Pampa Energia S.A.

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. Please send your questions in writing through Zoom chat. If anyone needs assistance, please send us a Zoom message. Before continuing, 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 will turn the video conference to Lida.

Hi everybody, good morning. Thank you for joining us. And first, I would like to give you a quick summary of our announcement on fertilizers. This is a new business. And then a quick summary of the quarter so we can move on to the Q&A. Today we have only our CFO. We have a small inconvenience without Gustavo, but I think we both can do it, right? Yeah. So, let me go to the slide three, which you can see, last July, our board approved the FID for the construction of Latin America's, so far, Latin America's largest Urea plant, officially marking Pampa's entry into the fertilizer business, Granular, Granular, Granular. Eurea is critical to agricultural production and global food security. And it is primarily used in the production of corn, wheat, sugarcane, and barley. Because natural gas, its main feedstock is the natural gas, urea production is highly concentrated in a few countries. While Argentina and its neighbor countries currently rely on imports from distant regions today exposed to significant geopolitical uncertainty. The investment thesis is straightforward. It's just we aim to monetize the best shale gas reserves that Pemba holds in Vagamorta through the development of high-value added businesses Natural Gas and Electricity account for approximately 70% of the production cost of urea and will be supplied by Pampa, reinforcing the competitive advantages of our vertically integrated business model while enhancing the project's operating efficiency and long-term profitability. So beyond diversifying Pampa's revenue base, the fertilizer business will also help Argentina's foreign currency generation through import substitution. We are substituting imports and increasing exports. with an annual contribution of approximately $1 billion. Brazil, which currently imports between 7 and 8 million tons of urea per year, together with the rest of the southern corn, which has an annual deficit of about 2 million tons, will be the project's primary market. Moving on to the project details, the plant will be located in Bahia Blanca on a proprietary site strategically positioned next to one of Argentina's main export ports, Bahia Blanca, with direct connection to Vaca Muerta pipelines, existing pipelines, and close to Pampa's thermal and renewable power generation assets. This is a $2.7 billion investment to build on a turnkey basis, a 2.1 million ton per annum plant consuming 3.3 million kilometers per day average year, and 75 megawatts of power, again, supplied by Pampa. The plan is scheduled to be completed by the end of 2029. Now that we have reached the FIDE, so the next milestones are obtaining the RIGI and the Buenos Aires RIGI approvals, which are essential to the development of the project. Last Friday, the evaluation committee of the RIGI clear Fertil Pampa's presentation, so we are waiting for the formal approval to be published in the official gazette. Thus, Pampa continues to strengthen its industrial profile further through the several projects presented under the REHEAP framework. You see, we are currently participating in seven projects across oil, gas, mistrain, LNG, fertilizers. NGLs. Last June, following the FID at TGS, our affiliate filed an application for the $3 billion investment in an integrated NGL project. Also, TGS's private initiative, which consists in expanding the Perito Moreno Pipeline, and Tessa Matias dedicated pipeline for the LNG project and Rincón de Aranda. All those RIGI applications got approved. Overall, these projects provide a clear roadmap for Pampa's long-term growth, supporting Argentina's export expansion and enable us to monetize Paca Muerta's resources further. Well, now moving on to the second quarter results, let me tell you, the adjusted BDA amounted to $415 million, highlighted by a quarterly all-time high production of 107.5 thousand barrels of oil equivalent per day, due to the sustained ramp-up of Rincón de Aranda and gas cell supply. The new regulatory framework also had a positive impact on our power generation segment, which benefited from the strong spot margins as high fuel costs impact and grow the marginal costs up the system. So that helped. And also, we have more B2B PPA cells. To the less extent, increasing the national prices also boosts the pet can business, which recorded its highest quarterly EBDA since 2023, three years ago. Quarter on quarter, EBDA grew 28%. Thank you very much. were