, are included as an attachment to this letter.



Terms
of Usage



The results of our
third party study, presented in report form herein, were prepared in accordance with the disclosure requirements set forth in the
SEC regulations and intended for public disclosure as an exhibit in filings made with the SEC by ECOPETROL.



We have provided ECOPETROL
with a digital version of the original signed copy of this report letter. In the event there are any differences between the digital
version included in filings made by ECOPETROL and the original signed report letter, the original signed report letter shall control
and supersede the digital version.



The data and work papers
used in the preparation of this report are available for examination by authorized parties in our offices. Please contact us if
we can be of further service.



| | Very truly yours,                           
| | --------------------------------------------
| |                                             
| | RYDER SCOTT COMPANY, L. P.                  
| | TBPE Firm Registration No. F-1580           
| |                                             
| | \s\ Herman G. Acuña                         
| |                                             
| | Herman G. Acuna, P.E.                       
| | Texas P.E. License No. 92254                
| | Managing Senior Vice President–International
| |                                             
| | [SEAL]                                      



HGA (DPR)/pl





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS



















Professional Qualifications



The conclusions presented
in this report for Ecopetrol for properties located in Colombia are the result of technical analysis conducted by teams of geoscientists
and engineers from Ryder Scott Company, L.P. Herman G. Acuña was the primary technical person responsible for overseeing
the independent estimation of the reserves, future production and income to render the audit conclusions of the report.



Mr. Acuña, an
employee of Ryder Scott Company L.P. (Ryder Scott) since 1997, is a Managing Senior International Vice President and serves as
an Engineering Group Coordinator responsible for coordinating and supervising staff and consulting engineers of the company in
ongoing reservoir evaluation studies worldwide. Before joining Ryder Scott, Mr. Acuña served in a number of engineering
positions with Exxon. For more information regarding Mr. Acuña’s geographic and job specific experience, please refer
to the Ryder Scott Company website at www.ryderscott.com.



Mr. Acuña earned
a Bachelor (Cum Laude) and a Masters (Magna Cum Laude) of Science degree in Petroleum Engineering from The University of Tulsa
in 1987 and 1989 respectively. He is a registered Professional Engineer in the State of Texas, a member of the Association of International
Petroleum Negotiators (AIPN) and the Society of Petroleum Engineers (SPE).



In addition to gaining
experience and competency through prior work experience, the Texas Board of Professional Engineers requires a minimum of fifteen
hours of continuing education annually, including at least one hour in the area of professional ethics, which Mr. Acuña
fulfills. Mr. Acuña has attended formalized training and conferences including dedicated to the subject of the definitions
and disclosure guidelines contained in the United States Securities and Exchange Commission Title 17, Code of Federal Regulations,
Modernization of Oil and Gas Reporting, Final Rule released January 14, 2009 in the Federal Register. Mr. Acuña has recently
taught various company reserves evaluation schools in Argentina, Bolivia, China, Denmark, Spain, U.S.A and Venezuela. Mr. Acuña
has participated in various capacities in reserves conferences such as being a panelist a the 2008 Trinidad and Tobago’s
Petroleum Conference, delivering the reserves evaluation seminar during IAPG convention in Mendoza, Argentina in 2006 and chairing
the first Reserves Evaluation Conference in the Middle East in Dubai, U.A.E in 2006.



Based on his educational
background, professional training and over 20 years of practical experience in petroleum engineering and the estimation and evaluation
of petroleum reserves, Mr. Acuña has attained the professional qualifications as a Reserves Estimator and Reserves Auditor
set forth in Article III of the “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information”
promulgated by the Society of Petroleum Engineers as of February 19, 2007.





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS













PETROLEUM RESERVES DEFINITIONS



As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (SEC)



PREAMBLE



On January 14, 2009,
the United States Securities and Exchange Commission (SEC) published the “Modernization of Oil and Gas Reporting; Final Rule”
in the Federal Register of National Archives and Records Administration (NARA). The “Modernization of Oil and Gas Reporting;
Final Rule” includes revisions and additions to the definition section in Rule 4-10 of Regulation S-X, revisions and additions
to the oil and gas reporting requirements in Regulation S-K, and amends and codifies Industry Guide 2 in Regulation S-K. The “Modernization
of Oil and Gas Reporting; Final Rule”, including all references to Regulation S-X and Regulation S-K, shall be referred to
herein collectively as the “SEC Regulations”. The SEC Regulations take effect for all filings made with the United
States Securities and Exchange Commission as of December 31, 2009, or after January 1, 2010. Reference should be made to the full
text under Title 17, Code of Federal Regulations, Regulation S-X Part 210, Rule 4-10(a) for the complete definitions, as the following
definitions, descriptions and explanations rely wholly or in part on excerpts from the original document (direct passages excerpted
from the aforementioned SEC document are denoted in italics herein).



Reserves are those
estimated remaining quantities of petroleum which are anticipated to be economically producible, as of a given date, from known
accumulations under defined conditions. All reserve estimates involve some degree of uncertainty. The uncertainty depends chiefly
on the amount of reliable geologic and engineering data available at the time of the estimate and the interpretation of these data.
The relative degree of uncertainty may be conveyed by placing reserves into one of two principal classifications, either proved
or unproved. Unproved reserves are less certain to be recovered than proved reserves and may be further sub-classified as probable
and possible reserves to denote progressively increasing uncertainty in their recoverability. Under the SEC Regulations as of December 31,
2009, or after January 1, 2010, a company may optionally disclose estimated quantities of probable or possible oil and gas reserves
in documents publicly filed with the Commission. The SEC Regulations continue to prohibit disclosure of estimates of oil and gas
resources other than reserves and any estimated values of such resources in any document publicly filed with the Commission unless
such information is required to be disclosed in the document by foreign or state law as noted in §229.1202 Instruction to
Item 1202.



Reserves estimates
will generally be revised as additional geologic or engineering data become available or as economic conditions change.



Reserves may be attributed
to either natural energy or improved recovery methods. Improved recovery methods include all methods for supplementing natural
energy or altering natural forces in the reservoir to increase ultimate recovery. Examples of such methods are pressure maintenance,
natural gas cycling, waterflooding, thermal methods, chemical flooding, and the use of miscible and immiscible displacement fluids.
Other improved recovery methods may be developed in the future as petroleum technology continues to evolve.



Reserves may be attributed
to either conventional or unconventional petroleum accumulations. Petroleum accumulations are considered as either conventional
or unconventional based on the nature of their in-place characteristics, extraction method applied, or degree of processing prior
to sale. Examples of unconventional petroleum accumulations include coalbed or coalseam methane (CBM/CSM), basin-centered gas,
shale gas, gas hydrates, natural bitumen and oil shale deposits. These unconventional accumulations may require specialized extraction
technology and/or significant processing prior to sale.





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS















PETROLEUM RESERVES DEFINITIONS

Page 2





Reserves do not include
quantities of petroleum being held in inventory.



Because of the differences
in uncertainty, caution should be exercised when aggregating quantities of petroleum from different reserves categories.



RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(26) defines reserves as follows:



Reserves.Reserves are
estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date,
by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation
that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and
gas or related substances to market, and all permits and financing required to implement the project.



Note to paragraph (a)(26): Reserves
should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated
and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation
by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir, or negative test results). Such areas
may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).



PROVED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(22) defines proved oil and gas reserves as follows:



Proved oil and gas reserves.Proved
oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated
with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing
economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right
to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic
methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably
certain that it will commence the project within a reasonable time.



(i) The area of the reservoir
considered as proved includes:



(A) The area identified by drilling
and limited by fluid contacts, if any, and



(B) Adjacent undrilled portions
of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible
oil or gas on the basis of available geoscience and engineering data.



(ii) In the absence of data
on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration
unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS















PETROLEUM RESERVES DEFINITIONS

Page 3





PROVED RESERVES (SEC DEFINITIONS)
CONTINUED



(iii) Where direct observation
from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved
oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance
data and reliable technology establish the higher contact with reasonable certainty.

(iv) Reserves which can be
produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are
included in the proved classification when:



(A) Successful testing by a
pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of
an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable
certainty of the engineering analysis on which the project or program was based; and



(B) The project has been approved
for development by all necessary parties and entities, including governmental entities.



(v) Existing economic conditions
include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price
during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic
average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements,
excluding escalations based upon future conditions.





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS













RESERVES STATUS DEFINITIONS AND GUIDELINES



As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (SEC)



and



PETROLEUM RESOURCES MANAGEMENT SYSTEM
(SPE-PRMS)

Sponsored and Approved by:

SOCIETY OF PETROLEUM ENGINEERS (SPE),

WORLD PETROLEUM COUNCIL (WPC)

AMERICAN ASSOCIATION OF PETROLEUM GEOLOGISTS
(AAPG)

SOCIETY OF PETROLEUM EVALUATION ENGINEERS
(SPEE)



Reserves status categories
define the development and producing status of wells and reservoirs. Reference should be made to Title 17, Code of Federal Regulations,
Regulation S-X Part 210, Rule 4-10(a) and the SPE-PRMS as the following reserves status definitions are based on excerpts from
the original documents (direct passages excerpted from the aforementioned SEC and SPE-PRMS documents are denoted in italics herein).



