Pampa Energia S.A.

Recording in progress.

There will be a Q&A session. Questions can only be submitted in writing through Zoom. Should any participant need help, 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 Energías' 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 Pampanergia and could cause results to differ materially from those expressed in such forward-looking statements. Now I will 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 the 2024 and Q4. You may find more details in our earnings release and financial statements. For today's Q&A, let me introduce here our CEO, Gustavo Mariani, our EVP and head of E&P, Mr. Horacio Turri, and our new CFO, Adolfo Zuberbühler-Pito. First, we wanted to review 2024, a year that was challenging from the very beginning. Despite this, the macro outperformed expectations and we advanced with the development of Rincón de Aranda, our flagship shell oil project. As one of the country's leading gas producers, we reached a new all-time high this 2024, marking a 21 growth in year average output and an impressive 80% increase since 2017. This is driven by our top performing wells in Vaca Muerta. It is worth highlighting we hit 100,000 barrels of oil equivalent per day again during the winter. This is the most critical supply period of the year. While 2024's output was entirely gas, we will diversify into shale oil once Rincón de Aranda comes online. In the power segment, we commissioned PP6 wind farm. This is adding another 140 milliwatts of green energy, having grown nearly 50% since 2017. With a strong focus on operational excellence, we achieved an impressive 95% availability rate in 2024, reaffirming our position as the country's leading IPP. ABDA grew 19% year-on-year and 29% compared to 2017, mostly coming from power and gas and contributing to another milestone. Net debt fell to $410 million, the lowest since 2016. Now, turning to Q4 only, the quarter was marked by strong performance in gas upstream and power. Gas production rose 11% year on year, with shale gas shrinking its share from 32% in 2023 now to nearly 50% in 2024. Power units recorded a 94% availability rate with a notable recovery in the PPA units. Also, as I mentioned before, the balance sheet keeps getting stronger with extended maturities and improved quality. We are preparing for the shallow ramp-up starting early April, currently operating with four drilling rigs and one freight fleet while building the necessary facilities. The adjusted BDA for the quarter amounted to $182 million. This is up 60% from last year. driven by increased gas deliveries from thermal power generation. The contribution of PP6 improved PPA performance in addition to the tariff hikes benefiting TGS and TransCenter. Higher operating costs and lower exports at the blended effects partially offset these gains. The quarter-on-quarter decrease was due to the seasonality. Notably, 68% of our quarters EBDA was dollar-linked due to the successive basically increases in spot energy and utilities, rising to 88% at the parent company. CapEx in Q4 was 20% lower year-on-year, mainly because of the shale gas ramp-up in 2023, partially upset by final payments for PP6 and the ongoing development in Rincón de Aranda. Moving to EMP on slide 5, adjusted VDA was $36 million in Q4, down 26% year-on-year, largely due to the lower sales to industries in Chile, as well as higher operating costs. The impact exports settled at the differential FX, which amounted to last year's Q4 $24 million. Nearly zero this Q4. These factors were upset by increased gas production for thermal power generation. The beginning of Rincón de Aranda's development and program overhauls pushed the total lifting costs up 29% year-in-year. Lift-in costs per VOE rose to $8.7 per VOE, while gas lift-in costs increased by 10% to $1.2 per million BTU, also influenced by the lower seasonal output. Total production averaged nearly 62,000 VOE per day, 9% higher than last year, When we zoom in, crude oil represented 6% of the output and 25% of the EMP's revenue, while gas accounted for 94% of the production. El Mangrucho contributed 54% of the Q4 production, while Sierra Chata increased to 30%. Growing production, 34% year-on-year in Sierra Chata, without new wells connected. drill, you know, new wells drill during the quarter. During 2024, we connected three wells. So Sierra Chata's annual production rose 40% versus 2023 in the year average. El Mangrucho output also increased 12% year-on-year without additional DNC in the quarter, with an annual production up 23% from three wells connected in 2024. In Rio Neuquén, which is a non-operating block, a production averaged 1.3 million cubic meters per day, similar to the last year's quarter. The average gas price for the quarter was $2.9 per mil BTU, down 10% due to lower exports to Chile and sales to industries, partially upset by better retail prices following the tariff increases. As you can see right below, most local gas deliveries were directed to Camesa for thermal power generation. Okay, so let me briefly comment on our progress on Rincón de Aranda. In Q4-24, the production averaged almost 1,000 barrels per day, which is in line with the expected decline curves for these well types. Since September last