Pampa Energia SA (PAM) 2022 Q2 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for waiting. I'm Margarita Chun from IR, and we would like to welcome everyone to Pampa Energia's Second Quarter 2022 Results Video Conference. We inform you that this event is being recorded. (Operator Instructions) Before proceeding, please read the disclaimer that is located in the second page of our presentation.

Let me mention that forward-looking statements are based on Pampa Energia's management beliefs and assumptions and information currently available to the company. They involve risks, uncertainties and assumptions because they are related to future events that may or may not occur in the future. Investors should understand that general economic and industry conditions and other operating factors could also affect the future results of Pampa Energia and could cause results to differ materially from those expressed in such forward-looking statements.

Now I'll turn the video conference over to Lida Wang, our Investor Relations and Sustainability Officer of Pampa Energia. Please go ahead.

Good morning. Thank you, Madge, and everyone for joining our conference call. It's been a great quarter, but in interest of time, I will make it short and sweet, so we have plenty of time for Q&A with our CEO, Gustavo Mariani; Gustavo Mariani is here, our CFO, Nicolas Mindlin is here and they are waiting for you with the Q&A.

So let's start with the quarter's figures. Revenues increased 28% year-on-year to $587 million, driven by rising gas output, commodity prices, B2B Energia Plus sales and higher legacy energy and regulated prices. However, lower income from Loma, Barragan and Piquirenda offset these increases because its PPAs expired. As a result, around 85% of our sales were dollar-linked. The adjusted EBITDA amounted to $253 million, 6% up year-on-year and 13% up quarter-on-quarter, explained by the same reasons detailed before and the petchem margins offset by increased costs on maintenance and contractors from intense E&P activity and higher peso-linked expenses, because inflation is outpacing the valuation.

Quarter-on-quarter, seasonality explains the boost in the EBITDA. As you can see on the right below, oil and gas led the consolidated adjusted EBITDA for the first time in a long time, thanks to our gas business taking 59%. CapEx in Q2 was 49%, up year-on-year and [36%] up quarter-on-quarter. This is mainly due to the growing Plan Gas commitment and power expansions at PEPE III and Barragan.

Moving on to power generation as seen on Slide 4. We posted an EBITDA of $99 million in Q2, this is 18% down year-on-year and quarter-on-quarter, mainly due to PPA maturities we mentioned before and higher local currency expenses, compensated by thermal -- better thermal B2B margins and spot energy sales despite the peso depreciation. The outstanding operating performance also contributed to the EBITDA, Q2 generation was up 18% year-on-year surpassing by far the national grid that only achieved 1% aggregated growth, because of the peak season that began in May, our thermal units were highly demanded when combined cycles dispatching at full capacity and dual units firing with liquid fields.

The power generation business relies on chemical pay, capacity pay, so availability is what matters the most. In Q2, we reached an outstanding rate of almost 98% with minor outages in Piedra Buena. In contrast, we recorded roughly 96% year-on-year, last year due to (inaudible) and Genelbe's partial outages. So again, Pampa's availability rate was way above the system average of 77%.

Regarding our expansion at Ensenada Barragan, the closing to CCGTs advancing now more than 80% run. We are preparing the facilities to perform (inaudible) this month and running the pre-commissioning of the water treatment plant and the cooling tower. More than 450 people are working daily on this project to achieve (technical difficulty) is forecasted by the end of 2022.

Moving to PEPE III wind farm expansion. The project is beyond half way advanced. We continue with the civil works, working on the wind turbine basis. We have already received the anchor cages and the wind turbine components are driving at the port of Bahia Blanca this month. The estimated COD is split in 2 stages: the first 50 megawatts by February 2023 and the remaining 31 megawatts by May 2023.

Now moving to E&P in Slide 7. Our gas production reached a new all-time high, record again. Recording 11.2 million cubic meters per day in June. Actually -- currently, this is the level that we are producing. The ramp-up is mainly explained by Plan Gas last tender, which added 2 million cubic meters per day of deliveries since May. In addition, the exports to Chile, even during the peak season contributed to the production hike all made on a spot basis and higher sales to the industrial segment.

