Ecopetrol S.A M&A announcement

Good morning. My name is Natalia, and I will be your operator today. Welcome to Ecopetrol's conference call regarding the acquisition of Brava Energia. During today's presentation, management will discuss the strategic rationale, key transaction highlights, expected synergies, and long-term value creation opportunities resulting from this transformative transaction. There will be a questions and answer session at the end of the presentation. Before we begin, it is important to mention that the comments made during this call by Ecopetrol senior management may include forward-looking statements regarding the company's future performance, expectations, and the anticipated impact of the transaction. These statements do not constitute any commitment as to future results and are subject to risks and uncertainties that could cause actual outcomes to differ materially. As a result, Ecopetrol assumes no responsibility in the event that future results differ from the projections shared during this conference call.

Participating in today's call are Mr. Julián Lemos, Corporate Vice President of Strategy and New Businesses, and Mr. Camilo Barco, Chief Financial Officer.

Good morning, everyone, and thank you for joining us today to discuss on Brava acquisition. I am Julián Lemos, Strategy and Business Development Corporate Vice President at Ecopetrol. The acquisition of a 51% controlling stake in Brava Energia represents a significant milestone in the execution of our long-term strategy. More than an acquisition, it establishes a meaningful operating platform in Brazil and certainly strengthens Ecopetrol position in an integrated regional energy company with more diversified and resilient portfolio. To understand the strategic rationale behind this transaction and contribution to Ecopetrol, it is important to start showcasing Brazil's potential. Brazil is one of the leading energy markets worldwide, combining scale, resource quality, investment attractiveness, and highly developed energy ecosystem. Today, the country is the eighth-largest oil producer and the eighth-largest oil consumer, and home of the ninth-largest refining park globally. For Ecopetrol, Brazil offers much more than a geographical diversification.

It provides access to world-class hydrocarbon resources, prolific offshore basins, and a mature regulatory framework, and a deep pool of technical talent. These attributes create a compelling environment for long-term value creation and disciplined investment. All of this summarizes our view on Brazil as a strategic growth market. Our investment thesis is straightforward, expanding our exposure to high-quality reserves and production, strengthening our EBITDA and cash flow generation potential, and creating additional avenues for profitable growth while maintaining financial discipline. The acquisition of Brava provides an immediate platform to advance on that strategy and positions Ecopetrol to participate more actively in one of the most attractive energy markets worldwide. Next slide, please. After covering why Brazil is a strategic market for Ecopetrol, the next question is: Why Brava?

Brava stands out as a diversified independent oil and gas company in Brazil and the second largest independent player in the country in terms of production and reserves. What makes Brava particularly attractive is the quality and diversity of its oil asset portfolio. The company combines onshore and offshore producing assets, exploration opportunities, and a strategic infrastructure across the energy value chain, especially in the upstream segment, but also midstream and downstream. Production is oil-based mainly and supported by a strong offshore position complemented by gas and onshore asset that enhance portfolio diversification and resilience. During the first half of 2026, Brava produced approximately 79,000 barrels of oil equivalent per day, of which 79% was oil and 21% gas, on a diversified operation footprint across some of Brazil's most relevant producing basins.

For Ecopetrol Group, this means immediate scale in Brazil, an increased footprint in the platform that is already operating today, while preserving significant upside through reserves development, production growth, and operational improvement over time. Ultimately, Brava provides the combination we look for in strategic acquisitions, a solid consolidated business, meaningful cash generation, and high-quality reserves. This precisely is what makes it the right platform to support Ecopetrol's long-term growth ambition in Brazil, incorporating actual production and material reserves after 20 years of presence in this country. Next slide, please. Let me now briefly walk you through the execution of this transaction. From the outset, our objective was not simply to acquire an asset, but to establish a controlling position in a disciplined manner, maintaining transparency, governance, and alignment with market regulations.

The acquisition was completed through Ecopetrol Investimentos do Brasil, our special purpose vehicle created for this transaction following a structured two-step process. In April 2026, we signed a share purchase agreement with key shareholders, securing an initial 26% interest in Brava. We then launched a public tender offer in the Brazilian market to acquire an additional 25%, providing all shareholders with an equal opportunity to participate on the tender under the same economic conditions. Following the successful completion of the tender offer and the settlement process, on August 17th, we acquired 51% controlling stake in Brava, representing total investment of approximately $1.2 billion. More importantly, this transaction reflects the principles that guide our capital allocation decisions. We pursued this opportunity because it met our strategic objective, offered a compelling value proposition, and provides a clear path to long-term value creation for Ecopetrol shareholders, and complies with our capital discipline criteria.

