Emerging markets bonds for all investors

18 September 2026, 11:45 UTC Chief Investment Office GWM Investment Research

Ecopetrol: Sound NOC Emerging markets bonds for all investors Author: Donald McLauchlan, Latin America Credit Strategist, CIO Americas, UBS Financial Services Inc. (UBS FS)

• Ecopetrol is Colombia's national oil company (NOC), and is the country's largest integrated energy producer, accounting for approximately 70% of the nation's hydrocarbon production (oil, natural gas, and natural gas liquids). We regard Ecopetrol as a quasi-sovereign issuer, as the Republic of Colombia owns around 88.5% of the company.

• Ecopetrol's 2Q26 operational and financial performance came in line with expectations, and credit metrics remained well inside sound and sustainable territory, in our view. Ecopetrol's balance sheet is liquid, and refinancing risk over the foreseeable future remains low. We view the company's expansion of its operations in Brazil positively, as it should boost hydrocarbon reserves Source: UBS

and production, while mitigating Colombian risk. We also highlight that in 2Q26 Ecopetrol's operations in the Permian Basin in the US accounted for about 11.4% of total hydrocarbon production. Figure 1 - Ecopetrol - Credit risk flags • We maintain a constructive view on the credit and continue to regard its bonds as an attractive alternative to Colombian sovereign risk, and suitable for a hold-to- maturity investment strategy. We keep our preference for UBS, as of 17 September 2026 the USD 4.625% bond due in 2031, as we believe it better fits CIO's views on benchmark US Treasury rates and duration.

2Q26 snapshot EBITDA margin widened 650bps, from 37.5% in 2Q25 Average hydrocarbon production (oil, natural gas, and to 44.0% in 2Q26. Quarter over quarter, net revenues natural gas liquids) in 2Q26 came in at 705,800 barrels of oil and EBITDA grew 43.9% and 34.6%, respectively, but the equivalent per day (boed), down 6.6% year over year from quarterly EBITDA margin narrowed 300bps versus 47.0% in 755,500 boed in 2Q25, and 6.2% quarter over quarter from 1Q26. 725,200 boed in 1Q26, mostly on the back of lower output from the Permian operations in the US, and natural declines Table 1 - Ecopetrol - Quarterly financial data in the Piedemonte and Bonga-Mamey fields in Colombia.

Average realization prices for crude oil in 2Q26 of USD 96.7 per barrel were 44.9% year over year higher than USD 66.7 per barrel in 2Q25, and 42.0% quarter over quarter above Company reports, UBS, as of 17 September 2026 USD 68.1 per barrel in 1Q26.

Net revenues and EBITDA increased 57.5% and 84.6% year over year in USD terms, respectively, and the quarterly

This report has been prepared by UBS Financial Services Inc. (UBS FS). Analyst certification and required disclosures begin on page 6.

Emerging markets bonds for all investors

Table 2 - Ecopetrol - LTMs financial data Ecopetrol from Ba1 to Ba2, with a negative outlook on its view that government interference risk may have increased.

Table 3 - Ecopetrol - Credit ratings

Bloomberg, as of 17 September 2026

Risk factors Aside from exposure to a still challenged underlying sovereign (Colombia), risk factors in Ecopetrol include crude oil price volatility, and the capital-intensive and highly speculative nature of the oil and gas industry. We also note Company reports, UBS, as of 17 September 2026 that oil and gas, like any other natural resource extraction activity, can be accident-prone.

Sound debt indicators... Our bottom line Leverage (total debt divided by 12-month trailing EBITDA) We maintain a constructive view on the credit and continue as of 30 June came in at a relatively low multiple of to regard its bonds as suitable for a hold-to-maturity 2.2x, down from 2.5x in both March and December 2025, investment strategy. We view the company's expansion of its although the ratio still exceeded 2.0x in December 2024, operations in Brazil positively, as it should boost hydrocarbon and 1.9x in December 2023. That said, over the last 10 reserves and production, while mitigating Colombian risk. years, Ecopetrol's leverage ratio, which still ranks among We also highlight that in 2Q26 Ecopetrol's operations in the strongest within our Latin American corporate…