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 of 2025 results video conference. Before continuing, please read the description. 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 Pampa Energía 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 Q1, very quick, so you can find more details in the earnings release and the financial statements. For today's Q&A, we have our CEO, Mr. Gustavo Mariani, our head of oil and gas and EVP, Mr. Horacio Turri, and our CFO, Mr. Fito Suervido. So let's go to the first quarter, 2025, and we saw a solid performance in power generation and utility businesses, along with the higher gas deliveries for thermal generation. Also a key highlight after the quarter end was the FIB on the FLNG project where Pampa holds a 20% stake. This milestone officially kicks off the project The two charter vessels will export 6 million tons of LNG per year, requiring 27 million kilometers of gas per day. Pampa will supply to 6 million kilometers per day through a GSA. This is almost a 50% increase from our current average production of 13 million kilometers per day. The first vessel is expected online by the end of 2027, early 2028, and the second, the MK2, will be a year later. This is a strategic move to monetize our Vaca Muerta reserves, position Argentina in the global LNG market, and bring much-needed foreign currency inflows, create jobs, and boost local suppliers. In a nation, last week, TGS and TransAner reached a major milestone by completing their comprehensive tariff reviews, Their conditions now are set for the next five years until 2030, marking a real progress toward regulatory normalization in the Argentine utility universe. So now, turning to the numbers. The adjusted VDA for the quarter amounted to $220 million. This is 17% up from last year, driven by stronger spot prices in power, higher deliveries of plant gas, the full commission of pp6 pp6 and high tariff heights at tgs and transcendent it is also worth noting that last year's q1 included a 20 million haircut from kamesa which didn't repeat this year These gains were partially offset by higher operating costs and softer B2B gas sales. Compared to the last quarter, EVDA improved a lot due to the seasonality and stronger peso link margins in spot energy and utilities. The capex rose 35% year-on-year, mainly due to the progress that we're doing at Rincón de Aranda, which absorbed $114 million out of the total $180 million of capex in the quarter. Moving on to the E&P business in the slide four, adjusted VBA was $41 million in the Q1, down 39% year-on-year, largely due to the increased operating expenses, mostly related to Rincón de Aranda. as we are preparing for production ramp up. Also, we saw lower sales to industries because there was a partial disruption that already fully enabled at TGS transportation system in March following severe floods and soft exports to Chile driven by the weaker brand prices. These headwinds were partially upset by stronger deliveries under plant gas, supported by robust thermal power demand thanks to the hot weather and low hydropower water input. Higher costs due to the well-testing and preliminary low output at Rincón de Aranda, road lifting costs per BOE 20% year-on-year up. to $6.9 per VOE. Gas lifting costs also increased, though moderately, of 17% year-on-year to $1 per millimetre, mainly explained by higher treatment costs and partially upset by solid gas output. If you compare it, however, quarter-on-quarter, the lifting costs per VOE was down 20%, explained by increased seasonal output and lower lifting cost expenses. Total production averaged nearly 73,000 barrels of oil equivalent per day. This is flat year-on-year, but higher quarter-on-quarter because of seasonality, where we're assuming the mix, the oil just accounted 4% of total output and 15% of the revenues of the segment, explained by the divestment of Gobernadora Shala and the decline in conventional oil blocks that we do not operate. Total gas production remains flat year on year, just 12 million cubic meters per day, However, it grew 21% versus the last Q4. This is explained by seasonality. And Mangrusha continued to lead the output, but its share, its production share, fell to 55% of Q1 gas volume. Meanwhile, with Sierra Chata, increased to 30% of total gas production, with an increased 51% year-on-year. Both locks, however, didn't tie in any new wells during the quarter. As of today, we drill three out of the 15 planned wells at Sierra Chata this year, which is all our operating gas during campaign for the 2025. This is reflecting the robust productivity, shale productivity at Sierra Chata. 