DEVELOPED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(6) defines developed oil and gas reserves as follows:



Developed oil and gas reserves
are reserves of any category that can be expected to be recovered:



(i) Through existing wells with
existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost
of a new well; and



(ii) Through
installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means
not involving a well.



Developed Producing (SPE-PRMS Definitions)



While not a requirement
for disclosure under the SEC regulations, developed oil and gas reserves may be further sub-classified according to the guidance
contained in the SPE-PRMS as Producing or Non-Producing.



Developed Producing
Reserves

Developed Producing Reserves
are expected to be recovered from completion intervals that are open and producing at the time of the estimate.



Improved recovery reserves
are considered producing only after the improved recovery project is in operation.





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS















RESERVES STATUS DEFINITIONS AND GUIDELINES

Page 2





Developed
Non-Producing

Developed Non-Producing Reserves
include shut-in and behind-pipe reserves.



Shut-In

Shut-in Reserves are expected
to be recovered from:

| | (1) | completion intervals which are open at the time of the estimate but which have not yet started
producing;
| | --- | ---------------------------------------------------------------------------------------------------------

| | (2) | wells which were shut-in for market conditions or pipeline connections; or
| | --- | --------------------------------------------------------------------------

| | (3) | wells not capable of production for mechanical reasons.
| | --- | -------------------------------------------------------



Behind-Pipe

Behind-pipe Reserves are expected
to be recovered from zones in existing wells which will require additional completion work or future re-completion prior to start
of production.



In all cases, production can
be initiated or restored with relatively low expenditure compared to the cost of drilling a new well.



UNDEVELOPED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(31) defines undeveloped oil and gas reserves as follows:



Undeveloped oil and gas reserves
are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where
a relatively major expenditure is required for recompletion.



(i)
Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain
of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic
producibility at greater distances.



(ii) Undrilled locations can
be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to
be drilled within five years, unless the specific circumstances, justify a longer time.



(iii) Under no circumstances
shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved
recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir
or an analogous reservoir, as defined in paragraph (a)(2) of this section, or by other evidence using reliable technology establishing
reasonable certainty.





RYDER SCOTT COMPANY PETROLEUM CONSULTANTS

















|                                        |                    |            |                          
|--------------------------------------- | ------------------ | ---------- | -------------------------
|                                        |                   
|TBPE REGISTERED ENGINEERING FIRM F-1580 | FAX (713) 651-0849
|                                        | 1100 LOUISIANA     | SUITE 3800 | HOUSTON, TEXAS 77002-5235







January 23, 2012



HOCOL S.A.

Carrera 7 No. 113-43 Piso 16

Bogota, D.C., Colombia



Ladies and Gentlemen:



At the request of HOCOL
S.A. (HOCOL), Ryder Scott Company (Ryder Scott) has prepared an audit of the proved reserves attributable to certain properties
of HOCOL, as of December 31, 2011. The subject properties are located in the country of Colombia.



For the purpose of
the audit, Ryder Scott estimated the reserves based on the definitions and disclosure guidelines of the United States Securities
and Exchange Commission (SEC) contained in Title 17, Code of Federal Regulations, Modernization of Oil and Gas Reporting, Final
Rule released January 14, 2009 in the Federal Register (SEC regulations). Our third party study, completed on February 4, 2012
and presented herein, was prepared for public disclosure by HOCOL in filings made with the SEC in accordance with the disclosure
requirements set forth in the SEC regulations.



The properties evaluated
by Ryder Scott account for a portion of HOCOL’s total net proved reserves as of December 31, 2011. Based on information provided
by HOCOL, the third party estimate conducted by Ryder Scott addresses 79percent of the proved
developed and undeveloped net liquid hydrocarbon of HOCOL.



The estimated reserve
amounts presented in this report, as of December 31, 2011, are related to hydrocarbon prices. The hydrocarbon prices used in the
preparation of this report are based on the average prices during the 12-month period prior to the ending date of the period covered
in this report, determined as the unweighted arithmetic averages of the prices in effect on the first-day-of-the-month for each
month within such period, unless prices were defined by contractual arrangements, as required by the SEC regulations. Actual future
prices may vary significantly from the prices required by SEC regulations; therefore, volumes of reserves actually recovered may
differ significantly from the estimated quantities presented in this report. The results of Ryder Scott’s estimates are summarized
below.



SEC PARAMETERS

Estimated Net Reserves

Certain Interests of

HOCOL

|As of December 31, 2011
|-----------------------



|                          |  | Proved    |       
|------------------------- |  | --------- | ------
|                          |  |           |       
|                          |  | Developed |       
|Net Remaining Reserves    |  |           |       
|Oil/Condensate – MBarrels |  |           | 26,547



|SUITE  600,  1015  4TH  STREET, S.W. CALGARY, ALBERTA T2R 1J4      TEL (403) 262-2799 | FAX (403) 262-2790         
|------------------------------------------------------------------------------------- | ---------------------------
|621  17TH STREET, SUITE 1550                                                          | DENVER, COLORADO 80293-1501











HOCOL S.A.

January 23, 2012

Page 2



Liquid hydrocarbons are
expressed in thousand standard 42 gallon barrels. These proved reserves volumes are exclusive of royalties.



Reserves Included in This Report



The proved reserves
included herein conform to the definition as set forth in the Securities and Exchange Commission’s Regulations Part 210.4-10(a).
An abridged version of the SEC reserves definitions from 210.4-10(a) entitled “Petroleum Reserves Definitions” is included
as an attachment to this report. The various proved reserve status categories are defined under
the attachment entitled “Petroleum Reserves Definitions” in this report.



No attempt was made
to quantify or otherwise account for any accumulated gas production imbalances that may exist. The provedgas volumes included herein do not attribute gas consumed in operations as reserves. Non-hydrocarbon or inert gas volumes
have been excluded from the reserves reported herein.



Reserves are those
estimated remaining quantities of petroleum that are anticipated to be economically producible, as of a given date, from known
accumulations under defined conditions. All reserve estimates involve an assessment of the uncertainty
relating the likelihood that the actual remaining quantities recovered will be greater or less than the estimated quantities determined
as of the date the estimate is made.The uncertainty depends chiefly on the amount of reliable geologic and engineering
data available at the time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed
by placing reserves into one of two principal classifications, either proved or unproved. Unproved reserves are less certain to
be recovered than proved reserves, and may be further sub-classified as probable and possible reserves to denote progressively
increasing uncertainty in their recoverability. At HOCOL’s request, this report addresses only the proved reserves attributable
to the properties evaluated herein.



Proved oil and gas
reserves are “those quantities of oil and gas which, by analysis of geoscience and engineering data, can be estimated with
reasonable certainty to be economically producible from a given date forward.” The provedreserves
included herein were estimated using deterministic methods. If deterministic methods are used, the
SEC has defined reasonable certainty for proved reserves as a “high degree of confidence that the quantities will be recovered.”



Provedreserve estimates will generally be revised onlyas additional geologic or engineering
data become available or as economic conditions change. For proved reserves, the SEC states that “as
changes due to increased availability of geoscience (geological, geophysical, and geochemical), engineering, and economic data
are made to the estimated ultimate recovery (EUR) with time, reasonably certain EUR is much more likely to increase or remain constant
than to decrease.” Moreover, estimates of proved reserves may be revised as a result of future operations, effects of regulation
by governmental agencies or geopolitical or economic risks. Therefore, the proved reserves included in this report are estimates
only and should not be construed as being exact quantities, and if recovered, the revenues therefrom, and the actual costs related
thereto, could be more or less than the estimated amounts.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











HOCOL S.A.

January 23, 2012

Page 3



The
proved reserves reported herein are limited to the period prior to expiration of current contracts providing the legal rights to
produce, or a revenue interest in such production, unless evidence indicates that contract renewal is reasonably certain. Furthermore,
properties in the different countries may be subjected to significantly varying contractual fiscal terms that affect the
net revenue to HOCOL for the production of these volumes. The prices and economic return received for these net volumes can vary
significantly based on the terms of these contracts. Therefore, when applicable, Ryder Scott reviewed the fiscal terms of such
contracts and discussed with HOCOL the net economic benefit attributed to such operations for the determination of the net hydrocarbon
volumes and income thereof. Ryder Scott has not conductedan exhaustive audit or verification
of such contractual information. Neither our review of such contractual information nor our acceptance of HOCOL’s representations
regarding such contractual information should be construed as a legal opinion on this matter.



Ryder
Scott did not evaluate the country and geopolitical risks in the countries where HOCOL operates or has interests. HOCOL’s
operations may be subject to various levels of governmental controls and regulations. These controls andregulations may
include, but may not be limited to, matters relating to land tenure and leasing, the legal rights to produce hydrocarbons including
the granting, extension or termination of production sharing contracts, the fiscal terms of various production sharing contracts,
drilling and production practices, environmental protection, marketing and pricing policies, royalties, various taxes and levies
including income tax, and foreign trade and investment and are subject to change from time to time. Such changes in governmental
regulations and policies may cause volumes ofproved reserves actually recovered and amounts of provedincome actually received to differ significantly from the estimated quantities.



