YPF Sociedad Anonima

as we get closer to the event.

Thank you for standing by. My name is Danica, and I will be your conference operator today. At this time, I would like to welcome everyone to the YPF First Quarter 2025 Earnings Webcast presentation. 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, press star one again. Thank you. I would now like to turn the call over to Margarita Chung, YPS Investor Relations Manager. Please go ahead.

Good morning, ladies and gentlemen. This is Margarita Chun, YPF IR Manager. Thank you for joining us today in our first quarter 2025 earnings call. Today's presentation will be conducted by our chairman and CEO, Mr. Horacio Marin, and our CFO, Mr. Federico Barretta-Vena. 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 management. 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 adjusted VTA. Finally, according to the relevant facts released last December, as from 2025, the new business structure of YPF is in place. The main changes are as follows. First, we split gas and power segments into two segments, LNG and integrated gas, and new energies. Second, we renamed downstream segment as midstream and downstream. And third, we reallocated our midstream gas business that used to be in gas and power segment to midstream and downstream segment. You can find further details on the backup slide of this presentation. I will now turn the call over to Horacio. Please go ahead.

Thank you, Margarita, and good morning, everyone. Let me begin today's presentation with the main highlight of the quarter. First, we recorded a strong level of asset EBITDA of $1.24 billion, making a significant sequential growth of 48%. This increase reflects the initial benefit and increasing profitability resulting from the initial disbursement in mature fields in accordance with the first two pillars of the 424 plan. In addition, we report improved refining and marketing margins, where our strategy efforts have played a crucial role in this performance to align our price to international priorities and enhance our operational efficiency metrics. Let me also highlight that without the negative contribution of our mature fields, Our policy of Ashad EBITDA during this quarter will have been roughly $1.35 billion. Interannually, Ashad EBITDA remains stable as the robust growth in our Shell operation and higher local fuel prices of Q1 this year was offset by the extraordinarily low OPEX in Q1 last year after the discrete devaluation of December 2023. but partially softened by lower value or inventory due to this devaluation. In terms of shale oil, we produced 31% more than Q1 last year, now representing 55% of our total oil production. This outstanding growth was boosted by record drilling performance achieved especially in March. First, we record the fastest unconventional drilling speed of 551 meters per day in our engineer block for an oil well with 2,573 meters of lateral length in 10 days. Second, in the same month, we drilled the deepest unconventional oil well 7,828 meters with a useful lateral length of 4,501 meters in the Marga Chica block at a speed of 353 meters per day. In both cases, our real-time intelligence center contributed to efficiently design the roadmap and casing processes and mitigate vibrations. In downstream business, in Q1, we reached a record high refinery utilization of 94%, even with a higher technical capacity of 338,000 barrels per day. Moreover, at the beginning of this month, we inaugurate our first real-time television center for the downstream segment in La Plata Refinery. This center is designated to facilitate data-driven decision-making in real time, with a focus on profitability and maximizing the output value for every barrel of oil processed, while optimizing resource utilization. We plan to replicate this center in the other two refineries of YPF, as well as in logistics and commercialization, throughout this year and into 2026. Additionally, by the end of April, we signed an MOU with Loban to accelerate our digital transformation, implementing artificial intelligence that leans and evolves, incrementally making complex decisions by using algorithms that are supervised by our experts, so that we can optimize efficiency across the world's supply chain. Regarding our LNG projects, last week, Southern Energy, also known as CISA, obtained FID approval for the 20-year bearable charter agreement for 2.45 MTPA floating LNG Healy, which is expected to be operational in 2027. With respect to Healy, a few weeks ago, the SPV already obtained a three-year export permit from the Secretary of Energy for a maximum daily volume of 10.4 million cubic meters per day as from July the 1st of 2027. Moreover, the Rio Negro Province approved the Environmental Impact Assessment. Additionally, a few days ago, the Secretary of Energy approved the RIGI for a total capacity range between 1.5 and 2.2 million tons per year of LNG, depending on the ability of gas. In addition, CISA also signed a 20-year Railroad Charter Agreement for 3.5 million tons per year floating LNG MK2, subject to FID approval, which is estimated to be no later than July 31. If approved, is expected to be operational in 2028. This second vessel allows the construction of a 100% dedicated gas pipeline from Baca Muerta to the San Matias Gulf in the province of Rio Negro, available during the whole year, instead of using existing pipeline hydro capacity during the off-peak season. To supply natural gas for the floating LNG helium and MH2, CESA signed a 20-year gas supply agreement with main gas producers of Argentina, including YPF, through its subsidiary Sol Inversiones Energéticas. Our equity stake in CESA is 25%, while our commitment of gas production is 27.5%. On the other hand, in In mid-April, we signed an MOU with ENI, the strategic partner for the Argentine LNG-3, to analyze the development of upstream transportation and gas liquefaction facilities through two floating LNGs using six MTPA each for a total of 12 million tons per year. Considering all this advance and the project development agreement signed last December, we show our strategic planning for the Argentina LNG-2 with a capacity of 10 million tons per year. It