YPF Sociedad Anónima (NYSE:YPF) Q2 2025 Earnings Call Transcript

YPF Sociedad Anónima (NYSE:YPF) Q2 2025 Earnings Call Transcript August 8, 2025

Margarita Chun: Good morning, ladies and gentlemen. This is Margarita Chun, YPF IR Manager. Thank you for joining us today in our second quarter 2025 earnings call. Today’s presentation will be conducted by our Chairman and CEO, Mr. Horacio Marin; our CFO, Mr. Federico Barroetave; and our Strategy, New Businesses and Controlling VP, Mr. Maximiliano Westen. During the presentation, we will go through the main aspects and events that explain the quarter results, and then we will open the floor for Q&A session together with our management. Before we begin, please consider our cautionary statement on Slide 2. Our remarks today and answers to your questions may include forward-looking statements. which are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by these remarks.

Our financial figures are stated in accordance with IFRS, but during the presentation, we might discuss some non-IFRS measures such as adjusted EBITDA. I will now turn the call over to Horacio. Please go ahead.

Horacio Daniel Marin: Thank you, Margarita, and good morning, everyone. Despite international price volatility, we delivered not only solid results in Q2, but also significant progress in our 4×4 plan by achieving key remarkable milestones. This quarter’s volatility actually demonstrated the right direction and implicit value of our 4×4 plan outlined since December ’23. During this quarter, the international oil market experienced significant volatility with low prices. As a result, our realization price of oil decreased by 12% sequentially. Our shale oil production remained largely unchanged even after selling our 49% stake in Aguada del Chañar, which decreased its contribution by 6,000 barrels a day. Moreover, during July, we have just achieved record high production of roughly 165,000 barrels a day.

In fact, on Tuesday, the production — the daily production was 163,800 barrels a day. Despite the challenging context, our continued delivery on our 4×4 plan substantially mitigated this negative price environment. During this quarter, we reached key milestone in divesting program of mature field, particularly in Santa Cruz. As a material result of this pressure, we can show a 24% interannual reduction in our lifting costs. Another key milestone was achieved financial closing at VMOS. After 18 months of hard work and dedication today, I would like to share with you the remarkable progress we achieved in our 4×4 plan, delivering important results across all our four strategic pillars, especially since our last call in May. As we have always said, our first pillar is to focus on our most profitable business, oil Vaca Muerta.

We have continued to expand our shale oil operations and made significant progress in advancing midstream infrastructure projects to support future growth. YPF as the largest shale oil producer in Argentina continues to deliver solid performance. Back in November ’23, YPF oil production was 110,000 barrels per day, by last month, production has increased to roughly 165,000 barrels per day, even after divestment 6,000 barrels per day in, as I mentioned before. We project further growth aiming to close the year at around 190,000 barrels per day. This will represent an outstanding organic production ramp-up of over 70% in just 25 months. Moreover, in the last 18 months since 2024, our oil export revenue reached $1.5 billion. In terms of volume, this quarter, we exported nearly 44,000 barrels per day.

Moving to midstream expansion. Since day 1, we were convinced that VMOS represented the key and the best infrastructure vehicle to ramp up YPF production from ’23 and beyond and also for all the industry. This new pipeline completely unlocks YPF growth plan to achieve roughly 250,000 barrels per day by the end of 2026 and allowing to reach 0.5 million barrels per day by 2030. To this end, YPF led in record the development of this project in collaboration with the rest of the shale industry. First, we aligned commitments that allow starting construction on January ‘255. Then supported by a solid contractor structure, the project recently secured a syndicated loan for $2 billion to finance the construction of VMOS. Besides economic benefits for YPF and the entire shell industry, this transaction reopened the international project finance market for Argentina.

It stands as the largest commercial loan for infrastructure project in the country. It’s also one of the top 5 largest financing in Latin American oil and gas sector so far. The overall construction progress stand 23% as July with welding works completed for around 120 kilometers. Additionally, assemblies of floor plates for the tanks have begun at both Allen and Punta Colorada Export terminal. Let me now talk on Pillar #2 that focuses on active portfolio management. From the very beginning, we committed to create value for our YPS through a dynamic portfolio management approach. Over the past 15 months, after receiving initial approval from our Board, we already completed the transfer of 28 out of 3 mature blocks identified in the initial plan called Andes.