The estimates of proved
reserves presented herein were based upon a detailed study of the properties in which HOCOL owns an interest; however, we
have not made any field examination of the properties. No consideration was given in this report to potential environmental liabilities
that may exist nor were any costs included for potential liabilities to restore and clean up damages, if any, caused by past operating
practices.



Estimates of Reserves



The estimation of reserves
involves two distinct determinations. The first determination results in the estimation of the quantities of recoverable oil and
gas and the second determination results in the estimation of the uncertainty associated with those estimated quantities in accordance
with the definitions set forth by the Securities and Exchange Commission’s Regulations Part 210.4-10(a). The process of estimating
the quantities of recoverable oil and gas reserves relies on the use of certain generally accepted analytical procedures. These
analytical procedures fall into three broad categories or methods: (1) performance-based methods; (2) volumetric-based methods;
and (3) analogy. These methods may be used singularly or in combination by the reserve evaluator in the process of estimating the
quantities of reserves. Reserve evaluators must select the method or combination of methods which in their professional judgment
is most appropriate given the nature and amount of reliable geoscience and engineering data available at the time of the estimate,
the established or anticipated performance characteristics of the reservoir being evaluated and the stage of development or producing
maturity of the property.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











HOCOL S.A.

January 23, 2012

Page 4



In many cases, the
analysis of the available geoscience and engineering data and the subsequent interpretation of this data may indicate a range of
possible outcomes in an estimate, irrespective of the method selected by the evaluator. When a range in the quantity of reserves
is identified, the evaluator must determine the uncertainty associated with the incremental quantities of the reserves. If the
reserve quantities are estimated using the deterministic incremental approach, the uncertainty for each discrete incremental quantity
of the reserves is addressed by the reserve category assigned by the evaluator. Therefore, it is the categorization of reserve
quantities as proved, probable and/or possible that addresses the inherent uncertainty in the estimated quantities reported. For
proved reserves, uncertainty is defined by the SEC as reasonable certainty wherein the “quantities actually recovered are
much more likely than not to be achieved.” The SEC states that “probable reserves are those additional reserves that
are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.”
The SEC states that “possible reserves are those additional reserves that are less certain to be recovered than probable
reserves and the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable
plus possible reserves.” All quantities of reserves within the same reserve category must meet the SEC definitions as noted
above.



Estimates of reserves
quantities and their associated reserve categories may be revised in the future as additional geoscience or engineering data become
available. Furthermore, estimates of reserves quantities and their associated reserve categories may also be revised due to other
factors such as changes in economic conditions, results of future operations, effects of regulation by governmental agencies or
geopolitical or economic risks as previously noted herein.



The proved reserves
for the properties included herein were estimated by performance methods, the volumetric method, or a combination of performance
and volumetric methods. The following table summarizes the approximate percent of reserves estimated by each of these methods.



Approximate Percent Proved Reserves Estimated
by the Various Methods



|            |  | Liquid Hydrocarbons |   
|----------- |  | ------------------- | --
|Method      |  | Developed           |   
|Volumetric  |  |                     | - 
|Performance |  |                     | 99
|Analogy     |  |                     | - 
|Combination |  |                     | 1 



These performance methods
include, but may not be limited to, decline curve analysis and analogy which utilized extrapolations of historical production and
pressure data available through November, 2011 in those cases where such data were considered to be definitive. The data utilized
in this analysis were supplied to Ryder Scott by HOCOL and were considered sufficient for the purpose thereof. The volumetric method
was used where there were inadequate historical performance data to establish a definitive trend and where the use of production
performance data as a basis for the reserve estimates was considered to be inappropriate. The volumetric analysis utilized pertinent
well and seismic data supplied to Ryder Scott by HOCOL that were available through November, 2011. The data utilized from the well
and seismic data incorporated into our volumetric analysis were considered sufficient for the purpose thereof.



To estimate economically
recoverableprovedoil and gas reserves and related future net cash
flows, we consider many factors and assumptions including, but not limited to, the use of reservoir parameters derived from
geological, geophysical and engineering data that cannot be measured directly, economic criteria based on current costs and SEC
pricing requirements, and forecasts of future production rates. Under the SEC regulations 210.4-10(a)(22)(v)
and (26), proved reserves must be anticipated to be economically producible from a given date forward based on existing economic
conditions including the prices and costs at which economic producibility from a reservoir is to be determined.While it
may reasonably be anticipated that the future prices received for the sale of production and the operating costs and other costs
relating to such production may increase or decrease from those under existing economic conditions, such changes were, in accordance
with rules adopted by the SEC, omitted from consideration in making this evaluation.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











HOCOL S.A.

January 23, 2012

Page 5



HOCOL has informed
us that they have furnished us all of the material accounts, records, geological and engineering data, and reports and other data
required for this investigation. In preparing our forecast of future proved production and income, we have relied upon data furnished
by HOCOL with respect to property interests owned, production and well tests from examined wells, normal direct costs of operating
the wells or leases, other costs such as transportation and/or processing fees, ad valorem and production taxes, recompletion and
development costs, abandonment costs after salvage, product prices based on the SEC regulations, adjustments or differentials to
product prices, geological structural and isochore maps, well logs, core analyses, and pressure measurements. Ryder Scott reviewed
such factual data for its reasonableness; however, we have not conducted an independent verification of the data furnished by HOCOL.
We consider the factual data used in this report appropriate and sufficient for the purpose of preparing the estimates of reserves
herein.



In summary, we consider
the assumptions, data, methods and analytical procedures used in this report appropriate for the purpose hereof, and we have used
all such methods and procedures that we consider necessary and appropriate to prepare the estimates of reserves herein. The proved
reserves included herein were determined in conformance with the United States Securities and Exchange Commission (SEC) Modernization
of Oil and Gas Reporting; Final Rule, including all references to Regulation S-X and Regulation S-K, referred to herein collectively
as the “SEC Regulations.” In our opinion, the proved reserves presented in this report comply with the definitions,
guidelines and disclosure requirements as required by the SEC regulations.



Future Production Rates



For wells currently
on production, our forecasts of future production rates are based on historical performance data. If no production decline trend
has been established, future production rates were held constant, or adjusted for the effects of curtailment where appropriate,
until a decline in ability to produce was anticipated. An estimated rate of decline was then applied to depletion of the reserves.
If a decline trend has been established, this trend was used as the basis for estimating future production rates.



Test data and other
related information were used to estimate the anticipated initial production rates for those wells or locations that are not currently
producing. For reserves not yet on production, sales were estimated to commence at an anticipated date furnished by HOCOL. Wells
or locations that are not currently producing may start producing earlier or later than anticipated in our estimates due to unforeseen
factors causing a change in the timing to initiate production. Such factors may include delays due to weather, the availability
of rigs, the sequence of drilling, completing and/or recompleting wells and/or constraints set by regulatory bodies.



The future production
rates from wells currently on production or wells or locations that are not currently producing may be more or less than estimated
because of changes including, but not limited to, reservoir performance, operating conditions related to surface facilities, compression
and artificial lift, pipeline capacity and/or operating conditions, producing market demand and/or allowables or other constraints
set by regulatory bodies.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











HOCOL S.A.

January 23, 2012

Page 6



Hydrocarbon Prices



The hydrocarbon prices
used herein are based on SEC price parameters using the average prices during the 12-month period prior to the ending date of the
period covered in this report, determined as the unweighted arithmetic averages of the prices in effect on the first-day-of-the-month
for each month within such period, unless prices were defined by contractual arrangements. For hydrocarbon products sold under
contract, the contract prices, including fixed and determinable escalations, exclusive of inflation adjustments, were used until
expiration of the contract. Upon contract expiration, the prices were adjusted to the 12-month unweighted arithmetic average as
previously described.



HOCOL furnished us
with the above mentioned average prices in effect on December 31, 2011. These initial SEC hydrocarbon prices were determined using
the 12-month average first-day-of-the-month benchmark prices appropriate to the geographic area where the hydrocarbons are sold.
These benchmark prices are prior to the adjustments for differentials as described herein. The table below summarizes the “benchmark
prices” and “price reference” used for the geographic area included in the report. In certain geographic areas,
the price reference and benchmark prices may be defined by contractual arrangements. In cases where there are numerous contracts
or price references within the same geographic area, the benchmark price is represented by the unweighted arithmetic average of
the initial 12-month average first-day-of-the-month benchmark prices used.



The
product prices that were actually used to determine the future gross revenue for each property reflect adjustments to the benchmark
prices for gravity, quality, local conditions and/or distance from market, referred to herein as “differentials.” 
The differentials used in the preparation of this report were furnished to us by HOCOL.The
differentials furnished to us were accepted as factual data and reviewed by us for their reasonableness; however, we have not conducted
an independent verification of the data used by HOCOL to determine these differentials.



In addition, the following
table summarizes the net volume weighted benchmark prices adjusted for differentials and referred to herein as the “average
realized prices.” The average realized prices shown in the table below were determined from the total future gross revenue
before production taxes and the total net reserves for the geographic area and presented in accordance with SEC disclosure requirements
for each of the geographic areas included in the report.



|                |  |                |  |                          |  | Average   |           | Average 
|--------------- |  | -------------- |  | ------------------------ |  | --------- | --------- | --------
|                |  |                |  | Price                    |  | Benchmark |           | Realized
|Geographic Area |  | Product        |  | Reference                |  | Prices    |           | Prices  
|Colombia        |  | Oil/Condensate |  | WTI Cushing, Okla - SPOT |  | $         | 96.19/Bbl |         



For the properties
reviewed by Ryder Scott, approximately 100 percent of the future gross income is derived from the sale of oil.



