YPF Sociedad Anonima

Hello, greetings, and welcome to the YPF third quarter 2024 earnings webcast presentation. All participants are in a listen-only mode at this time. Later, we will conduct a question and answer session. To ask a question, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, just press star one. As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to Margarita Chu, YPF's IR Manager. Please go ahead.

Good morning, ladies and gentlemen. This is Margarita Chun, YPF IR Manager. Thank you for joining us today in our third quarter 2024 EARNEST Call. This presentation will be conducted by our CFO, Mr. Federico Barretta-Veña, and our Strategy, New Businesses, and Controlling Vice President, Mr. Maximiliano Weston. During the presentation, we will go through the main aspects and events that explain the quarter results. And then we will open the floor for Q&A session, together with our CEO, Mr. Horacio Marín. Before we begin, please consider our cautionary statement on slide two. Our remarks today and answer to our 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. Our financial figures are stated in accordance with IFRS, but during the presentation we might discuss some non-IFRS measures, such as Adjust the EVTA. I will now turn the call over to Federico. Please go ahead.

Thank you, Margarita, and good morning, everyone. Let me start today's presentation by describing the main highlights of Q3 2024. First of all, We achieved a strong level of EBITDA, 13% up sequentially and even higher, 47% up interannually, despite the recent rain contraction and the extreme weather conditions in Patagonia during July that affected our conventional production. This positive result reflects the company's dedicated efforts since December and along this year to fully converge local fuel prices to international parity, in parallel with our focus on production efficiencies in our core asset, Vaca Muerta, where we can now share improved process and efficiency metrics across all the businesses. As a result of this, we produced 36% more shale oil than Q3 last year, now representing almost half of our total production. Very important and in line with this inter-annual expansion, we became the largest oil exporter in the country, exporting roughly 40,000 barrels per day. We also made progress in the development of the key infrastructure project, Vaca Muerta South Oil Pipeline, also known as VEMOS, that YPF is leading as a producer's consortium export initiative. Also, we advanced further with the Andes project, and Max will share further details later. Now, let's move on to the quarter's result. Revenues reached $5.3 billion, 7% up sequentially, mainly driven by higher seasonal sales of gas, as well as growing oil exports to Chile and better fuel prices, which was boosted by higher gasoline demand. These effects were partially upset by contraction in diesel demand and oil prices, in addition to lower conventional production due to our Patagonia's operations affected by the extreme climate until early August. Interannually, revenues increased by 18%, mostly on the back of a rebound in fuel prices, plus even higher oil exports, partially upset by lower fuel demand, which was exceptionally high last year in view of reduced prices. Adjusted EVDA totaled almost $1.4 billion, 13% up sequentially, primarily due to the higher seasonal sales of gas, coupled with higher shale hydrocarbon production and better fuel prices, partially offset by higher costs related to Patagonia's weather condition and cost inflation, besides lower export prices linked to Brent. Interannually, the increase was remarkable, growing the adjusted VDA by 47%, mainly boosted by the significant recovery of fuel prices, in addition to 29% expansion in shale hydrocarbon output combined with lower imports of fuel partially offset by higher costs and the weather impact mentioned before. Net result grew significantly, posting roughly $1.5 billion almost three times the previous quarter, mainly due to a positive income tax on the back of a lower devaluation expected for tax assets so decreasing future tax payable. Interannually, besides this impact, the increase was even higher since Q3 last year was affected by an impairment charge in natural gas assets. Total hydrocarbon production averaged 559,000 barrels of oil equivalent per day, rising 4% sequentially and 8% interannually. driven by a solid performance in our shale operations, which is our core business and focus since last December. This was partially upset by lower conventional output due to the conditions in Patagonia. In terms of investments, we deployed near $1.4 billion, 13% up sequentially, mostly on the back of higher activities in the upstream to ramp up shale oil production. Interannually, CAPEX was 7% down, mainly due to last year's inflationary context. Notably, 73% of the quarter's investment was concentrated in the upstream, mostly for shale oil operations. On the financial side, we reported a negative free cash flow of $173 million, although the adjusted VDA was similar to the deployment OF OUR CAPEX, Q3 WAS MAINLY AFFECTED BY HIGHER DEBT SERVICE PAYMENT, PARTIALLY UPSET BY A GROWING ACTIVITY IN ABSTRAINED BUSINESS, TEMPORARILY INCREASING ACCOUNTS PAIL. AS A RESULT, WE MAINTAINED NET DEBT AT $7.5 BILLION, BUT IMPROVED NET LEVERAGE RATIO TO 1.5 TIMES, FULLY ALIGNED WITH THE TARGET OF THE YEAR. Turn the call to Max to continue with the quarters operating performance.