Moreover, we have successfully reverted 11 mature blocks to the provinces, one in Chubut and the other is in Santa Cruz, the most challenging blocks in terms of complexity, achieving another key milestone in our 4×4 plan. During the past 18 months since 2024, the mature blocks that we already left produced roughly 61,000 barrels of oil per day and 3.2 million cubic meter of gas per day. However, it’s worth noting that they were very mature and carry high lifting costs, around $42 per barrel. As a result, during this 18 months, the overall negative impact on our free cash flow was around $840 million. This amount includes the operational cash flow and the exit cash flow. Additionally, we have successfully divested our subsidiaries in Brazil and Chile besides closing unprofitable chemical plants.

All this [indiscernible] was critical to our 4×4 plan as it simplifies our portfolio and enable us to concentrate our effort and the majority of our capital on our most profitable asset, Vaca Muerta. Regarding this exit program from mature fields, I want to highlight the constructive agenda that we were able to develop in collaboration with governors and unions. This represents an unprecedented level of cooperation among key stakeholders. I’m confident that with the same spirit, we will reach an agreement in ongoing negotiation with Tierra del Fuego during Q3. As a result of all these efforts, we can report today a remarkable reduction in listed costs of 24% interannually. With the decision to make YPF a very profitable company, we have recently decided to expand the scope of assets to be divested to become next year a pure and conventional ethane company.

We have identified the other 16 performing conventional blocks. We will open these assets for divestment with a superior objective to continue upgrading our portfolio and making YPF much more profitable and more resilient to low crude prices. Completely aligned with the same portfolio rationale, this week, we executed a bidding agreement to acquire Prime Tier 1 Shell acreage from Total for $500 million, subject to certain conditions. This acquisition follows the same value dynamics of our active portfolio management, divesting noncore, less profitable assets while securing long-term productive value for the company. In this case, La Escalonada and Rincón La Ceniza blocks are located in the most promising area in the oil and wet gas window of North Vaca Muerta, close to Bajo del Choique, Lea Invernada blocks that Pluspetrol has recently acquired from Exxon.

[ La Calera ] is a first-class crude oil producing block that will generate synergies with the development of Vaca Muerta North Hub. Rincón La Ceniza has a strategic potential for the development of wet gas and the Argentina LNG project. We expect to assume the operating role of these two blocks holding a 45% working interest, partnering with Shell and Gas y Petroleo. Together, these blocks are 100% encompass nearly 115,000 acres of Vaca Muerta with outstanding well inventory of over 500 wells. Wells drilled in the volatile oil window during the early stage of development demonstrate quite promising productivity levels that underscore their long-term potential. Our expectation is to accelerate the development plan to fast track the monetization of this production.

This new asset increases our future oil production curve, extend the duration of our plateau and reinforce our leading position in Vaca Muerta reserves. Furthermore, when we complete the divestment of our conventional asset, YPF will become a pure integrated shell player with superior size synergies and economic of scale, as I mentioned before. Now pillar #3 focuses on maximizing our upstream and downstream efficiencies. Since our last call in May, we have inaugurated three real-time intelligence centers, two of them are in La Plata and Luján de Cuyo refinery, respectively. And the third one is based in our headquarters to support our downstream commercialization business. The latter one has been key for the implementation of micro pricing and sell fuel projects.

This real time is unique in Latin America. We can follow the demand by each gas station during 24 hours beside our old product at convenience store. We are changing the way of delivering fuel and products in the country. It’s really disruptive marketing change. We have an impressive positive image from the people in the poles. This 100% technology driving an in-house management project were launched last month to seek a win-win strategy. Micro pricing allow our gas station clients to access a different price at fuel at 9 from midnight to 6:00 a.m. [ Shell fuel ] provides these clients with greater savings if the payment is made through the YPF application in certain gas stations. YPF has pioneered this metal prices in Argentina with the objective of reducing our fixed costs and growing our nighttime sales and generate more profit for YPF.

