Pampa Energia S.A.

Good morning, everyone, and thank you for waiting. I'm Raquel Cardaz from IAR, and we would like to welcome everyone to Pampa Energía's first quarter 2024 results video conference. We would like to inform you that this event is being recorded. Our participants will be in listen-only mode during the presentation. After the company's remarks, there will be a Q&A session. Questions can only be submitted in writing through Zoom. Should any participant need assistance, please send us a chat message. Before proceeding, please read the disclaimer on the second page of our presentation. Let me mention that forward-looking statements are based on Pampa Energia's management beliefs and assumptions and information currently available to the company. They involve risks, uncertainties, and assumptions because they are related to future events that may or may not occur. Investors should understand that general economic and industry conditions and other operating factors could also affect the future results of Pampa Energía and could cause results to differ materially from those expressed in such forward-looking statements. Now, I'll turn the video conference over to Lida. Please go ahead.

Thank you, Raquel. Hello, everyone, and thank you for joining our conference call. I will make a quick summary of Q1. You may find more details in our earnings release and financial statements. Today, we are having a Q&A with our CEO, Mr. Gustavo Mariani, our CFO, Mr. Nicolás Mindin, Mr. Horacio Turri, our head of EMP, and also Adolfo Súder-Bühler, our finance director. Let's just start with the quarter figures. After a soft Q4 gas and power demand, recover. Pampa delivered 31% higher gas production year-on-year and 32% quarter-on-quarter, thanks to the new gas pipeline online in August of last year. Remember that Pampa was awarded 4.9 million cubic meters per day out of the 11 of the pipeline's capacity. This is very important as this late summer bloom prevented the country from importing gas and firing alternative fuels. Therefore, there is more local gas output, less RFX outflow, a friendlier carbon footprint, and more power efficiency. Also, we kept boosting shale gas production, representing 40% of our total output of this quarter, a significant increase compared to last year's 14%. In contrast, we've been experiencing significant delays in collecting CAMESA payments, bearing higher working capital. We learned that the Secretary of Energy instructed CAMESA to pay December 2023 and January 2024 transaction in face value dollar bonds. So we book a $34 million impairment loss on trade receivables. We are awaiting the final resolution, analyzing the course of action. The adjusted VBA for the quarter amounted to $189 million. This is a decrease of 8% compared to last year's amount because of the payment haircut on CAMESA's January receivables, and lower gas exports, in addition to the drop of PECM, petrochemicals, and energy spot prices, the latter affected by the sharp peso depreciation in December. Higher domestic Gas demand and lower net operating costs partially offset these effects. However, the VDA grew 70% quarter-on-quarter, mainly due to this recovery in gas and power demand. Notice that the Q4-23 VDA is also affected by Kimisa haircut because of December's transaction. CapEx in Q1 slowed down. being 36% lower year-on-year, mainly because of the strong shale gas activity, and PP4 was developed in 2023. Plus, in Q1, we carry out the last diversions of PP6, our last wind farm, which is estimated to be fully commissioned by October of this year. This was partially upset by the beginning of the pilot plan for shale oil in Rincon de Aranda. Moving on to the power generation as seen on slide four, we posted an adjusted BDA of $85 million in Q1, 22% lower year-on-year, mainly explained by the $17 million impairment of Canvesa's January 2024 invoice explained before. It is also impacted by the peso devaluation on the spot prices and Mario Cerreiro's divestment, partially upset by lower operating costs and the commissioning of 54 in June last year. Q4 dispatch increased 3% year-on-year. This is mainly due to Barragán's new CCGT, higher water levels at Mendoza Hydros, and PP4's contribution, partially upset by lower fuel and fire generation, and Lomas gas to ride number five that, after being out of service for six months, resumed dispatch on January. Take-or-pay capacity payment, especially from PPAs, explains most of our EBITDA in this segment. It is driven by availability. And in Q1, we reached 96%. This is higher than last year, 93%, because last year there was a lot of thermal outages. Let's do a quick review on PP6 expansion. The project's progress is 89% advanced, so it's pretty advanced. We mounted the eighth wind turbine on Monday, as seen on the installation status report that you see here. Meanwhile, the tower components keep arriving at the site. The four power transformers have already been commissioned, tested, and cleared by CAMESA and TransCener, but they are still awaiting for China's approval. Finally, to avoid power transmission curtailments, we connected the wind farm to a new 500 kV power high voltage