Therefore, during Q2, our gas production outperformed by growing 38% year-on-year and 14% quarter-on-quarter, averaging 10.2 million cubic meters per day in the quarter and outpacing nationwide growth that only increased by [14%.] We drilled 12 gas wells and completed 17, all type and mostly at El Mangrullo, where 72% of our production in the quarter came from.

Last May, we added 2.5 million cubic meters per day of evacuation and (technical difficulty) capacity at El Mangrullo. By the third quarter of this year, the total capacity of this block will be 14 million cubic meters per day, more than double last year's capacity. Rio Neuquen and Sierra Chata also contributed to the growing output at a smaller pace. Tight gas is our main production source, but we expect to increase our shale gas share further soon, since we began drilling horizontal wells at Sierra Chata this month as a part of a new investment plan. This plan, we plan to complete 14 horizontal wells targeting to Vaca Muerta formation before June 2023.

Briefly commenting on E&P business figures as seen on Slide 8. We posted an adjusted EBITDA of $102 million in Q2, 39% up year-on-year and almost doubled quarter-on-quarter, explained by the gas performance that we mentioned before, and higher realized oil prices, offset by increased costs related to the growing activity and export expenses. Our total production averaged 65,000 BOE per day, of which 92% is gas.

Our lifting costs grew by 62% year-on-year and 35% quarter-on-quarter. However, efficiency-wise, the lifting costs increased just 20% year-on-year and 5% quarter-on-quarter, recording $6.2 per BOE. To me crude oil represented [19%] of the segment's revenue in the quarter. The revenue sold was similar year-on-year, but 11% down quarter-over-quarter being 4.700 barrels per day. During the quarter, local sales increased, but export reduced their pace to resume it in last month July. Realized price was almost $73 per barrel, primarily due to the brand and the [dollar raised] domestic price.

Back to gas. Our average sale price of the quarter was $4.4 per million BTU, this is 14% up year-on-year and 25% up quarter-on-quarter, driven by export prices on local gas prices, this is due to the seasonal gas demand. As we are right now in the peak season, our key sales breakdown is skewed to retail, because they have priority in winter under the Plan Gas, we (technical difficulty) despite selling under spot. We aim to keep up with this production level of 11 million cubic meters per day, even after the winter ends. So we are working to place the excess output. A few days ago, we were clear by the Energy Secretary to export under take-or-pay basis, 1.5 million cubic meters per day to Chile during the off peak season.

Moving to petrochemicals. It delivered another outstanding adjusted EBITDA of $19 million in Q2, higher than last year, $16 million. This is primarily contributed by a broader margin respect and volume of reforming products, plus the increasing demand for polystyrene, partially offset by higher raw material costs quarter-on-quarter, the EBITDA has more than triple, this is driven by better product margins or spreads.

Sales volume was 19%, up year-on-year, mainly due to the demand growth for octane bases, polystyrene and naftas. In Q2, 41% of the total sales were exports. Regarding cash flow, as seen on Slide 10, we recorded a free cash flow outflow of $62 million. This is mainly due to the working capital impacted by the seasonal billing, remember that we are in winter and higher payment delays from CAMMESA. In addition, because of the gas commitment deliveries, we ramp up our E&P CapEx significantly by 55% year-on-year, plus the year PEPE III renewal expansion investment. We recorded lesser debt service due to lower stock compared to last year. In addition, we incur in minor debt and collected Edenor's self annual installment. In summary, we reduced $41 million of net cash in the quarter, achieving $566 million of cash by the end of the quarter.

Moving are on the Slide 11. This slide shows consolidated figures, including our affiliates at ownership, but let's focus on the restricted group that reflects the Pampa perimeter. We posted a gross debt of $1.5 billion, similar to the last quarter, this is 97% dollar denominated bearing an interest rate average of 7.8%, the average life decreased slightly to 3.9 years. During the quarter, we added minor peso loans though net debt slightly increased to $902 million due to the cash outflow mentioned before. The net leverage ratio remains similar at 1.3x.