56% of the quarter's production was shale. Gas prices average around $3 per millimeter. This is 6% down compared year on year because of B2B supply, which pushed the prices down and weaker rent prices affecting exports. These effects were partially upset by improved retail prices. As you know, there's a lot of tariff increases. As you can see right below, most of our gas deliveries went to the thermal power generation, to CAMESA. Exports were steady year on year, but as Horacio flagged in the last Q4 poll, since May we've been increasing our flows through Gazandes and more recently, We are doing it through Pacifico pipeline, now delivering half a million cubic meters per day to the southern Chile. So in total, we are exporting 1.5 million cubic meters per day of gas to our neighboring country. In late April, we also made our first export, our first shipment to Chile, to Brazil, sorry, uncovering a new frontier to Pampa. With this outlook, our 2025 export campaign is on track to double last year's volume, export volume. Now, let's zoom in in Rincón de Aranda. In March, we completed the fracking and tidying the pad number two of four wells, now beginning to ramp up the production and fill up the pipelines and the temporary production facility called TPF. which has a capacity of 20,000 barrels per day to treat it. Also, that same, we are still creating out water. We see we just need more days to assess the final performance. Currently, the block is averaging over 6,000, close to 6,500 barrels per day, all transported through pipelines, so no more trucking. Therefore, lower transportation costs, lower costs in the area going forward. In terms of takeaway capacity, Pampa holds 8,000 barrels per day in its own right in duplicar, plus another additional 12,000 barrels temporarily borrowed from third parties, giving us flexibility as production is ramping up. So far this year, we drilled five pads, fracked three of them, and tidying one, the one I told you. We have two more in the Q week, tidings planned in the next couple weeks. Everything can be asked to Mr. Turri. We are also making progress in infrastructure. The temporary production facility, or TPF, is online, as I said. The local pipelines and other facilities across the area are being built. Currently, we have two high spec rigs working, and we have one frag plate active in the field. So for 2025, we're targeting a total capex for this block of $800 million. And by Q4, we aim to hit the 20,000 barrels per day of production with eight paths online. So moving on to the power generation, Business on slide 7. We posted an adjusted VBA of $130 million in Q1. This is a 51% increase year-on-year, mainly explained by higher spot prices as those units have been getting more price updates than inflation and devaluation. On top of that, we had strong contributions for newly commissioned PPCs, the wind farm, and outstanding operating performance this quarter, especially from our PPA-backed units, partially upset by higher operating expenses. Generation volumes remain stable year on year, despite the decline in the total national grid, mainly thanks to PP6, higher gas supply, thanks to the Perito Moreno pipeline, stronger wind, and reduced downtime in Loma La Lata. The outage that we experienced in Inisa, in Igüiles Hydro, due to heavy flooding and Barragán's program overhaul partially upset these variations. Capacity payments, especially taker pay from the PPAs, are the key part of this segment, EBTA performance. So once again, our thermal capacity delivered outstanding availability of 96%. The overall capacity availability dipped due to the New Willis floods, but PP6 commissioning helped to upset that. In terms of maintenance, in March, we launched a major overhaul of Loma de Melalata CCGT gas turbine, including live extension works. Next month, we will begin the upgrading project in Barragan gas turbines to boost efficiency and increase by 11 megawatts the capacity. Okay, so moving on to slide eight, looking at the cash flow, we show just the restricted flow, just because that reflects the bond perimeter. In Q1, we posted a free cash flow of 118, outflow of $118 million, mainly driven by higher CapEx, resistant to the development of Rincón de Aranda. which accounted for 71% of the total capex in the restricted group, plus a seasonal increase in the working capital. As a result, cash and cash equivalents ended in the quarter at $1.1 billion. Finally, on the balance sheet, gross debt stood at $1.6 billion. This is a 19% decrease compared to December 2024 due to the redemption of the 2027 notes. Net debt increased to $577 million. This is 0.8 times net leverage ratio, reflecting the decline in cash debt. explained before. The issuance of the 2031 and the 2034 notes allow us to further extend our debt average life to five years and significantly improve our maturity profile. So this concludes our presentation. Now the floor is open for questions. If you have a question, please send it through Zoom chat. We will read it and answer first in, first out. Also, please make sure you put your name, your company, so we can introduce you to the audience. Should any participant have a problem, need assistance, just send us a chat or email us. Please hold while we poll for questions. So, we have first question coming from Ignacio Sieniczowski, Invertir en Bolsa. I hope I pronounced well your last name. How is the situation today in Ecuador?

El derecho.

El derecho.

Good morning, everybody. Thank you, Ignacio, for the question. The situation in Ecuador is, you know, the concession ended at the end of last year. We gave it back in November of last year to the Ecuadorian government. And since then, we have been trying to get rid of the – to recover the guarantees that were given for these concessions. There are two guarantees of $50 million each. One is an environmental guarantee, and the other one is an operational guarantee. There is no reason at all for that – that these guarantees should not be released because the pipeline is operating in perfect conditions and there has not been any environmental issue during our time as operators of the pipe. But so far, we have not been able to obtain the release of the guarantees. So a few weeks ago, we decided to initiate an arbitrage to recollect these guarantees, which we are very optimistic of the results. We don't know how long is it going to take. But that is basically the situation. Very optimistic about the outcome of the of the arbitrage, but it will take some time.

All right. Alejandro De Michelis from Jefferies, he's asking, please, can you update on the development of Rincón de Aranda and what production exit rate you expect for this year?

Hey, good morning, everybody. Thanks for the question. Rincón de Aranda, so far, we drilled five pads. We fragged three. We have one tied in, which is pad number two. The performance is pretty good. We are pumping approximately 6.5 thousand barrels a day overall. And as I mentioned, the world performance is what we expected and it's very good. What we are going to do in the coming days is tying in the next two pads, which are pads number three and number four. And... Well, keep on with the fracking until we end up with six out of the seven pads being fracked by the end of 25. Awesome. And tied in. I don't know if she asked about the production rates. Yeah. Okay. The production rate, as I mentioned, today is more than 6,000 barrels a day. We are supposed and we hope that we will get to 20,000 barrels per day by the end of 25. And so far, so good.

Awesome. Thank you, Horacio. And the next question he asks, with investments in upstream and LNG, where do you see the CapEx requirement that in the next couple of years?

So in the CapEx, I'll leave it to you. Okay. CapEx for the LNG?

LNG and upstream, yes.

Okay. LNG, well, we are hiring the two vessels, but for the Healy, we have a commitment of $7 billion in the 20 years. Regarding CAPEX, specifically for all of the facilities and some ancillary services that we need for the boats, We are talking about $700 million until 2028, out of which $150 million are going to be paid by Golar. So we have a remaining of $550 million, and out of which we have a participation of 20%. So it's a little bit more than $100 million for Pampa. Great.

And for upstream?

And in the upstream, we're going to be developing Sierra Chata. Our estimation in order to supply the almost 6 million cubic meters per day, that is our share of the two vessels, we envision around $400 million from 2026 to 2028. And just to add that,

In addition to those $700 million that you mentioned, we need to build a dedicated pipeline. We are quite optimistic that a midstreamer will build it and the consortium will pay it as a transportation tariff as an OPEX.

And then I guess he's asking also what about the upstream investments in Pincon de Aranda, Royal, right? Because you mentioned...

Okay, no problem. Rincón de Aranda for 2026, we envision around $500 million, $460 million to be more accurate, out of which $360 comes from drilling and completion and $100 million out of facilities.

Well, next question from Guido.

No, I think he asked about debt.

So this year we're planning to fund all our CapEx with the cash flow generated by power and gas businesses plus our strong cash position. So we're not envisioning issuing more debt. unless, no more debt for CapEx. If there are very good market opportunities, we will always pursue an active liability management. But other than that, we're not seeking to increase our debt significantly.

Thank you, Fito. Next question is coming from Guido Bizzosero from Alaria. Regarding the Argentina FLNG project, How much of the $7 billion CapEx announced by Golar will be financed through project finance, and how much by the 20% stake of FAMPA in CESA?

Well, the $7 billion of CapEx is not being financed at all by us. It's just a higher fee, so there's no finance there. And as I mentioned before, what we need to – to face in the future is a 20% of those at 550 million, which is a little bit more than a hundred million dollars. And again, as Gustavo mentioned, we are assuming that the new pipeline is gonna be a transportation capacity charge. Awesome.

In order to achieve the six million, I think you already have mentioned, it's how much capital already mom mentioned about. Do you have an estimation of the EBTA contribution for this new project? By 2028, 2029?

Okay, when the two vessels are online and we are already delivering the almost 6 million cubic meters per day, we estimate approximately $150 million of EBITDA for a FOB price of $7.2 per million BTU. That's what our best estimation of EBITDA is. Contact with it. Yeah, I would say it's a base case. Yeah, based on that price of 7.2. Right.

Well, considering the FLNG is now a full-year gas project for 2028, are you planning any other project for the idle gas production incapacity during the summer period or the off-week period?

I don't think I understand very well the question. I mean, the demand for the vessels is flat.

No, I think he means another project beyond FLNG, like VIA, for example.

The only project that we have today facing us is the potential expansion of TGS through the IP that we already presented to the government. And that accounts for 40 million additional cubic meters per day. out of which eventually we might get, I don't know, maybe 20% of that. So it's going to be around three more million cubic meters for 120 days a year. So that's the only project that we have in the short term.

Great. Guido is also asking, could you give us a little bit of color about the expected evolution for lift and cost and production? Well, production we already talked, but lift and cost? Yes.

Yes, sure.

Rincón de Aranda.

Rincón de Aranda? No problem. For Rincón de Aranda, we have like three different stages. One that's already, we've already been through, which was a tracking, I would say the tracking stage, which was obviously the most expensive. We were talking about $23 to $24 per barrel of lifting costs, which obviously is very expensive. Now we already tied in our first stage, of our pipeline connecting Rincón de Aranda with La Marga Chica Norte, which reduced dramatically our lifting costs. We are now in the range of $8 per barrel. And the second, the third stage, sorry, is going to be the connection or the tying in of the pipeline, the oil pipeline, to Cabo Noc, which is the interconnection with the Vaca Muerta system. And we see that after that, our lifting cost probably will go down to $5 per barrel. Awesome.

In the last conference call, you mentioned that Pampa hedged, well, not you. I didn't mention that. You didn't mention that, but someone did. Hedged from May to December, most of this crude oil production at $72 per barrel. Are you planning to continue with this policy in the future?

Yes, we will continue with the policy of hedging oil prices when conditions are good. Great.

All right. And regarding power generation, Guido asks, Ax asks, although we do not know what happens, what will happen with the legacy carriers in the future? What will be the impact on MBTA for 26, 2026, 2027 when some of your PPA contracts will come to an end? Well, I mean, right now, in 26, we only have a small contract of 75 megawatts of TG4 in Loma La Lata. And then we have three contracts under Resolución 21, Loma La Lata TG5. Parque Pilar, and by Ingeniero White. So the four of them, they account around $100 million of EBDA, a little bit, yeah, $100 million of EBDA yearly. I'm estimating that there's status quo, there's no changes, and there will be, because there are peakers. So they should be charging around, I don't know, $5,000 per month, I am assuming a drop in EBITDA of around $70 million, more or less. 100 to 20-something. I did the math.

It's a little bit aggressive.

You do 380? times 5,000 times 12, which is the capacity. This is a rough number, right? It gives you around $25 million of EBITDA. And for 125, I guess the difference is 75. But I know it's too early to tell, but that's the drop in the EBITDA. But again, very important. The PPAs on Kamesa, they are meant to be repaid investment in the tenure of the PPA. So that's why they migrate to the spot market. That's unlike to the other B2B or PPAs that we develop in the B2B world, like Mater, for example, that doesn't have any maturity at all. They just keep rolling, right? And the other question, which confirmed the PPA sending, I already said that. Next question, Anne Milne from Bank of America. Does Pampa plan to bid the tender for the hydroelectric concessions in Iguales and Diamante?

Yeah, eventually, yes, we will. We will look at them and eventually participate, not only in the Iguales and Diamante, we could eventually participate in any of the hydro concessions that will be auction in the coming months. The first ones will be El Chocón, the ones from the Comahue area, Piedra del Águila, El Chocón, and Alicura. Those are the first three hydroelectric concessions that will be in the auction. Later, it will be in Igualas and Diamante. And once the conditions are on the street, we will evaluate and eventually we will decide whether to participate in which of them.

Great. All right. The second question she asked, is there a rough timeframe for the CERI complex of TGS to fully resume the NGL production?

Yes, CERRI Complex has already resumed production at full capacity, although because of the floods, equipments are still not with the reliability that they had prior to this catastrophic situation. So they're still... adjusting to, they're still solving problems, but it's already fully online.

She's asked about Rinconeranda, we already talked about that. Spendback considering calling the 29 bond, given it has a high coupon and trading above the call price?

Well, We definitely look all the time to many opportunities in liability management, as I said, but it's not only the coupon. You have to factor in all the cost of issuing a new bond. The prime is over $2 premium that you have to pay to call the bond, plus any new issue spread, plus any spread in a longer bond. So, When you factor all that in, you need to have a positive net present value of all that. And given the case, it might make sense to call the bond, but we are not there yet, but we will keep analyzing and searching for any market opportunities.

We don't have any need to do any liability management. If market conditions are good enough, we will eventually do it, but not before.

If the net present value makes sense, it is because there is a very good market and bonds are trading tighter. Well, we look at that in the new moment.

Great. Thank you, Fito. Next question comes from Gustavo Faria from Bank of America Equity. The other was fixed income. So do you have any estimate about the upside potential of the power sector deregulation in Argentina, including, let me give you a first, higher margin on the fuel procurement in its own thermal power plants, reservoir to wires? That's the first.

Say that again, please.

So if there's any warning to the ones that do the self-procurement of fuel.

Not currently. Nobody is... still using that opportunity. It's complicated to explain in a minute. But we are still awaiting, regarding the deregulation of the power sector, we're still awaiting for the regulator to issue the new rules. As you know, I think it was late last year that they published the guidelines 1.0. And basically they gave the industry, all the participants, large users, distribution companies, power generators, everybody in the industry to give feedback about these guidelines, which were already given. Now the regulator has been working on guidelines 2.0, which has not been released yet. So we are waiting for those new guidelines to come out and see what they look like.

And then he asked, well, will they be higher prices for the legacy energy capacity?

hopefully, but hopefully after this deregulation, there will no longer be legacy capacity and there will no longer be the regulator defining a price, but rather letting the market decide for that. But again, we are still waiting for the new guidelines and totally guessing and I cannot give you any better answer than this.

And Gustavo asks, what's the upside potential for Pamba in each of the initiatives? Because we are gas producers and power producers as well.

As we always said, we are awaiting this regulation because as an integrated company, it's music to our ears to be able to use our own gas in our own power plants. So we are very eager for this to, this deregulation to happen and to be able to use our own fuels. What additional margin this will bring us is very difficult to forecast at this point.

And, well, I think we talked about it as the timeline. You don't know much. The timeline to have this.

We are waiting for the second round of guidelines to be published anytime, but this will not take effect. This will be, again, guidelines, and the government has already announced that they expect the new rules to be implemented during the wintertime and to take effect in By November, by the end of this year, basically.

After the winter, yeah.

After the winter, yeah, in November of this year.

Cool. Thank you. Next question is coming from Luna Montanari from Morgan Stanley. Well, I think we didn't cover this. With the recent decline in the oil price, do you expect any changes in the capex, in the intensity, in the round-up schedule in Rincón de Aranda?

No, no, we are not foreseeing any changes. any decline in our rates of drilling or on completing the wells. It's very fast. Yeah, we keep the course.

Okay. And he's asking, well, a little bit more boots. Look, can you provide an update on your CapEx budget per business segment in 2025?

CapEx of 2025?

Per business. Like power?

Or business. Yeah. The E&P segment will be around $950 million, out of which $800 million goes for the development of Rincon de Aranda, all the infrastructure facilities, plus the drilling of the of all the wells. The other 150, it's basically some drilling in Sierra Chata for a few gas wells, plus some maintenance of the king. So EMP around 950 in total. Power generation is $120 million. That is basically... $30 million that is the remaining payments for PPSAs for the last wind farm that we put online last year. And the other $90 million is maintenance capex. It's a little bit above average of maintenance capex in power generation this year because we have some, as Simita mentioned earlier, some life extensions. That's why it's a higher capex than the average. So all in all, it's about a $1.1 billion capex for Pampa this year.

Great. Awesome. Regarding the Argentina LNG project, wait, it's the YPFS, will Pampa also seek to join the future phases being planned by YPF?

Eventually, yes, but still we don't have much information about those projects, but definitely, as we have proven with the first one, with CESA, the consortium that we joined, last year this is a strategic uh this is strategic for for for pampa and it's a way to monetize uh our very competitive gas reserves so we would definitely look at all the opportunities regarding lng that will come out

Great. And he asked, finally, we are in the first phase, the FLNG project. Is Bumper interested to take part on the midstream, the dedicated pipeline project? Bumper, did you ask?

Ah, okay.

Pampa itself is not interested in participating in the midstream. That's not our core, but we have TGS, whose core business is midstream, and it has been proven to the market recently. in the recent years with a lot of investment in the midstream area and a segment of the company that is growing very, very importantly. So yes, TGS will definitely be interested in participating in offering the construction and the operation of the pipeline, of the dedicated pipeline that the Floating LNG project will need.

Awesome. Well, now, next question coming from Lucas Erimedo from Quantum Finanzas. Any comments about, very broad though, any comments about Complejo Petrochemical San Martin, our petrochemical complex? I guess he's asking about pet chem business, I guess. Over.

Okay, if the question goes for the pet chem business, as we have been mentioning in previous call, this is a tough year for that business segment, which we expect to... basically to break even or to have just small EVDA margin this year, but because of international prices, because of basically higher dollar costs and lower sales and more competition from imports. So several factors that are affecting the business. So it's a tough year for the segment, but it's not gonna be as good as the previous three or four years were.

Right. Awesome. This question is coming from Jorge Moura from Fundamenta. I think we covered most of it. So supplying own gas, we talked about that. I guess adjustments in energy-advanced prices, do you foresee more?

Yeah. I think the trend might continue. Increases have I think most of the increases have already been given, or most of the catch-up has already happened, but not all of it, and still some technologies are still struggling to make money. So there might be... further adjustment on the road while we await for the deregulation and the new rules.

The first was about the hydro options that we already covered. Next question is coming from Juan Ignacio Lopez from Puente. He has one question about the outlook in the power sector, which I think we already talked about that. The outlook in the power sector, the deregulation, I think we covered. Have you made any investment decisions, like organic investment decisions in the power sectors? We are aware of the batteries tender launched by the Secretary of Energy. We would like also to know whether you are considering new renewal assets in this context. Thank you.

Regarding the battery, the BES, BESS auction, so battery, well, this auction has been called by Camesa. We are studying that. We have recently requested suppliers. so we haven't taken a decision whether we will participate or not. It will very much depend on the cost of equipment and the projected IRR of the project. And the same can be said about the renewable project. At this point, we don't have anything, and we are awaiting the deregulation of We are not taking any decision on new renewable. We believe prices are quite tight. Competition is already tough in that segment. The deregulation might bring an additional competition from thermal units. So we are waiting to see how that market where the equilibrium prices land before deciding on building new renewable power. Great.

Next, Andres Cardona from Citi. Is there any M&A opportunity that you're looking at?

Yeah, we are always analyzing M&A opportunities in several sectors. But nothing concrete that I can comment right now.

Awesome. Andres Cardona from CIDI and also Andres Cidivignano from Balances are asking together, can you provide information about the status of the RIA project? How close is the FID?

We are not – the FID is far away, and we are – We have a team. We have set up a team, and the team is working very hard to get all the information, to have suppliers providing us with firm quotations of the total cost of the project. We are several months away of obtaining that information. Hopefully, it will be before year-end. We hope to be able to make a decision by year end, first quarter of next year, to decide whether to go forward with the project or not.

Great. Well, next question, very oil and gassy oil, actually, from Daniel Guardiola from BDG. He's asking, good morning. Could you share us an indication of the expected trajectory of the production flowing from Rincón de Aranda in 2025? I guess throughout the year.

Throughout the year? Okay. Well, as I mentioned before, we started with a little bit more than 6,000 barrels per day right now. We will go up to 12,000 barrels by August, September, and hopefully by the end of the year we will be reaching the 20,000 barrels per day.

And then share with us the total amount of DUCs you currently have. And what is the expected time it will take you to frack and put them into production, this inventory of drilled out but incomplete wells?

Okay. Currently, we only have one. drill and complete it well, which is part number five. We are currently drilling two more parts, parts number 10 and part number 11. And we still have to drill and frack part number five. And then we will proceed after that with the fracking of parts 10 and 11. And This is basically because we have two other paths, which are paths number seven and number eight, that have been drilled up to the landing point in Vaca Muerta, but not the horizontal leg, just to avoid interference between drilling and completion, or the parent-child, as it's usually known. So to be more accurate, we have one DUC, which will be drilled laterally, in June, and then we will be drilling by September and November, patch number 10 and number 11. Right.

Daniel, now it's getting more into the point, and he's saying, can you share some data of Rincón de Aranda like UR, IP production, lift and cost, lift and cost we cover, capex per well, and if possible, if possible, any IRR you're expecting per well basis?

Okay. Easy titles. Regarding the IP and the UR, we are talking about 1,600 barrels per well. And the UR will be around 1.2, 1.3 million barrels. And cost per well, it's in the range of $16 to $17 million. Okay. Yeah, at this point. Once we reach the factory model, which is hopefully going to happen by the end of this year, we hope that our capex per cost will go down to some figure around 15 to 14.5 million dollars.

He says, well, to better grasp how resilient your oil operation is, are you able to provide an indication of resilience? How much is the break-even of Rincón de Aranda in terms of Brent and cash? Yes, cash break-even and Brent.

I know Brent. Yeah. If we're looking at the factory model, CapEx, the project has a break-even of less than $40 per bar. We are talking one head. And regarding the capex per well, it's very important to notice that we are also adding to the total capex the flow lines, because usually oil companies tend to avoid the adding up of the flow line from the well to the treatment facility. And this is why some companies are showing costs of $12.5 to $13 million per well. But you need the flow line to get that oil out.

Great. Thanks for the transparency. And then one more from – well, more. He's asking, Daniel, what is the real potential of exporting gas to Brazil? And can you provide us an update on this infrastructure you're using to ship the gas to Brazil? Okay.

With the current infrastructure, we are capable of exporting to Brazil around 4 to 5 million cubic meters per day. Million cubic meters per day. Million cubic meters per day. The infrastructure that we use is the infrastructure that is already there in place. Basically, the reversion of the Northwest Pipeline, plus the Bolivian infrastructure, plus the Brazilian infrastructure from the Bolivian border to San Pablo. A lot. It's a lot, and it's very expensive. So far, it's very expensive. So we are barely competitive with the alternative of the Brazilian industry, which is getting LNG from their regasification terminals.

Awesome. And one more from Daniel. He can get it now. He says, do you foresee any potential synergies of having YPF as a new partner in Sierra Chata? Are you considering to accelerate the development of that field?

Well, having YPF with all the LNG projects that they have in their portfolio definitely helps us to accelerate the development of Sierra Chata. So I think it's good news.