grid the first three points line protection system in already is a rail line and the second has begun to process for commission the estimated full cod will be in october of this year pp6 energy will be sold under b2b dpas in matter Moving on to EMP, I wanted to quickly comment on the gas deliveries, which recovered after Q4 soft demand, thanks to the late summer bloom. As you can see here, domestic sales are way above take or pay, although exports to Chile are still struggling, but better off than what last Q4. The winter season began this May, and we are hitting peak production soon. Commenting on the segment's performance on slide seven, our EMP business posted an adjusted VBA of $70 million in Q1. This is 14% higher year on year. This increase was driven by higher domestic gas demand unlocked by the commissioning of this new pipeline and the hot weather, lower gas exports, which I mentioned before, and the crude oil sales that were lower offset these variations. In Q1, our total production averaged above 73,000 barrels of oil equivalent per day. This is 27% higher than last year. Summing in crude oil represented 6% of our EMP output, but 16% of the segment's revenue. Gas keeps taking the lead, representing 94% of the total production. Higher maintenance, treatment, and transportation costs in Mangrush and Sierra Chata, due to the increased activity, explain that our total lifting costs likely grew by 4% year on year. Still, this is very important, the rising output mostly possibly impact on the lifting cost per BOE, which decreased 19% year-on-year, recording $5.8 per BOE. Also this quarter, we started activities in Rincón de Aranda, which yielded promising results. We completed one DUC well targeted in Vaca Muerta with initial production of over 1,300 barrels and currently producing practically at the same rate. Once the well testing is done and duplicated partially commissioned, that is due this year, a stage of it, we plan to resume production in the well tithing back in 2018. Focusing on gas, our production in Q1 increased by 31% year-on-year and 32% quarter-on-quarter, arranging almost 12 million cubic meters per day, again, because of the local demand. 64% of the quarter's production came from El Mangrucho and 20% from Sierra Chata, both our flagship shale gas fields. Regarding the campaign, We drilled one well and completed another free shale gas wells in Sierra Chata. The productivity was outstanding, so we almost doubled our gas production there. On the other hand, in El Mangrucho, we experienced a 29% increase compared to last year without new drill or tidying wells. In non-operated areas, Rio Neuquén tied in five wells this quarter, maintaining production levels. The average gas price for the quarter stood at $3.2 per million BTU. This is 18% down due to lower exports in volume and price to Chile, as we explained before. We can see right below, the higher deliveries of local gas were destined for thermal power generation. The petrochemicals business posted $11 million ABTA in Q1. This is a 58% growth year on year, mainly because of the higher sales in the reformer and lower costs because of VFX, upset by sub-domestic sales due to the economic activity and lower international prices. Quarter or quarter, the EBITDA decreased by 45%. This is mainly because the export dollar income was lower. The reformer led the output mostly, upset by the reduced demand for ceramics. Well, in Q1, moving to cashflow, we recorded a free cashflow flow of $187 million. Besides the $17 million haircut on Camesa's January invoice that impacted the EBTA, this outflow is purely explained by the sharp increase in working capital due to the payment delays from Camesa, which rose from 73 to 89 days in the quarter. Now it is over 120 days if all the free-due bills are paid today. May 10 is the due March invoice, so the debt will pile four bills if nothing changes. The higher working capital is upset by lower debt service, mainly due to the reduced peso stock, debt stock. However, we took advantage of the local market conditions and issue new debt to recover the increased working capital. Also, it is worth highlighting that we collected $45 million in dividends from OCP, Co-Control Oil Pipeline Company. This is the second largest and only private pipeline in Ecuador. In summary, we increased $11 million of net cash in the quarter despite the high working capital, achieving an $845 million cash position. by the end of March. Moving to the slide 12, we show our consolidated financial position, including our affiliates at ownership, but let's just focus on the restricted group that reflects the bottom of the perimeter. We posted a gross debt of almost $1.6 billion. This is 6% lower year on year and 10% growth in cash. we kept diversifying the currency and source of our debt. And as a result, 75% of the gross debt is in US dollars. The net debt recorded $718 million. It's 21% lower year on year and 1.1 times leverage. The average life was 2.8 years until 2027. We do not face any relevant death maturities. So this concludes our presentation. Now I'll turn the word to Raquel. She will call for the questions. Thank you very much.

