YPF Sociedad Anonima

Good day and thank you for standing by. Welcome to the YPF first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Santiago Wesenach, IR Manager.

Good morning, ladies and gentlemen. This is Santiago Wesenach, YPF's IR Manager. Thank you for joining us today in our first quarter 2021 earnings call. I hope you all continue to be safe. This presentation will be conducted by our CEO, Sergio Fronte, our CFO, Alejandro Leo, and myself. During the presentation, we will go through the main aspects and events that explain our first quarter results, and finally, we will open up for questions. Before we begin, I would like to draw your attention to our cautionary statement on slide two. Please take into consideration that our remarks today and answer to your questions may include forward-looking statements which are subject to risk and uncertainties that could cause actual results to be materially different from the expectations contemplated by these remarks. Also, note the exchange rate used in calculations to reach our main financial figures in dollars. Our financial figures are stated in accordance with IFRS, but during the call we might discuss some non-IFRS measures, such as adjusted VDA. I will now turn the call to Sergio.

Thank you, Santiago. Good morning, ladies and gentlemen. Thank you for joining us on the call today. First and foremost, let me highlight that health and safety of our people and business partners remains our top priority. As the COVID pandemic still impacts our region, we have continued working under a strict set of guidelines, both for our employees and contractors, to ensure the protocols continue to be followed and precautionary measures to prevent contagion are not relaxed, thus assuring operational continuity and the achievement of our business plan. going into the economic and operating results for the first quarter ypf has made a robust start to 2021 leaving one of our toughest years behind and giving a step forward towards recovery and growth we have attained a solid rebound in profitability with adjusted evita reaching 767 million dollars increasing over three times sequentially and coming just 10% below the levels reached a year ago. This improvement was mainly due to a significant comeback in demand for gasoline and diesel, higher realisation prices and the materialisation of cost efficiencies resulting from the company-wide cost-cutting plan put in place last year. We are now focused on fully consolidating these efficiencies making each dollar spent significantly more powerful. As we kept ramping up activity, we completed 48 wells, 34 of which were in the unconventional segment, resulting in the quarter with the most completed horizontal wells since YPF started the development of Vaca Muerta. This, coupled with the better than expected initial performance on the recently connected wells, allowed for our total shale oil production to jump by 20% sequentially, backed by our core hub where output reached its record high in March and has already been outpaced in April, producing almost 43,000 barrels per day. On the conventional side, we managed to mitigate natural decline and grow by 1% sequentially, as we continue to have very good results by applying both secondary and tertiary recovery methods. As an example, production at Mananteles Ver, a 90-year-old block, continues growing and achieving new records, with additional production for tertiary recovery reaching 4.8 thousand barrels per day in the first quarter, and ever higher 5.4 thousand barrels per day more recently in April. As a whole, total oil production expanded by 4% on sequential basis to 208 thousand barrels per day in the first quarter, being well on track to meet our guidance for the whole year. despite recent disruptions originated in the 20-day blockade in the province of Neuquén, which partially affected our operations and investment activities in the region. On the back of this positive start of the year, our financial situation improved beyond our initial forecasts. Despite moving forward with our investment plan for a year, we delivered a positive free cash flow of around $280 million. This, in turn, allowed us to reduce our net debt during the quarter, down by over $300 million, reaching $6.7 billion, a level not seen since 2015. The first quarter provided encouraging results. making us more confident in our ability to fully execute our capex plan for the year and in turn achieve our production targets nevertheless the near future remains challenging ongoing and future mobility restrictions on the back of the evolution of the pandemic as well as macro volatility will probably continue to dictate the general business environment requiring us to be even more focused in consolidating and further identifying efficiencies to become linear while we remain quick to react to the evolving landscape and keep on delivering value to our shareholders. Let me end by saying that I am particularly proud of our employees. of their commitment and their efforts. I also want to thank our clients for their fidelity and our investors, partners and suppliers for their continued support. I believe the challenges ahead are still many, but I am confident of what we have achieved so far and this first quarter represents the first step towards getting back on a profitable growth cycle. Now I leave you with Alejandro, who will go into further detail on our first quarter 2021 results.