Costs



Operating
costs used in our evaluation were based on the operating expense reports of HOCOL and include only those costs directly applicable
to the evaluated assets. The operating costs include a portion ofgeneral and administrative costs allocated directly to
the leases and wells. The operating costs furnished to us were accepted as factual data and reviewed by us for their reasonableness;
however, we have not conducted an independent verification of the operating cost data used by HOCOL. No deduction was made for
loan repayments, interestexpenses, or exploration and development prepayments that were not charged
directly to the assets.



Development costs were
furnished to us by HOCOL and are based on authorizations for expenditure for the proposed work or actual costs for similar projects.
The development costs furnished to us were accepted as factual data and reviewed by us for their reasonableness; however, we have
not conducted an independent verification of these costs. The estimated net cost of abandonment after salvage was included for
properties where abandonment costs net of salvage were significant. The estimates of the net abandonment costs furnished by HOCOL
were accepted without independent verification.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











HOCOL S.A.

January 23, 2012

Page 7



The proved developed
and undeveloped reserves in this report have been incorporated herein in accordance with HOCOL’s plans to develop these reserves
as of December 31, 2011. The implementation of HOCOL’s development plans as presented to us and incorporated herein is subject
to the approval process adopted by HOCOL’s management. As the result of our inquires during the course of preparing this
report, HOCOL has informed us that the development activities included herein have been subjected to and received the internal
approvals required by HOCOL’s management at the appropriate local, regional and/or corporate level. In addition to the internal
approvals as noted, certain development activities may still be subject to specific partner AFE processes, Joint Operating Agreement
(JOA) requirements or other administrative approvals external to HOCOL. Additionally, HOCOL has informed us that they are not aware
of any legal, regulatory, political or economic obstacles that would significantly alter their plans.



Current costs used
by HOCOL were held constant throughout the life of the properties.



Standards of Independence and Professional
Qualification



Ryder Scott is an independent
petroleum engineering consulting firm that has been providing petroleum consulting services throughout the world for over seventy
years. Ryder Scott is employee-owned and maintains offices in Houston, Texas; Denver, Colorado; and Calgary, Alberta, Canada. We
have over eighty engineers and geoscientists on our permanent staff. By virtue of the size of our firm and the large number of
clients for which we provide services, no single client or job represents a material portion of our annual revenue. We do not serve
as officers or directors of any privately-owned or publicly-traded oil and gas company and are separate and independent from the
operating and investment decision-making process of our clients. This allows us to bring the highest level of independence and
objectivity to each engagement for our services.



Ryder Scott actively
participates in industry-related professional societies and organizes an annual public forum focused on the subject of reserves
evaluations and SEC regulations. Many of our staff have authored or co-authored technical papers on the subject of reserves related
topics. We encourage our staff to maintain and enhance their professional skills by actively participating in ongoing continuing
education.



Prior to becoming an
officer of the Company, Ryder Scott requires that staff engineers and geoscientists have received professional accreditation in
the form of a registered or certified professional engineer’s license or a registered or certified professional geoscientist’s
license, or the equivalent thereof, from an appropriate governmental authority or a recognized self-regulating professional organization.



We are independent
petroleum engineers with respect to HOCOL. Neither we nor any of our employees have any interest in the subject properties and
neither the employment to do this work nor the compensation is contingent on our estimates of reserves for the properties which
were reviewed.



The results of this
study, presented herein, are based on technical analysis conducted by teams of geoscientists and engineers from Ryder Scott. The
professional qualifications of the undersigned, the technical person primarily responsible for overseeing, reviewing and approving
the evaluation of the reserves information discussed in this report, are included as an attachment to this letter.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











HOCOL S.A.

January 23, 2012

Page 8



Terms
of Usage



The results of our
third party study, presented in report form herein, were prepared in accordance with the disclosure requirements set forth in the
SEC regulations and intended for public disclosure as an exhibit in filings made with the SEC by HOCOL and its affiliated companies
ECOPETROL.



We have provided HOCOL
and ECOPETROL with a digital version of the original signed copy of this report letter. In the event there are any differences
between the digital version included in filings made by HOCOL or ECOPETROL and the original signed report letter, the original
signed report letter shall control and supersede the digital version.



The data and work papers
used in the preparation of this report are available for examination by authorized parties in our offices. Please contact us if
we can be of further service.



|             | Very truly yours,                           
|------------ | --------------------------------------------
|             |                                             
|             | RYDER SCOTT COMPANY, L. P.                  
|             | TBPE Firm Registration No. F-1580           
|             |                                             
|             | \s\ Herman G. Acuña                         
|             |                                             
|             | Herman G. Acuna, P.E.                       
|             | Texas P.E. License No. 92254                
|             | Managing Senior Vice President–International
|             |                                             
|             | [SEAL]                                      
|             |                                             
|HGA (DPR)/pl |                                             



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











Professional Qualifications



The conclusions presented
in this report for HOCOL for properties located in Colombia are the result of technical analysis conducted by teams of geoscientists
and engineers from Ryder Scott Company, L.P. Herman G. Acuña was the primary technical person responsible for overseeing
the independent estimation of the reserves, future production and income to render the audit conclusions of the report.



Mr. Acuña, an
employee of Ryder Scott Company L.P. (Ryder Scott) since 1997, is a Managing Senior International Vice President and serves as
an Engineering Group Coordinator responsible for coordinating and supervising staff and consulting engineers of the company in
ongoing reservoir evaluation studies worldwide. Before joining Ryder Scott, Mr. Acuña served in a number of engineering
positions with Exxon. For more information regarding Mr. Acuña’s geographic and job specific experience, please refer
to the Ryder Scott Company website at www.ryderscott.com.



Mr. Acuña earned
a Bachelor (Cum Laude) and a Masters (Magna Cum Laude) of Science degree in Petroleum Engineering from The University of Tulsa
in 1987 and 1989 respectively. He is a registered Professional Engineer in the State of Texas, a member of the Association of International
Petroleum Negotiators (AIPN) and the Society of Petroleum Engineers (SPE).



In addition to gaining
experience and competency through prior work experience, the Texas Board of Professional Engineers requires a minimum of fifteen
hours of continuing education annually, including at least one hour in the area of professional ethics, which Mr. Acuña
fulfills. Mr. Acuña has attended formalized training and conferences including dedicated to the subject of the definitions
and disclosure guidelines contained in the United States Securities and Exchange Commission Title 17, Code of Federal Regulations,
Modernization of Oil and Gas Reporting, Final Rule released January 14, 2009 in the Federal Register. Mr. Acuña has recently
taught various company reserves evaluation schools in Argentina, Bolivia, China, Denmark, Spain, U.S.A and Venezuela. Mr. Acuña
has participated in various capacities in reserves conferences such as being a panelist a the 2008 Trinidad and Tobago’s
Petroleum Conference, delivering the reserves evaluation seminar during IAPG convention in Mendoza, Argentina in 2006 and chairing
the first Reserves Evaluation Conference in the Middle East in Dubai, U.A.E in 2006.



Based on his educational
background, professional training and over 20 years of practical experience in petroleum engineering and the estimation and evaluation
of petroleum reserves, Mr. Acuña has attained the professional qualifications as a Reserves Estimator and Reserves Auditor
set forth in Article III of the “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information”
promulgated by the Society of Petroleum Engineers as of February 19, 2007.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











PETROLEUM RESERVES DEFINITIONS



As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (SEC)



PREAMBLE



On January 14, 2009,
the United States Securities and Exchange Commission (SEC) published the “Modernization of Oil and Gas Reporting; Final Rule”
in the Federal Register of National Archives and Records Administration (NARA). The “Modernization of Oil and Gas Reporting;
Final Rule” includes revisions and additions to the definition section in Rule 4-10 of Regulation S-X, revisions and additions
to the oil and gas reporting requirements in Regulation S-K, and amends and codifies Industry Guide 2 in Regulation S-K. The “Modernization
of Oil and Gas Reporting; Final Rule”, including all references to Regulation S-X and Regulation S-K, shall be referred to
herein collectively as the “SEC Regulations”. The SEC Regulations take effect for all filings made with the United
States Securities and Exchange Commission as of December 31, 2009, or after January 1, 2010. Reference should be made to the full
text under Title 17, Code of Federal Regulations, Regulation S-X Part 210, Rule 4-10(a) for the complete definitions, as the following
definitions, descriptions and explanations rely wholly or in part on excerpts from the original document (direct passages excerpted
from the aforementioned SEC document are denoted in italics herein).