Thank you very much, Lida. The floor is now open for questions. If you have a question, please send us through Zoom chat. We will read and answer them in order with you. Also, please make sure your name and company are correctly displayed to introduce you to the audience. Should any participants need assistance, send us a chat message or raise your hand. Please hold while we pause for questions. So the first question comes from Anne Milne from Bank of America. The first question is, how do you see the evolution of the power generator sector on such things as spot energy pricing and price adjustments, construction on future generation facilities, future PPA contracts, And what are the implications for the profitability of Argentine generators?

Good morning. Thank you for your question. Unfortunately, this discussion that is public with the Secretary of Energy and with the Ministry of Economy regarding the CAMESA payments have put on hold all the conversations regarding regulatory changes going forward. I hope that we are a few weeks away from being able to start those conversations again or that the Secretary of Energy could focus on this issue. Certainly the spot energy pricing needs an adjustment. Desperately needs an adjustment very soon. So we hope that the Secretary will have time to focus on this issue in the next few weeks, but we don't have any visibility on that matter. Regarding construction of future generation facilities, as you know, the auction that was made that was awarded at the end of the last administration, at the very end of the last administration, has been put on hold or more than put on hold. All the signals are that it will be canceled. So there is no visibility there. And you also ask about future PPAs, but I don't believe that this administration is thinking about PPAs, at least not in a way that we have seen in the last decades. PPAs were the counterparty It's basically Kamesa or the Secretary of Energy. But probably the scheme that this new administration will propose will be PPAs, where the counterparty of the power generation will be the distribution companies directly. But that is a regulatory change that has been... mentioned and likely discussed with the authorities, but we haven't seen. But again, we had those conversations during our summer. But since then, there's not been further discussion on this topic.

Thank you very much, Guls. And second question is, can you provide an update on the construction of the various new pipelines that will help producers to evacuate production during off-peak times or sales to neighbor countries such as Bolivia, Brazil, and others?

The only infrastructure, there are currently a couple of things. One is the reversion of the north pipeline, the pipeline that currently brings gas from Bolivia and from the north basin of Argentina to the center of Argentina. That pipeline is in the process of reversing its flow of gas. now it's coming north to south. And once this reversion is completed, natural gas from the Neuquina Basin will be able to reach the north part of the country and eventually Bolivia. Unfortunately, we don't see this infrastructure been completed by this winter. We hope it will be completed by the end of the year, by next summer or early next year. So it will be online by then. The other, just to keep in mind, that will not increase the the amount of gas that the Neuquina Basin will be able to export, but rather gas that currently goes to the east side of Argentina will be able to reach the north part of Argentina that because of the decrease in in imports from Bolivia because of the decline of production there needs to be satisfied. While the east of the country could be supplied with energy or eventually with liquid fuels. The other important infrastructure project is the completion of the gas compression plants in the Gasoducto Néstor Kirchner. So the first tranche of the Gasoducto Néstor Kirchner was put online at the middle of last winter. Now the two compression plants will be able to double the capacity of that first tranche of the Gasoducto Néstor Kirchner. The first of that Compression plant will be ready, we hope, in the next month or so, before the end of the winter, increasing the capacity of the pipe in 6 million cubic meters of natural gas per day. The other 5 million will be once the second compression plant is ready, which we expect. We don't have much visibility, but we expect it will be by the end of the year or during the summer.