Thank you, Federico. Before starting with the quarters performance, let me briefly update on the mature field strategy in order to exit from around 50 conventional blocks. The Andes project that grouped 30 blocks has been achieving successful results. So far, we have executed nine SPAs for a total of 25 blocks. Also, we obtained the provincial approval for one of the clusters in the province of Chubut. Considering the positive performance, we recently decided to add seven blocks from the province of Tierra del Fuego to the Andes project. So the total now amounts to 37 blocks. Regarding the blocks not included in the Andes project, There are continuous ongoing negotiations. Moving to the quarter's performance during the third quarter, total hydrocarbon production grew by 4% quarter-on-quarter and 8% year-on-year, once again driven by shale contributions, which further continued its upward trend and now accounts for 55% of our total output compared to 46% in the third quarter last year. Net crude oil production recorded a new sequential 3% increase, averaging 256,000 barrels per day on the back of a solid 11% shale expansion, minimizing the impact on the conventional production decline, which remained constrained in July by the extreme weather in Patagonia. Since the beginning of August, we were able to resume our operations and return to normal activity levels. Despite this contraction, it is worth highlighting that 9% of the conventional output came from tertiary production, increasing by 2% sequentially and minimizing this impact and the natural decline in mature fields. Beyond crude oil, natural gas production grew 4% on a quarterly basis, mainly driven by the completion of the compressor plants and the GNK pipeline and the seasonal peak demand, while NGL's production increased 7% due to the increased shale gas production and the productivity achieved after the optimization implemented in the turbo expander located in the Loma La Lata block. Moving to lifting costs, we recorded $16.1 per barrel of oil equivalent in the third quarter, remaining essentially flat on a sequential basis, mainly due to higher hydrocarbon production offset by higher pressure on our cost structure from quarterly inflation and lower conventional production mentioned before. In this sense, the lifting cost in our core blocks recorded $4.6 per barrel of oil equivalent on a gross basis, decreasing 2% quarter on quarter on the back of higher oil shale production. Considering the evolution of inflation, which has been higher than the evaluation, as well as the divestment of mature fuels expected to be completed in the following months, we expect our target lifting cost for the year to be in the range of $15 per barrel of oil equivalent instead of the original $13. Regarding prices in the upstream segment, crude oil realization prices are at $68 per barrel in the third quarter, 4% down quarter on quarter. Despite the decline in Brent during the third quarter, the local pricing environment remained steady. On the natural gas side, prices reached $4.5 per million BTU, driven by the seasonal winter price of plant gas. Now walking through our shale activities, we continued focusing on operational efficiencies. The initiatives presented in March this year are showing important results. In the third quarter, we drilled 50 wells but completed 67 wells and tied in 68 wells at our operated blocks, being all from them oil of horizontal wells. Also, let me highlight, in the first nine months, we tied in 41% more wells and completed 28% more wells compared to last year. These improved KPIs at our core activities are fully in line with the anticipated ramp up in our shale oil production for the second half of the year. In this sense, in the third quarter, our shale oil production set a new year record, delivering 126,000 barrels per day, increasing by 11% sequentially and 36% interannually. 86% of the total shale oil output came from our core hub oil blocks Loma Campana, La Marga Chica, Bandurra Sur, and Aguada Chana. In terms of efficiencies within our unconventional operations, we continued with high levels of drilling and fracking performance, averaging 314 meters per day of drilling and 240 stages per set per month on fracking. Considering all these metrics, we were well on track to meet our target of more than 120,000 barrels per day on average for 2024. Let me highlight that our production in September has already surpassed 130,000 barrels per day. Moving on to our downstream segment, processing levels averaged 298,000 of barrels per day recording once again refinery utilization rate of above 90%. It was mainly boosted by La Plata Refinery, where after working on the efficiency initiatives, we obtained the highest quarterly record of processing levels in the last 10 years. On the other hand, last year was affected by programmed shutdowns at Lujan de Cuyo and La Plata Refinery. Fuel sales volumes were similar sequentially, good news since the 5% expansion in gasoline was partially offset by a 3% drop in diesel due to lower seasonal demand from industries. Interannually, fuel sales volumes declined by 9% since last year was affected by an exceptional high level of demand. On a cumulative basis though, during the first nine months of the year, we managed to maintain local fuel market share at 57%, similar to last year. Regarding fuel imports, during the quarter, we only imported diesel, mainly preparing for the following stoppages, representing 4% of total fuel sales volumes compared to 7% in the third quarter last year. In terms of prices, during the third quarter, we continued mitigating the impact of the devaluation and fuel tax increases, as well as converging to international parities. As a result, average fuel prices measured in dollars increased by 1% sequentially and 23% interannually, while the spread versus import parity became positive to 1% in the third quarter, compared to negative 5% during the second quarter and 28% in the third quarter last year. As mentioned before, these are remarkable results we achieved after a continuous conviction to follow international priorities. Lastly, efficiency-wise, we continued moving forward with our plan to improve our downstream margins. In that sense, we have identified and implemented a series of initiatives based on the optimization and maintenance stoppages processes and power consumption in our industrial complexes, as well as improvements in products, storage, and contracts, and logistic rearrangements, among others. I will now turn back to Federico to go through the quarter financial results.