Reserves are those
estimated remaining quantities of petroleum which are anticipated to be economically producible, as of a given date, from known
accumulations under defined conditions. All reserve estimates involve some degree of uncertainty. The uncertainty depends chiefly
on the amount of reliable geologic and engineering data available at the time of the estimate and the interpretation of these data.
The relative degree of uncertainty may be conveyed by placing reserves into one of two principal classifications, either proved
or unproved. Unproved reserves are less certain to be recovered than proved reserves and may be further sub-classified as probable
and possible reserves to denote progressively increasing uncertainty in their recoverability. Under the SEC Regulations as of December 31,
2009, or after January 1, 2010, a company may optionally disclose estimated quantities of probable or possible oil and gas reserves
in documents publicly filed with the Commission. The SEC Regulations continue to prohibit disclosure of estimates of oil and gas
resources other than reserves and any estimated values of such resources in any document publicly filed with the Commission unless
such information is required to be disclosed in the document by foreign or state law as noted in §229.1202 Instruction to
Item 1202.



Reserves estimates
will generally be revised as additional geologic or engineering data become available or as economic conditions change.



Reserves may be attributed
to either natural energy or improved recovery methods. Improved recovery methods include all methods for supplementing natural
energy or altering natural forces in the reservoir to increase ultimate recovery. Examples of such methods are pressure maintenance,
natural gas cycling, waterflooding, thermal methods, chemical flooding, and the use of miscible and immiscible displacement fluids.
Other improved recovery methods may be developed in the future as petroleum technology continues to evolve.



Reserves may be attributed
to either conventional or unconventional petroleum accumulations. Petroleum accumulations are considered as either conventional
or unconventional based on the nature of their in-place characteristics, extraction method applied, or degree of processing prior
to sale. Examples of unconventional petroleum accumulations include coalbed or coalseam methane (CBM/CSM), basin-centered gas,
shale gas, gas hydrates, natural bitumen and oil shale deposits. These unconventional accumulations may require specialized extraction
technology and/or significant processing prior to sale.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











PETROLEUM RESERVERS DEFINTIONS

Page 2



Reserves do not include
quantities of petroleum being held in inventory.



Because of the differences
in uncertainty, caution should be exercised when aggregating quantities of petroleum from different reserves categories.



RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(26) defines reserves as follows:



Reserves.Reserves are
estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date,
by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation
that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and
gas or related substances to market, and all permits and financing required to implement the project.



Note to paragraph (a)(26): Reserves
should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated
and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation
by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir, or negative test results). Such areas
may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).



PROVED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(22) defines proved oil and gas reserves as follows:



Proved oil and gas reserves.Proved
oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated
with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing
economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right
to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic
methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably
certain that it will commence the project within a reasonable time.



(i) The area of the reservoir
considered as proved includes:



(A) The area identified by drilling
and limited by fluid contacts, if any, and



(B) Adjacent undrilled portions
of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible
oil or gas on the basis of available geoscience and engineering data.



(ii) In the absence of data
on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration
unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











PETROLEUM RESERVERS DEFINTIONS

Page 3



PROVED RESERVES (SEC DEFINITIONS)
CONTINUED



(iii) Where direct observation
from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved
oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance
data and reliable technology establish the higher contact with reasonable certainty.

(iv) Reserves which can be
produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are
included in the proved classification when:



(A) Successful testing by a
pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of
an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable
certainty of the engineering analysis on which the project or program was based; and



(B) The project has been approved
for development by all necessary parties and entities, including governmental entities.



(v) Existing economic conditions
include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price
during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic
average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements,
excluding escalations based upon future conditions.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











RESERVES STATUS DEFINITIONS AND GUIDELINES



As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (SEC)



and



PETROLEUM RESOURCES MANAGEMENT SYSTEM
(SPE-PRMS)

Sponsored and Approved by:

SOCIETY OF PETROLEUM ENGINEERS (SPE),

WORLD PETROLEUM COUNCIL (WPC)

AMERICAN ASSOCIATION OF PETROLEUM GEOLOGISTS
(AAPG)

SOCIETY OF PETROLEUM EVALUATION ENGINEERS
(SPEE)



Reserves status categories
define the development and producing status of wells and reservoirs. Reference should be made to Title 17, Code of Federal Regulations,
Regulation S-X Part 210, Rule 4-10(a) and the SPE-PRMS as the following reserves status definitions are based on excerpts from
the original documents (direct passages excerpted from the aforementioned SEC and SPE-PRMS documents are denoted in italics herein).



DEVELOPED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(6) defines developed oil and gas reserves as follows:



Developed oil and gas reserves
are reserves of any category that can be expected to be recovered:



(i) Through existing wells with
existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost
of a new well; and



(ii) Through
installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means
not involving a well.



Developed Producing (SPE-PRMS Definitions)



While not a requirement
for disclosure under the SEC regulations, developed oil and gas reserves may be further sub-classified according to the guidance
contained in the SPE-PRMS as Producing or Non-Producing.



Developed Producing
Reserves

Developed Producing Reserves
are expected to be recovered from completion intervals that are open and producing at the time of the estimate.



Improved recovery reserves
are considered producing only after the improved recovery project is in operation.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











RESERVES STATUS DEFINTIONS
AND GUIDELINES

Page 2



Developed
Non-Producing

Developed Non-Producing Reserves
include shut-in and behind-pipe reserves.



Shut-In

Shut-in Reserves are expected
to be recovered from:

| | (1) | completion intervals which are open at the time of the estimate but which have not yet started
producing;
| | --- | ---------------------------------------------------------------------------------------------------------

| | (2) | wells which were shut-in for market conditions or pipeline connections; or
| | --- | --------------------------------------------------------------------------

| | (3) | wells not capable of production for mechanical reasons.
| | --- | -------------------------------------------------------



Behind-Pipe

Behind-pipe Reserves are expected
to be recovered from zones in existing wells which will require additional completion work or future re-completion prior to start
of production.



In all cases, production can
be initiated or restored with relatively low expenditure compared to the cost of drilling a new well.



UNDEVELOPED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(31) defines undeveloped oil and gas reserves as follows:



Undeveloped oil and gas reserves
are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where
a relatively major expenditure is required for recompletion.



| | (i) | Reserves on undrilled acreage shall be limited to those directly offsetting development spacing
areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes
reasonable certainty of economic producibility at greater distances.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(ii) Undrilled locations can
be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to
be drilled within five years, unless the specific circumstances, justify a longer time.



(iii) Under no circumstances
shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved
recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir
or an analogous reservoir, as defined in paragraph (a)(2) of this section, or by other evidence using reliable technology establishing
reasonable certainty.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS















|                                        |                    |            |                          
|--------------------------------------- | ------------------ | ---------- | -------------------------
|                                        |                   
|TBPE REGISTERED ENGINEERING FIRM F-1580 | FAX (713) 651-0849
|                                        | 1100 LOUISIANA     | SUITE 3800 | HOUSTON, TEXAS 77002-5235





February 7, 2012



Mr. Oscar Valbuena

ECOPETROL

Cra. 13 No. 36-24

Edificio Principal, Piso 7

Bogotá, D.C., Colombia



Mr. Valbuena:



At the request of ECOPETROL,
Ryder Scott Company (Ryder Scott) has prepared an audit of the proved reserves attributable to their interest in properties operated
by HOCOL, as of December 31, 2011. The subject properties are located in the country of Colombia.



For the purpose of
the audit, Ryder Scott estimated the reserves based on the definitions and disclosure guidelines of the United States Securities
and Exchange Commission (SEC) contained in Title 17, Code of Federal Regulations, Modernization of Oil and Gas Reporting, Final
Rule released January 14, 2009 in the Federal Register (SEC regulations). Our third party study, completed on February 4, 2012
and presented herein, was prepared for public disclosure by ECOPETROL in filings made with the SEC in accordance with the disclosure
requirements set forth in the SEC regulations. The properties evaluated by RyderScott account
for all net reserves operated by HOCOL



The estimated reserve
amounts presented in this report, as of December 31, 2011, are related to hydrocarbon prices. The hydrocarbon prices used in the
preparation of this report are based on the average prices during the 12-month period prior to the ending date of the period covered
in this report, determined as the unweighted arithmetic averages of the prices in effect on the first-day-of-the-month for each
month within such period, unless prices were defined by contractual arrangements, as required by the SEC regulations. Actual future
prices may vary significantly from the prices required by SEC regulations; therefore, volumes of reserves actually recovered may
differ significantly from the estimated quantities presented in this report. The results of Ryder Scott’s estimates are summarized
below.



SEC PARAMETERS

Estimated Net Reserves

Certain Interests of

ECOPETROL

|As of December 31, 2011
|-----------------------



|                       |  | Proved    |       
|---------------------- |  | --------- | ------
|                       |  |           |       
|                       |  | Developed |       
|Net Remaining Reserves |  |           |       
|Oil – MBarrels         |  |           | 10,670



Liquid hydrocarbons are
expressed in thousand standard 42 gallon barrels. There are no gas reserves associated with these properties. These proved reserves
volumes are exclusive of royalties.



|SUITE  600,  1015  4TH  STREET, S.W. CALGARY, ALBERTA T2R 1J4 | TEL (403) 262-2799          | FAX (403) 262-2790
|------------------------------------------------------------- | --------------------------- | ------------------
|621  17TH STREET, SUITE 1550                                  | DENVER, COLORADO 80293-1501 | TEL (303) 623-9147











ECOPETROL

February 7, 2012

Page 2



Reserves Included in This Report



The proved reserves
included herein conform to the definition as set forth in the Securities and Exchange Commission’s Regulations Part 210.4-10(a).
An abridged version of the SEC reserves definitions from 210.4-10(a) entitled “Petroleum Reserves Definitions” is included
as an attachment to this report. The various proved reserve status categories are defined under
the attachment entitled “Petroleum Reserves Definitions” in this report.