Thank you very much. The last question from Anne is, are there any other regulatory changes that you are monitoring closely? No, as I said,

All the attention has been, unfortunately, during the last couple of months, has been on this issue of the payments. So we hope to be able to resume or the Secretary of Energy can focus on these other regulatory changes in the next few weeks.

Thank you, Hugo. Now, Alejandro de Michelis from Jefferies has three questions. First one says, could you please provide an update on negotiations with Gamesa regarding payments and a potential bond? Could you please confirm the outstanding balance with Gamesa?

Yes. Thank you, Alejandro, for the question. I think you all know it was released yesterday, published in the official Gazette this morning, Resolution 58. Basically, Resolution 58, what it says is encapsula, or it puts into brackets the payments of the transactions of December, January... and February of this year. And the proposal is to pay December and January transactions with bonds that currently trade at around 50%. And the transaction of February will be paid in cash. This is assuming that the generator reaches or settles this agreement with Camesa. In terms of numbers, the December and January transaction for Pampa is 85 billion pesos. That is what the Ministry of Economy is proposing to pay with bonds. And the February transaction is 53 billion pesos.

This is...

What it means, we need further clarifications on the resolution that has been published. It implies a significant haircut, and as Lida explained, we have already accounted for that on our balance sheet. What I think is already public as well is that AGEIRA, which is the association of all the power generators of the country, had formally rejected the proposal in the name of all its private members. I mention private because AGEIRA is composed both of private generators and state-owned generators. We believe this is an ongoing negotiation. We are very optimistic that an agreement could be reached with the government, with government, with minor improvements and take it into account the restrictions that the Secretary of Energy, that the Treasury is facing. Obviously, as we and all the creditors of CAMESA have mentioned that is crucial to this negotiation is the fact that we have going forward the visibility that payments will begin to be current and on time from now onwards. that the stock of debt, the one that we are taking a haircut on, is limited and will not continue increasing. So again, there's not much that I can tell you, but that we are optimistic that an agreement will be reached, but with the not, accepting this current proposal.

Thank you, August. Next question from Alejandro. He wants to know how do you see upstream volumes evolving during rest of 2024?

Okay, good morning to everybody. Going to your question, Alejandro, we have to separate between gas and oil. In terms of gas, as Lida mentioned before, the demand is picking up. So currently we are delivering a bit more than 14 million cubic meters today. Our commitment total delivery is in the range of 15.7 for the winter, which we think is going to be achievable. And then going, this includes approximately 600,000 cubic meters of exports to Chile during the winter season. And then we will probably go back to the 13.8 that we also have committed for the off-peak season, including around nearly 1 million cubic meters per day exports to Chile. So that's regarding natural gas. In terms of oil, we will see a significant increase in Pampas production. We are currently in the range of 4,500 barrels per day, with the Rincón de Aranda 2001 delivering 1,300 barrels a day, plus the tying in of the Rincón de Aranda 2000 with approximately or more than 400 barrels a day, we will be adding up like 1,800 barrels a day of crude oil, which represents a little bit less than 50% of our current production.

Thank you. Alejandro also wants to know an update on the performance of the Rincón de Aranda block.

Okay. Going to Rincón de Aranda 2001 well, We have very good news. The well was extremely successful. We reached almost 1,400 bars per day of initial production, which gives you an EUR of around... 1.3 to 1.4 million barrels. This is particularly good. If you compare this well with the average of wells that have been drilled with 2,000 meters of lateral leg in the area, you can see there in the slide that we rank among the top three When we compare with La Marga Chica, Bajada del Palo and Aguada Canepa, which approximately accounts for around 300 wells, we see that the behavior of the Rincón de Aranda 2001 is very promising. And as you can see also in the slide, we are way above the average wells that have been drilled with 2,000 meters of lateral leg by far. They accounted for initial productions of 150. We are in more than 200. And also the EURs are particularly above that. In terms of future development, we foresee the drilling and completion of two parts during 2024-2025, which have basically the objective of de-risking the area and also adding up production if we are successful. With these two pads, we will be adding up approximately 2,000 cubic meters per day to the current production. And the only constraint we will be facing is the transportation capacity to evacuate this oil into the Bahia Blanca port. We already acquired 1,000 additional capacity from the older valve bit. And we are optimistic that we will be able to find alternative ways of moving that oil into the export facilities in Bahia Blanca.