Thank you, Max. Switching to the financial front, Let's start with cash flow evolution. Although where adjusted the VDA was similar to the deployment of our CAPEX, higher debt service and purchases of crude oil to third parties due to lower conventional production affected cash flows, but partially upset by the temporarily increased accounts payable in the absent shale activities. As a result, free cash flow came at a negative $173 million. In terms of financing, in Q3, we successfully issued a seven-year unsecured international bond for $540 million at a yield of eight and three quarters and proceeded with the repayment OF $334 MILLION FOR THE 2025 NOTES AND $166 MILLION FOR THE 2027 NOTES, IN ADDITION TO A $40 MILLION EXCHANGE TO THE 2025 NOTES. SO WITH THIS NEW ISSUE, WE CONTINUE REDUCING REFINANCING NEEDS AND COSTS FOR 2025. and at the same time, consolidating the overall spread curve of YPM. In the local capital market, we issued a two-year dollar-linked bond for $185 million at a 0% yield, as well as promissory notes issued for $100 million, also at 0% yield, with maturities of up to 18 months. During this quarter, we also reopened the local bank-syndicated market with a $300 million syndicated loan with three local relationship banks. After Q3, we issued two new dollar-denominated bonds, $125 million in dollar MEP at a yield of 6.5 and $25 million in dollar CABLE at a yield of 7%, both with a tenor of four years. On the liquidity front, by the end of Q3, our cash and short-term investment decreased 14% sequentially to $1.2 billion, a lower level of cash aligned with our short-term needs and improved confidence in refinancing our schedule of debts. Our net debt remained similar at $7.5 billion, and with better EBITDA quarter on quarter, we improved the net leverage ratio from 1.7 to 1.5. Regarding our maturity profile, as of the end of September, the company faces debt maturities in the next 12 months for $1.7 billion, mostly international bonds, for $1 billion and short-term trade finance for almost $400 million, both with local and international banks. The remaining portion includes local bonds for $150 million and bank loans and other facilities for another $140 million. Now, let me comment on the progress achieved in the oil midstream expansions to unlock the evacuation capacity in the Neuquena Basin. Continuing our focus on growing oil exports, during Q3 we increased our sales to Chile, delivering 39,000 barrels per day through the Trans-Andean Pipeline, reaching net export revenues of over $200 million. This volume is 37% more than Q2 and represents more than 15% of our total oil production. Regarding the evacuation to the Atlantic, the construction of the first tranche of Bemos connecting Vaca Muerta Formation to Allen achieved a 50% construction progress. Total capex for this first tranche amounts around $200 million dollars. We expect the first tranche starting capacity of more than 350,000 barrels per day by Q first 25 at Allen to be initially utilized by Old Del Valle's system, which connects to the province of Buenos Aires. In line with Old Del Valle's pipeline where YPF shipping stake is 25%, it continues with expansion expected to gradually add around 30,000 barrels per day by year-end and roughly 215,000 barrels per day by QE1 next year. The BEMOS first tranche shall be expanded to over 450,000 barrels per day by 3Q26 at Allen once the second tranche starts its operation, connecting also to the OIL EXPORT DEDICATED PORT OF PUNTA COLORADA IN THE PROVINCE OF RIO NEGRO. THE PLAN OF THE SECOND AND MOST IMPORTANT TRANCH OF VEMOS IS DESIGNED TO REACH COMMISSIONING CAPACITY OF 180,000 BARRELS PER DAY BY Q3 2026 AND INCREASE IN CAPACITY UP TO 400 TO 500,000 BARRELS PER DAY BY 2027. New pipeline will also be able to reach more than 700,000 barrels per day of design capacity if the basin requires it. Total capex amounts to roughly $2.5 billion and includes the 440 kilometers oil export dedicated pipeline, storage and control room facilities, as well as monoboys to operate VLCCs the 2 million barrel mega vessels that will allow Argentina producers to have access to the Asian markets. In terms of progress to date, we have signed term sheets with different producers for around 370,000 barrels per day. We also created the SPV that will develop the producers consortium export pipeline, and we are preparing this SPV to apply for the RIGI as soon as possible. Also, before month end, we expect to announce the initial shippers where YPF expects to have around 30 to 40% of shipping and equity interest. The plan is for the SPD to award the EPC contracts for the pipes and the EPCM contracts for the export terminal to start construction between December and January. Regarding the project finance, we are developing the consortium agreements with the target to structure 70% debt and 30% equity. So far, we have received banks' LOIs in line with this purpose and indicating a strong international financial backing for the project. So with this, we conclude our presentation and open the floor for questions.

And just as a reminder, if you would like to ask a question, simply press star followed by the number one. Our first question comes from the line of Vicente Falanga from Bratisaco. Please go ahead.

Hi. Hello, Horacio, Federico, all YPS team. Thank you for taking my questions. I basically have two questions here. First of all, Horacio, if you can mention and share with us How was your roadshow to sell Argentina's LNG and Asia and Europe? How was the receptivity of potential buyers and how is the process to potentially get equity investors to the LNG plant? That's my first question. And then my second question is on lifting costs, which right now is at $16 a barrel. I know the company has a target to get to $8 a barrel some point next year. It seems a little bit far away, if you could provide a roadmap of how to get there. And then also, during the call, I think you mentioned something about $13 a barrel of lifting costs, but I missed the message there, if you could repeat it. Thank you very much.

Hello, Vicente. Thank you very much. Do you hear me? Because I have problem hearing you, okay?

Yes, I can hear you well, yes.

Okay. Okay. This is Horacio Marin. I am in Austin because this evening I will receive a Distinguished Alumni Award in the University of Texas from my Master of Petroleum Engineering. We have a little problem with the communication, but if you hear me from the telephone, it's okay. I didn't hear at the beginning. Could you repeat? Because I have problems.

Yes. The first question was if you could share how was your roadshow to sell Argentina's LNG in Asia and Europe and how is the process to get an equity investor, a possible equity investor to the LNG plant. Okay. And then my second is how to get the lifting cost from $16 to $8. Okay.

Okay, to the energy, I think I have to clarify a little bit. For investor or iniquity, maybe what you are more interested in is a little different than the off-takers. Investor, there are the companies of Argentina that they have the resource, the gas resource, plus Petronas is one. that they have to decide at the end of december if you continue or not but because our our job is to maximize the shareholder value we are continuing to to discuss with super major to enter as a equity and i cannot tell the name of the companies because it's confidential at that moment and we are going to uh to declare that when we have the final document signed okay in what is about the the the offtakers we went to india as you know and we were we went also to europe and really i'm very very positive because we have A lot of NDA sign, I think it's in the order of 14 so far, and MOU with different companies and also countries. Like India, we are in the process of sign one of these MOU for the big number of selling. And in all the travel to the different countries, we know that we were to Hungary. We have also in Italy. in Germany, and also we went to London, and there are several companies. In all the meetings, it was positive. That doesn't mean that we signed contracts. That means that we passed to the next phase, which is to sign NDAs, MOU, and start the negotiation as soon as possible. So from there, I'm very positive. The second question was about the lifting cost that you say how you can go to 18 to, I don't remember, I say 15, no? 16, yeah. It doesn't matter. Yeah. It doesn't matter the number, but it's okay. Yeah. The answer is remember, we are going to be almost a non-conventional company from the next year and so on. That's why we can get down because the difference in the lifting costs from one to the other is huge. And that's why in the 4x4, YPF 4x4, what this first pillar and the second pillar, first pillar is concentrate our investment in the more profitable business with this back and mortar oil. Second, that is to work for a new ecosystem for very small companies, what we call mature fields. We are now in the process, that was a highlight trademark in Argentina that was two weeks or three weeks ago that they come to the first area. So we are all in the process that the provinces, because it's a new process in Argentina, beginning from the new constitution in 1984, and the province have to sign from constitutional law to sign the the approval and that we are in that process that is new for everybody in the massive way that we are doing so we we are still we have a very econogram very very tight one and we still want to be out of the process in the beginning of next year for the 25 areas And we are still in one of the province, which is Santa Cruz. And also, we make the number the second understood that is for . I think it's okay for you, or you need more details?

That is great. Thank you very much, and good luck on your masters. Thank you. Okay. Thank you very much.

Our next question comes from the line of Bruno Martinari from Morgan Stanley. Please go ahead.

Good morning, everyone. Thanks for taking my question. I have only one question. I wanted to explore a little bit how you are envisioning your free cash flow trends into 2025. So when could we start to see perhaps the free cash flow turn positive into next year or if That only happens in 2026. And if you could give us a hint of what your CAPEX plan looks like for next year, excluding the conventional assets, that would be very helpful. Thank you very much.

Okay. Our idea is the same that it was, I think, was the first call, that this year the The cash flow is neutral from an operational point of view because we have the mature field. Next year, with the mature field, the majority of mature field out, we continue still thinking that we want to have a neutral cash flow for all the companies, including the financing. We are working now in the budget 2025. Remember that YPF has plenty of assets. And we have partners and we have 100%. And so after we have received the approval of the partner, it can be more in detail that I think it will be in the next call in April. But that is the way that we are thinking on that. uh so for next year to be clear we think we still continue thinking that we are going to be new neutral with including all of the company financing operational way from the 26 00 going on it will be positive cash flow and the capital all right okay sorry the capex yep the package capex The CAPEX, we are going to maximize the CAPEX in the non-conventional. We think that we are going to be in the order of the CAPEX that we have this year, but it will be more in Baca Muerta than in the other parts. For sure, we are going to maximize the shareholders, and we think that this bottleneck, we are going to reduce the CAPEX if necessary. Our work here is to be very efficient, so reducing the DAX as much as is possible because we have 14 rigs, but we are working in that issue a lot. If we see that the DAX is increasing, for sure, what we have to do is to reduce the capex if that happens, okay?

Perfect. Thank you very much.

Thank you. Our next question comes from the line of Daniel Gordiala from BTG. Please go ahead. Daniel Gordiala Hi.

Good morning, Horacio, Federico, Maximiliano, and Margarita. I have a couple of questions. The first one will be on infrastructure, and more specifically on midstream infrastructure. So in the case of the DupliCAR expansion project, I would like to know if you can share with What share of the additional capacity have you secured going forward? How do you see the progress of the construction of this pipeline? And when do you expect, you know, the pipeline to come online? And I would like to know also how ready you are to fulfill this capacity at this pipeline once it is ready. And if you're foreseeing a spare capacity in the pipeline in 2025 and perhaps in 2026. So that's regarding all the evolved duplicate projects. And regarding Vaca Muerta South, I would like to know if you can share with us when do you expect to start construction of the second tranche of the project? And also it would be great if you can share with us if you already have secured all the required environmental permits to develop this pipeline. So those would be my two questions on infrastructure. And just a third one, if I may squeeze. During the last days, we saw, you know, YPF grabbing the headlines because of the legal dispute with Beaufort, and I would like to know if you can share with us an update on this legal dispute. Thank you.

Okay, I will start from the end and to the forest, I think. Beaufort, if you will, remember that in Beaufort we are out of the tryout from the forest circuit. and they will be next year in the second sequence so i cannot answer by the republic that is that is a confidentiality had to answer the republic the i have the same information that you have from the newspaper and because of the of the document that the united states government put in the in the in the prescott okay for for in new york That's for before. The other you say about the BEMOS. In BEMOS, we have all the permits, all the permits, environment, social, everything is done. We are going to pass in our Board of Directors of November 2014, the approval, the internal approval of the Board for that investment for the part of YPF. We are a little late, I would say two weeks, because our first purpose, as you see in the media, was to sign everything for November the 14th, but because we have several companies working, a lot of lawyers, a lot of financing guys, a lot of operational guys, I think we need a couple of weeks more, three weeks more, that it will be done. We have all the bidding process done. We have the tubulars, and we have also the bidding process for the civil work, and they will be given to the company as soon as we have the sign, but we will decide with all the partners next week who will be the winner of that process. We don't see a delay or a couple of weeks only. I think over three weeks. But we have in communication that we need to have the first delivery for the third quarter. I say the beginning of third quarter of 2026. The other question that you asked me is about the Oudelval. I don't know if you asked me the other part. The one will be in December or January. That will be the first part. I think it's $50,000 for all the companies. And at the end of May, it will be done, all the parts. We always follow in our processes to follow the capacity of the oil pipes. we try to fill up everything that remember that when you are an operational company if you if you lose if you lose the capacity you lose a lot of money if you have a little capacity spare capacity is like it works as a secure okay But we are following that. We are following our production. We always try to follow the production with incremental capacity. Because they are in spikes, every company will have a different situation. I don't know if I answered all the questions. I don't know.

Yeah, thank you. Just a clarification. Can you share with us what percentage of the additional capacity do you have in Old Del Valle. And just to confirm with you, how many barrels are you trucking right now, just to make sure you know that once the pipeline comes online, you're able to fill your capacity as soon as possible?

Yes. The daily production today, yesterday, the day before yesterday, now we are 50-50%, even though we have all the conventionals, okay? We are in 135 barrels thousand bodies a day and for the end of the year we think we are going to improve a lot by a lot i was saying one month okay because we will have a new type of in i think it's the order of 16 if i don't remember but um it will be more than 140 thousand bodies a day at the end of the of the year that is our our purpose okay For the, I don't remember the capacity of Odelval. I don't know if Max, if you remember exactly the number. I don't remember. Sorry? Our capacity.

Yeah, it's about 25% and regarding trucking, it's marginal. It's about 10,000 barrels per day, so it's quite marginal.

Okay, now the 35, I remember, the 10,000 is not a lot, okay.

what is okay or daniel or you need more all right and our next question comes from andres cardona from citigroup please go ahead thank you good morning horacio fey ypf team and i want to follow on one of the answers that you just give to daniel you said that your exit production for this year will be 140,000 barrels a day. And it's quite a strong growth. But my question is about 2025. Don't you think that 160,000 average production for the next year could be a conservative assumption? And if you can provide some color about how relevant this upside could be?

Okay, remember that when you make a forecast production, all with this uncertainty, and it depends on the different areas that you are going to invest, and it depends on the approval of the different partners that we have. But you have, for everybody, you have to expect for next year that will increase the unconventional production in the order of 30 to 40%. In that range, it will be the incremental production. That's why we can achieve our average of 160 that we talked to you in the first quarter, I think. It could be conservative, really. I don't know. I hope so. If I hope so, because we are going to make more money for you but this is the number that we have today, okay?

Okay, Horacio. And the second question that I have is, you have been talking about the potential, the vestiture of MetroGas. You wanted to understand how this process should go. Okay. Maybe also with the falling rates in Argentina and the maturity that you have in third quarter 25, if there is not a window to perhaps prepaid is that issuing anyone? Is something that you are considering at this point?

Okay, I will answer about MetroGas. From the beginning, I think when I started alone in my house to say what we have to do in YPF, we say that the affiliates have to be focused where we make value. And also MetroGas is a distribution gas company that is not the core for YPF. From the beginning, I always say that we are going to solve MetroGas, and it's something that is logical from the law of Argentina, and it's totally logical that YPS must do that. The last nine months, I spoke, I don't know how many, maybe 100 times, that is a big number, but a lot of times talking for what is YPS 4x4 project or program. Always, like I said, the metrograph is in our range. And to maximize, we need the moment that we can maximize the value for YPF. Because of the big, big, big that we have in Argentina, and so the people think that that would be the moment. And it could be the moment. And that's why it was in the media. I was talking, I don't know, two weeks ago in a big meeting with people from the economy, private economy. So if now we have companies that put a good value, that we think that is good for the shareholder, we have something in our mind, on the team of YPF, for sure we are going to sell. But it's not that we start the process. We continue to talk about that. It could be we have to decide when is the proper time to do that. But I again say if somebody has a good number and give us an unsolicited offer or we have offers, that match our number, we must do a transparent bidding process for selling MetroGas to maximize CO2 value. From the maturity of the bonds, I pass to Federico.

Hi, Andres. Thank you, Horacio. Well, Andres, We have just reduced our 2025 bond coming during July by around 40% with the issue we did in September. So let's say it's not dependent on Metro Veraz. I think that the market is quite open now. Let's say we see several options. to, let's say, cancel these maturities. We are just having 750 coming during July. So we are much more confident now in having different alternatives to refinance this next year. Let's say we have international bond markets. We have also possibility of doing prepayments or of product, also local market. And that all depends on how Argentina is going to evolve. But in essence, we are not linking in any way MetroGas to the bond maturities in next year.

Thank you, Russell. Federico?

Our next question comes from the line of Marina Mertens from Latin Securities. Please go ahead.

Hi, good morning. Thanks for taking my questions. My first question is on the downstream segment. How does the decision-making process to adjust prices at the pump work? Do you plan to maintain this to import parity? And then on the downturn in demand, do you think this has more to do with reduced economic activity or to factors such as the narrowing of the gap between prices in Argentina and in neighboring countries. And then I have another question. Do you plan at some point to show an adjusted EBITDA, including the contributions from companies such as Proferred in May or YPF Loads? And if so, can you give us an idea of how much these companies could add to YPF's EBITDA? Thank you.

OK. Thank you for the question, Marina.

