YPF Sociedad Anonima

Good morning and welcome to the YPF fourth quarter and full year 2024 earnings conference call and webcast. All participants are in a listen-only mode. After the speaker's remarks, we'll conduct a question and answer session. To ask a question, you'll need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Margarita Chun, YPF's IR Manager. Please go ahead.

Good morning, ladies and gentlemen. This is Margarita Chun, YPF IR Manager. Thank you for joining today in our full year and fourth quarter 2024 earnings call. Before we begin, please consider our cautionary statement on slide two. Our remarks today and answers 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. Our financial figures are stated in accordance with IFRS, but during the presentation, we might discuss some non-IFRS measures such as suggested EVTA. During the presentation, we will go through the main aspects and events that explain the annual and Q4 results, and then we will open the floor for Q&A session. Today's presentation will be conducted by our chairman and CEO, Mr. Horacio Marin, our CFO, Mr. Federico Barretabena, and our strategy, new businesses, and controlling vice president, Mr. Maximiliano Weston. I will now turn the call over to Horacio. Please go ahead.

Thank you, Margarita, and good morning to everyone present on this call. Let me begin by highlighting that 24 was a transformational year of YPF. We have deployed our 4x4 plan designed to increase the value of the company. In the afternoon segment, we are reshaping our oil production matrix, leaving conventional mature fill and targeting to increase our shell oil production share from 50% to a minimum of 80%. As of today, we achieved significant progress in the majority of the total of 49 mature blocks. We signed SPAs for 24 blocks, and we're in the final stage of agreement to transfer and revert 18 blocks located in the province of Santa Cruz and Tierra del Fuego. On the other hand, we are ready the largest shale oil production of the country. and we continue expanding in the coming years, reallocating and concentrating our investments on Vaca Muerta. In parallel, we are leading the Misting Project Development of Vemos, a new oil export-dedicated pipeline, engaging and consolidating the effort of all major producers in Argentina to ramp up production to 180,000 parts per day in the second half of 26, jumping to more than half a million barrels per day by second half of 27. The contraction has already started and YPF's initial capacity will be 120,000 barrels per day, accounting for 27 percentage stake and expecting to reach more than $3 billion of additional export by the second half of 27. In the downstream segment, despite challenging macro context, we returned to a 100% free market where we were able to fully normalize local price of fuels and conversion them to international parties. On the other hand, along 24, we have been implementing multiple operational efficiency measures to enhance productivity across all businesses. In the upstate segment, our daily and completion speed for unconventional wealth of 24 are already near 25 targets, so comfortably exceeding 24 targets. In this sense, last month we achieved the highest lateral length drilling speed for one shell well in Langostura soil block, surpassing 1747 meters in 24 hours. This lateral length is equivalent to 5731 feet. We believe further improvement will be achieved through our new real-time intelligence center, inaugurated last December. This new technology and process optimization plan will allow YPF to continue increasing the day-to-day efficiency by taking real-time data-driving decisions in drilling and wheel completion activities in Bakamarta with Starlink connectivity. This has been a transformational change in the acting business of YPF, moving from a monitoring room to a real-time decision-making process center. Thanks to this, we expect to materially improve our well construction costs in the near future. Moreover, we carry out the Toyota Well project based on the efficiency of the car industry to reduce the time of our well construction cycling. reducing our working capital and increasing our profitability from the acceleration in production. Our target by 2025 is to decrease by 30% of the world contractual cycle from 312 days in 2023. As initial stage, we developed two prototype lines to be implemented on a large-scale in Vaca Muerta in the near future. And the results are promising. We reached an average of 24% reduction at this initial stage. In the downstream segment, we reached a record high in the processing level of our refineries, exceeding 300,000 barrels per day in 2024 and exceeding the year with 318,000 barrels per day in December. with a refinery utilization of 92% mainly driving by the bumping of our La Plata refinery, which increased its capacity and improved the quality of the fuel by reducing the sulfur content. In addition, we achieved record high production level in 24, 5,605 cubic meters per day of premium diesel and 13,000 915 cubic meters per den of gasoline. Regarding downstream efficiency, during 24, we created a specialized industrial team to target and monitor the efficiency and productivity goals by implementing a series of initiatives, such as the optimization of our refinery output, maintenance, shutdowns, and power consumption in our industrial complexes. as well as a comprehensive improvement in product storage and logistics contracts. All in all, we record a total saving of $405 million in 24. Moreover, we will inaugurate our downstream real-time intelligence center in mid-March, combining artificial intelligence to boost our efficient metrics. This center will be the first in Argentina. In terms of financing, EPFE took the lead in reopening debt markets of Argentine corporates. In January 24, we successfully issued an international bond market, a seven-year bond of $800 million. Following this, we executed two additional bond transactions, $540 million in September and $1.1 billion last January. This progressive strategy approach enabled us to effectively lower yields to 8.5% while increasing tenor. Moreover, in the local market, we successfully arranged the first syndicate bank transaction in more than four years, setting another reopening for Argentine corporates. We secured $400 million term loan structure in two- and three-year tranches, with participation