year, we have been drilling paths to prepare the UCs on the way to complete three paths so far. The frag fleet arrived in early February, and we already fragged the first pad, and we are in preparation for the second, and in preparation for duplicar, which should be online early April. By May, we plan to have two pads connected, bringing output to 8,000 barrels per day. To reach this year's plateau, we plan to complete five more paths targeting 20,000 barrels per day by December of this year. We are building pipelines, preparing early production facilities, building the central processing facility, water treatment pools, et cetera, et cetera. So before we move on from EMP, I wanted to do a real quick update on the reserves. Total proven reserves rose 16% to 231 million barrels of oil equivalent. This is driven by the increased activity in Sierra Chata and El Mangrucho, our flagship shale gas blocks, as well as testings in Rincón de Aranda. Shell reserves grew 60% year-on-year to 132 million barrels, with Shell Oil now accounting for 9% of the total of the shale reserves, marking the first time it has been booked. The remaining 91% is shale gas. The reserve replacement ratio, the RRR, was 2.2 times, maintaining an average life of 8.6 years. Since 2019, proven reserves have increased by 71%, with a sharp growth in our proven shale reserves, particularly in shale oil, since last year. So moving on to power generation on slide nine, we posted an adjusted BDA of $86 million this quarter, up 7% year on year, mainly explained by the contributions of PP6 and the PPAs and recovering legacy spot prices. partially offset by higher operating expenses. Q4s likely fell 4% year-on-year because of the life-extension overhaul that we're doing in Genelva, old CCGT, and lower water levels in Pichipicunufo, hydro. The higher dispatch from Loma La Lata and the commissioning of PP6 offset these effects. Take-or-pay capacity payment, especially from the PPAs, were the main EVDA driver, reflecting the outstanding capacity availability, which improved to 94% from the 93% last year due to fewer thermal outages. In 2025, we plan to upgrade Barragán's gas turbines, adding another 11 megawatts, and conduct a major overhaul in Loma de la Lata gas turbine in March. Well, a quick brief on PP6 expansion, which is no longer a project. The COD was completed last November 21, bringing the total installed capacity to 140 MW. Now Pampa operates 427 MW of wind energy, ranking us among the country's top five renewable IPPs. Moving to slide 11, we show the restricted group figures that reflect the bond perimeter. Free cash flow in Q4 market, $82 million, supported by the working capital inflows from the winter receivables, the highest revenue making period of the year. Day sales outstanding stood at 45 days, meaning just a three-day delay, alongside robust operating cash flow from power and gas. After last year's capex for the shale gas ramp-up, 2024 expanding was mainly just maintenance-focused, spiced up by Rincón de Aranda development. The total capex for the quarter was $154 million, but Rincón de Aranda was more than half of it. In December, we issued a $360 million international bond maturing in 2034 to improve our debt profile, redeeming the remaining 2027 notes at par. This resulted in a cash increase to $1.7 billion, though after the 2027 bond repurchase this year, cash stood at $1.3 billion, more than 50% than last year's $834 million cash. The next slide shows our consolidated financial position, including our affiliates at ownership, but just let's keep focusing on the restricted group. Gross debt stood at $2 billion, up 44% year-on-year due to the 2031 and the 2034 bond issuances for $770 million total, which directly funded the repurchase of 2027 notes. It is no worry that besides further extending the average life to 4.2 years and securing the lowest spread to US TBLs in the history of the Argentine corporates, the net debt dropped to $410 million. This is 33% down year on year and 0.6 times net leverage ratio. This is the lowest ratio and the lowest level since 2016 when we acquired the former Petrobras Cantina. This was mainly because of the strong cash flow inflow from power generation and gas operations alongside improved collections from Camesa and Enarza. Well, in sum, we successfully met one of our key 2025 goals, extending the large maturity wall for 2027 to 2031 and beyond, with highly competitive rates shielding our financial position to support the development of Rincón de Aranda. Well, now concludes our presentation. The floor is open for question. If you have a question, please send us through Zoom chat. I will read it and answer them in the order received, first in, first out. So please make sure you put your name, your company, so we can introduce you to the audience. Should any participant that needed assistance, just write in the Zoom chat. Please call, just we call for the questions. Well, the first question, all right? Marina Merten from Latin Securities, she asks, how do you expect regulatory changes introduced by the Secretary of Energy to impact Pampa, particularly regarding the ability for generators to self-procure the fuel? What impact do you anticipate for both EMP and power generation segments?