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A headline this morning stating Colombia's oil company was now the largest company in Latin American - passing the value of Petrobras - caught me by surprise. Ecopetrol S.A. (NYSE:EC) was on my list of ADR stocks to review, but I had no idea the company was poised to overtake Petrobras (NYSE:PBR) in market value. I had not realized the Colombian company had built up that much of a market value.

As of this morning - May 17, Yahoo Finance shows Ecopetrol with a market cap of $124.8 billion and Petrobras with a value of $128.5 billion, so it seems the Brazilian oil giant has again moved back on top. The bigger news are the facts that the Ecopetrol ADR value is up 33% so far in 2012 while the Petrobras ADR has shed 20% of its value. For a further comparison, the Chevron (NYSE:CVX) is down 5% so far in 2012.

The Petrobras value problems stem from two sources. First, the Brazilian Real has depreciated from about 1.7 to the U.S. dollar to a current 2.0. Depreciating currency is good for exports but bad for share prices denominated in dollars. Secondly, the Brazilian government has not allowed Petrobras to pass along higher energy prices to Brazil's drivers. In Colombia the government allows Ecopetrol to pass along higher energy costs and the company generates two-thirds of its revenues from international sales - allowing the company to profit from higher crude oil prices. Also, the Colombian peso is appreciating in 2012, boosting the ADS value.

For the 2012 first quarter, Ecopetrol reported 8.3% greater production than a year earlier. Revenue, operating income, EBITDA and net income were all 24% to 29% better than a year earlier - all results in the local currency. The ADR share price is also 40% above the year ago value, so the market is reflecting the growth in sales and profits. The company benefits from the near proximity of the U.S. markets and about one-half of revenues is from crude oil sales to the U.S.

The biggest negative regarding Ecopetrol is a relatively low level of proven reserves. The company lists 1.8 billion barrels of reserves compared to 15 billion barrels of reserve for Petrobras and 11 billion barrels for Chevron. Ecopetrol is expanding offshore exploration and drilling in 2012 in a move to increase proven reserves.

As an investment, Ecopetrol is the momentum play for large cap energy companies. There is no other $100 billion + or - so energy company with a share price in positive territory for 2012. The average of analyst earnings estimates has the Ecopetrol net income increasing by 35% in 2012 and increasing by 15% in 2013. Energy company earnings are highly dependent on the price of oil, however, this Colombia based oil giant is well poised to profit from continued high crude oil prices.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.