The results so far are impressive. In the first month since launching this project, our sales volume at the gas station line grew roughly 30% compared to Q2 this year. On the industrial efficiency side, we have reduced significantly the duration of program maintenance, especially in La Plata refinery, we complete the maintenance between 40% to 60% faster than historical records. Regarding Toyota well project, we have been able to reduce the construction cycle for the pad of four wells or roughly 230 days. We represent a reduction of around 80 days compared to 2023 levels. The same methodology and focus are adapting real-time intelligence center for drilling and completion that start to deliver results as you will see in the next slides. We are the larger operating in Vaca Muerta, working upstream real-time intelligence center 24/7 remotely from YPF headquarters.

As a record, one of the biggest service company last week, it was the first time that deliver a work from remote all around the world. In the third week of August, we are opening the RTIC Real-time Intelligence Center for operation and maintenance, pooling and logistics in Nine to improve our efficiency and coordination in all the operations of Vaca Muerta. This achievement reflects our integrated approach, working closely with our strategic suppliers at every stage of the well production process. Additionally, we enhanced our operational dashboard to enable real-time anomaly detection and implement corrective action plans rapidly. All of these initiatives represent a critical cultural change for YPF entire management and production processes.

Finally, pillar #4 is Argentina LNG project. And since our last call in May, we signed the health of agreement with ENI for the consolidation first 3 for 12 million tons per annum, expecting the approval of final investment decision in Q1 ’26. In the same direction, we are working with Shell for Phase 2 in order to speed up the FID and obtain synergy between both projects in the structure. Moreover, this week, our SPV SESA obtained the FID approval for the 20-year bareboat charter agreement for its second floating LNG named MK II. This vessel has a capacity of 3.5 million tons per year as expected to be operational in 2028. We are also working on the project RIGI as well as environmental and export permits for MK II. Consider the first vessel Hilli, the total capacity amount to roughly 6 million tons per year.

Let me mention that this second vessel allowed the contraction of a 100% dedicated gas pipeline from Vaca Muerta to the San Matías Gulf in the province of Río Negro available during the whole year instead of the original plan of using existing pipeline idle capacity during off-peak season operating only Hilli. Now moving on Q2 results. Revenue remained stable sequentially, reaching over $4.6 billion with record high seasonal sales on natural gas and fuels. and increased export volume of crude oil and agro products. However, the volatility in international price negatively impact our refined product prices, especially local fuels. Additionally, Q2 was affected by lower seasonal gasoline demand. Interannually, despite roughly 20% drop in Brent, revenues only declined by 6%.

The drop in Brent prices were mitigated by operational efficiency, the increase of shell export and a recovery in local fuel demand. Adjusted EBITDA was $1.12 billion in Q2, decreasing 10% sequentially. It was mainly explained by Brent contraction impact in refined product prices, exit from mature field and value of inventories. On the positive side, this negative effect was softened with lower lifting costs on the back of less exposure to mature fields. Interannually, adjusted EBITDA declined by 7%, also reflecting Brent volatility, but it was partially mitigated by the significant ramp-up in shale oil production and even better conventional lifting costs. Also, bear in mind that Q2 last year was affected by the extreme weather conditions experienced in Patagonia.

At this point, I would like to note that excluding the negative contribution from mature field, our proxy adjusted EBITDA would have been $1.25 billion. Looking at the bottom line, Q2 net profit was $58 million compared to a loss of $10 million in the previous quarter. This turnaround was mainly driven by one-off items related to mature fields in Q1. Interannually, net profit declined sharply, explained by higher depreciation from shell activity expansion and lower gains from financial securities in 2024. Also this quarter included an income tax charge due to higher future tax payable, while Q2 ’24 was the opposite. Mature field also impacted on the net results. Excluding them, our profit net result would have been a profit of $264 million.