No attempt was made
to quantify or otherwise account for any accumulated gas production imbalances that may exist. The provedgas volumes included herein do not attribute gas consumed in operations as reserves. Non-hydrocarbon or inert gas volumes
have been excluded from the reserves reported herein.



Reserves are those
estimated remaining quantities of petroleum that are anticipated to be economically producible, as of a given date, from known
accumulations under defined conditions. All reserve estimates involve an assessment of the uncertainty
relating the likelihood that the actual remaining quantities recovered will be greater or less than the estimated quantities determined
as of the date the estimate is made.The uncertainty depends chiefly on the amount of reliable geologic and engineering
data available at the time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed
by placing reserves into one of two principal classifications, either proved or unproved. Unproved reserves are less certain to
be recovered than proved reserves, and may be further sub-classified as probable and possible reserves to denote progressively
increasing uncertainty in their recoverability. At ECOPETROL’s request, this report addresses only the proved reserves attributable
to the properties evaluated herein.



Proved oil and gas
reserves are “those quantities of oil and gas which, by analysis of geoscience and engineering data, can be estimated with
reasonable certainty to be economically producible from a given date forward.” The provedreserves
included herein were estimated using deterministic methods. If deterministic methods are used, the
SEC has defined reasonable certainty for proved reserves as a “high degree of confidence that the quantities will be recovered.”



Provedreserve estimates will generally be revised onlyas additional geologic or engineering
data become available or as economic conditions change. For proved reserves, the SEC states that “as
changes due to increased availability of geoscience (geological, geophysical, and geochemical), engineering, and economic data
are made to the estimated ultimate recovery (EUR) with time, reasonably certain EUR is much more likely to increase or remain constant
than to decrease.” Moreover, estimates of proved reserves may be revised as a result of future operations, effects of regulation
by governmental agencies or geopolitical or economic risks. Therefore, the proved reserves included in this report are estimates
only and should not be construed as being exact quantities, and if recovered, the revenues therefrom, and the actual costs related
thereto, could be more or less than the estimated amounts.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











ECOPETROL

February 7, 2012

Page 3



The
proved reserves reported herein are limited to the period prior to expiration of current contracts providing the legal rights to
produce, or a revenue interest in such production, unless evidence indicates that contract renewal is reasonably certain. Furthermore,
properties in the different countries may be subjected to significantly varying contractual fiscal terms that affect the
net revenue to ECOPETROL for the production of these volumes. The prices and economic return received for these net volumes can
vary significantly based on the terms of these contracts. Therefore, when applicable, Ryder Scott reviewed the fiscal terms of
such contracts and discussed with ECOPETROL the net economic benefit attributed to such operations for the determination of the
net hydrocarbon volumes and income thereof. Ryder Scott has not conductedan exhaustive audit
or verification of such contractual information. Neither our review of such contractual information nor our acceptance of ECOPETROL’s
representations regarding such contractual information should be construed as a legal opinion on this matter.



Ryder
Scott did not evaluate the country and geopolitical risks in the countries where HOCOL operates and ECOPETROL has interests. HOCOL’s
operations may be subject to various levels of governmental controls and regulations. These controls andregulations may
include, but may not be limited to, matters relating to land tenure and leasing, the legal rights to produce hydrocarbons including
the granting, extension or termination of production sharing contracts, the fiscal terms of various production sharing contracts,
drilling and production practices, environmental protection, marketing and pricing policies, royalties, various taxes and levies
including income tax, and foreign trade and investment and are subject to change from time to time. Such changes in governmental
regulations and policies may cause volumes ofproved reserves actually recovered and amounts of provedincome actually received to differ significantly from the estimated quantities.



The estimates of proved
reserves presented herein were based upon a detailed study of the properties operated by HOCOL in which ECOPETROL owns an
interest; however, we have not made any field examination of the properties. No consideration was given in this report to potential
environmental liabilities that may exist nor were any costs included for potential liabilities to restore and clean up damages,
if any, caused by past operating practices.



Estimates of Reserves



The estimation of reserves
involves two distinct determinations. The first determination results in the estimation of the quantities of recoverable oil and
gas and the second determination results in the estimation of the uncertainty associated with those estimated quantities in accordance
with the definitions set forth by the Securities and Exchange Commission’s Regulations Part 210.4-10(a). The process of estimating
the quantities of recoverable oil and gas reserves relies on the use of certain generally accepted analytical procedures. These
analytical procedures fall into three broad categories or methods: (1) performance-based methods; (2) volumetric-based methods;
and (3) analogy. These methods may be used singularly or in combination by the reserve evaluator in the process of estimating the
quantities of reserves. Reserve evaluators must select the method or combination of methods which in their professional judgment
is most appropriate given the nature and amount of reliable geoscience and engineering data available at the time of the estimate,
the established or anticipated performance characteristics of the reservoir being evaluated and the stage of development or producing
maturity of the property.



In many cases, the
analysis of the available geoscience and engineering data and the subsequent interpretation of this data may indicate a range of
possible outcomes in an estimate, irrespective of the method selected by the evaluator. When a range in the quantity of reserves
is identified, the evaluator must determine the uncertainty associated with the incremental quantities of the reserves. If the
reserve quantities are estimated using the deterministic incremental approach, the uncertainty for each discrete incremental quantity
of the reserves is addressed by the reserve category assigned by the evaluator. Therefore, it is the categorization of reserve
quantities as proved, probable and/or possible that addresses the inherent uncertainty in the estimated quantities reported. For
proved reserves, uncertainty is defined by the SEC as reasonable certainty wherein the “quantities actually recovered are
much more likely than not to be achieved.” The SEC states that “probable reserves are those additional reserves that
are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.”
The SEC states that “possible reserves are those additional reserves that are less certain to be recovered than probable
reserves and the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable
plus possible reserves.” All quantities of reserves within the same reserve category must meet the SEC definitions as noted
above.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











ECOPETROL

February 7, 2012

Page 4



Estimates of reserves
quantities and their associated reserve categories may be revised in the future as additional geoscience or engineering data become
available. Furthermore, estimates of reserves quantities and their associated reserve categories may also be revised due to other
factors such as changes in economic conditions, results of future operations, effects of regulation by governmental agencies or
geopolitical or economic risks as previously noted herein.



The proved developed
reserves for the properties included herein were estimated by performance methods and the proved undeveloped reserves analogy.
These performance methods include, but may not be limited to, decline curve analysis and analogy which utilized extrapolations
of historical production and pressure data available through November, 2011 in those cases where such data were considered to be
definitive. The data utilized in this analysis were supplied to Ryder Scott by HOCOL and were considered sufficient for the purpose
thereof.



To estimate economically
recoverableprovedoil and gas reserves and related future net cash
flows, we consider many factors and assumptions including, but not limited to, the use of reservoir parameters derived from
geological, geophysical and engineering data that cannot be measured directly, economic criteria based on current costs and SEC
pricing requirements, and forecasts of future production rates. Under the SEC regulations 210.4-10(a)(22)(v)
and (26), proved reserves must be anticipated to be economically producible from a given date forward based on existing economic
conditions including the prices and costs at which economic producibility from a reservoir is to be determined.While it
may reasonably be anticipated that the future prices received for the sale of production and the operating costs and other costs
relating to such production may increase or decrease from those under existing economic conditions, such changes were, in accordance
with rules adopted by the SEC, omitted from consideration in making this evaluation.



HOCOL has informed
us that they have furnished us all of the material accounts, records, geological and engineering data, and reports and other data
required for this investigation. In preparing our forecast of future proved production and income, we have relied upon data furnished
by HOCOL with respect to property interests owned, production and well tests from examined wells, normal direct costs of operating
the wells or leases, other costs such as transportation and/or processing fees, ad valorem and production taxes, recompletion and
development costs, abandonment costs after salvage, product prices based on the SEC regulations, adjustments or differentials to
product prices, geological structural and isochore maps, well logs, core analyses, and pressure measurements. Ryder Scott reviewed
such factual data for its reasonableness; however, we have not conducted an independent verification of the data furnished by HOCOL.
We consider the factual data used in this report appropriate and sufficient for the purpose of preparing the estimates of reserves
herein.



In summary, we consider
the assumptions, data, methods and analytical procedures used in this report appropriate for the purpose hereof, and we have used
all such methods and procedures that we consider necessary and appropriate to prepare the estimates of reserves herein. The proved
reserves included herein were determined in conformance with the United States Securities and Exchange Commission (SEC) Modernization
of Oil and Gas Reporting; Final Rule, including all references to Regulation S-X and Regulation S-K, referred to herein collectively
as the “SEC Regulations.” In our opinion, the proved reserves presented in this report comply with the definitions,
guidelines and disclosure requirements as required by the SEC regulations.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











ECOPETROL

February 7, 2012

Page 5



Future Production Rates



For wells currently
on production, our forecasts of future production rates are based on historical performance data. If no production decline trend
has been established, future production rates were held constant, or adjusted for the effects of curtailment where appropriate,
until a decline in ability to produce was anticipated. An estimated rate of decline was then applied to depletion of the reserves.
If a decline trend has been established, this trend was used as the basis for estimating future production rates.