As I say, we have like a fair, but I cannot tell you the process because if not, I give the competition how we are working.

We have a fair process of pricing

with the consumers. And so if the price goes up, we have to go up. If price goes down, we have to go down. We have to work in a normal, we have to think that Argentina is today a normal country. And we are, we have a way of maintaining the prices in propriety prices as a normal one. So when the price goes up, it will be down. So regarding, I don't know, downturn in demand, okay, it depends. Now we are seeing a difference. We are seeing that we are increasing in the last issue, where we should like, I'm talking about WPF, we are increasing, the demand is increasing, no, decreasing the demand. So we have to have a fair value price, and that is what we are doing, is to do that. And that's why I think it's one of, there are several reasons why we are succeeding in YPS. That is the prices, that is the good financing program, capital allocation, and efficiency. And that is our job. So we are very happy how we are working on that. And just EBITDA including contribution for associate companies is the second one. We have in our EBITDA approximate 300 from FAT participations. And we are looking how to can improve our EBITDA in the different companies, okay? YPS is an excellent company, the same as Pro30, and I don't know why, what is your purpose of the question, or maybe I didn't understand very well what you want from us or for me to answer.

I think that the question is on consolidating the EBITDA, and the answer is, Marina, that we co-control these companies, so we cannot and we do not consolidate those on our financial statements. But just to give you a sense of the EBDA of YPF loose for these last nine months, the EBDA was 262, and profertil was something in the range of 200 also year-to-date.

Okay. Thank you. Thank you very much.

Our next question comes from the line from UBS. Please go ahead.

Hi. Thanks for taking my question. I think taking advantage here of this nearly one year in the position as CEO of YPF, could you share with us the main challenge faced so far and how different has been leading YPF as a state-owned company compared to leading a private company?

and amid this context how have been interactions with the government related either to the investments the assets on the investments um adjusting fuel prices and so on that's my question thank you okay we are working in uh you know they are me a 61 year old guy that i was working three 35 years in a private company we are working here as a private company What we are doing is, I would say, a big change in management, management control, capital allocation, and investing in portfolio analysis, what is more efficient and more profitable for shareholders. And that is as simple as that, how we are working. It's a big challenge. It's a big change. Yes, it's a big change. But you see the results. YPF is unbeatable. If you work as we are working, all the employees how we are working today. And really, I would like to say thank you for all of them for the effort that we are doing. Everybody is doing, not only us, but all the employees. And so we see a big change in everything. and and the efficiency is the key for us the productivity is the key for us profitability is is the goal the other is a medium to achieve the profitability big changes that we are doing the the december 13 we are going to open a real-time intelligence center in the in yps in the in buenos aires where we have all the knowledge and we are going to work as a major super major, but in the real-time decision-making for all the drilling and completion. We don't need to go any more to the walls because we have the real-time everything, artificial intelligence inside. We have everything on that. This is a big change. The other that is more disruptive, I think that we are going to be, I think and I can say because I I was working on there and I couldn't do that, but I say always in YPS in what we've done. What is the Toyota well? Toyota well means we are working with Toyota and we are making all the efficiency of Toyota first in the car industry, in the construction of the well, and that it will be very disruptive. I'm thinking, and we have seen why we're doing that, because we have to use the equal cycle We have to reduce the working capital of the company a lot. We are seeing measures different now, and we are going to have strategic partners as Toyota do when they make the high looks in Argentina or in all the world. And so that is the way that we are working to save. As an industrial part, we are working for the efficiency in all the refinances. But La Plata was the biggest one. I am from the La Plata city. And we have to have the base of refinery in the operational margin point of view. And we have hundreds of initiatives. And we, at times, are responsible to improve our margin. And that is the way that we have to do. We came to YPS to do something very, very extraordinary for the company, for the shareholders. And that is why we are working and what we are doing I don't know if I answered or I talked more than you wanted or less.

I don't know. No, that's clear. Thank you, Horacio.

Our next question comes from the line of Bruno Amorim from Goldman Sachs. Please go ahead.

Hi. Good morning. Thanks for taking my question. I have a follow-up on the outlook for production growth going forward. On the shale side, it's very clear what's your view for 2025. You also have a guidance, you correct me if I'm wrong, but you have a guidance for 250,000 barrels per day shale oil production by 2027. So the question is, you know, is this issue a valid guidance and what are kind of the upside risks here and what are the challenges as well? To what extent does it depend on for the improvements in midstream or not. So that would be my main question. And then just a quick follow-up on the conventional side of the production. I understand that's not your focus, but just so we have an idea, what's the expected decline rate going forward is the 10% year-on-year decline that we saw in third quarter, good reference for the next few years or not? Of course, considering on a like-for-like basis without considering the divestitures. Okay, thank you so much.

Okay.

