By Brazil Stock Guide – Ecopetrol secured control of Brava Energia (B3: BRAV3) on the same day the Brazilian oil producer reported net income of R$871 million for the second quarter.
The result reversed a loss of R$350 million in the first three months of the year, although it was 17% below the R$1.05 billion profit recorded a year earlier. Net revenue rose 14% year over year to a record R$3.60 billion.
Adjusted EBITDA, excluding IFRS 16 effects, increased 33% to R$1.77 billion, also the highest level in Brava’s history. The adjusted EBITDA margin expanded by seven percentage points to 49.3%.
“We recorded all-time highs in net revenue and adjusted EBITDA, accompanied by a significant expansion in operating margins,” management said. According to the company, the performance reflected improved asset operations, higher realized prices and continued synergy gains.
Brava sold its oil at an average realized price of US$91.40 per barrel, up 46% from the same period in 2025 and 23% from the first quarter. Stronger pricing offset average production of 81,700 barrels of oil equivalent per day, which was down 5% year over year but 8% higher sequentially.
Downstream operations also supported the results. Wider refined-product crack spreads lifted the segment’s adjusted EBITDA margin to a record 13.1%. The offshore margin, however, fell 6.5 percentage points from the previous quarter to 61.2%, pressured by lower sales volumes from the Atlanta field and higher costs at Papa-Terra.
Accounting Profit, Cash Outflow
A significant part of the earnings turnaround came from financial instruments. Brava recognized a R$462 million mark-to-market gain on its oil hedges after Brent fell from US$118.40 a barrel at the end of March to US$72.90 at the end of June.
The cash impact moved in the opposite direction. Settling oil hedge contracts resulted in a net cash outflow of R$864 million during the quarter, which concentrated the largest volume of hedged barrels reaching maturity. On a cash basis, the company recorded a net financial loss of R$155 million, despite reporting a positive accounting financial result of R$131 million.
Operations generated R$829 million in cash. Excluding the hedge-related outflow, operating cash generation would have reached R$1.69 billion, up 72% from the first quarter. Brava ended June with R$5 billion in cash, down 11%, while net debt declined 2% to R$7.38 billion. Leverage increased to 1.97 times from 1.84 times.
Ecopetrol Takes Control
In the tender-offer auction held Wednesday, Ecopetrol purchased 116.1 million Brava shares at R$23 each, for a total of R$2.67 billion. The shares represent approximately 25% of Brava’s capital and will be added to the 26% stake already held by the Colombian company.
Financial settlement is scheduled for Aug. 17. Once completed, Ecopetrol will hold 236.9 million shares, equivalent to 51% of Brava’s capital.
The transaction gives Ecopetrol control of one of Brazil’s leading independent oil and gas producers. Brava was created in 2024 through the merger of 3R Petroleum and Enauta, combining mature onshore fields and offshore assets under a single company.
Its portfolio includes the onshore Potiguar and Recôncavo clusters, as well as the Atlanta, Papa-Terra and Peroá fields, which Brava operates. The company also holds non-operated stakes in Parque das Conchas, Manati and Pescada, where Shell and Petrobras serve as operators.
The change of control comes as Brava accelerates investment in its main offshore assets. Capital expenditure doubled from the first quarter to R$765 million, with 74% allocated primarily to Papa-Terra and Atlanta. Two new wells at Papa-Terra are expected to begin producing in the fourth quarter, while drilling of two additional wells at Atlanta is scheduled to start in October, with first oil expected in the first half of 2027.
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