Regarding our upcoming maturities, we tapped our 2023 notes last June and carry out an exchange offer that successfully settled this look. Our goal was to strengthen our debt profile and preserve a solid gas cash position to move forward with an intense investment plan in our core businesses, especially in gas production. Thanks to our bondholder support, we successfully exchanged $407 million out of the $500 million face value with 48% choosing the cash and notes proposal and 52% picking the new note compensation.

Thus, we reduced debt by paying $122 million in cash and extended principle by issuing $293 million of new 2026 notes, amortizing annually from December 2024 to 2026 with a fixed interest rate of 9.5%. In addition, we issued a local bond for ARS28 billion due in 18 months and also to ARS7 billion net pesos of bearing loans, bank loans. So as you can see in the new debt profile after the exchange until 2027, Pampa does not face relevant debt maturities.

So, this concludes our presentation. I will turn now the word to Margarita, who will open the floor for questions. Thank you.

Thank you, Lida. (Operator Instructions) So here, we have Gustavo Mariani, our CEO, Lida Wang in the same camera. So our first question comes from Frank McGann of Bank of America. He has 3 questions. We will start with the first one. The first one is what are the expectation now for oil and gas output for Pampa site, over the next 2, 3 years with the new transportation capacity?

Sorry, we had a thing that rolling with my iPad. But -- so I have to move to Lida's position. Is it working now?

Yes.

Okay. Regarding oil, we -- currently, we don't have any plan to significantly increase production in any way, although we are analyzing any -- all the alternatives that we have, we are discussing with our partners with one -- with the partner in Piquirenda. That's our Vaca Muerta play in oil that we operate in order to start drilling in that area. But still nothing confirmed on that front yet.

In terms of natural gas, our aim is to continue growing. We are currently at full capacity of all our gas treatment plants. We currently reach as Lida mentioned, a record of 11.2 cubic meters of natural gas per day of production, which we hope to maintain throughout the summer, [things] to export to Chile in the summertime. And in order to increase that we -- increase the production, we are a few months away of finishing a new gas plant treatment in El Mangrullo for another 5 million cubic meters of natural gas.

So we hope by next winter of 2023, be able to use all that capacity that will depend on the outcome of -- that will depend on basically on the market on the outcome of what we are expecting, there is a new auction in the -- sorry, so I haven't been heard for how long?

No.

Okay. So as you know, the contracts have been signed in order to start building the new pipeline to increase evacuation capacity from the Neuquen Basin. And if everything goes fine, and as we expect it will go by mid of next winter, there will be an increase of 11 million cubic meters of natural gas of evacuation capacity out of the Neuquen Basin. So we are expecting the Secretary of Energy will soon announce a new Plan Gas in order to fulfill this new pipeline with gas. And depending on how successful we are on that auction will be the plans for next year. Okay. So I think covered up.

The second question is about power generation. What planned maintenance is scheduled over the next several quarters in your power plants?

So the next quarter, Q3, we usually do at the end of the quarter between September and October. Maintenance is in our combined cycles. This is in Loma De la Lata and in Ingeniero, the #2, the #2 combine cycle, the original one. And we have some maintenance in the same turbines of Piedra Buena and in Guemes. The same turbines of Piedra Buena and Guemes.

And the last question of Frank is also about power generation. What additional PPA changes are expected in terms of ending and starting of contracts through the rest of 2022 and in 2023 and 2024?

Are you seeing me now? Okay. Regarding PPAs, as you know, we are working together with YPF in (inaudible) the picture in finishing the closing of the cycle of Ensenada Barragan, that will add a new steam turbine of 280 megawatts of capacity with a 10 year PPA. As Lida mentioned, we expect this to finish by the end -- the works on -- the COD to be at the end of the fourth quarter by the end of the year. And so we are expecting the impact of that PPA fully in 2023.