From the guidance of the oil for our guidance for 2027, maintain value today. We are working uh to tie up all the company and be what we call the full development and we are it's a it's a iterative process it's not as easy as as if you make cash flow easy in excel in five minutes because that means that you have to do in the proper way taking all the capital and we are working so maintain the diamonds but i i try i would like for for april to uh to that i think is a more time presentation that we can we can update it and i promise that for that moment i will update for everybody that guidance okay for the part of the conventional um remember i will go i will always to have in the the south it will be in a manatee what is the biggest one that is producing the order of 25 salsam berries a day, and that we have tertiary, secondary, primary, and it's an excellent path, and that you cannot expect that it's declining because we have more approaches of tertiary to do, and it's working very well, the tertiary polymers in that area. We have in southern Mendoza some areas that we are not the operator that they also they they have a potential on that and so it's it's not that you have to expect that here is going to uh 10 percent per year in depends on that investment but this uh i would say that that i will be the the two only the that it will be the biggest one the other i think for yps for a for the sixth for the industry uh for the country is better than they have a small companies working remember that you start working in my in my career in much of field and i know how to work in much of fear and also in the biggest field and you have to know when you have to go out and the others can can make more value okay and and so don't expect that it will be the reaction as the others, because remember that today we are 50 on 50. When we have 50, only 50, it would be like almost, we are going to be almost unconventional at once, and it's not important, that production, it would be not important as it was before the conventional for YPS. I don't know. The challenge here, I don't know which challenge you're talking about. The mistrain, you say? The mistrain, I think we are in a good shape to make the BEMUS. When we have the BEMUS, I think the BEMUS, the Bacamulta South oil pipe, it will be a change, a change for the country, not only for YPF. So all the oil companies that they have asset in back and mortar, they will improve the production. And if you adapt the capacity that they will have, they will remember that after for incremental capacity, they are only pumping units. And so the investment is not low. And I think we were not as emphasizing in the call at the beginning, but you would say $360,000, but you have to adapt the winner of excellent assets. And so the total production for the first phase, it will be much more than we expect at the beginning, at least when we start working in this project, that we continue working in this project in YPF. We expect at the first phase to be lower appetite of the companies, but it seems that they will be big incremental. I don't know. Dependence on mainstream, for sure, as every company, we are dependent on the back and mortar cells, oil pipe. That's why we put so much emphasis during this year. and we are going to present the regime for i think in in very very short time we have the the company that we made the company for the regime and we will present that and as soon as all the document is signed it will be done all the process to start that one and we think that we are going to maintain that for the third quarter of 26 um after that the dependency will be on capital uh i think prices of oil as you were um and and result of who was what that people think that everybody wants um is our shop so i think we are going to increase a lot of the production and be sure that i will that i i i will work as much as we can to improve the production as much as you can in the lower time.

Very helpful. Thank you so much.

Our next question comes from Leonardo Marcondes from Bank of America. Please go ahead.

Hi, everyone. Thank you for picking my questions here. Most of them have already been answered, but I have a few here from my side. First one is on the newest well that you guys drilled. We saw the news that you guys have drilled the longest horizontal well in Waccamarta recently, so I was wondering if you guys could provide some color on what are the expectations for this well and if we should see wells like this one being the standard going forward. My second question is regarding the Exxon assets. We saw some news that Perth Patrol was the winner for these assets, and that Exxon has already communicated to other participants about the results. So my question is, can you confirm that, or is the process still ongoing? Thank you.

Okay, yes, we did the longest wall in Loma La Lata, in Loma Campana block. I think it was LL1783, if I don't remember the name of the wall, okay? This is a trademark, but I tell you one thing for you all, Ernesto Esqueda-UC Riverside Partners, In from the rest of our point of view, the longest the world, the best from the profitability, but the question is sometimes is a question of the of the cost, you have to see the cause, and you have to be more than the course is the mechanical lot the mechanical issue that you have a. Ernesto Esqueda-UC Riverside Partners, Because if you have. Ernesto Esqueda-UC Riverside Partners, A. the the capacity of all the mechanical and so we always see also in united and we have in the order of three three hundred sorry three thousand meters is on the average that we have why sometimes we bring so high those wells is to make we we make there when you have a the the one increase a lot of the The investment, but when you have to make two worlds, that is one $3,000 and the other $1,000 or $1,500, we try to be a long world. But in general, our goal is $3,000 because we have optimized all the costs. And if we always we try to go father, OK, the following role as an hour is the better. In general, the better if you have more profit profit, OK? That is in the first part. The second part of the questions. He was a disposal with a disposal of. I knew I'm a.

Disposal assets, what do you mean with disposal assets? Hello?

Leo, can you repeat the second question, please?

Sure. Sorry, I apologize. I was on mute here. The second question is regarding Exxon assets, right? Exxon was selling their assets in La Camerta, and we saw some news that Petrol was the winner for these assets, and that Exxon has already communicated to other participants in the process about the results. So my question is, if you guys can confirm that to us, or is the process still ongoing? Thank you.

Okay. Remember that are the assets from ExxonMobil, so it's confidential. It's ExxonMobil that say what is the communicator for Petrol. So Petrol was the winner of the bidding process as they say ExxonMobil. So that is confidential. I will not answer, but I have to ask to ExxonMobil what is the owner. of the asset and is the only decision-making company for that program.

That's very clear. Thank you. No, thank you.

Our final question comes from the line of Ezequiel Fernandez from Valance.

Please go ahead.

Can you hear me all right? Yes.

Yes, we can.

OK. OK, great. So good morning gentlemen, Margarita and Valentina too. Congratulations on all the operational upgrades, acceleration of shed completion, the higher utilization and refineries. It was great to see all that. I have four questions. I apologize for that, but I promise they will be quick and maybe we can take them one by one. My first one is What is your expectation for nationwide crude production in Argentina, which is now about 700,000 barrels per day for the end of 2025 and 26? If you could share that, of course.