allows us to reach almost 30 million tons per year of the Argentina LNG project, which was defined on White Pierce Ranch's 4-5 plan in March last year. Moving to our quarterly results, we reported revenues of $4.61 billion in Q1, reflecting a 3% sequentially decline, mainly explained by lower seasonal local demand of diesel oil and fertilizers, and reduced oil export volume as we increased the vertical integration with our La Plata refinery. These effects were partially offset by higher local fuel prices and peak seasonal demand of natural grass from power plants. Interannually, revenues grew by 7%, mainly boosted by shale activity, including increased oil exports. Improving in tariffs on metrograss and slightly higher local fuel prices and our agro-business sales also plays a role in enhancing our Q revenues. Nevertheless, revenues were partially offset by discontinuation of jet fuel sales from our Chile subsidiary. Q1 has just evaded the amount of $1.24 billion, increasing by 48% sequentially. Primary driven by increased prices of fuels and other refined products. driven by higher brand as well as OPEC savings related to the partial sale of mature fields. In addition to higher value inventories and processing levels in our refineries to accumulate stock of our incoming program maintainers. On the other hand, EBITDA was negatively impacted by slightly higher costs of oil purchases to third parties. Interannually, as just EBITDA remained flat as a strong shale production was counterbalanced by the exceptional low OPEX record last year as a result of the December 2023 devaluation. This last effect was partially offset by lower value of inventories due to the same devaluation. Also, Q1 last year was affected by lower availability of crude oil and adverse weather conditions that affect La Plata refinery, while Q1 this year records strong processing levels to accumulate stock before the next maintenance stoppage, as mentioned before. Let me remark once more that without mature field, our proxy adjusted EBITDA would have been $1.35 billion. In the coming quarters, we expect it to continue to reduce this impact and deliver even stronger EBITDA to achieve guidance of the year will range from $5.2 to $5.5 billion Considered a normal average rent of $72.5 per barrel. Q1 net result was a loss of $10 million compared to a loss of $284 million in Q4 last year, mainly explained by higher adjusted EBITDA and lower one-off costs related to mature field. partially offset by income tax charges from subsidies and higher negative financial results driven by lower gains for the holding of financial instruments and higher net interest expenses. On the other hand, Q4 last year accrued positive income tax driven by lower future tax payables. Internally, net results declined significantly compared to a gain of $657 million, primarily explained by one of costs related to mature fields in Q1 this year, in addition to higher depreciation and amortization due to increased unconventional activities. While during Q1 last year, we accrued positive income tax driven by lower future tax payables. As highlighted earlier, mature fields also impacted on our net results. Without mature fields, our proxy net result would have been a gain of $428 million. In terms of investment, in Q1, we deployed $1.21 billion and 75% was allocated to unconventional assets. Also, this level of capex is fully in line with our guidance for the year, ranging from between $5 billion and $5.2 billion. Sequentially, Q1 capex declined by 8%, mainly because during Q4 we recorded higher capex in downstream. related to revamping works and seasonality, partially offset by higher sale activities. Interannually, CAPEX increased 4% mainly boosted by sale operations. On the financial side, we reported negative free cash flow of $957 million in Q1. Although adjusted EBITDA was similar to deployment of our CAPEX, Q1 was mainly affected by $336 million of negative impact from mature fields net of proceeds. Moreover, Q1 free cash flow was impacted by $211 million of net disbursement made for the acquisition of Sierra Chata at 54.45% of stake that is a shell gas block in Bacamorta. As a result, our net debt rose to $8.3 billion, reaching a net leverage ratio of 1.8 times. We expected to reach, after divesting our mature fields, returning to 1.5 and 1.6 times level by year-end, considering an annual average rent of $72.5 per barrel. Focusing on the upstream segment, Q1 total hydrocarbon production increased by approximately 5%, both on a sequential and a granular basis, reaching 552,000 barrels of oil equivalent per day, primarily boosted by shale contribution, which now accounts for an outstanding level of 58% of the total output. On the other hand, mature field output reduced by 11% versus the previous quarter, mainly due to the effect of already depleted block, recording 97,000 barrels of oil equivalent per day, and represented 18% of the total. Crude oil production amounted to 270,000 barrels per day in Q1, recording an interannual increase of 6%, mainly driven by shale expansion, which effectively offset reduction in conventional oil, especially mature fuels. Notably, shale oil production grew an impressive 31% year over year. underscoring our strategy focus in our Pillar 1 and in line with our 2025 annual target of over 165,000 barrels per day. As a result of the production ramp-up, our oil exports mailing to Chile grew by 34% inter-annually, reaching 36,000 barrels per day and representing 13% of our oil production. Sequentially, oil export reduced by 11% and expanded vertical integration with our refineries. Beyond crude oil, natural gas production in Q1 increased by 9% sequentially, delivering more than 37 million cubic meters per day, mainly due to higher seasonal demand from power plants. NGL's production amounted to 47,000 barrels per day, returning to normal levels thanks to the reactivation of MEGA's facilities after maintenance. In Q1, total lifting costs reached $15.3 per barrel of oil equivalent, a sequential 12% reduction, mostly driven by the completion of displacement of certain mature fields. If we exclude this mature fill, our proxy lifting cost of Q1 would have been below $9 