Test data and other
related information were used to estimate the anticipated initial production rates for those wells or locations that are not currently
producing. For reserves not yet on production, sales were estimated to commence at an anticipated date furnished by HOCOL. Wells
or locations that are not currently producing may start producing earlier or later than anticipated in our estimates due to unforeseen
factors causing a change in the timing to initiate production. Such factors may include delays due to weather, the availability
of rigs, the sequence of drilling, completing and/or recompleting wells and/or constraints set by regulatory bodies.



The future production
rates from wells currently on production or wells or locations that are not currently producing may be more or less than estimated
because of changes including, but not limited to, reservoir performance, operating conditions related to surface facilities, compression
and artificial lift, pipeline capacity and/or operating conditions, producing market demand and/or allowables or other constraints
set by regulatory bodies.



Hydrocarbon Prices



The hydrocarbon prices
used herein are based on SEC price parameters using the average prices during the 12-month period prior to the ending date of the
period covered in this report, determined as the unweighted arithmetic averages of the prices in effect on the first-day-of-the-month
for each month within such period, unless prices were defined by contractual arrangements. For hydrocarbon products sold under
contract, the contract prices, including fixed and determinable escalations, exclusive of inflation adjustments, were used until
expiration of the contract. Upon contract expiration, the prices were adjusted to the 12-month unweighted arithmetic average as
previously described.



HOCOL furnished us
with the above mentioned average prices in effect on December 31, 2011. These initial SEC hydrocarbon prices were determined using
the 12-month average first-day-of-the-month benchmark prices appropriate to the geographic area where the hydrocarbons are sold.
These benchmark prices are prior to the adjustments for differentials as described herein. The table below summarizes the “benchmark
prices” and “price reference” used for the geographic area included in the report. In certain geographic areas,
the price reference and benchmark prices may be defined by contractual arrangements. In cases where there are numerous contracts
or price references within the same geographic area, the benchmark price is represented by the unweighted arithmetic average of
the initial 12-month average first-day-of-the-month benchmark prices used.



The
product prices that were actually used to determine the future gross revenue for each property reflect adjustments to the benchmark
prices for gravity, quality, local conditions and/or distance from market, referred to herein as “differentials.” 
The differentials used in the preparation of this report were furnished to us by HOCOL.The
differentials furnished to us were accepted as factual data and reviewed by us for their reasonableness; however, we have not conducted
an independent verification of the data used by HOCOL to determine these differentials.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











ECOPETROL

February 7, 2012

Page 6



In addition, the following
table summarizes the net volume weighted benchmark prices adjusted for differentials and referred to herein as the “average
realized prices.” The average realized prices shown in the table below were determined from the total future gross revenue
before production taxes and the total net reserves for the geographic area and presented in accordance with SEC disclosure requirements
for each of the geographic areas included in the report.



|                |  |         |  |                          |  | Average   |           | Average 
|--------------- |  | ------- |  | ------------------------ |  | --------- | --------- | --------
|                |  |         |  | Price                    |  | Benchmark |           | Realized
|Geographic Area |  | Product |  | Reference                |  | Prices    |           | Prices  
|Colombia        |  | Oil     |  | WTI Cushing, Okla - SPOT |  | $         | 96.19/Bbl |         



For the properties
reviewed by Ryder Scott, all of the future gross income is derived from the sale of oil.



Costs



Operating
costs used in our evaluation were based on the operating expense reports of HOCOL and include only those costs directly applicable
to the evaluated assets. The operating costs include a portion ofgeneral and administrative costs allocated directly to
the leases and wells. The operating costs furnished to us were accepted as factual data and reviewed by us for their reasonableness;
however, we have not conducted an independent verification of the operating cost data used by HOCOL. No deduction was made for
loan repayments, interestexpenses, or exploration and development prepayments that were not charged
directly to the assets.



Development costs were
furnished to us by HOCOL and are based on authorizations for expenditure for the proposed work or actual costs for similar projects.
The development costs furnished to us were accepted as factual data and reviewed by us for their reasonableness; however, we have
not conducted an independent verification of these costs. The estimated net cost of abandonment after salvage was included for
properties where abandonment costs net of salvage were significant. The estimates of the net abandonment costs furnished by HOCOL
were accepted without independent verification.



The proved developed
and undeveloped reserves in this report have been incorporated herein in accordance with HOCOL’s plans to develop these reserves
as of December 31, 2011. The implementation of HOCOL’s development plans as presented to us and incorporated herein is subject
to the approval process adopted by HOCOL’s management. As the result of our inquires during the course of preparing this
report, HOCOL has informed us that the development activities included herein have been subjected to and received the internal
approvals required by HOCOL’s management at the appropriate local, regional and/or corporate level. In addition to the internal
approvals as noted, certain development activities may still be subject to specific partner AFE processes, Joint Operating Agreement
(JOA) requirements or other administrative approvals external to HOCOL. Additionally, HOCOL has informed us that they are not aware
of any legal, regulatory, political or economic obstacles that would significantly alter their plans.



Current costs used
by HOCOL were held constant throughout the life of the properties.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











ECOPETROL

February 7, 2012

Page 7



Standards of Independence and Professional
Qualification



Ryder Scott is an independent
petroleum engineering consulting firm that has been providing petroleum consulting services throughout the world for over seventy
years. Ryder Scott is employee-owned and maintains offices in Houston, Texas; Denver, Colorado; and Calgary, Alberta, Canada. We
have over eighty engineers and geoscientists on our permanent staff. By virtue of the size of our firm and the large number of
clients for which we provide services, no single client or job represents a material portion of our annual revenue. We do not serve
as officers or directors of any privately-owned or publicly-traded oil and gas company and are separate and independent from the
operating and investment decision-making process of our clients. This allows us to bring the highest level of independence and
objectivity to each engagement for our services.



Ryder Scott actively
participates in industry-related professional societies and organizes an annual public forum focused on the subject of reserves
evaluations and SEC regulations. Many of our staff have authored or co-authored technical papers on the subject of reserves related
topics. We encourage our staff to maintain and enhance their professional skills by actively participating in ongoing continuing
education.



Prior to becoming an
officer of the Company, Ryder Scott requires that staff engineers and geoscientists have received professional accreditation in
the form of a registered or certified professional engineer’s license or a registered or certified professional geoscientist’s
license, or the equivalent thereof, from an appropriate governmental authority or a recognized self-regulating professional organization.



We are independent
petroleum engineers with respect to HOCOL and ECOPETROL. Neither we nor any of our employees have any interest in the subject properties
and neither the employment to do this work nor the compensation is contingent on our estimates of reserves for the properties which
were reviewed.



The results of this
study, presented herein, are based on technical analysis conducted by teams of geoscientists and engineers from Ryder Scott. The
professional qualifications of the undersigned, the technical person primarily responsible for overseeing, reviewing and approving
the evaluation of the reserves information discussed in this report, are included as an attachment to this letter.



Terms
of Usage



The results of our
third party study, presented in report form herein, were prepared in accordance with the disclosure requirements set forth in the
SEC regulations and intended for public disclosure as an exhibit in filings made with the SEC by ECOPETROL.



We have provided ECOPETROL
with a digital version of the original signed copy of this report letter. In the event there are any differences between the digital
version included in filings made by ECOPETROL and the original signed report letter, the original signed report letter shall control
and supersede the digital version.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











ECOPETROL

February 7, 2012

Page 8



The data and work papers
used in the preparation of this report are available for examination by authorized parties in our offices. Please contact us if
we can be of further service.



|             | Very truly yours,                           
|------------ | --------------------------------------------
|             |                                             
|             | RYDER SCOTT COMPANY, L. P.                  
|             | TBPE Firm Registration No. F-1580           
|             |                                             
|             | \s\ Herman G. Acuña                         
|             |                                             
|             | Herman G. Acuna, P.E.                       
|             | Texas P.E. License No. 92254                
|             | Managing Senior Vice President–International
|             |                                             
|             | [SEAL]                                      
|             |                                             
|HGA (DPR)/pl |                                             



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











Professional Qualifications



The conclusions presented
in this report for Ecopetrol for properties located in Colombia and operated by Hocol are the result of technical analysis conducted
by teams of geoscientists and engineers from Ryder Scott Company, L.P. Herman G. Acuña was the primary technical person
responsible for overseeing the independent estimation of the reserves, future production and income to render the audit conclusions
of the report.



Mr. Acuña, an
employee of Ryder Scott Company L.P. (Ryder Scott) since 1997, is a Managing Senior International Vice President and serves as
an Engineering Group Coordinator responsible for coordinating and supervising staff and consulting engineers of the company in
ongoing reservoir evaluation studies worldwide. Before joining Ryder Scott, Mr. Acuña served in a number of engineering
positions with Exxon. For more information regarding Mr. Acuña’s geographic and job specific experience, please refer
to the Ryder Scott Company website at www.ryderscott.com.