destined to Rincón de Aranda. It is worth noting that we already invested last year $900 million in Rincón de Aranda, and we expect to invest an additional $700 million this year as we move toward the 45,000 barrels per day production plateau once the CPF and Vaca Muerta Sur oil pipeline are both online next year. So moving on to the slide seven, the oil and gas adjusted BDA was $182 million, more than double last year, driven again by Rincón de Aranda production ramp up. The gas cell supply to our power plants are resulting in higher output billing at stronger prices as fuel cost pass-through increase. These factors were partially upset by lower realized crude oil prices due to the hedge. Quarter on quarter, ABDA increased by 74%. This is mainly explained by gas seasonality. Total lifting costs grew 30% year-on-year. This is primarily driven by Rincón de Aranda ramp-up, partially upset by the divestment at El Tordillo and lower activity at El Mangrucho. Gas Block. Cost per BOE, however, remained broadly flat at $7.7 on average as production growth offset the increase in lifting costs. If we do double-click, oil lifting costs per barrel actually declined 28% to $15 in Q2. However, it increased quarter on quarter following the commissioning of the second TPF at Rincón de Aranda that increased the treatment, the crude oil treatment from 20,000 barrels to 28,000 barrels per day. Gas listing costs also decreased 13% year-on-year to $1 per mil BTU, but slightly decreased 6% sequentially due to the maintenance cost at El Mangrucho. So focusing on crude oil only, production increased three times year on year, purely explained by Rincón de Aranda. Realized price averaged nearly $59 per barrel. This is a little bit below last year due to the oil hedge. Without the hedge, the prices would have been $91 per barrel, resulting in approximately $64 million more of sales. Exports accounted 57% of total volume sold in Q2 26. This is very similar year on year and quarter on quarter. Rincón de Aranda contributed one third of oil and gas EPDA up from 6% last year. So last year was only 6% and this year is one third, this year's quarter. This is continuing to diversify the production mix. Now, oil accounting 22% of the total output. At Rincón de Aranda, the ramp up continues. As you can see, the performance is comparable to the best blocks in the core half, reaching a new record of 27,000 barrels per day on May 21, actually, specifically. Since March, we have not tied in new wells, just producing from 43 wells. Even so, Rincón de Aranda averaged 22,000 barrels per day, up 22% quarter-on-quarter. The quarter's exit rate was 16,000 bottles, temporarily affected by chokes on certain wells while we completed other neighboring paths, so we avoid the frack hit. These 10 wells in said paths, said two paths, were completed in July and will be tidied in August. Well, now, which will support rebound in production. In Q2, we also drill another 10 wells for two pads. Currently, we have two high spec rigs and one freight fleet operating in the block. For the remainder of the year, we expect to tighten those 10 wells that we drill. to reach an exit rate of 28,000 barrels per day. Our target remains a production plateau of 45,000 barrels per day once the CPF and the Vaca Muerta oil pipeline are online next year. Regarding Reheat, well, as we said previously, the application was formally approved on July 21 as long-term strategic export project. The application includes the drilling and completion of 259 wells. and the construction of the CPF, we are already building, oil and gas pipelines and water treatment plants, facilities to treat the water flow back. Total estimated investment amounts to $4.5 billion, and it is expected to be deployed through 2041. So the re-approval represents a significant milestone for Rincón de Aranda, providing a stable framework for tax, customs, and effects incentives for 30 years. Long-term strategic export projects are also Thank you very much. which is estimated to generate approximately $17 million over the project's useful life. Moving on to gas, production increased 10% year-on-year and 4% sequentially, reaching over 14 million cubic meters per day, driven by the gas cell supply to our CCGTs under the new power market framework, partially financed Thank you very much. During Q2, we tied in four new wells at Sierra Chata, bringing production to a new all-time high. At Del Mangrujo, there were no new development activity with production supported by the existing well base. At Rio Neuquén, four new Thai gas wells were drilled and two were connected. For the second half of the year, we... Our plan includes drilling activity in Sierra Chata and El Mangrucho. This