per barrel of oil equivalent. Considering that we continue reducing our exposure to mature fill, our best estimate for 2025 average lifting cost would be $12 per barrel of oil equivalent. Summing in our core cap locks, lifting cost was $4.6 per barrel of oil equivalent on a gross basis. Regarding prices in the uptick segment, crude oil prices recovered 3% sequentially, averaging almost $68 per barrel. Despite brand volatility during the quarter, local pricing environment was more gradual. On the natural gas side, price stood a similar level of $3 per million BTU, mostly derived from the off-peak season price of plant gas. Now, walking through the performance of our shale activities, we continue focusing on operational efficiency in our oil blocks, in line with the production target set for the year. In that sense, we accelerated the activity by drilling 51 of the salt and oil wells on the gross basis, most of them in operating blocks, delivering a 16% increase compared to the same period last year. Our net working interest percentage also grew to 65%. This performance is in line with our estimated number of wells to be drilled during the year 2025, which amounts to 190 operated and 15 not operating shale oil wells on a gross basis, where net working interest should be around 55%. In terms of completion and tying of wells, we also accelerate activities in our operating blocks, completing 53 and time mean 47 horizontal waves on a gross basis, recording an increase of 83% and 21% respectively when comparing to Q1 last year. Once again, we successfully set a new record high shale oil production delivering 147,000 barrels per day in Q1, which is more than 50% growth compared to 23 annual average production. This production level indicates a positive start for the year to reach the 2025 target of 155,000 barrels per day. 76% of the total shale output came from our coal hub oil blocks, Loma Campana, La Marga Chica, Bandura Sur, and Aguada de Chañar. Moreover, it's important to highlight that sequential oil was driven by the contribution from La Nostura Sur 1, a block located in the south hub of Vaca Muerta, which has shown outstanding productivity. In terms of efficiency, with our unconventional operation, on the drilling side, we reach an average speed of 304 meters per day in our core hub blocks. Despite beginning the year with a drilling speed at a level below our expectation, in certain wells in our general block, In March, we recovered successfully drilling the fastest unconventional well in the same block as mentioned before. Expecting further improvements, we are confident of achieving the annual target of 360 meters per day. On the fracking side, we record 235 stages per set per month in our conventional operation. Strong performance in line with the target of the year of 206 stages per set per month. Moving on to our downstream segment, during Q1, we continue adjusting local fuel price to fully converge with international priorities while preserving our leading market share. As a result, local fuel prices measured in dollars were up 2% versus the previous quarter and 1% up versus the same period last year, while the gap with import parties stood in positive territory at 1% in Q1 compared to 3% in Q4 and minus 7% in Q1 last year. Moreover, let me mention that driven by the international price downward trend, we reduced local fuel price by an average of 4% as from this month. Regarding fuel cell volume, it decreased by 5% sequentially to 3.4 million kilometers, but below the contraction of the competition. The main decrease came from diesel, which was affected by lower seasonal demand. Let me mention that since the second fortnight of April, diesel demand started to grow again. Also, it's worth noting that despite price normalization, our market share remains at a historical level of 56% in Q1, while growing our refinery and marketing margins by 28% sequentially to $14.3 per barrel, boosted by our OPEX efficiency measures. In terms of efficiency, we continue moving forward with our plan to improve our downstream margins and become a world-class refinery player. In that sense, during Q1 we implemented more than 100 initiatives that allow us to capture efficiency for more than $70 million, such as energy consumption, steam and gas recovery optimization, as well as service contract rearrangement and shutdown maintenance co-reduction. Lastly, regarding refinery utilization, we process 300 18,000 barrels per day in Q1, expanding 5% sequentially and recording a strong refinery utilization rate of 94%, hosted by the better performance of Plata Refinery during Q1, which was affected by the maintenance shutdown in Q4. Also, let me clarify once more that the higher processing level enables us to accumulate inventory or refine products before the oncoming maintenance stoppage. Interannually, processing level increased by 6%. Now, let me share the progress so far in terms of the mystery in all expansions. Regarding the existing all-world pipeline expansion and the DupliCare Plus project, it was successfully completed in early April, increasing its transportation capacity from 330,000 bodies per day by the end of December to 540,000 bodies per day today. Let me highlight that the original capacity of Del Valle before the execution of this project was roughly 225 sq. m. per day. Therefore, Del Valle more than doubled its capacity in close to two years, contributing significantly to the evacuation of the shale oil from Bacamorte. YPF shipping stake in Del Valle is roughly 25%. YPF will use this expansion to transport our Shell Oil to our La Plata Refinery, optimizing our vertical integration. Regarding the Vemos-Vaca Muerta Oil Pipe South, the new 100% oil export-dedicated pine land that started construction in the beginning of this year The SPB was already started receiving the pipes and started the contraction work in the oil pipe routes and the trench excavation. Moreover, it received the initial steel plates to initial tank assembly at the export terminal, where we are now working on ground movements and civil works. The operational progress of this project is roughly 4.5% by the end of March. Now I will turn the call over to Federico.