Mr. Acuña earned
a Bachelor (Cum Laude) and a Masters (Magna Cum Laude) of Science degree in Petroleum Engineering from The University of Tulsa
in 1987 and 1989 respectively. He is a registered Professional Engineer in the State of Texas, a member of the Association of International
Petroleum Negotiators (AIPN) and the Society of Petroleum Engineers (SPE).



In addition to gaining
experience and competency through prior work experience, the Texas Board of Professional Engineers requires a minimum of fifteen
hours of continuing education annually, including at least one hour in the area of professional ethics, which Mr. Acuña
fulfills. Mr. Acuña has attended formalized training and conferences including dedicated to the subject of the definitions
and disclosure guidelines contained in the United States Securities and Exchange Commission Title 17, Code of Federal Regulations,
Modernization of Oil and Gas Reporting, Final Rule released January 14, 2009 in the Federal Register. Mr. Acuña has recently
taught various company reserves evaluation schools in Argentina, Bolivia, China, Denmark, Spain, U.S.A and Venezuela. Mr. Acuña
has participated in various capacities in reserves conferences such as being a panelist a the 2008 Trinidad and Tobago’s
Petroleum Conference, delivering the reserves evaluation seminar during IAPG convention in Mendoza, Argentina in 2006 and chairing
the first Reserves Evaluation Conference in the Middle East in Dubai, U.A.E in 2006.



Based on his educational
background, professional training and over 20 years of practical experience in petroleum engineering and the estimation and evaluation
of petroleum reserves, Mr. Acuña has attained the professional qualifications as a Reserves Estimator and Reserves Auditor
set forth in Article III of the “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information”
promulgated by the Society of Petroleum Engineers as of February 19, 2007.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











PETROLEUM RESERVES DEFINITIONS



As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (SEC)



PREAMBLE



On January 14, 2009,
the United States Securities and Exchange Commission (SEC) published the “Modernization of Oil and Gas Reporting; Final Rule”
in the Federal Register of National Archives and Records Administration (NARA). The “Modernization of Oil and Gas Reporting;
Final Rule” includes revisions and additions to the definition section in Rule 4-10 of Regulation S-X, revisions and additions
to the oil and gas reporting requirements in Regulation S-K, and amends and codifies Industry Guide 2 in Regulation S-K. The “Modernization
of Oil and Gas Reporting; Final Rule”, including all references to Regulation S-X and Regulation S-K, shall be referred to
herein collectively as the “SEC Regulations”. The SEC Regulations take effect for all filings made with the United
States Securities and Exchange Commission as of December 31, 2009, or after January 1, 2010. Reference should be made to the full
text under Title 17, Code of Federal Regulations, Regulation S-X Part 210, Rule 4-10(a) for the complete definitions, as the following
definitions, descriptions and explanations rely wholly or in part on excerpts from the original document (direct passages excerpted
from the aforementioned SEC document are denoted in italics herein).



Reserves are those
estimated remaining quantities of petroleum which are anticipated to be economically producible, as of a given date, from known
accumulations under defined conditions. All reserve estimates involve some degree of uncertainty. The uncertainty depends chiefly
on the amount of reliable geologic and engineering data available at the time of the estimate and the interpretation of these data.
The relative degree of uncertainty may be conveyed by placing reserves into one of two principal classifications, either proved
or unproved. Unproved reserves are less certain to be recovered than proved reserves and may be further sub-classified as probable
and possible reserves to denote progressively increasing uncertainty in their recoverability. Under the SEC Regulations as of December 31,
2009, or after January 1, 2010, a company may optionally disclose estimated quantities of probable or possible oil and gas reserves
in documents publicly filed with the Commission. The SEC Regulations continue to prohibit disclosure of estimates of oil and gas
resources other than reserves and any estimated values of such resources in any document publicly filed with the Commission unless
such information is required to be disclosed in the document by foreign or state law as noted in §229.1202 Instruction to
Item 1202.



Reserves estimates
will generally be revised as additional geologic or engineering data become available or as economic conditions change.



Reserves may be attributed
to either natural energy or improved recovery methods. Improved recovery methods include all methods for supplementing natural
energy or altering natural forces in the reservoir to increase ultimate recovery. Examples of such methods are pressure maintenance,
natural gas cycling, waterflooding, thermal methods, chemical flooding, and the use of miscible and immiscible displacement fluids.
Other improved recovery methods may be developed in the future as petroleum technology continues to evolve.



Reserves may be attributed
to either conventional or unconventional petroleum accumulations. Petroleum accumulations are considered as either conventional
or unconventional based on the nature of their in-place characteristics, extraction method applied, or degree of processing prior
to sale. Examples of unconventional petroleum accumulations include coalbed or coalseam methane (CBM/CSM), basin-centered gas,
shale gas, gas hydrates, natural bitumen and oil shale deposits. These unconventional accumulations may require specialized extraction
technology and/or significant processing prior to sale.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











RESERVES STATUS DEFINITIONS AND GUIDELINES

Page 2



Reserves do not include
quantities of petroleum being held in inventory.



Because of the differences
in uncertainty, caution should be exercised when aggregating quantities of petroleum from different reserves categories.



RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(26) defines reserves as follows:



Reserves.Reserves are
estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date,
by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation
that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and
gas or related substances to market, and all permits and financing required to implement the project.



Note to paragraph (a)(26): Reserves
should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated
and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation
by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir, or negative test results). Such areas
may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).



PROVED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(22) defines proved oil and gas reserves as follows:



Proved oil and gas reserves.Proved
oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated
with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing
economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right
to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic
methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably
certain that it will commence the project within a reasonable time.



(i) The area of the reservoir
considered as proved includes:



(A) The area identified by drilling
and limited by fluid contacts, if any, and



(B) Adjacent undrilled portions
of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible
oil or gas on the basis of available geoscience and engineering data.



(ii) In the absence of data
on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration
unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.



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RESERVES STATUS DEFINITIONS AND GUIDELINES

Page 3



PROVED RESERVES (SEC DEFINITIONS)
CONTINUED



(iii) Where direct observation
from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved
oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance
data and reliable technology establish the higher contact with reasonable certainty.

(iv) Reserves which can be
produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are
included in the proved classification when:

(A) Successful testing by a
pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of
an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable
certainty of the engineering analysis on which the project or program was based; and



(B) The project has been approved
for development by all necessary parties and entities, including governmental entities.



(v) Existing economic conditions
include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price
during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic
average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements,
excluding escalations based upon future conditions.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











RESERVES STATUS DEFINITIONS AND GUIDELINES



As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (SEC)



and



PETROLEUM RESOURCES MANAGEMENT SYSTEM
(SPE-PRMS)

Sponsored and Approved by:

SOCIETY OF PETROLEUM ENGINEERS (SPE),

WORLD PETROLEUM COUNCIL (WPC)

AMERICAN ASSOCIATION OF PETROLEUM GEOLOGISTS
(AAPG)

SOCIETY OF PETROLEUM EVALUATION ENGINEERS
(SPEE)



Reserves status categories
define the development and producing status of wells and reservoirs. Reference should be made to Title 17, Code of Federal Regulations,
Regulation S-X Part 210, Rule 4-10(a) and the SPE-PRMS as the following reserves status definitions are based on excerpts from
the original documents (direct passages excerpted from the aforementioned SEC and SPE-PRMS documents are denoted in italics herein).



DEVELOPED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(6) defines developed oil and gas reserves as follows:



Developed oil and gas reserves
are reserves of any category that can be expected to be recovered:



(i) Through existing wells with
existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost
of a new well; and



(ii) Through
installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means
not involving a well.



Developed Producing (SPE-PRMS Definitions)



While not a requirement
for disclosure under the SEC regulations, developed oil and gas reserves may be further sub-classified according to the guidance
contained in the SPE-PRMS as Producing or Non-Producing.



Developed Producing
Reserves

Developed Producing Reserves
are expected to be recovered from completion intervals that are open and producing at the time of the estimate.



Improved recovery reserves
are considered producing only after the improved recovery project is in operation.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











RESERVES STATUS DEFINITIONS AND GUIDELINES

Page 2



Developed
Non-Producing

Developed Non-Producing Reserves
include shut-in and behind-pipe reserves.



Shut-In

Shut-in Reserves are expected
to be recovered from:

| | (1) | completion intervals which are open at the time of the estimate but which have not yet started
producing;
| | --- | ---------------------------------------------------------------------------------------------------------

| | (2) | wells which were shut-in for market conditions or pipeline connections; or
| | --- | --------------------------------------------------------------------------

| | (3) | wells not capable of production for mechanical reasons.
| | --- | -------------------------------------------------------



Behind-Pipe

Behind-pipe Reserves are expected
to be recovered from zones in existing wells which will require additional completion work or future re-completion prior to start
of production.



In all cases, production can
be initiated or restored with relatively low expenditure compared to the cost of drilling a new well.



UNDEVELOPED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(31) defines undeveloped oil and gas reserves as follows:



Undeveloped oil and gas reserves
are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where
a relatively major expenditure is required for recompletion.



(i) Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.



(ii) Undrilled locations can
be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to
be drilled within five years, unless the specific circumstances, justify a longer time.



(iii) Under no circumstances
shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved
recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir
or an analogous reservoir, as defined in paragraph (a)(2) of this section, or by other evidence using reliable technology establishing
reasonable certainty.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS