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.