In the terms of investment, in Q2, we deployed $1.16 billion, remaining similar sequentially interannually. It’s very important to remark that 71% of the total was now directly allocated to unconventional assets. In Q2, we record a negative free cash flow of $355 million. It was mainly affected by $315 million of negative impact from mature fields. Moreover, we had negative working capital due to peak winter sales on natural gas and our subsidies paid income tax. However, the negative impact was softened by dividend collection from affiliates. As a result, our net debt rose to $8.8 billion, reaching a net leverage ratio of 1.9x as expected while divesting mature fields. Please take into account our acquisition of this year and also in the rest of this year, we are selling performing conventional assets at Metrogas after extension of the concession.

Now I will turn the call over to Max.

Maximiliano Pedro Westen: Thank you, Horacio, and hello to everyone. Focusing on the Upstream segment, the second quarter total hydrocarbon production was 546,000 barrels of oil equivalent per day. It remained stable both sequentially and interannually. Shale production keeps driving the growth, now representing an impressive 62% of the total output. It nearly offset the divestment of mature fields and to a minor extent, the lower working interest in Aguada del Chañar. In the case of mature fields, hydrocarbon production decreased by 26% versus the previous quarter as we kept divesting them. It recorded 72,000 barrels of oil equivalent per day, representing only 13% of the second quarter total production. Crude oil production amounted to 248,000 barrels per day in the second quarter, decreasing 8% sequentially.

it was primarily driven by lower mature fields and to a lesser extent, Aguada del Chañar, as explained before. Interannually, while total crude oil production remained stable, the remarkable 28% expansion in shale output fully offset the decrease in exposure to mature fields. Let me mention that last month’s shale oil production was approximately 165,000 barrels per day. We expect continuing significant growth in the second half of the year to achieve our 2025 annual target of over 165,000 barrels per day. Oil exports in the second quarter totaled 44,000 barrels per day, increasing by 20% sequentially. The main growth came from redirecting Escalante heavy oil to the foreign market as La Plata refinery was under program maintenance. Interannually, it grew by 43%, also boosted by Shell expansions.

Natural gas production increased by 6% in the second quarter sequentially to 40 million cubic meters per day, primarily supported by higher seasonal demand. NGL production was 48,000 barrels per day, a modest growth of 2% sequentially, driven by higher associated gas output in certain shale oil blocks. Total lifting cost was $12.3 per barrel of oil equivalent. This is a remarkable sequential reduction of 19%, reflecting further divestment of mature fields. Excluding mature fields, our proxy lifting cost for the second quarter would have been roughly $7.5 per barrel of oil equivalent. Zooming into our core hub blocks, lifting cost at 100% of working interest was $4.9 per barrel of oil equivalent. It grew by 7% sequentially due to higher pooling and maintenance costs.

Regarding prices in the Upstream segment, crude oil price was $59.5 per barrel, 12% lower sequentially, in line with Brent volatility. Natural gas price was $4.1 per million BTU, growing by 38% sequentially, primarily influenced by the peak season planned gas price. Now let me walk you through the performance of our shale activities. In the second quarter, we drilled 54 horizontal oil wells on a gross basis, mostly in operated blocks while maintaining our net working interest of 55%. In this sense, in the first half of the year, we drilled 105 horizontal oil wells on a gross basis. This is in line with our estimate of 205 wells for the year. In terms of completion and tie-in of wells, we accelerated our activity. In the second quarter, we completed 70 horizontal wells and tied in 76 on a gross basis.

They represented an increase of 35% and 69%, respectively, when compared to the second quarter last year. Shale oil production in the second quarter remained stable sequentially at 145,000 barrels per day. This is because the lower stake in Aguada del Chañar block was fully compensated by the growing contribution from La Angostura Sur I block. This block is 100% YPF, located in the South hub with a shale oil production of 20,000 barrels per day in the second quarter. Considering the acceleration in our activities mentioned before and July’s production level of 165,000 barrels per day, we are in good shape to reach the 2025 target of 165,000 barrels per day. In our unconventional core hub blocks, we achieved an average drilling speed of 331 meters per day.