Thank you very much.

Just to add to Horacio, just to recall to all of you that Rincón de Aranda is the area that last year We acquired the other 50% from our former partner by swapping, by exchanging the wind farm of 100 megawatt that we own in exchange for their 50% ownership in the area. Rincón de Aranda is 240 square kilometers or 60,000 acres, 15,000 acres of land. area and we knew at that moment that we were doing a very good and cheap transaction, probably the cheapest acquisition of acreage in the Vaca Muerta area. Now with the results of this first well and having the first well among the best three of the area is extremely optimistic. So confirms that we did an excellent transaction and we are very optimistic with the development of this area moving forward.

Just a bit more information about Rincón de Aranda. As Gustavo mentioned, those 60,000 acres account for approximately 220 wells that could be drilled.

And we think that in due time, we might be able to achieve a total production ranging from 35 to 40,000 barrels a day. So it's quite a challenge and an opportunity for PAM in the shale oil sector.

Thank you very much. Next questions come from Gustavo Faria from Bank of America. The first one says, Last week, Brazilian government stated its intentions to import gas of Bagamorta. In your view, what is the most feasible timeline for this? Do you have any preliminary estimates on how Pampa's gas production could grow and what internal capex should you perform to increase the gas production?

All right. Currently, we know that there have been developing negotiations between the Brazilian and the Argentinian government to make use of this off-peak capacity, gas capacity. We are We are still waiting for the outcome. There are different alternatives in place. One of them is making use of the current Bolivian gas pipeline capacity in order to export gas from Argentina. This necessarily needs the second tranche of the Néstor Kirchner pipeline to be finished, as well as the reversion Gustavo mentioned before. Either if we want to go through Bolivia or through the Uruguayana pipeline connecting Uruguayana to Porto Alegre. So we are still trying to understand what the final negotiations will end up with. But definitely this would add off-peak demand of around 20 to 40 million cubic meters per day. And if the necessary capacity is built in order to overcome the winter shortage, we eventually might have that additional capacity all year round. But we are just seeing the first steps of the negotiation.

Thank you very much, Horacio. Next questions come from Bruno Montanari from Morgan Stanley. The first one says, regarding the developers with backpacks with Camisas past due receivables and credit impairment, other than the impact this has on the working capital pressure, what other financial implications could arise from the current situation? Based on the company's interactions with Gamesa and the government, what is the best alternative to fix the current problem? Given that the mindset of the current administration is to have free market practices across all sectors, should we see a faster pace of tax hikes to the consumer, which would allow Gamesa to honor its payments with the power industry?

Difficult question to answer, Bruno.

Regarding credit impairments, I believe basically what we... haircut that we took into account in the first quarter accounts for roughly 40% discount. I think worst case scenario could be in the 50% discount range. So it would be a marginal further haircut that we may need to take. Regarding ongoing working capital pressure, I hope, and as I explained before, I hope we have seen the worst and that from now onwards, CAMESA will begin to pay current and on time. That is crucial to the agreement. And I think that the Secretary of Energy has been doing an excellent job in order to ensure that. Basically doing what it needed to be done the most, that was increasing tariffs and A significant portion of the demand is currently paying the full price of electricity. Only those what we call the N2 and N3 that are the low and the lower and middle income are still, residential users are still subsidized. And those, I think it will need to continue to be subsidized. And the pace at which those subsidies will disappear I'm not in a condition to say that it's more related to... It's more a political and social issue that the government needs to decide on. I'm not sure if I... Let me read the question. Is there anything else that I'm missing? I have to add this question.

Yeah, it was a long question.