The acquisition also marks the beginning of a governance integration process. With the appointment of three Ecopetrol representatives to Brava board of directors, we have established the foundation for effective control, alignment of strategic priorities, and a disciplined integration process. As controlling shareholder, our focus is to support Brava continued growth while preserving strong corporate governance standards, and operational excellence, and value creation for all shareholders. Next slide, please. After establishing control, our focus moves from acquisition by building a threefold roadmap focused on the following. In the near term, our focus is on ensuring governance, alignment on the business plan, capital allocation, and reporting standards to ensure a smooth integration process. In the short to medium term, our priority is to optimize operational performance, improve reliability, enhance capital efficiency, as well as strengthen cash flow generation and debt management.

On the medium to long term, we expect focusing on developing Brava's reserves base, converting growth opportunities into cash flow, and pursuing value accretive opportunities with a strict capital discipline. Success will be measured through the metrics that matter most to the shareholders: operational performance, reserves growth, EBITDA, free cash flow, returns on capital, and disciplined leverage management. Brava provides us with immediate production, reserves, and operating capabilities in Brazil. Our objective now is straightforward: leverage those assets to deliver sustainable value creation for both Ecopetrol and Brava shareholders. Now I will hand over to Camilo Barco, who will walk you through the transaction's financial contribution.

Thank you, Julian. This pro forma view illustrates the financial and strategic contribution that Brava brings to Ecopetrol. Based on first half 2026 results, Brava would have increased the group consolidated revenue by 7% and EBITDA by 8% approximately, while maintaining profitability levels consistent with Ecopetrol's performance. Net income attributable to Ecopetrol shareholders would have increased by approximately 2%, reflecting our 51% ownership interest and excluding the debt-related cost associated with the transaction. It is noteworthy that the impact on Ecopetrol third quarter 2026 results will be partial due to the consolidation of Brava's operations starting from September. From the fourth quarter of 2026 onwards, investors will see the full effect of three complete months of financial performance. Julian, let me hand it back to you to cover the operating contribution.

From an operating standpoint, Brava adds approximately 79,000 barrels of oil equivalent per day, corresponding to 11% of Ecopetrol production. While its 1P reserves represent nearly 24% of Ecopetrol reserve base at 2025 closing report. This meaningfully strengthens both the scale and longevity of our upstream portfolio. The acquisition of Brava was completed with attractive valuation metrics, approximately $8.4 per barrel of 1P reserves, and $6.3 per barrel of 2P reserves, reinforcing the value proposition of this transaction. With that, I will hand it back to Camilo to discuss the financing structure supporting the transaction.

Regarding financing, our objective was clear: to fund this acquisition in a consistent manner with our capital discipline criteria, while preserving the financial strength and flexibility of the Ecopetrol Group. To ensure a timely closing, we initially secured a bridge facility of about $1.2 billion for a period of approximately one year, including the transaction value, as well as estimated 2026 financing costs, fees, and interest. This structure provides full funding certainty and enabled the successful closing of the transaction on August 17th. The financing was arranged through Ecopetrol Capital AG, our international financing subsidiary, which subsequently channeled the funds to Ecopetrol Investimentos do Brasil, the entity that completed the acquisition. Looking ahead, our focus is on implementing a long-term funding solution that further strengthens our liquidity position and optimizes the transaction financial profile.

We are evaluating a range of alternatives, including long-term debt, portfolio management initiatives, and internal funding sources. The final structure will be determined based on four key principles: cost efficiency, maturity profile, funding diversification, and liquidity preservation. The financing alternatives available to us provide flexibility to select the most efficient and sustainable solution. This refinancing process will not create obligations or guarantees at Brava operating company level. Brava's capital structure, cash flow generation, and operating activities will remain independent from the financing structure used to acquire control. As a part of this process, we will continue evaluating market conditions and obtaining the required approvals to execute the long-term financing strategy under the most attractive cost and risk conditions. This transaction remains fully aligned with our commitment to financial discipline.

Even after consolidating Brava, we estimate that the group's gross debt to EBITDA ratio will remain below our strategic threshold of 2.5 times, supported by Brava's EBITDA generation, cash flow potential, as well as future dividend contribution. In summary, we structured this acquisition with a clear objective: secure execution in the short term while preserving financial flexibility and sustainable capital structure over the long term. The success of this investment will be measured not only by reserves and production we have acquired, but by our ability to translate those assets into cash flow, returns, and long-term shareholders' value. Please turn onto the next slide. Now, let me conclude with three key messages. First, Brava provides Ecopetrol with an immediate operating platform in Brazil, adding meaningful production, reserves, EBITDA contribution, and future development opportunities.