Thank you, Horacio. Switching to the financials, let us start with the cash flow evolution. In Q1, we posted a negative free cash flow of $957 million. Although adjusted EBDA was consistent with the deployment of our CAPEX, the quarter was significantly impacted by the performance of the mature fields. Specifically, these fields resulted in an adjusted EBDA loss of $106 million and a one-off cash flow loss of $230 million net of proceeds. Additionally, we disbursed a net amount of $211 million in M&A activity, primarily for the acquisition of Sierra Chata, and provided contributions and prepayments to our affiliates for $102 million, mostly to Vimos and Oldelval. Considering also the negative working capital, mainly due to lower sales accrual, In addition to the regular debt service, we added approximately $1 billion of new net debt, including the reduction of our cash and equivalent position by 18%. In terms of financing, as mentioned during the last call, in January we issued a nine-year unsecured international bond for $1.1 billion at a yield of 8.5%. The proceeds were mainly directed to refinance $757 million of the 2025 notes maturing in July and acquire 54% of the Sierra Chata block. Regarding the 2025 notes, we executed a cash tender offer, preparing $315 million in January and exercised the make-hold call option for the remaining balance in February to complete the refinancing. In addition, we have also been active in the local bond market. We issued two dollar map local bonds in February, one for $140 million with a two-year tenor at six and one quarter, and $60 million bill with a six-month tenor and 3.5%. After the quarter, we also issued a $204 million bond in April and more recently in May, another $140 million bond. The first one with a 15-month tenor at 3.95% and the second one with a two-year tenor at 7%. For the remaining nine months of 2025, the company faces around $800 million consisting of 71% of local maturity and only 29% international. Also, as mentioned in the last call, as a consequence of the recent sovereign rating upgrade, lower country risk and a better outlook During Q1, two global rating agencies raised YPF trade ratings. Moody's upgraded from CAA3 to CAA1 with a stable outlook, while S&P upgraded from CCC to B-. On the liquidity front, in line with the free cash flow and debt issuance, our cash and and short-term investment decreased by 18% versus previous quarter to $1.2 billion, while our net debt increased amounting to $8.3 billion. Consequently, our net leverage ratio also increased from 1.6 to 1.8 times as anticipated during our investor day last month. Once we fully divest mature fields, we estimate to end the year with a net leverage ratio of 1.5 or 1.6 times, considering an annual average rent of $72.5 per barrel. So with this, we conclude our presentation and open the floor for questions.