So just a shorter question so I can answer them completely. Well, I think I have basically covered it.

Thank you very much. Second question from Bruno says, Pampa has indicated it wants to pursue investments in its shale oil acreage. How should we think about the timeline for CAPEX acceleration and how does the issue with CAMESA impact the capital allocation through processing short to medium term?

Okay. We don't see any relationship between the CAMESA problem and our investments in oil. It's a completely different market and we don't see any uh relation between those two uh regarding the uh the investment uh faith base sorry uh we as we mentioned before we will probably be drilling uh and completing two paths uh that uh of uh four wells each so it's a total of eight wells and that will account to approximately 160 million dollars plus the necessary facilities in order to evacuate uh that initial production

Thank you, Horacio. Next question comes from Liliana Young from HSBC. First one says, could you give more detail about the write-off of CAMESA receivables and in which circumstances you would be able to reverse such write-off and expected payment for the remaining balance?

Sorry. More details about the write-off.

The write-off, as I explained before, December and January transactions account for 85 billion pesos, that is capital plus interest. Regarding the interest, there is a doubt how those will be accounted for, whether we should do a complete write-off, whether they will be paid with bonds, or whether they will be paid in cash. There are three alternatives, and it's not clear what the proposal is. Just depending on that outcome, the discount could be between 30 and 50%. So our write-off stands right in the middle. It could be a slight decrease or increase depending on the final outcome of the negotiation in the case that we eventually decide to accept the proposal if we are being granted other issues that are not related to the discount, but with things that may happen in the future. As this is an ongoing negotiation, I'd rather not give much information.

Thank you, August. Next question from Liliana says, if we can give an update on the Nestor-Gishner pipeline status and outlook for easing the infrastructure constraint, and if there are any changes in the outlook for the pricing scheme of natural gas.

I think also we covered this, but again, Gasoducto Néstor Kirchner increased the evacuation capacity from the Neuquina Basin in 11 million cubic meters of natural gas per day. That happened in August of last year. Once the two compression plants that are currently being built are ready, the capacity doubles. So it goes from 11 to 22. The first of these compression plants will be ready in a month or so, increasing six, so going from 11 to 17. Once the second compression plant is ready, goes from 17 to 22 million cubic meters. And the other question is if any changes in the outlook of, no, we don't, we don't, As you know, there's a plant gas scheme that has basically set the commitment of volume and prices for the industry until 2028. So, no, we are not expecting any changes to that.

Thank you, August. Next question comes from Paula La Greca from TPCG. First one is, is there any other energía base tariff increase in the upcoming months? The last one was 74% in February.

Hi, Paula. Yes, you are right. There was a 74% increase in February. I don't recall when was the previous adjustment, but I think it was in February of former year. So this 74% lag significantly the inflation that was accumulated throughout the former 12 months. So it was short of the expectation of the industry. And since then, we have been running, unfortunately, high inflation every month. So we hope it will come in the next few months. Actually, we hope it will come in the next few weeks. But honestly, I cannot give you any clarity because, as I said previously, At least from our side. I don't know about our colleagues, but from our side, there hasn't been any discussion with the authorities.

Thank you. The second question from Paula says, would you please give more color on the petrochemical business sales?

Petrochemical business sales.

The pet chem business has two parts. One, what we call the reforma, that it's a business that its drivers are more related to international prices, basically price of crude vis-a-vis refined products. And this international spread of those pricing drives the economics of this part of the business, which in the past few years has been profitable or has been in good levels vis-a-vis former years and at least what we are seeing in the in the future markets is that, uh, this trend will, will continue. The other part of the business, what we call the, uh, that those are more related, um, to the activity, to the economic activity, especially because it's related to, uh, across all industries, especially constructions, but many other industries, durables, many other industries are, we are suppliers of many industries, and so it's more dependent on the economic activity of the country. We have already seen significant declines of 15, 20, 25% vis-a-vis. And part of that, you've seen that on the figures that we published yesterday. And we think that this trend will continue until the rebound of the economy comes, hopefully at some point in the second semester.

