YPF SA (YPF) 2024 Q4 法說會逐字稿

Good morning and welcome to the YPF fourth-quarter and full-year 2024 earnings conference call and webcast.

(Operator instructions) As a reminder, this conference call is being recorded.

I would now like to turn the call over to Margarita Chun, YPF IR Manager.

Please go ahead.

Good morning, ladies and gentlemen.

This is Margarita Chun YPF's 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 2.

Our remarks today and answers to your questions may include forward-looking statements, which are subject to risks 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 EBITDA.

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.

This presentation will be conducted by our Chairman and CEO, Mr. Horacio Marin; our CFO, Mr. Federico Barroetave and our Strategy, New Businesses and Controlling Vice President, Mr. Maximiliano Westen.

I will now turn the call over to Horacio.

Please go ahead.

Thank you, Margarita and good morning to everyone on this call.

Let me begin by highlighting that 24 was a transformational year of YPF.

We have deployed our four-by-four plan designed to increase the value of the company.

In the after segment, we are reshaping our oil production matrix, leaving conventional ma field and targeting to increase our 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 FPA for 24 blocks, and we're in the final stage of agreement to transfer and or river 18 blocks located in the province of Santa Cruz and Tierra del Fuego.

On the other hand, we are already the largest shale oil producer of the country, and we continue expanding the coming years, reallocating and concentrating our investments on Vaca Muerta.

In parallel, we are leading the midstream process development of Vemos, a new oil export dedicate pipeline engaging and consolidating the effort of all major producing in Argentina to ramp up production to 180,000 bars per day in the second half of '26, jumping to more than half a million barrels per day by the second half of '27.

The contraction has already started and YPF's initial capacity will be 120,000 bodies per day, accounting for 27% stake and expecting to reach more than $3 billion of additional exports by the second half of '27.

In the dumping cement, despite challenging micro context, we returned to a 100% free market where we were able to fully normalize local price of fuels and converting them to international parties.

On the other hand, on '24, we have been implementing multiple operational efficiency measures to enhance productivity across all businesses.

In the after segment, our dealing 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 high lateral length drilling speed for one shell well in Langoturasor block.

Surpassing 1,747 m in 24 hours.

This lateral lane is equivalent to 5,731 ft.

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 Vaca Muerta with startling 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 work contractual 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 cycle, reducing our working capital and increasing our profitability from the acceleration in production.

Our target by '25 is to decrease by 30% of the world contractual cycle from 312 days in '23.

As initial stage, we developed two prototype lines to be implementing on a large-scale 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 '24 and exceeding the year with 318,000 barrels per day in December with a refined utilization of 92%, mainly driven by the revamping of our la Plata refinery, which increased.

Its capacity and improve the quality of the fuel by reducing the sulfur content.

In addition, we achieved record high production levels in '24, 5,605 cubic meters per day of premium diesel and 13,915 cubic meters per day of gasoline.

Regarding downstream efficiency, during 24, we created a specialized industrial team to target and monitor 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 methods.

This center will be the first in Argentina.

In terms of financing, EPFA 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 strategic 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 4 years, setting an order reopening Argentine corporates.

We secured $400 million term loan structured in two- and three-year tranches with participation of 16 financial institutions.

Finally, we changed the authorization markets of the company, changing internal procedures and increasing the control of process compliance.

Moving on to the next slide, let me highlight that through our exit from Ma 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 in the owner of the resources at 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, you already completed the transaction of Shananello cluster.

In Mendoza North, after having received all provincial approval, you're in the final stage, expecting to closing within the next two weeks.

In the Nosa South cluster, we already obtained the assignment approval and we expect the extension approval of the concession to be run in a week.

Immediately after, we close the transaction with the buyer company.

Regarding the province of Rio Negro, we completed the transaction for the latter in the latter, we in the final stage of negotiation targeting to execute the SPA during March and why the closing should be no later than April.

In the province of Neuquen, we already received all the provincial approval for Norte and South latter, just waiting for the corresponding decrees.

In the latter 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 ComintoCentranic Perdido clusters.

While we are very advanced with the process of transferring or reverting Reingai to the province, regarding the non-operative position to, we are in ongoing negotiation.

Lastly, in the province of Santa Cruz and Tierra Fuego, we are making progress in negotiation.

Targeting to transfer or reward the remaining assets back to the provinces.

In summary, during these 12 months, we have achieved a material province with no precedence 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 nearly third of a Vaca Muerta shale oil production achieved an impressive output of 122,000 bodies per day in '24.

This marks a 26% increase compared to 23% and is fully in line with the annual target to the markets in March '24.

Moreover, as of today, our net production is above 150,000 bodies per day.

Looking ahead, we anticipate sustained growth in '25, concentrating our effort on our more profitable assets, shale oil from Vaca Muerta.

Also, let me highlight that as operator YPF produced more than half of Vaca Muerta shale oil production in '24.

The competitiveness of YPF is now more evident to the market based on the unique shale production scale and synergies that the company now consolidates between after and after segments.