We remain optimistic about reaching our annual target of 360 meters per day. On the fracking side, we completed 259 stages per set per month in our unconventional operations, now very close to achieve our annual target of 260 stages per set per month. In our Downstream segment, local fuel prices remained closely aligned with international parities, reflecting Brent volatility. As a result, local fuel prices measured in dollars were down 8% sequentially and 10% interannually. Also, second quarter local fuel prices were just 1% below import parities. Fuel sales volume was 3.5 million cubic meters in the second quarter, growing by 4% sequentially, primarily explained by seasonality. Interannually, it increased by 3%, mostly driven by demand recovery.

We also maintained our leading market share of 55%. In the second quarter, we processed 301,000 barrels per day, recording a 5% sequential contraction due to the maintenance stoppage at La Plata refinery. This resulted in a refining utilization rate of almost 90% as anticipated in our previous call. However, let me highlight that La Plata refinery achieved a record high monthly processing level of the past 15 years, reaching nearly 201,000 barrels per day in April. Our refining and marketing margins declined by 17% sequentially. It was mostly due to lower prices, combined with higher costs related to maintenance. However, it was mitigated by lower cost of oil on top of the OpEx efficiency measures said before. Now I will turn the call over to Federico.

Federico Luis Barroetave: Thank you, Max. Switching to the financials. Let’s start with the cash flow evolution. In Q2, we posted a negative free cash flow of $365 million, mainly explained by the performance and closing agreements of mature fields. They recorded an adjusted EBITDA loss of $126 million and one-off cash flow loss for almost $190 million. Moreover, our subsidiaries, Metrogas and AESA paid income tax, while the regular debt service remained stable. On the other hand, the dividend collection from our affiliates, net of contributions and prepayments mostly offset the negative working capital. The latter was mainly explained by higher seasonal gas sales and payroll. In the same line, exports of agricultural products grew, boosted by reduced export duties.

As a summary, for the first half of the year, we recorded a negative free cash flow of $1.3 billion, mainly explained by the impact of mature fields. These assets recorded an adjusted EBITDA loss of over $230 million and a negative one-off cash flow for around $420 million totaling an aggregate of $650 million. In addition, year-to-date, we disbursed a net amount of roughly $210 million in M&A activity, mainly the acquisition of Sierra Chata. Therefore, during this six-month period, the proxy free cash flow, excluding mature fields and M&A activity was $460 million negative, which is mostly explained by the regular interest payment for roughly $320 million and income tax payments from our subsidiaries for around $100 million. Now in terms of Q2 financing, we ended with $8.8 billion of net debt, representing a net leverage ratio of 1.9x as anticipated during our Investor Day in April.

During this quarter, we issued a $204 million linked bond and $140 million hard dollar bond. The first one was with a 15-month tenure at 3.95% and the second one with a 2-year tenure at 7%. We also secured around $190 million in another local financing. After the quarter, we also issued two local bonds, a $250 million MEP bond and $167 million Cable bond. The first one was a 2-year tenure and the second one, a 5-year tenure. Considering the recent acquisition of shale assets, we will complement the last issuance of dollar Cable bond with cross-border acquisition financing. We anticipate this M&A will take our net leverage ratio to near 2x during Q3. However, for the second half of the year, we expect that the increase in EBITDA driven by the ramp-up in production and the sale of our mature fields, combined with the divestment of additional nonmature fields that [indiscernible] anticipated will lead to a normalized net leverage ratio of 1.8x by year-end.

In terms of refinancing activities, during the rest of the year, we will be targeting debt maturities of nearly $800 million, 78% local and only 22% international. In this process, it is important to highlight that last month, Moody’s upgraded YPF’s credit rating from Caa1 to B2 with a stable outlook following the recent sovereign rating improvement. So with this, we conclude our presentation and open the floor for questions.

Operator: [Operator Instructions] Your first question comes from Tasso Vasconcellos with UBS.