Also regarding the expansion of PEPE III, where we will be adding 80 megawatts of wind mills, a minute before the -- this conference start, [we took the] picture of the unloading of the wind mills for that expansion. So everything is on track there. And in a few weeks, we will begin putting the wind mills on the site. So by February of next year, the first 50 megahertz should be online and 2 months later, the other 30 megahertz. So that is -- so in 2023, you have the 50% of the addition of Ensenada Barragan, that is 140 megawatt of our PPA plus the 80 megawatt of the new expense of the new wind farm. And regarding PPAs, that will come to an end, from now until the end of 2026, we don't have any maturities. So 2026 and 2027 will be the next maturities in PPAs.

And our next question comes from Matias Castagnino from BCP Securities. He also has 3 questions. The first one is regarding the new pipeline. Pampa is recording a record high production of gas. How much does your production grow depend on the new gas pipeline?

It fully depends on the new pipeline, because all our production in natural gas is concentrated in the Neuquen Basin, almost all of it is concentrated in the Neuquen Basin. And the Neuquen Basin has reached its evacuation capacity, towards the internal market. And also towards Chile, during the summer, we are exporting as much as we can. So until there is -- until this new pipeline it's online, which we expect to happen by mid winter of next year. There's no way to increase production other than gaining a little bit of market share within the basin, which is unlikely to happen.

The second question of Matias is regarding the petrochemicals business. Petrochemical recorded another exceptional EBITDA in the quarter. In the global market, we see that in July and August, there are margins decreasing. So what is your expectation regarding your business for the remaining period of the year?

You're totally right. The petrochemical business is having a terrific year, probably, it will be a record year again. As you know, our petrochemical business has several -- has basically 4 segments. And as you correctly said, some of those segments are slowing down, but others remain with very good health. So as we have visibility, the third quarter, we are optimistic that it will be a very good quarter. We have less visibility and less capacity to hedge prices for longer-term. So fourth quarter, it's more uncertain, but everything looks fine. So I think we are on track on having a very good year, because besides some slowdown in some of the segments.

And the last question about Matias is regarding the net debt. You increased slightly the net debt by $50 million compared to March. And we would like to know what are the main reasons?

So, Hi, Matias, so the increase -- this increase in net debt is something circumstantial, and it can't be explained by many different reasons. The first one is working capital. We have been experiencing as Lida said before, higher delays in payments from CAMMESA during the last few months, mostly because of seasonal billing. And secondly, because during June and July, we had some stationary high CapEx expenditures and some extraordinary expenses regarding the expansion of free wind farm.

And lastly, because on June, we faced some losses on some financial investments, partially offset in July. But we don't expect this increase in net debt to stay over time. But obviously, this will depend on what happens with working capital and CAMMESA payment delays in the future.

And our next question comes from Alejandra Andrade of JPMorgan. She has 4 questions. We will start with the first one. Could you comment on the buildup of account receivable and the day of sales of funding -- day of collection from CAMMESA?

So as I just said in the last few months, the usual seasonal billing, the payment delay of CAMMESA have been trading and deteriorating, especially during the last weeks, reaching almost 90 days of delay approximately. When last year, we were on an average of 70 days. But we hope the situation revert in the upcoming month.

Alejandra's second question is regarding, what is the outlook about your production and CapEx level?

Well, right now, as I said before, the idea is to keep up with the production that we are now to have 11 million cubic meters per day. This is beyond the off peak season, if we can place the cells that we are very confident on, we will. CapEx for this year in E&P because we ramp up heavily, it's estimated at around $350 million total of the year. But next year, we expect to go down to maintain CapEx on -- it's around $200 million, $250 million. Then we have power generation. Power generation, we are close to 19 terawatt of energy this year generated from all our units that we operate. This is quite an increase compared to last year. This is placing us stronger in the grid.

And CapEx for this year is $140 million, this is what we expect to diverse. Mainly, this is $50 million from maintenance and the rest, $90 million is coming from PEPE III. The expansion that we're doing next year, the diverseness left, it's very little.

And Alejandra's third question is regarding the 2023 notes that is remaining, it is about $93 million roughly and maturing in July 2023. What's going to happen with that?

So if the current regulation remains the same next year, we understand that we will have access. As participation in the exchange was of more than 80%, the amount of holdouts for 2023 shares $3 million that we think is a very reasonable number considering Pampa's cash flow generation capacity. So in the upcoming months, we will analyze the alternatives, taking [into] account the company CapEx plans and also the regulation in place at that time.

And Alejandra's last question is about the inflow of asset sales that we can see in the balance sheet.

So this is mainly because during the last week of June and the first week of July, we collected the last $40 million of the sale of the 51% of Edenor. And with this payment, we complete the $100 million, and we do not have anything else to collect from the buyers.

And our next question comes from Florencia Mayorga from the company MetLife. Your question is regarding the chemical program we had in one of the gas turbines of Loma De la Lata. What is your expectation regarding the insurance company? How much they should cover regarding these chemical program?

The insurance company should cover, basically, what we have is in terms of business interruption beyond 60 days, which we hope it will not take that long, and the machine will be ready before. And they should cover -- we have a deductible -- between the deductible and the self-insurance retention that we have, it's about $9 million. So we should cover anything that goes beyond that number. But the reality is that we are discussing with the supplier, because we understand that they should cover the damage that we suffer and we are optimistic on the outcome of that negotiation. We had these kind of issues in the past, and they have responded according to the responsibility. So we hope not to be -- to need to claim anything to the insurance company and to solve the issue with the supplier. That's our expectation of this product.

Florencia, added one more question, and it is about the new official appointment in the Energy Secretary, what is Pampa's view on this change?

We -- well the -- regarding the change of the Secretary of Energy, some of the new appointments are officials that have been working with the government in other positions, which we know them very well, and we have a very -- an excellent dialog and relationship. With the new appointed Secretary of Energy, although we know her, we have -- and we know her, because we have assets in the province where she is coming from. We had less knowledge, but we are very optimistic about her capabilities for the position.

So far, the announcement has been excellent towards the sector, both the tariff -- the reduction in subsidies. It's a significant step forward, very, very important. And all the other announcements regarding the -- that were made yesterday by the Minister of Economy, regarding Vaca Muerta and the incentives to increase production are excellent news for the sector. So although Argentina, as you well know, is going through tough times in terms of the macro situation. And what is related to our sector, we are very optimistic, because they are doing -- they're moving in the right directions of solving issues. So that the energy sector becomes an important help to the macroeconomic situation.

Our next question comes from Paula La Greca from TPCG. How much incremental revenue will represent exports to Chile in Q3 and Q4 of this year?

We are about to be granted a 1.5 million firm export permit to Chile, export permits are -- almost all the -- yes, all the paperwork in the Secretary of Energy is almost done. So in the next couple of weeks should be published and we will -- we are expecting to be granted 1.5 million cubic meter per day of firm export. Those exports will be done on an average close to $8 per million of BTU. So it's an excellent price. And assuming the difference between the local price during the summertime and the export price being something about the $4 or $5. So the incremental revenue should be around $20 million, $25 million because of the export contract.

Our next question comes from Lucas Caldi from Portfolio Personal. He has 2 questions. The first one is related to the gas export as well, but during off peak season. How much gas do you think you'll be able to export during the off peak season in the coming months? As Gustavo mentioned, we are having the 1.5 million cubic meters (technical difficulty) We apologize, we are having some inconvenience with the internet quality. Please give us few minutes until we settle the situation, please.

Well, the first question of Lucas Caldi was related to the gas export, but during off peak season as Gustavo mentioned, we are having the paperworks ready to have the export permit of 1.5 million cubic meter per day, since October, until May next year on a take-or-pay basis. And can you give what would be the expected pricing of those exports?

Okay. I think I just answered that. But, what we are expecting to export during the summer beginning October 1 until the end of April is in firm 1.5 million, hopefully on a -- not on a firm basis, but we expect to export around 0.5 million cubic meters of natural gas per day more, so a total of 2 million. And the price for the firm gas will be close to $8 per million of BTU, for the other 0.5 million, we are still negotiating with our counterparty in Chile.

And Lucas' next question. This is a final question of Lucas, is regarding the next winter. Are you expecting to further increase natural gas production next winter? In case the new pipeline is not ready by that time. Could you export to Chile that additional production as you did this winter?