Thank you. At this time, I'd like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. Your first question comes from the line of Daniel Guadalio with BTG. Your line is now open.

Hi, good morning. Actually, it's Daniel Guardiola. Thank you, Horacio and Federico, for the presentation. Before we dive in, I just want to take a moment and wish you, Horacio, a very happy birthday. Congrats, and I hope the market gets the chance to give you a decent present today. Looking at the questions, my first question is on how resilient the company is amid the current uncertain and bearish environment of prices. And I wanted to know if you could please share with us what is the current breakeven level in terms of EBITDA and cash flow that the company currently has? My second question will be also on the same line, but just to better understand what is the required capex that you need to keep your current production stable, especially considering that right now the bulk of your production is shale oil and shale gas and the declining rates are very steep. Those are my two questions. Thank you.

Okay. Thank you very much. Because you tell me Happy birthday, I answer second question, okay? If not, I will say no, okay? Okay, for the first question, if you see, I think it's July 37th, if my memory is not bad, because now I am old man of 62 years old. Remember for all the market, I'm two years more than Federico. So Federico is 60, okay? If you go to that slide, you can see that every $10 of reduction as an average in all the year, all the year, for the sensitivity is in order of 900 million, okay? That is the answer. If I take Brent for 60, our EBITDA will be 4.4. That is everything I explained that in New York. That is the, I think it's the first. The second one is in the order of two million, okay, to maintain our production. But we are going to grow, okay? Thank you, Rafael.

Okay. All right. Our next question comes from Alejandro de Mercuris. Please go ahead.

Yes, good morning. I'm here from Jeffries. One question, please, as a bit of a follow-up. So in the current early price scenario that we are seeing, when you were in New York, you talked about some flexibility on your plans. What is your latest thinking in terms of how you're seeing capex, activity levels, and also the risk that some of these processes that you have been doing may not complete because some of your buyers may actually have some travel financing goals?

Okay. First, I would like to say that if we have to change our program, we will change, okay? And never, never I will take decision in panic, okay? And also, there is A lot of uncertainties, and I said that, no, there is a lot of, sorry, in the price. The wild was down, the sound was down. And if there is one new that is positive, you can get back, okay? So we wait. If we need to stop, we will stop. But it's not the moment today, okay, to do that. And another thing is that we have the cap to go when the price is down. It's a bit of a news for you, for investors, because I can reduce the price of the Unicorps, because service companies, when it goes down, they go down the price, and I can reduce the investment, and when they go back, we make much more money. But we will wait. I think now is not... For me, the market is not stabilized to say that that is the new number, the new price, that it will be still here, okay? Okay. Okay, thank you.

All right, our next question comes from Leonardo Macondes with Bank of America. Please go ahead.