of 16 financial institutions. Finally, we changed the authorization matrix of the company, changing internal procedures and increasing the control process compliance. Moving on to the next slide, let me highlight that through our exit from mature field, we are achieving the transformation of YPS since we managed to reduce losses, allocate capital, efficiently and focus on Vaca Muerta, our most profitable asset. Let me also clarify that this is a new process with no precedent in Argentina since the owner of the resource has the provinces, and the approval requires several provincial authorities to complete each process. Now let me briefly update on the progress we made so far. In the province of Mendoza, we already completed the transaction of the Chancanelo cluster. In Mendoza North, after having received all provincial approvals, we are in the final stage, expecting to closing within the next two weeks. In Mendoza South cluster, we already obtained the assignment approval, and we expect the extension approval of the concession to be done the next week. Immediately after, we will close the transaction with the buyer company. Regarding the province of Rio Negro, we completed the transaction for the Estancia Fernandezoro cluster. In Señal Picada Punta Varda Cluster, we are in the final stage of negotiation, targeting to execute the SPA during March and while the closing should be no later than April. In the province of Neuquén, we already received all the provincial approvals for Neuquén Norte and South Cluster, just waiting for the corresponding decrease. In Chigüido-Puesto Hernández cluster, we have initiated discussions to transfer reverted back to the province. Focusing on the province of Chubut, we already completed the transaction for El Trebol Escalante and Campamento Central Cañadón Perdido clusters, while we are very advanced with the process of transferring or reverting Restinga Lee to the province. Regarding the non-operated position in Chubut, we are in ongoing negotiations. In the province of Santa Cruz and Tierra del Fuego, we are making progress in negotiation, targeting to transfer or revert the remaining assets back to the provinces. In summary, during these 12 months, we have achieved a material province with no presence in YPF and Argentina. This is the most transformational project that YPF needs to eliminate losses and inefficiencies. I continue to be committed to move forward with this project to be finished in the next few months. Now, to begin with numbers, I'm pleased to share a quick overview of our key accomplishments obtained during this first year. I'm proud to report that YPS has accounted for near one-third of Guacamorta shale oil production, achieved an impressive output of 122,000 barrels per day in 24. This marks a 26% increase compared to 23, and is fully in line with the annual target rate to the markets in March 24. Moreover, as of today, our net production is above 150,000 barrels per day. Looking ahead, we anticipate sustained growth in 25 concentrating our effort on our most profitable asset, shale oil from Vaca Muerta. Also, let me highlight that as operator, YPS produced more than half of Vaca Muerta's shale oil production in 24. The competitiveness of YPS is now more evident to the market based on the unique shale production scale and synergies that the company now consolidates between aftering and aftering segments. In line with this production ramp-up, we almost tripled our oil export revenues in 24, achieving near $1 billion and averaging 35,000 barrels per day. In Q4, we jumped to 41,000 barrels per day, representing roughly 20% of the country's oil exports, and making YPF the largest oil exporter of Argentina in 24. In the downstream business, during the entire year, the company consistently adjusting local fuel price to be in line with international prices. As a result, we narrow significantly the gap to import policies, decreasing from 20% in 23 to just 2% in 24, despite the significant evaluation that took place in December 23, while our market share remains strong at 56%. Also, the recovery in price coupled with the serial efficiency initiatives mentioned before, that resulted in a better comprehensive refining and marketing EBITDA margin of $13.7 per body, growing 24% compared to 23. This margin includes refinery, chemical, petrochemical, logistical, and lubricant. In parallel, with the increase in export, we reduced the fuel imports significantly in 24, mostly due to demand contraction and refinery capacity expansion. It's also worth mentioning that 23 was affected by an extraordinary demand driving by local price considered below import parity. During 24, in light with price recovery, demand declined, particularly in the first half, but gradually improved during the second half. plus the improvement in refinery capacity mentioned before. All these positive outcomes have contributed to a 15% growth in the company as it has been there in 24 compared to 23. However, let me clarify that 24 figures could have been higher, but it was negatively impacted by two important factors. Roughly $300 million negative is that from mature fields. and around $85 million of low EBITDA from the Patagonia weather impact on conventional production. We are confident that this factor will be almost permanently eliminated once we complete our exit program from mature field during 25. In terms of investment, we deployed $5 billion in 24, reducing by 5% compared to 23. and successfully meeting our target of $5 billion. Despite the total capex remain almost stable, the breakdown changed significantly, lowering conventional activities, particularly in mature fields, and redirecting toward our cold share operation, facilitating a ramp up in shale oil production. Therefore, around 64% of the total capex of 24 was allocated in the unconventional asset, reaching an annual growth of 28%. On the financial side, we reported negative free cash flow of $760 million in 24. Our improvement during this year was driven by the strong performance of our shale oil asset and recovery of refinery margin, as well as tighter capex compared to the previous year. Nevertheless, 24 was affected by around $685 million negative impact. We consisted of $433 million from mature field, net of proceeds, $166 million of import payment deferred from 23, and $85 million from Patagonia weather. Now, I will turn the call to Maxi.