As said before on the Frank McGann's question, by next winter, we will have the possibility to increase production to 16 million, 16.5 or 16 million, 17 million cubic meters of natural gas per day. Thanks to our investment in infrastructure that will be ready by that time. Whether we reached that level of production or not, it will depend on the visibility we have on our capacity to sell our production through the new pipeline that we expect, it will be ready by mid of next winter. And to export gas to Chile, during the winter, because of transportation restrictions. During the summer, we can export to Chile, around 9 million cubic meters of natural gas per day from remuneration I'm referring.

During the winter, we can only export less than [5 million] to Chile because of transportation restriction. So again, we will have the capacity to grow production, but we don't have yet visibility on our market share both in the export market or in the local market with the expansion of the new pipeline. So, once we have more clarity on that, we will be able to fine-tune our increase in production.

Our next question comes from Kostas Papalias from Puente. He has 2 questions. The first question is, what percentage of your revenues has the state as a counterpart? On the same line, what are the average collection days? And what will be the net effect of a steep overnight evaluation on Pampa's finance given the amount of unpaid invoices?

So, as I said before, commission payments delay has been deteriorating, reaching approximately 90 days. And obviously any discreet increase in FX will affect our receivables in pesos, right? And the impact on this is difficult to estimate exactly, because it will depend on many factors at the time of that positive evaluation, as the amount of receivables at that time and the days of delay. But just to give you an idea, until delay for the 2 of the day, of the day the receivables has adjusted by FX, and after the delay (inaudible) adjusted by an interest rate in pesos today is near to 70%.

The second question of Kostas, is regarding the E&P business. Are there any logistic or macro-restrictions affecting your CapEx execution?

The question is regarding (inaudible) with the CapEx. No. We are not foreseeing any problems. And even yesterday, the Ministry of Economy has announced like a green channel for in customs for Vaca Muerta. So the government understands perfectly that energy will be part of the solutions to the macroeconomic problems. And so they're trying to smooth all the bottlenecks and the problems that the industry suffers in order to move further to increase production.

So, we haven't suffer any problems yet. We are -- there are some bottlenecks, for example, fracking equipment, -- lack of fracking equipment in the market that is a bottleneck. So we need to import new sets in order to be able to increase the rhythm of production both in oil and gas and -- talking about as an industry. And the government understand that we need to remove any problem. So we are optimistic. We will not have any problem with implementing our plans.

Our next question comes from Guilherme Levy from Morgan Stanley. He has 2 questions. One for E&P, and another one regarding working capital. The first one is, in E&P. What is the planning CapEx for the coming quarters? What is the company doing to ensure that investment to be executed in this high inflation environment, both in Argentina and in the global industry? What if there is any impact regarding import restriction in Argentina for the short-term investment?

Yes. So basically we can say again, the outlook for the year and CapEx for E&P is around $350 million. And then we have $140 million from power generation, this is the outlook for this year. It's not probably going to happen again next year, because this year it's loaded with one-offs expansionary CapEx in the case of E&P it's around $200 million of expansionary CapEx. And in the case of power generations, it's $90 million out of $140 million. Restrictions in imports, I think Gustavo, just covered recently, and working capital, we just covered it by our CFO, Nico.

So we covered the second question of Guilherme also regarding working capital. We'll move on with the question of Rafael Nagano of Credit Suisse. He has 3 questions. The first one is, what are the commercialization plans for Loma De La Lata steam turbine and Piquirenda, given the expiration of their PPA?

The things that -- when the PPAs -- they mature, they migrate to the spot market. That's how it works. This is for the CAMMESA PPAs. Now for the (inaudible) they constantly roll.

The second question of Rafael is, is there any expectation for new gas supply options? If so, when should it come and how big it should be?

The first -- this new pipeline that will be -- should [begin.] We hope and we're optimistic will be online by mid of next winter. Without on the first stage 11 million cubic meters of natural gas of capacity that is without compression. Then on the second stage, the compression plants will be ready and that capacity will double. So it will go from 11 million to 22 million of more evacuation capacity from the Neuquen Basin. But because of delay in the supply of the compression plants that is not going to be ready for winter 2023. Winter 2023, just a pipeline with our compression that's 11 million cubic meters per day. By summer of 2023, 2024, another 11 million, once the compression capacity is added to the pipeline.