Hi, everyone. Horacio, Federico, Margarita. Thanks for picking my questions here. I have two. My first one is related to the advancement of the mature assets. In this quarter, we saw an impact of around $230 million on the cash flow related to the mature assets, right? So I was wondering if you could provide more color on this impact and also if we could expect a further impact related to the divestment of the assets that are yet to be divested, right? My second question is regarding the LNG projects. I mean, could you walk us through the necessary steps for the final investment decision for the LNG projects that are more advanced. And by more advanced, I mean the Southern Energy JV, right, because there's still another effort to be brought, if I'm not mistaken. And also the project with Shell, because you already have the off-takers and so on, right? So what are the necessary steps for the FID of these projects? Thank you very much.

Okay, the first question, what I can tell you that in the, we are very proud of what we did in the mature fields, and today with the lower price, you have to be proud of us also, because we made YPF to be very good at low price, okay? Regarding the macho fields, yesterday was a decree of the province of Santa Cruz. We've seen them in a couple of months. We are finishing all going out from Santa Cruz. The same is in we are working hard for Kill Alpha, which is a small one. And the others that we have are we are in the last, last, last stage. So I think we are going to be out during this year, I would say, Q3 is my prediction. our purpose because of all the delays that you need for signing all the documents and following all the laws for the different provinces. Regarding if you have to spend more this month, this best month, We think that it could be some materials, but not a lot. We have almost all done, okay? Completing with all the process is marginal, what we expect from that, okay? The second question, you tell about the LNG project. For the CESA, I called Argentina one energy. That is the one that we made with CESA, the one that we signed the FID for the first ship in May the 1st. For the second, we had to sign the FID before the end of July. The second, what is Argentina and G2, what this will show, you know, I don't know if you remember, but we are in the process today to forbidding the FIB. And after FIB will be, I would say, end of next year or so. I cannot exactly tell you when because it depends. We are going to receive the bidding process during those days for the field, and after we can have a better date. And with the Argentine Free, which is in an eye, the purpose that we have both companies is to sign FID by the end of the year. That is our goal. But things can change while you are... and see what is happening in the war, okay?

That's very clear. Thank you very much for the answers. Thank you for the question.

All right, our next question comes from George Gestaut with Latin Securities. Please go ahead.

Hi, good morning, and thank you for taking my question. Following the gasoline project, price cut in May. What is your sole price strategy for the rest of the year? As a most competitively priced provider, do you expect to capture additional market share? And did this drive a quarterly improvement in market share?

Okay. The price strategy that we have is the same that any company can have around the world in a free market. It's as simple as that. So what I saw, I was in United States last, it was on Sunday and Monday for some meetings, and I saw the price of that, and it goes up. So that is our strategy. It's no different than that. So I can answer more than that. Thank you. It's import value, price of oil, taxes, price of biofuels that we have to buy, and the children of Argentina. Thank you.

Okay. All right. Our next question comes from Andres Cardolo with Citigroup. Please go ahead.

Hi, everyone. I have two questions. The first one is about the update you provide about the Camerta suit. I noticed you are moving forward the $550,000 that originally was scheduled for the 10-4-27, the first half of the year, but just like you are showing us today, that is not mentioned in the $180,000 addition by the fourth quarter of 2026. I'm still targeting that first stage by the end of next year. And the second one is India is reporting that the Southern Energy is negotiating already the gas pipeline with an international company. Do you know the size of the pipeline investment and the technical characteristics? And why not to go with an open process? Thank you. Okay.

The COD of BEMOS is as was detected. It's in line with what we say. But the first is 4Q between N of Q3 of And that is for 180. For 550, it's in the first, I would say, end of, I can say end of quarter two of 27. And as we say at the beginning, there is no delay. There is no delay. And we are working very hard on that. And for two hours, we are going to put a lot of effort to reduce if we can, okay? For, you are talking about the capex in the gas pipeline, okay, you are right. We are talking with an international company, and why not through an optional open process? Because if we can't have a company that is a good price for all the partners, that is a tariff, is a good deal for the project. a tariff that works for everybody, and within the debt, if that happens, it will be an excellent new for all our companies, all the partners. But there is a preview of that, and if that's finished, and we don't agree with the tariff, we are making an auction open process as you say, exactly as you say, okay?

