YPF Sociedad Anonima

Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the YPF fourth quarter 2021 earnings webcast presentation and conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. Pablo Calderon, YPF Investor Relations Manager. You may begin your conference.

Good morning, ladies and gentlemen. This is Pablo Calderon, YPF Investor Relations Manager. Thank you for joining us on the call today in our full year and full quarter 2021 earnings call. I hope you all continue to be safe. This presentation will be conducted by our CEO, Sergio Franti, our CFO, Alejandro Leo, and myself. During the presentation, we will go through the main aspects and events that explain our fiscal year and forecast the results. And finally, we will open up the call for questions. Before we begin, I would like to draw your attention to our questionnaire statement on slide two. Please take into consideration that what are remarks today and answer to your question 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 calculation to reach our main financial figures in U.S. dollars. Our financial figures are stated in accordance with the IFRS, but during the call, we might discuss some new IFRS measures such as adjusted EBITDA. I will now turn the call to Sergio. Please, Sergio, go ahead.

Thank you, Pablo. Good morning, ladies and gentlemen. Thank you for joining us on the call today. Only a year has passed since we were announcing the worst annual results for this company in its recorded history. And at that time, I said that I had rejoined YPF with the firm determination to steer the company through the storm. And now, only a year later, we are proud to present a fully recovered reality, delivering exceptional results on all fronts in light with guidance that we have provided. In 2021, we managed to restore profitability that resulted in solid positive free cash flow that in turn translated into healthy reduction of our net leverage. Adjusted EBITDA for the year ended in line with guidance at $3.8 billion, exceeding pre-pandemic levels of 2019 by about 6%. And the positive cash flow generation achieved along seven consecutive quarters allowed for an aggregate reduction in net debt of around 17% or 1.3 billion when compared to December 2019 levels. We have also accomplished a much needed recovery in our oil and gas production, managing to grow it sequentially along the year after five years of continuous decline, delivering over 14% growth in the fourth quarter compared to the same period in 2020. This was particularly possible on the back of a strategy that combined financial prudency together with company effort to become more efficient across our operations, allowing us to fully execute our targeted CAPEX program. And at the same time, these efforts permitted us to restore a positive path in terms of approved hydrocarbon reserves, reaching remarkable growth in our reserves of around 24% and historical high reserve replacement ratio of 2.3 times. Our production achievements were the result of a conscious effort to simultaneously tackle the natural decline in our conventional fields and the unparalleled opportunities to accelerate the development of our shale blocks. And while we continued prioritizing oil over gas, The materialization of Plan CAS4 at the beginning of the year created a renewed opportunity that we managed to successfully exploit, acting as the largest bidder on the public tender and delivering on the challenging production commitments. During the year, we saw outstanding progress in our operations, particularly in Vaca Muerta. Our focused approach towards revisiting our processes and engineering models permit us to continue improving our efficiency. In that regard, we achieved a tremendous improvement in our fracking speed and more recently in our drilling speed. And we were capable to continue reducing the development cost in our half core on the back of new well designs that resulted in lower average well cost and higher average estimated ultimate recovery. We have recently revisited the EUR for a tight wall of 2,500 meters of horizontal leg at some areas of the Loma Campana block to almost 1.5 million barrels, a jump of 17% compared to previous estimates. Along the year, we have also experienced a significant recovery in the local demand for both diesel and gasoline, with particular ramp up in the fourth quarter. This recovery permitted further improvement in our refiner's runs, reaching an average utilization rate of 85% in the fourth quarter, while also leading to incremental volumes of imported fuels, particularly diesel, to maintain the market fully supplied. And to maintain our brand visibility, in 2021, we launched a program to update the image of our gas stations across the country. As part of this program, which includes the assistance through third-party financing for our franchisee network, 68 locations revamped their infrastructure during 2021. In addition, during the year, we inaugurated the first gas station of the future in La Plata City and started works at the Echevarria gas station in the city of Buenos Aires, which will become our flagship location in coming months. Moreover, along the year, we incorporated 30 new locations to our network to over 1,600 stations across the country, including 20 new builds. Customers' loyalty through innovation remains a key priority to upsell in complex market conditions, as well as following YPF on the edge of the energy transition. And this was not only a year of positive economic and operating results. we have also maintained our sustainability agenda at the forefront of our strategic decisions. As we always remark, sustainability is at the core of everything we do, and therefore, safety of our people is a top priority. In 2021, we continue showing improvements in the safety of our operations, as shown in the evolution of the index that measures the frequency of accidents per million hours worked. Although higher than in 2020, given the low activity performed that year on the back of the pandemic, the result for 2021 continued delivering on the same ambitious lines established five years ago. To deliver on our safety and environmental goals, during 2021, we significantly increased the budget deployed towards keeping integrity and safety of our facilities. At about $465 million, This budget more than doubled the figure for 2020 and resulted more than 30% above the average for the last five years. Among other initiatives discussed allowed us to implement a spill prevention and control system, a program to automate detection, maintenance, and repairment with focus on hazardous liquids and natural gas pipelines, as well as a strong line of action to reduce the inventory of tanks in high risk status. Along the same line, in 2021, we carried out almost 500,000 hours of training for direct employees and contractors focused on what we define as the 10 golden rules to save lives, which looks to encourage and promote a safety culture within the entire organization. We also maintain the safe driving program put in place in previous years which has resulted in a relevant reduction in the frequency rate of vehicle accidents that compares positively with global oil and gas industry standards. It's also worth highlighting that our salary policy for variable bonus of executives and direct employees is based on a holistic assessment that includes not only financial and operating metrics of the company, but also sustainability goals in all its dimensions. which for the first time in 2022 will include diversity goals. Integration of a more plural and equitable workforce is not only a responsibility we have as a company throughout our diversity committee and new protocol sanctions during the year, but also because we truly believe it has immediate and long-term benefits on our day-to-day job. Further focusing on sustainability and in line with our policy to promote cleaner and more efficient energy solutions, during 2021, we have been working hard and making good progress on the path of reducing our direct greenhouse gas emissions. Within our upstream operations, which represent half of our total emissions, we have made meaningful progress so far, and much more should be achieved in the future. Given the significantly lower emissions intensity of our shale operations, we expect to continue reducing our carbon footprint intensively in coming years and have established a target for a further 10% reduction in 2022, averaging less than 41 kilograms of CO2 equivalent per barrel produced. This is then seeing the over-accomplishment of the targets put forward back in 2017. accounting for over 14% in cumulative GHG reduction and targeting a further decrease of 6.5% in 2022. Our commitment towards this reduction continues foreseeing more than 30 initiatives for the decarbonization of our activities, as well as having an all-time high share of renewable sources in our energy purchases for the last quarter. Outlining our energy transition initiatives, YPF LUS, our strategic arm to continue expanding our renewable energy matrix, has become the second largest renewable energy generator in the country after reaching COD on two new wind farms that added 175 megawatts to reach a total renewable portfolio of almost 400 megawatts in installed capacity. Moreover, the company has recently announced the construction of a new 100 MW solar PV project in the province of San Juan, financed by a $64 million long-term green bond recently issued in the local market. Finally, it's worth noting that we are also analyzing future projects to improve fuel quality. enter a lithium value chain, and deploy blue and green hydrogen pilots through the H2R consortium, all led by YPF Technology, our research and development company association with CONICET. I will now turn to Alejandro to go further in detail into our financial and operating results. And before the Q&A section, I will share our view of the 2022 outlook.