In line with this production ramp up, we almost triple our oil export revenues in '24, achieving near $1 billion and averaging 35,000 barrels per day.

In Q4, we jumped to 41,000 bodies 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 can be consistently adjusting local fuel price to be in line with international prices.

As a result, we narrowed significantly the GAAP to import parities, 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 recovering price coupled with the efficiency initiatives mentioned before, that resulted in a better comprehensive refining and marketing EBITDA margin of $13.7 per bar, growing 24% compared to '23.

These margins include refinery, chemical, petrochemical, logistics, and lubricants.

In parallel with the increase in exports, we reduce the fuel imports significantly in '24.

Mostly due to demand contraction and refinery capacity.

It's also worth mentioning that '23 was effective and extraordinary demand driven by local price considering below import parities.

During '24, in line 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 the positive has continued to a 15% growth in the company and '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 EBITDA from mature fields and around $85 million or lower 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 ma 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 remaining almost stable, the breakdown changed significantly.

Lowering conventional activities, particularly in major fields and redirected to our coal 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 report a negative free cash flow of $760 million in '24.

Our improvement that during this year was driven by the strong performance of our shale oil assets and recovery of refining margin, as well as tighter caps compared to the previous year.

Nevertheless, '24 was affected by around $685 million negative impact, which consisted of $433 million from mature field net of proceed $166 million of import payment deferred from '23 $85 million from Patagonia Weather.

Now I will turn the call to Maxi.

Thank you, Horacio and hello, to everyone.

Turning to our annual and fourth quarter financial results, revenues reached $19.3 billion in 2024, marking an 11% annual increase, mainly driven by the rebounded fuel prices and a rise in oil exports.

These gains were partially offset by a contraction in fuel demand which was exceptionally high during the second half of 2023.

Due to reduced fuel prices coupled with more than 200% GAAP between the official and the parallel rate.

Adjusted EBITDA totaled $4.7 billion in 2024, reflecting a 15% annual increase, mainly boosted by higher revenues and hydrocarbon production.

However, as mentioned before, 2024 was affected by mature fields and Patagonia weather, while 2023 was impacted by a high level of fuel imports and a wide GAAP to import parities.

Net results improved substantially, posting a gain of $2.4 billion in 2024 compared to a loss of $1.3 billion in the previous year.

In 2023, the company recorded a non-cash impairment charge from fields.

While in 2024 there was a positive income tax accrual driven by lower future tax payables.

Investments in free cash flow was also explained in the previous slide, and as a result, our net debt rose to $7.4 billion a 9% increase from 2023, but we successfully reduced our net leverage ratio to 1.6 times fully aligned with the target.

Now let me briefly explain the quarter financial results. fourth quarter revenues were 10% down sequentially, mostly due to the lower seasonal sales of gas and international reference prices, partially offset by higher demand of fuels.

Fourth quarter adjusted EBITDA was 39% down sequentially, primarily explained by lower revenues set before, reduced value of inventories of fuel and oil in line with price and marginally a $60 million of extraordinary environmental provision in the downstream segment partially offset by shale oil expansion and recovery of Patagonia Conventional.

In the bottom line, in the fourth quarter, we reported a net loss of $284 million compared to a net gain of $1.5 billion in the third quarter, mainly attributable to a lower EBITDA impairment and a one-off cost related to mature fuels, as well as reduced deferred income tax benefits.

Fourth quarter investments remained stable compared to the previous quarter, while in terms of free cash flow we saw a positive turnaround, reaching $64 million.

Although EBITDA was not fully compensated by CapEx, we collected overdue natural gas receivables and proceeds from certain mature fields in addition to paying lower debt service.

Now moving on to the upstream performance, our total hydrocarbon production amounted to 536,000 barrels of oil equivalent per day in 2024, an increase of 4% versus 2023, mostly boosted by the remarkable growth in shale output, representing 53% of the total compared to 46% in 2023.

Also, let me mention that 22% of the total carbon production came from mature fields which amounted to 117,000 barrels of oil equivalent per day in 2024.

Crude oil production reached a 6% annual growth in 2024, reaching 257,000 barrels per day on the back of a solid 26% shale expansion, more than compensating the lower conventional output decline, significantly affected by reducing mature fields productivity and extreme weather in Patagonia during almost two months.

Beyond crude oil, natural gas production grew 3% in 2024, reaching 37.4 million cubic meters per day, mainly driven by the expansion of the Neuquina basin evacuation capacity through the Perito reno gas pipeline and the following commissioning of the compressor plants in the same pipeline during July.

Focusing on the fourth quarter, natural gas production remained essentially flat interannually while declining sequentially, mainly due to the off-peak season.

Let me mention that moving forward our focus for the long term is to grow natural gas exports on a large scale.

Therefore, we are not aiming to expand our share in the local market.

Lastly, NGS production in 2024 stood at the same level versus 2023, averaging 43,000 barrels of oil equivalent per day.