Q&A Session

Tasso Sousa Vasconcellos: I would like Horacio, to get a broader update on the development plans that you guys have planned ahead. The company just announced the acquisition of this block that you mentioned during the presentation. How does that impact the current production plan for the upcoming years? And how do you view the risks of an increased development plan amid an already accelerated plan that you guys have released before? And in parallel, Horacio, you recently said in an interview that you view the acceleration in the CapEx in Vaca Muerta. Can you also give some additional feedback on the view of yours? Those are my two questions here.

Horacio Daniel Marin: Why we bought that is because this field is one of the best field in the north of Vaca Muerta, where the type well is more, I would say, if you see from different consultants, the average production of UR of wells for all Vaca Muerta is in order of 1 million. But if you see this area, it could be 1.5 million or more. So that means that it’s more profitable than anyone else. They are in the very, I would say, sweet spot as in the United States, they want to say. What is the affect? Nothing. Because it’s good. We are going to make more money for you. And so we are going to prioritize with shell for sure, to go very quickly because it will be one of the best fields as rentability of Argentina. I don’t know if I answered the question or you need more detail.

Tasso Sousa Vasconcellos: It’s clear.

Horacio Daniel Marin: Okay. Thank you.

Tasso Sousa Vasconcellos: From you on this interview that you recently gave on this potential deceleration on Vaca Muerta activities as a whole?

Horacio Daniel Marin: Okay. Why I say that in an interview because they asked me in an interview, but it’s no YPF. It’s not the problem for us to do that. So we are delivering what we say. And in everything that we say in 4×4, we have delivered. I answer at that moment because there are people say in the market of Argentina, they said there will be a reduction in some number of rigs, but it’s no YPF. So I think it’s not, I would say, not logic and fair that I would say which company is reducing the rigs, okay?

Operator: Your next question comes from Leonardo Marcondes with Bank of America.

Leonardo Marcondes: I have two from my end. The first one is regarding the new Andes project. Could you provide some color on your expectations in terms of timing for the conclusion of the whole Phase 1? And also some more details on Phase 2 on what is the total production to be divested from? What is it EBITDA representativeness? And also your expectations in terms of conclusion for the second phase as well? My second question is regarding the export tariff for oil, right? We have recently seen the government reducing the export tariff for other segments. So is there any expectation or discussion with the government to reduce the export tariff for oil as well in the short term?

Horacio Daniel Marin: Okay. Thanks for the question. Let’s go by number one, And. And one. In — and one, we are finishing. There is only one block that is in Rio Negro that is the expectation. They have to be approved by the government of Rio Negro, but is in the final phase, and we are out totally out. When there is something that I have to explain for you that Andes where we sell, we sold everything. But there were two provinces that is one is in Santa Cruz that we are out now because we are no more the owners of the blocks. We are operating for up to December at most but we operate for the province company, okay, because they don’t have the people to do that, okay? But we are out there. In Tierra del Fuego, that is very small comparing with Santa Cruz, very, very small.

We are — I think next week, we can have — maybe we can have good news because we are in the last phases to agree with the province, okay? That is Andes 1. What is Andes 2? Andes 2 is all the conventional blocks that we have left because remember, if you see some interviews, I say that the goal of all the people that work in YPF in the management is to be unconventional company next year. And so now we are delivering and to sell what you can call core conventional fields that they have good result for conventionals, okay? But why we do that? Because we can make more money as you realize that we have a good portfolio to invest in Vaca Muerta. And so this one that they have lifting cost that is more than $20 per barrel is no priority. I don’t know how to see Priority for us because of the profitability.

And so there is all the others is in Chubut or in Mendoza and in Salta. There are oil and gas. The production of all the assets is in the order of 50,000 barrels a day production of us is 2 million cubic meter per day. The EBITDA of all of this is in the order of 8% at 2024, okay? And I think I answered the question or I left something. There is a second one. I work — I am a guy that work in a private company. I’m not the guy that regulate the Argentina tariff or export tariffs. I don’t know that you have to ask to the government.

