Pampa Energia S.A.

Good morning, everyone. Thank you for waiting. I'm Raquel Calas from IAR, and we would like to welcome everyone to Pampa Energía's second quarter 2024 results video conference. We would like to inform you that this event is being recorded. All 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 in the second page of our presentation. Let me mention that forward-looking statements are based on Pampa Energía'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 Lydia. Please go ahead.

Hi, thank you, Raquel. Hello, everyone, and thank you for joining our conference call. I will make a quick summary of the Q2. You may find more details in our earnings release and financial statements. Today, we are having a Q&A with our CFO, Mr. Nicolás Mindlin. Mr. Horacio Turri, our head of the MP, is here. And Adolfo Zuber-Müller, our head of finance, is also here. Unfortunately, our CEO, Gustavo Mariani, can't join us today because he is in Paca Muerta hosting our president-elect. The gas production is what definitely stands out the quarter's figures. Again, we've beaten all company records, delivering a 37% increase year on year. In Q2, I'm recording a new daily record high of 16.8 million kilometers per day. The output surge is explained by the latest land gas contract we've been awarded. enabled by the new pipeline bill last year. It also helped the early winter freeze, driving retail and thermal power generation. The production increase is backed by shale gas, harvesting the campaign we began last year. Shale gas now represents almost half of our total output this quarter, a significant increase compared to last year's 23%. Therefore, this quarter, the adjusted VDA amounted to $288 million, an increase of 30% compared to last year's figure, mainly because of the gas outperformance and TGS's contribution, which surged by the 675% carrying hike. granted in April. Lower gas exports, sales to industries, and thermal dispatch partially upset this effect. The quarter-on-quarter increase is explained by the seasonality and Camisa's haircut recorded in Q1 and last year, Q4. It is worth noting that almost 80% of the quarter's EBDA was dollar-linked, And the share now is led by EMP, which is mainly due to the gas production. CapEx in Q2 is 28% lower year-on-year, mainly because in 2023, we had a strong shale gas drilling and completion campaign and the construction of PP4. This was partially offset by the last diversions of PP6, which is estimated to be fully commissioned by October this year and the beginning of the pilot plan for Shell Oil in Rincón de Aranda. Moving on to the power generation segment, as seen on slide 4, 5, sorry, we posted an adjusted VDA of $106 million in Q2. This is 9% higher year on year. mainly explained by lower operating costs, the full commissioning of PP4 in June last year, and the strong spot sales in Genelva, partially upset by reduced Energia Plus sales, which is in line with the decline in industrial activity, in addition to Mario Cebreiro's divestment last year. Q2 dispatch increased 3% year-on-year. This is mainly due to the lower gas availability for thermal dispatch that mainly affected our CCGT. Partially upset by a better dispatch in the old CCGT in Geneva, which in Q2 last year had more days out of service for maintenance, higher water levels at Mendoza hydros, and the before's contributions. The incur pay capacity payment, especially from PPAs, explains most of the ABDA. It is driven by availability, and in Q2, we reached 98% availability. This is higher than last year's 95%, mainly due to the previous year's thermal outages that we mentioned. So now turning, let me give you a quick brief on PP6, the expansion, the project. It's highly advanced, 94% between July and August. Tempestous wind turbines were commissioned by Cabeza, totaling 45 MW. We are testing to commission another four. The 500 kV high voltage grid and transformer station have been fully energized, as well as free wind turbine circuits. The estimated fuel COV will be in October. And PPSX The P6 energy will be sold under B2B PPAs in the matter. Going on, on slide eight, our EMP business posted an adjusted PPA of $121 million in Q2. This is 24% higher year-on-year. This increase was driven by PlantGas' latest round, unlocked by the commissioning of the new gas pipeline, in which we We're awarded a long-term contract for 4.8 million kilometers per day flat during the year. The yearly freeze also helped. Lower gas exports and sales to industries upset this. In Q2, our total production averaged almost 91,000 barrels per day. This is 35% higher than last year. When we zoom in, crude oil just represented 6% of our EMP output and 50% of the sector's revenue. Total gas just keeps taking the lead, representing 94% of our total production. Higher maintenance and treatment costs due to the increased activity. and explained that our total lifting costs grew by 11% year-on-year. Still, the rising output possibly impacted lifting costs per BOE, which decreased 17% year-on-year, recording $5.3 per BOE and monetizing the economies of scale. Quickly commenting on gas, Our production in Q2 increased by 37% year-on-year and 24% quarter-on-quarter. This is averaging almost 15 million cubic meters per day in the quarter. As commented before, shale gas is the main contributor here, and 63% of the quarter's production came from El Mangrucho and 23% from Sierra Chata, our flagship shale gas field. Sierra Chata production grew 50% year-on-year without connecting or drilling a well this quarter, while El Mangrucho experienced a 45% surge with only three wells tied in. The average gas price over the quarter stood at $4 per million BTU. This is 14% down due to the lower exports to Chile, as you can see right below. the higher deliveries of local gas were destined for thermal power generation. This is a quick review on Rincón de Aranda sharing the promising results. Horacio surely will comment more on the Q&A. As you can see here, our wells performance is within the range in Our neighboring shale oil blocks and our daily production reached above 1,600 barrels per day once we connected the shutting well in Shun. We have already placed a drilling rate in the block to start drilling a pad of four wells plus another pad next year, meaning to produce by mid-next year and reaching plateau production between 40,000 and 45,000 barrels per day by 2027. The petrochemical business went on to another business, posted a $50 million ABDA in Q2. This is 50% growth year on year, mainly because of the higher sales of reforming and improved exports of SBR margins, offset by the domestic sales due to the economic downturn. Hence, the export share is getting more and more important. Moving on to slide 12. Moving on to slide 12. We show the restricted group figures that reflect the bond perimeter. In Q2, we recorded a free cash flow of $60 million. Our working capital We have recovered since chemists last quarter. As of today, days of sales outstanding is 55 days total. This means a delay of only 13 days. The payment normalization allow us to cancel that. So the net debt is significantly below last quarter, as you can see here. In summary, we can increase $69 million of net cash in the quarter, achieving a $914 million cash position by the end of the period. Well, this slide shows our consolidated financial position, including our affiliates of ownership, but let's keep it focusing on restricted group figures. We posted a gross debt of $1.6 billion. This is 3% lower year on year and a 5% growth in cash. After settling peso debts and depreciations of the peso, 92% of the gross debt is in U.S. dollars. the net debt recorded $691 million. This is 12% year-on-year lower and one time to last 12 months EPTA net leverage. The average life was 2.6 years and until 2027, we just don't face any relevant debt maturity. So this concludes our presentation. Now we'll turn the word to Raquel, who will poll for the questions. Thank you very much.

Thank you very much, Lina. So the floor is now open for questions. If you have any questions, please send us through Zoom chat. We will read and answer them in order received. Also, please make sure your name and company are correctly displayed to introduce you to the audience. Should any participant need assistance, send us a chat message or raise your hand. Please hold while we pull for questions.