So the first option will be of 11 million and what the -- and reduction should be announced any time, because the industry needs to I think -- the sooner that it's been announced, the better for the industry and for the government in terms of the price that's going to be offered. Regarding (inaudible) whether those -- at what percentage of those 11 million are on a year round, so contracted with the year round and how much it'll be just for winter. We think something like 75% of those 11 million cubit meter year round demand. And there will be a small peak, especially in 2023, probably 2024. Then all those 11 million loss, Bolivia continues to provide less gas during the summer (inaudible) the year round.

Our last question from Rafael of Credit Suisse is about, should we expect any additional adjustment to legacy capacity remuneration?

We hope so. And we're discussing with the authorities. We are optimistic, and we have been given since February of last year, legacy capacity basically to adjustment one-off 30% that impact in February of this year, and another 10% in June of this year. But that is since February of 2021 and inflation has been way above those figures. They are aware of it. So we're currently discussing with the authorities. We don't have anything confirmed yet, and we are optimistic that in the coming months, we will have a -- and we just want to compensate the cost inflation.

We will move on with the next question, is from Rodrigo Nistor from AR Partners. He has 7 questions, but most of them were already answered. So we will reply 2 questions. The first question is, do you expect a reduction in payment days from CAMMESA as consumers pay larger portion of energy cost?

It's tough to answer. First question is, yes, definitely it's a good news and it'll help -- that the system will require less subsidy from the treasury. That is very good news. So -- and also what is important about CAMMESA is that the most of the stress that CAMMESA suffer is during the winter, because they need to pay for imports of fuel to supply the power plants, basically imports of diesel oil and LNG, which are very heavy in the winter and we are almost over about season.

So we expect the collection from CAMMESA, because of this seasonality. And because of what you have mentioned that in terms of the increasing collections of CAMMESA to the distribution company, because of the price increase. But then those are 2 factors that impact positively, and CAMMESA we should expect that's. Let's be optimistic. That will be the case.

And the second question of Rodrigo is, how much can you grow production, if additional mixing capacity becomes available?

I think I answered already (inaudible) have a capacity to produce [11 million] cubic meters of natural gas and that is what we're currently producing. We're about to finish a new gas treatment plant in El Mangrullo to take the Mangrullo from 8.5 million that is our current production in Mangrullo to 13.5 million. So we are in total of 5 million new production capacity. We need to drill and complete the work in order to -- by September or October that new capacity will be ready, but we will not have new wells in production to fill that up. We will have the field that was ready, starting second quarter or next year. But whether we fully fill that up, those 5 millions or not as said before, it will depend on the demand and we see both from the domestic market and from the export from Chile.

We have been covering most of the questions. There were some few questions that couldn't be answered, because we are running out of the time. We tried to respect the 1 hour video conference. Anyway, we will contact directly to the person who answered, who answer the question. So this concludes the question-and-answer section. I'll turn to Lida for final remarks.

And I would say, it was a great quarter. If there is any topic or any questions that we didn't answer, please contact us, we will reach out to the unanswered question. This is not -- seriously, we have a lot of questions. It does -- that keep us very happy, because we feel like it's -- there is a lot of activity. Any questions you may have, you can reach us out Margarita and I, we are always fill the available for you. Gus, do you like to close and Nico.

Thank you very much for participating. We are very optimistic going forward on the prospect of the company. As Nico and Lida said this past week have been very important for our company. Being able to refinance our 2023 maturity, leave us with the capacity to focus exclusively on growing and on growing production. So it's -- has been very important to move forward to reduce our indebtedness and move forward those -- that maturity and also the news about the new pipeline.

Finally, moving forward and all the measures that have been announced by the Minister, the new Minister of Energy and Economy are excellent news for the company. So we are very optimistic and we will be working very hard to fulfill our expectations. Thank you very much for joining.

Thank you, Gus. This concludes today's presentation. Thank you for joining. You may be disconnect at this time. Goodbye.