Our next question comes from Guilherme Martins with Goldman Sachs. Please go ahead.

Hey, everyone. Thanks for having my questions. I have three quick ones. The first one is a follow-up on the development of the natural fields. I understand roughly 11 blocks were already fully developed, right? I would like to get a sense on terms of production contribution from those blocks. And my second question is still no divestment of mature fields is correct me if I'm wrong, but you mentioned you are expecting to bring leverage down as you divest from those legacy fields. I would like to understand if this reduction in leverage is more on the back of you exiting EBITDA negative assets or if you're expecting some relevant cashing flow from the divestments. And my third and final question is on CapEx. I understand you mentioned you're still too early to reassess your investment program for the year, but I would like to understand better for how long would BrainSpice have to stay at the 60s in order for you to revise your drilling and CapEx activity? Thanks so much for the space.

The material field, the production contribution for those blocks, we can, as we mentioned and you showed in all our calls, we are changing from improving production from back and more. So there is no, for us, another problem. And also, I don't care a lot about production because the EBITDA was almost nothing. Negative in some cases. Negative in some cases, so it's better for investors, okay? So, we are not worried about that. And also, Argentina is a free market today, so I can get the oil. Either way, at the same price. It's not a problem, so I can make much more money if I buy. And also, you don't ask that question, but we have an excellent result in the downstream, so it's not a problem at all.

The question from Guilherme on this is basically how we are going to slow it down on the debt after the pitch that we announced in New York because of the divestment of the mature fields. We predict that to be happening end of the second queue or during the third queue. So once we finish with that, Guilherme, what is going to happen is we are going to be taking out all the negative EVDAs from the material fields that are affecting our overall EVDA. So once we finish, we're going to start seeing the YPF that is going to be mostly unconventional, and that will have a higher EVDA, and you will start to see that most likely With that, we are going to be switching or reducing the leverage by the end of the year. We are also, as anticipated in New York, considering other divestments that may happen towards the end of the year or beginning of next year. We don't know exactly the timing, but we have some considerations there.

And with the cafes, really, with 60, I explained that we have a low price, we have a breaking price for developing Bacamorta. So at 60 in Bacamorta, we make money, and we make good money. for sure, it's lower money than 70, it's lower money than 80, or not so, or 100. But after the time passed, you need always less capital because you are making money with that number. So we will see, and I tell before, if I have to change, I will change. But today I don't see that it's necessary. Thanks so much. Okay.

Our next question comes from Tasso Vasconcelos with UBS. Please go ahead.

Thanks for taking my questions here. I have actually one follow-up on the CAPEX and one on the LNG project. Starting with the CAPEX, you have released a $5 billion guidance for 2025, and during the first Q right now, you just separated the $100 million disbursement to affiliates. So could you please clarify these disbursements on these affiliates and overall infrastructure projects, such as Vakamurta, Ayusu, Self Energy, and so on. Are these already included in the 5 billion CapEx for the full year? And what's the total expect breakdown here for the full year? How much we're aiming to disburse on these affiliates in 2025? The second question I'll follow up on the LNG project, you have been commenting that the project is more resilient, given this profile from the contracts and so on, but given that you're still negotiating this contract, have you already noticed some pushback from potential clients regarding the pricing for this contract? And in this context, do you believe that potential breadth, lower for longer, or the tensions from the U.S. government, could this lead you to assess the context and the size of this project at an extent? Those are my two questions on follow-up. Thank you.

Sorry, thank you for the question. Regarding the capex, the 100 million, remember that we are growing, growing. Argentina was a country that was producing for four or five different places, and now produces only one. So it's a big bottleneck for growth production. Not for White Bear, for all the companies, right? So that money is for infrastructure to grow, because if not, we cannot grow. That's why we have one company, and it's all included, because it's our business.

I think that, Pastor, maybe I don't know if we understood correctly your question, but the $5 billion doesn't include the contributions to affiliates. Mostly what you see in this quarter is the finishing of all the rail and the initial construction of Demos. So if that's your question, let's say, please let us know.