is aligned with our 2027 activity production plan, which considers the recently awarded transportation capacity at Perito Moreno pipeline, in which gas transported through new infrastructure is able to capture the full margin, the full spot margin. In Q2, 56% of our gas was sold under plant gas GSA through Gamesa and retailers, down from the 80% last year following the transfer of these GSAs to our power plants for cell supply. As a result, intersegment consumption increased to 31% of our total sales. This is compared to just 3% last year. Under the new framework, we expect approximately 40% of this year's production to procure our own power plants needs. Export volumes remain flat year on year at 1.2 million cubic meters per day. Industrial volumes declined as we prioritize self-supply demand, which is priced at a higher price. Gas prices average $4.6 per million BTU. This is 15% higher than last year. This is reflecting higher fuel pass-through in power generation. Pesos de Evaluación Turning to power generation, we posted an adjusted BDA of $155 million in Q2. This is 39% higher than last year and 8% higher than last quarter, mainly driven by stronger spot margins and B2B margins under this new regulatory framework, as well as LNG procurement margin. However, this was offset by the mandatory maturity of Energia Plus contracts, the outage of Loma La Lata's gas turbine number 4, that is under a PPA, which is remunerated under a PPA, and the Pepe Wind Farms under performance. As you know, the new guidelines will introduce marginal costs as part of the spot pricing methodology, which that marginal cost overshot during the quarter, especially during the winter season, reflecting higher fuel prices, in particular using LNG and liquid fuel oil, diesel oil. So the spot margins widen specifically for the CCGTs. though that margin is capped at 15%. We only can capture 15% of that margin, that's what I mean. The current framework allows full margin, so you can capture the whole margin, if you're using new infrastructure Thank you very much. that now has security to be transported through this Perito Moreno expansion. So full capture, the FRA equals to one instead of 15%. Pampa was awarded 3.2 million kilometers per day in the Buenos Aires bound trench so it goes to the it will be used to to procure the gas needs of the legacy Genelva CCGT right and we are we also participate in the second tender for the remainder of the If the regulator grants the clearance, we should add another 0.7 million kilometers per day to the Buenos Aires trench, plus another 1.3 million kilometers per day in the Bahia Blanca trench. Total availability fell to 88% during the quarter, mainly due to the ongoing outage in Iwiles, which now is currently, since July 31st, is no longer part of Pampa. And we had some outages also in Güemes and in the mentioned Loma La La Tatichi No. 4. Barragan also has some scheduled maintenance. Even though it's 88% availability, we continued to outperform the peers in the national grid. 35% of the capacity was contracted, slightly higher than Q2 last year. This is reflecting the new guidelines that boosted the B2B PPAs. Now, going to the financial part, turning on to the cash flow. In slide 11, we present the parent company figures, which aligns to our bond perimeter. Free cash flow was negative $128 million in Q2, but improved year on year and quarter on quarter. This is mainly due to stronger ABDA generation and lower capex at Rincón de Aranda and receivables due to the better collection though this is impacted by higher winter sales. Quarter-on-quarter improvement is explained by the release of Colateral on our Brent hedge as oil prices declined. As a result, cash and cash equivalents stood at $1.3 billion at the quarter end, $604 million more than Q1. Finally, on the balance sheet, gross debt as of June was $2.6 billion. This is mainly because of the re-tap of 2037 notes priced at the lowest spread to the U.S. TBLs in PAMPAS debt issuance history. and Corporate History, I've been saying, Argentine Corporate History, net debt rose to $1.3 billion, represented net leverage of 1.4 times to the last 12 months EBITDA. So it concludes now this presentation. The floor is open for questions. If you have a question, please send it through the Zoom chat. If you have a, we will read it first seen first, the first receives, first served. Make sure your name and your company is there, otherwise we can, We can just read it and so we can also reintroduce you to the audience. Should any participant have assistance, just send us a chat through the platform. Thank you. Wait for while we poll for questions.

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