Leonardo Marcondes: Very, very clear, Horacio. Just a follow-up on the first question. Regarding the second phase in terms of production and EBITDA representativeness, what should be the impact on the company?

Horacio Daniel Marin: I said maybe because my English maybe is not good, I know that, okay? But it doesn’t matter. The production is 50,000 barrels a day of all together and the production of oil. The production of gas is 2 million cubic meters per day. The EBITDA for all that in figures of 2024 that you have is the ordering of 8%. It was more clear.

Operator: Your next question comes from Matías Cattaruzzi with Adcap.

Matías Cattaruzzi: I have a question about the CapEx guidance. You gave us this $5.0 billion to $5.2 billion guidance with a Brent of $7 per barrel. Are you planning on changing that or adjusting it in the upcoming quarters?

Horacio Daniel Marin: Okay. No, we are not going to change. And also, if you look at our figures, we are very, very close to what is our budget, and we are going to continue.

Matías Cattaruzzi: Okay. And then could you provide an update of the equity contributions to Vaca Muerta del Sur for the upcoming two years?

Horacio Daniel Marin: The equity, I will pass to Federico. They are in charge of all the financing.

Federico Luis Barroetave: Matías, Well, basically, after the financial close of VMOS based on a total investment of $3.1 billion for the project and a 70% debt- to-equity ratio. The total number for our share of the equity will be in the range of $230 million, out of which close to $75 million, $76 million have been already contributed up to June. So the remaining amount will be $155 million until COD. I will say that at least $50 million will come along 2025 and the rest mainly concentrated in 2026. That will be our disbursement of VMOS equity.

Operator: Your next question comes from Juan Muñoz with BTG.

Juan José Muñoz: The first one is a follow-up of the divesting of the conventional assets. So regarding the proceeds that you expect with fully divesting those assets, if you could provide us an estimation of those proceeds? That’s my first question. And the second one is regarding the recent acquisition of the Shell assets from TotalEnergies more a strategic question is, how are you seeing the competitive M&A landscape in Vaca Muerta in the recent months? So that’s my two questions.

Horacio Daniel Marin: First question, okay, thank you. I cannot answer. Imagine that if I say what is our expectation, it will be in all the newspaper tomorrow. I cannot tell you that, okay? But we think that it’s a good number because they are very good assets, but I cannot tell you exactly the number, okay? With all our selling, I really think that we are going to get much more than the total acquisition, okay? That is something that I think I can answer you, okay? Regarding — I cannot — I don’t know if I can understand what you say competitive landscape. In which sense?

Juan José Muñoz: How are you seeing the competition regarding the current assets that are available for sale in Vaca Muerta right now?

Horacio Daniel Marin: Okay. Okay. But I think there are not a lot more. The company that we have all the — now all the assets, they are all focused in the development, okay? It could be another company or it could be changed, it’s normal, but we don’t see that there are more during the — it seems that there’s no more during this year at least, okay?

Operator: Your next question comes from Bruno Montanari with Morgan Stanley.

Bruno Amorim: I have one follow-up and one question. On the — coming back to the Total acquisition, can you share with us maybe the time line for when you would start to invest in the area? And if there is any CapEx expectation? Just like a quick math, if it’s a 500 well inventory at around, say, $14 million or $15 million per well over the full development, it would be at least around $7.5 billion in CapEx. So I just wanted to know if that makes sense and what type of facilities you would potentially have to invest as well? And the second question is maybe to on the financial side. When we look at 2026, the company has some concentration of maturities, especially in domestic bonds. So when would you start to work on the refinancing of the ’26 maturities?

Horacio Daniel Marin: Okay. I will answer the first, and Federico will answer the second, okay? With the Total acquisition, our partner is Shell is Shell and the province company, [ CMP ]. We are going to have a meeting with them to decide the development, okay, because we are partners. So I cannot say exactly there. We are going to prioritize as much as we can if necessary facilities. And also, we are talking with companies that are near there. So you can get, if you know Vaca Muerta to have synergy in the plants, in the CPF, okay? So there, everybody, we can reduce the investment per barrel. That is our idea, okay? The second question, I pass to Federico.

