Ecopetrol (EC) M&A announcement summary

Deal rationale and strategic fit

• Acquisition of a 51% controlling stake in Brava Energia expands presence in Brazil, a leading Latin American energy market, and aligns with long-term strategy to diversify geographically and strengthen the growth platform.

• Brava is the second largest independent oil and gas producer in Brazil, with a diversified portfolio of onshore and offshore assets, providing immediate scale and operational capabilities.

• The deal enhances portfolio resilience, leverages complementary capabilities, and supports value creation and long-term growth ambitions in Brazil and Latin America.

• Adds substantial reserves and production base, supporting long-term value generation and competitive positioning.

Financial terms and conditions

• The 51% stake was acquired for approximately $1.2 billion, through a two-step process: initial share purchase agreement and voluntary/public tender offer.

• Acquisition completed via Ecopetrol Investimentos do Brasil LTDA, funded through an intercompany loan from a group subsidiary.

• Valuation metrics: $8.4/bbl for 1P reserves and $6.3/bbl for 2P reserves.

• Funding closed August 17, 2026, with a phased long-term funding plan to optimize cost and liquidity.

Synergies and expected cost savings

• Integration expected to optimize operational performance, improve reliability, and enhance capital efficiency and cash flow generation.

• Opportunities identified to lower lifting costs by applying operational expertise and efficiency practices.

• Potential tax benefits from accumulated losses and previous investments under evaluation.

• Prioritization of investments by return and risk to drive profitable growth.