Thank you very much, Gus. Next questions come from Marina Mertens from Latin Security. First one says, which amount will be considered when calculating the outstanding debt? Will it include accrued interest and effects differences? Is there a possibility of recognizing an additional amount?

I think I already covered this. To summarize and to make it easier, we accounted for a 40% haircut. We think worst case scenario will be in the 50% haircut. So we will have to provision or to reflect the loss of an additional 10% of this 85 billion pesos that is the total and the total amount that is not paying in cash, that the proposal of the government is to pay in bonds. So assuming that we accept this proposal as it is, we might need to take a further 10% haircut.

Thank you. Next question, Seth. Could the approval of the ley de bases have any impact on your operations or strategy?

I think going forward, what is very important, not only for us, but for all our colleagues, is the RIGI. the the the scheme that incentivize big infrastructure projects i think that is for many infrastructure projects that could where where pampa could pump our subsidiaries as tgs could participate and This is an important issue that comes with the Ley de Bases.

Thank you very much. Next question comes from Ezequiel Fernandez from Valence. The first one, he wants To know for the oil and gas segment, if I take the cubic meters of gas sold at the reported price and the virus sold at the reported price and calculate the sales, I end up quite far from the total sales reported for the segment. What's the difference? I'm using a conversion factor of 0.053 for cubic meters BTU in gas.

I will give you later the answer, but I think you are comparing wrongly. But we produce what we sell, we don't buy trading so far, at least in this quarter.

Thank you. How many unconventional walls were connected in 2023 and 2022? net at working interest.

In 2022, when we say unconventional, we are talking about tight gas and shale. So in 2022, we drilled 20 tight gas wells. That's 100% participation in El Mangrullo and 2.5 wells at the working interest in Sierra Chata. And during 2023, we drilled... 23 wells in, sorry, 25 wells in Sierra Chata and Mangrullo together out of approximately half and half Mangrullo and Sierra Chata. So that would end up with 18.5 wells at the working interest.

Thank you very much. Next one, he wants to know about Rincon de Aranda, any updates on how you plan to proceed, timing, initial complex, number of wells, perhaps looking for a partner to develop the area?

I think we already covered this question. As we mentioned before, we will be drilling two paths by the end of 24, beginning of 25. And depending on the results, we will keep on with the developing plan in the coming years, subject to obtaining a equation for the production. There are no partners, we are on our own.

Thank you, Horacio. Next one, wants to know if there's any update on hydroconcessions?

No.

Again, we haven't had any talks with the Secretary of Energy other than the issue of the other payment. So I understand that's going, for those that have already matured, that's going to be a further extension for a few months. And that after, supposedly after that, they will return to be, to stay owned by Enarsa. But I don't know what are the plans going forward, whether there will be an auction for Operation Amanteina. So I don't know. I have no information.

Thank you. Next one from Florencia. She wants to know when we start to see lower capex.

I think we'll CAPEX will be lower than previous year for example in terms of natural gas and thanks to the excellent productivity of the last wells that we have drilled we don't need to drill any new well until until uh the beginning of uh next weird winter just a few wells in order to maintain production flat no approximately three four wells yeah three four wells to keep the production flat and those by we need to be in operation by the beginning of next winter winter of 2025 um And the capex that will continue to be high will be in order to develop Rincón de Aranda, which we are eager to do them.

Thank you, August. We have one more question from Ezequiel Fernández from Valence. He asked, when could Pampa start paying corporate taxes? Do you still have tax assets for loss harvesting?

we believe yes we continue to have a tax carry forward loss that will probably extinguish a year and a half from now so probably in 2026 it will be the first, the world will be a year where that loss carry forward will extinguish.

Thank you very much. Next one is from David Pardo from Puente Hermanos. He says, as YPF and PAE have recently re-taped the international markets, Do you expect to issue new debt during the year?

So, hello everyone. As of today, we have a very solid financial position.