Federico Luis Barroetave: Bruno, so looking for refinancing, first, we need to work on, let’s say, what we have for the rest of the year. Our total, let’s say, refinancing and acquisition finance now for $500 million to be done in this — in other words, we have $1.1 billion of additional debt to be acquired until the end of the year. For the acquisition finance, we already issued a bond last month in the local market for $167 million. So more than 30% of the total acquisition is already funded. The rest we have acquisition finance committed. And the rest, I think that will be mostly in the local market. Now looking at the tower of financing that we have for 2026, we have $2.3 billion, out of which more than 50% is local and refinancing and only $350 million are international bonds depending.

So we are going to be looking at the opportunities that we have in the local markets and in the international market. starting, I will say, from the last year of this year and also entering into early beginning of next year as, for example, as we did in January of 2025. But bear in mind that more than 50% of the refinancing required is coming from local bonds. I’m sorry. And so far, we have been very successful in refinancing locally. We just together with the dollar bond that we issued last month, we issued another dollar bond for $250 million. So in total, it was $417 million. That is the highest bond ever in the local market. So there is a growing appetite for our paper in the local market.

Operator: The company appreciates the question. But since we are running out of time, we’re going to accept one last question from Andres Cardona with Citigroup.

Andres Felipe Cardona Gómez: On the capital allocation team, I just wonder if you could provide any update about assets that are for divestiture excluding the Andes project. Maybe you can walk us through the rationale of the strategy of the discounts on the downstream business during nights, how it improves profitability or increased volumes, I don’t know, just help us to understand the rationale from a profitability perspective.

Horacio Daniel Marin: One question because I understand [indiscernible] [Foreign Language].

Margarita Chun: [Foreign Language]

Horacio Daniel Marin: Okay. Thank you. Now I can answer. The first question, besides Andres, I said in the media several times. There is also Metrogas, we will reach the extension that is expected to be this year. And after we are going to be in the market. And also, there is another one small refinery that we are trying to go out from there with the [ Refinol ] Even that refinery is not refining now, but it’s close, but we are seeing how we can go out if we can, okay? And the second one, you didn’t deny is lovely what we are doing because you have to come here to see what we did. It’s amazing. It’s unique. I would say unique in Spanish world, it’s unique. I don’t know it’s in someone else. We have E&I for everything in cars, everything that you want.

And we see the demand for each gas pump. You hear me each gas pump around all Argentina. So we are doing the same as you were, okay? So it depends on demand. It depends on ours, and that’s why we are trying to get more, more profit to YPF. Why at 9? Because after we decide and we start seeing something that nobody knows in minute by minute, we realized at 9, after midnight, there is a very low demand, which is logical because it’s logical. And people sleep. So we realize that there, our profitability at the gas station is negative. What is also logic and you have to reduce that to make more — reduce your loss because that is an essential service. You cannot close because it’s by law. And also it’s logical that you have to be opening at 9. So what we did is to reduce and it’s amazing the response of the people because our market share increased a lot.

And our — in one month, we reduced the loss at half. And our incremental demand during the night is more than 30% around all Argentina, all Argentina. And also there is some probably that they are more in elastic and there are more — other than much more elastic. And so we are playing with that. It’s amazing. I will love. I’m not doing that job. But if I work 25, I would like to work there. Really, I want to work more there than I was working in my life at the beginning of my career in reservoir. I tell you that it’s amazing what they are doing those rides.

Operator: That concludes our Q&A session. I’ll now turn the conference back over to Horacio Marin for closing remarks.

Horacio Daniel Marin: Okay. Thank you very much for all the questions. Really, we are proud of what we are doing in YPF. We are working very hard. In fact, I am today with infection, and I was coming all day long, all day week with infection because I love to be in YPF. I love what we are doing. I like what people are response in the profitability in all the company. And so thank you very much, and we will see in three months. But no see. We will be talking three months, okay?

Operator: This concludes today’s conference call. You may now disconnect.