Yes, in China we are not doing, well we have, but we are not doing like a forecast production official for that. The only thing that they can tell you that the chamber, the oil and gas chamber of Argentina make a work, I think was a year before, last year, and all the companies we passed our uh internal forecast and that is one of my general presentation that they said that they can reach between 1.2 to 1.4 million bars a day into a thousand and sorry that is what is in general on the industry is the last official document it was prepared by the oil and gas chamber will be called Okay, sorry, that was 1.2, 1.4 for which year? Yes, per day. A million virus per day for all the Argentina. With the capacity of Vemos and the Odelban, you can reach from Neuquén, plus remember that in Neuquén you have Otaza that goes to Chile, or the one that goes to Bahia Blanca, and you have the Bemos that is going to Rio Negro, and plus our oil pipes that go to our refinery, to the refinery in Lujan de Cucho. That is all the evacuation for Baca Muerta. If you allow all of that, they give you, in the other one, 1.5 million barrels a day, or it would have all the...

capacity the evacuation capacity of oil for for a back and water and unconventional fields of networking okay but the camera but the camera forecast of 1.21.4 for which year is it 2026 27 28 30. i i let me let me uh No, it's okay. Don't worry. I can take it with the IR team.

No, I don't want to bother you. No, it's in 240. It's between 239 and 240. I know with the DC-BEC, the other day, I didn't mention that, but several were talking about that, and it's in that order for 240. and that it could be because of demos okay because demos can be up to just a 2027 you can go up with the pumpings so the the in general people talking here for argentina that they can reach the the peak even it could be biggest of the peak or that for 230, and that was, I think, 1.2 or 1.4. I don't remember. I think 1.2. It's almost doubling the production. In general, when you see 240 and you put in the oil and gas, taking into account the LNG that is all doing by the camera, in bar in equivalent bodies of oil per day is 2.2 times the the actual actual production of argentina or the real production of indiana or the last one okay perfect thank you yes uh the second one is related uh gasoline and diesel sales

We have been seeing them contracting all year long, of course, due to the economic activity and the new pricing levels. I was wondering what have you seen in terms of your market share and when would you expect for gasoline and diesel demand to start growing again?

As I tell you, we are seeing I compare with Sean. I don't like to compare with previous year because previous year was another country. Another country, another prices, another everything, another. So I'm not compare that because I think you mix up the numbers. But I compare what happened this year. And July you can take out because it's like a driving season in Argentina because there is a There is like holidays like people use a lot of cars, so we you cannot look and compare that, but I compare with June and I see that this increasing the the oil of us and we are also increasing a little bit our micro share and there is in in gas in diesel. There is a from YPF numbers we see. In a lot of improvement interpretation and and also you are seeing that the I'm not the economy guy, but you see that everybody is saying and the numbers saying that Argentina is increasing now from out of the recession. And so that will be a good news for the country and for us because we are going to have more selling or even that we are in... It's a mix-up because we look at our refinery percentage that we are in a very good shape, okay? And so we think that it will be sustainable. And so we see change. We see change. We are improving our size, okay? And this is what is difficult for you. I tell you what is difficult is because the farm is seasonable, and now it's not consuming a lot. So when you see, you see flat, but you have to open the different markets for this B2B, B2C, the different one, interpretations, also industry, and also the industry including flights, and you see that difference, okay?

OK, perfect, thank you. My third question is related to the cash flow statement. There is a $205 million inflow in the first nine months of 2024 related to asset sales. I wanted to maybe ask you if you can tell us if this is entirely related to the Andes project and if it's only partial and you expect more more proceeds to come in in the final quarter of the year or the beginning of 2025.

I think, Ezequiel, that what you are seeing are the sale of financial assets. So that's what you see in the statement of cash flows. These are financial instruments.

You're absolutely correct. I apologize for that. So I will move on to my fourth question.

For the mature fields, it was not the we have a transparent process. We have the we hire a company from the United States that makes auditing. And we have that number, and we compare with that number, and we will see if we are going to open the total number. But we are really in the expectations, okay? We are real. Maybe it depends on the end, what we say and what is the last two promises. But we think that Oldevalle will be in the expectation because it's okay the number that we receive. In some, we are much more. In some, we are less. It's usual because it's a lot of assets.

Great. Thank you. My final one is related. Have you considered floating international bonds at the Oldevalle and Bacamorta Sur level? It might help you with getting some extra cash flows for the YPF holding and for CAPEX.

If you want, I can take this one.

Sorry? If you want, I can take this one. Well, Ezequiel, we are working on the financing plan for Bacamorta South. It's going to be arranged on a project finance basis. So we are looking at different potential lenders from the international bank market. Principally, we have received LOIs for around 1.5 billion. So we believe that we have, let's say, good support and a strong interest to finance this deal. We are working on the different project documents and arrangements we need to do in order to secure this project finance, but it will be a process that will take, let's say, some time. We are working first on consolidating the consortium with the other shippers.

Okay, got you. That's perfect. That's all from my side. I'm sorry for taking a little bit of time at the end of the call. Have a great weekend.

And those are all of the questions in our Q&A. I would like to turn it over to YPF CEO Horacio for closing remarks.

Okay. Thank you for very much for all the questions we are really working hard to obtain those results and i i wish you were you were i say happy with our show and and so that is uh our my final remark today and next for the next quarter we are going to present much more numbers and figures and and we will see I think in April, no? Thank you very much, everybody, for the question, the support, because I'm thinking that we have a lot of support from you, and that helps a lot for the improvement of our company and the price of our share. And so we say thank you. and and for our part you have to spare in management and per employees that we're working very hard to improve our company and reach our goal of the ypf 4x4 4x4 that is our our i would say path to to the next four years okay

That does conclude today's presentation. Have a pleasant day.