Sorry. So as of today, we have a solid financial position and we don't have significant debt maturities until 2027. So we are not in a hurry to issue new debt in international markets right now. So I think we would only do that in the case we need financing for an M&A opportunity or if there is a really good window in the market. But there is not a particular need right now. Also, in our last shareholders meeting, we approved the issuance of a convertible bond. So probably if market conditions are met, we could do that. And it will be an interesting opportunity to finance the company at very competitive rates. Also taking into account that we repurchase almost 30% of our ADRs at much lower prices.

Thank you, Juanico. Next questions are from Ludovic Kastrush. First one says, what would be the impact of the new investment regime included in the omnibus bill for Pampa?

the impact will be that big infrastructure projects that are difficult to finance and this scheme makes it more possible so that is the benefit of the scheme that big infrastructure projects that have a modest IRR, the fiscal incentives makes it possible. That is not for Pampa, but that's basically the incentive of the RIGI for all big infrastructure projects.

Thank you, Hugo. The next one says, if CapEx is lower this year, could we expect a dividend distribution?

We haven't taken that decision. We think that Argentina has proven to be, has always proven to be a very volatile market and Pampa's strong financial position has proven to be the right strategy. And you can see that in this situation, we have almost, we have not received any payment from Kamesa, which is accounts from 40, 45% of our sales. We haven't received any payment for four months. That would have put us in this stress situation. It's basically $200 million working capital need. And so we are very happy to have the strong financial situation that we see. On the other hand, it allows us to pursue M&A transactions that we don't have anything in the pipeline right now. But we like to be ready if an opportunity appears. So that's the corporate strategy as of now.

Okay. Next question from Ignacio Snikowski, I think it's pronounced, from Invertir en Bolsa. Do you think that there's still room for lower lifting costs in shale oil or at this level the company reached bottom?

Hi. We definitely see the possibility of lowering significantly the shale oil lifting cost because we are basically working today with an extended testing facility. So once we have the final facility in place, we will see a significant reduction in our lifting costs.

Thank you, Horacio. Next question from Santiago Herrera from Alaria. He says, in respect to TransCenter, did Camesa pay in April the outstanding debt of $42 to $25 million from previous quarters?

All the transmission companies Kamesa is current on transmission with transmission companies. Kamesa, there's been a, I think it was in February, a resolution of the Secretary of Energy giving transmission company priority vis-a-vis other creators of Kamesa. And so transmission companies are being paid on time. So I don't know what the 42 million pesos that he's referring to. I don't know what it is.

Thank you. Next one from David Pardo from Puente Hermanos. He says, what do you expect What do you expect Pampa's output through Duplicata to be once it is online?

We acquired 1,000 cubic meters per day of additional capacity through the Duplicata. So that's going to be the additional. That's 1,000 cubic meters per day. 6,000 barrels. 6,000 barrels.

Thank you, Horacio. Next question comes from Fabio Brandao. Could you please explain the deferred tax account in more detail? Has it had a significant impact on the net income? Also, why does higher inflation and currency depreciation affect it?

Can you hear me?

Can you hear me?

So the basic explanation is that for tax purposes, fixed assets are valued in pesos adjusted by inflation. So when inflation is higher than the valuation, they are appreciated in dollars. Consequently, the depreciation for tax purposes is higher than the one in the balance sheet, generating tax credit for the company. This happens basically because our financial statements use the US dollar as its functional currency, but for tax purposes, you have to use pesos.

There's a lot of questions, but we hit the top of the hour.

Actually, we are... Anything relevant that we haven't covered?

No, we covered most... Do you hear me well? So we cover all the topics, the most important topics of this quarter. We are one hour 15. The few questions left, they are very minimal, but we will, as you know, Raquel and I will cover you. We will try to reach you out and answer them. Or if you have any questions that we didn't have in this call, I think we did. Just don't mind to contact us, to reach us out and talk about it. We thank you very much for joining our call. It was a pretty full one. If you have any questions, you know how to reach us out. You can email us or contact us through the website. Thank you so much and have a good day.