That's all. Okay, yeah, that was the question, if oil is included on the guidance or not. and the second one on the LNG project.

The LNG project, remember that we have very, I would say that I'm very proud of the partner that we have, and it's all project finance. So, and the world needs LNG, and they need a lot of LNG, and there is no way that the world can supply the gas without the United States. And we are in a better way than the United States. So I'm very quiet, and I know that we can deliver the LNG in Argentina, and we can be very profitable, and if they make money, we will make money. So there is no real worry about that. And also for the quality of the company that we have, it's a good direction. You cannot see a crazy company that goes alone. In all the projects, we are in the order of 25%, so there is 75% of good partners that they think but are very good business. And Macamorta is huge, the reserve that they have. And I feel that I need, as a CEO and president of IPS, to develop the LNG for all the shareholders, because if not, I'm not doing a good job.

That's clear. Thank you.

Our next question comes from Anne Milne with Bank of America. Please go ahead.

Good morning, good afternoon. Thank you very much for the call, Horacio, Federico, and Margarita. My first question is for Federico. I know you went over the balance of your debt maturities for 2025, but you have a fairly large amount in 2026. I do see that it's mostly in the local market. So my question is, do you plan to refinance most of that in the local market? And how is the local market these days? I've heard a few questions. mixed comments, it might not be quite as liquid as it was at one point. And then the second question I have is on exports. I know your exports decreased this quarter. You mentioned it was because of greater vertical integration. Could you give us an idea of when you expect your exports to increase in a more meaningful fashion? Thank you.

Hey, Anne. How are you?

Well, on the first question, yes, for 2026, let's say most of what we have, it's going to be, roughly speaking, we have 1.5, let's say, of refinancing in the local market and only less than 400 in the international bond market. So, based on this and at the current situation, we maintain, let's say, all our eyes open for the different alternatives that we have. The local market continues to be quite open for YPF. We just priced a new issue. I think it was Monday or Tuesday, we priced around $40 million at 7%. So this was a bigger amount of what we were looking at, a lower interest rate of what we originally anticipated. So YPF continues to be one of the... key means into the local markets, and the markets have been reacting very well for all our debt issues in the different alternatives that we offer from time to time. So, while we're speaking, I will... Maintain my eyes open on what is the best alternative to refinance these maturities in 2026. As you know, international bond market, let's say, from time to time, it's reopened for Argentina since last year. And from time to time, we have, let's say, very good opportunity to refinance long-term at low rates, as we did back in January. So we will see. We have different pockets of liquidity to tap, and we are going to be playing like that. But the local markets continue to be very supportive to YPF, and I am very confident that this amount that we have in 2026, we are going to have no problem in refinancing in the local markets. Thank you. A second question. It's for oil exports. Well, I think that we are right now reducing a little bit what we export in first year. Now, when we are going to be increasing... Definitely related to the first oil expectation that we have for Venus, most likely that will be, as Horacio just mentioned, the end of 2026, the last quarter there. The pipeline will be releasing 180,000 barrels. We have a share of 27%. And that will continue to grow up until final COD in, I would say, end of the first quarter or during the second quarter of 2027. At that time, the pipeline will have a capacity of 550, and our commitment is to undertake $120,000. So that will be our export ramp-up for the for the coming year on top of what we can marginally add to Chile, depending on the price and the state that we can obtain and the circumstances.

Okay, so just to clarify, so when the VIMOS is up and running, so 27% of the 180 initially, and that will increase to 120 out of the 550 sales.

Yes, it starts with the first toll of 180, and then COD will be, the pilot will be delivering up to 550, out of which the seven initial shippers have committed a total capacity of 450, out of which YPF owns 120.

It's totally logical. Our incremental production depends on the capacity that we have, okay? That's why this year you see the same investment that happened last year, okay?

Very clear. Thank you very much. Okay.

All right. I will now turn the call back over to Horacio Marin for closing remarks.

Okay. Thank you very much for the question. We are very happy to work here in YPF, and I will switch to Spanish. Okay? Respire, prefe. Transpire, prefe. Piense, prefe. Amo, prefe. In my word.