Well, that was all from Daniel. Now we turn to someone, I don't know, but he's asking, Christian Andrews. Good morning. Broly speaking. Is the recent five-year tariff review for TGS Transcendent positive for your business? We were hoping or expecting for more favorable tariff increases. I think it was pretty online, right?

We were not. I would say that we were not surprised by

By the outcome.

By the outcome of the internal tariff revision, neither of Transenero or TGS, because as you know, the companies participate a lot in providing information and discussing with the regulators. So it didn't come as any surprise. It was in line with our expectations.

Great.

But that was a question of...

Yeah, it was like, are you okay? I guess in a nutshell, are you happy?

Yes, we are happy with them.

You're welcome. Yeah, another question from Christian. He says, in power generation, have payments terms mostly normalized with KEMESA, or are you still facing long payment delays? He's not following for a long time.

Yes. No, they... CAMESA, since the events of March, April of 2024, since that event, CAMESA has very quickly begun to pay, not exactly right on the date of the event, maturity of the invoice, but within the next three weeks, Kamesa fully pays the invoice of the month. So within the month, we fully collect both from Kamesa and Enarza. So there are a few days of delays in the payment, but nothing relevant.

Like five days? Five days?

In average, five days, yes.

Coming from 60 or more.

Yeah, exactly. So, yes, basically, Kamesa is the best payer right now. The best payer today.

Another question coming from Matias Cataruzzi from AdCap Securities. Could you break down the expected timeline from the Phase 1 FLNG project?

Say again, please.

Like the milestones on the FLNG project, like, I don't know, this year we do something.

Well, the COD of the first vessel is expected for the last quarter of 2027. In the meantime, what kind of... In the meantime, we need to secure the gas transportation project for CESA. So I would say that, plus the interconnections with the San Martin pipeline and all the Yolk and auxiliary services that we need for the vessel, basically.

Explain the yoke.

The yoke is the mooring system that allows the ship to deal with tides and with wind and with the normal movement of the motion of the ocean five kilometers away from the coast.

Okay. Well, we'll have to better keep it up. So he is asking about volume revenues every day. We already talked about that. So you can see in the rewatch. And then another question coming from Valentino Caramuti. Do you see further needs on Brazil gas imports from Pampa?

We see Brazil as a very big and relevant potential market. But as we mentioned before, we have to deal with the transportation tariffs that are imposed all over the way. If that is reduced, definitely it's going to be an opportunity for new exports to Brazil. But taking into account this cap of 5 million cubic meters per day, In order to do more than that, you need additional investments.

Yes.

Sorry. One relevant thing to mention here that has been published here is that beginning in 1st of May, we have begun exporting gas through Gasoducto del Pacífico to Chile, to the Villaviva region. We are currently exporting almost half a million cubic meters per day to Shell.

And it's the first export that takes place through that pipeline, apart from what YPF was doing for the past years.

Very good. Yeah, well, Valentino Caramuti is also asking from Quinteria, are you planning to raise more debt in the short, medium term?

Well, I think we saw that, but we don't have to raise new debt. We are okay with the level of debt we have, but we're always looking for market opportunities, and we're very active in our liability management, but not for any of these projects or food companies.

And the last one, because we are in the top of the hour, Jorge Mauro asking if in the upcoming sale of CTLF by Enarsa, can you participate? Would you? I mean, I guess TransCenter's sale, right? The sale of TransCenter's share of Enarsa.

Yeah. Enarsa is working in the process of divesting Citelec, which is a controlling – they're 50% ownership of Citelec, which is a controlling company of Transceder. Regulatory-wise, if you are a distributor or a power generator, you cannot – control transmission so we currently have the co-control together with the government of permission we cannot go beyond that so we cannot um acquires a narsa stake in citadel So that is the answer.

Great. Awesome. So we are at 12.02. This is completing our Q&A section. Thank you for joining us and taking time to join this call. Take care. Should you have any questions, please let us know. Write us to Raquel or me, to anything, and have a good day. See you next August. Bye.

Bye. Thank you very much for joining.