Fourth quarter, NGS production decreased by 29% sequentially, mainly due to the maintenance at mega facilities.

Moving to lifting costs, we recorded $15.6 per barrel of oil equivalent in 2024, remaining similar to 2023, as the lower productivity from mature fuels in Patagonia weather were partially offset by the ramp up in shale hydrocarbon production.

Excluding mature fields, our total lifting cost could have been below $9 per barrel of oil equivalent.

Very remarkable.

During 2024, the lifting cost in our core hub blocks recorded $4.2 per barrel of oil equivalent on a gross basis, reinforcing our four-by-four strategy to focus the entire company on its core production.

Fourth quarter total lifting cost illustrates the lower productivity of mature fields, increasing 7% sequentially, while core hub blocks on a gross basis posted 8% reduction thanks to its outstanding productivity and operational efficiencies achieved along 2024.

Regarding prices in the upstream segment, our crude oil prices rebounded to an average of $68 per barrel in 2024, 9% higher than 2023, while during the fourth quarter it was almost $66 per barrel, reflecting a sequential construction of 4% aligned to the downward trend in rent.

On the natural gas side, prices reached $3.7 per million BTU in 2024, similar to 2023 and in line with plant gas contracts, while the fourth quarter decreased by 30% sequentially, mostly due to the plant gas off peak season price.

Now walking through the performance of our sail activities, the steady focus on operational efficiencies allowed us to completely surpass the initial targets set for 2024 and last March.

In this sense, during 2024, we drilled 207 and completed 189 horizontal wells at our operated blocks.

Increasing 14% and 17% respectively versus 2023.

Regarding tight ends in accordance with our shale oil production targets for the year, we accelerated the activity, reaching 195 tied in horizontal wells at our operated blocks, representing a remarkable growth of 29% versus 2023.

Moreover, we continued setting new records in shale oil production, delivering 138,000 barrels per day in the fourth quarter, growing 10% sequentially and 26% inter-annually.

As a result, we achieved the annual production target of more than 120,000 barrels per day in (inaudible). 85% of total shale oil output for 2024 came from our core hub oil blocks Loma Campana, La Amarga Chica, Bandurria Sur and Aguada Chanar.

This outstanding performance along 2024 reaffirms our confidence on our shale production ramp up plans and the recent commitments on the upcoming midstream expansions of Oldelval and Vemos.

In terms of efficiencies within our unconventional operations, as Horacio anticipated at the beginning of the presentation, we fully surpassed the targets set in March 2024 for drilling and fracking.

Performance during the year averaging 309 meters per day of drilling in our core fields and 235 stages per set per month of fracking for the unconventional operations.

Zooming into the evolution of our hydrocarbon reserves, total proof reserves, according to the SEC criteria grew by 2% in 2024.

The increase was mainly on the back of a 13% increase in our Vaca Muerta shale reserves, which now represents 78% of our total P1 reserves partially offset by decline in conventional reserves.

Proof reserves addition totaled 250 million BOE driven by the progressive developments and expansions of our uncommercial operations, particularly in AatiChanoete, Loma La Lata Norte, and Lacalera blocks.

It was partially offset by high total hydrocarbon production, a downward revision of 17 million BOE, mainly due to the strategic change in drilling schedules.

As well as a 13 million BOE reduction, mostly due to lower enhanced hydrocarbon recovery and the divestment of conventional blocks El Trebol Escalante and

(inaudible).

It is worth noting that proof developed reserves regarded an annual expansion of 3% in 2024, mainly explained by development activities, new extensions and discoveries mentioned exceeding the annual production.

On the other hand, proved undeveloped reserves increased by 1%, mainly because of new additions offset the volumes developed in drilling of new wells.

Considering the shale hydrocarbon production ramp up in 2024.

And the development of our shale reserves, the reserve replacement ratio increased to 1.9 times with a 8.3 year of reserve slide.

Regarding total proof reserves, this ratio was 1.1 times with 5.6 years of reserves life.

Important also to clarify that excluding mature fuels, the total organic ratio for approved reserves improved to 1.5 times with 6.8 years of reserved lives.

Finally, since the SEC proof reserves do not encompass the huge potential of Vaca Muerta, let me tell you in advance that we are going to share our inventory of wealth in Vaca Muerta during our investor day, which will take place on April 11th in the New York Stock Exchange.

Moving on to our downstream segment during 2024, the company has been constantly updating food prices to convert to international parities and mitigate the impact of the currency devaluation while preserving the market share.

As a result, we were able to reduce the GAAP of import parity from 20% in 2023 to only 2% in 2024.

In line with price recovery and several operational efficiencies achieved during the year, refining and marketing EBITDA margins in 2024 was $13.7 per barrel, achieving an improvement of 24% compared to 2023.

However, fuel sales volumes decreased by 7% along 2024 to 13.9 million cubic meters, mainly because 2023 was affected by an exceptionally high levels of demand driven by low prices, especially in the second half of the year.

Despite this, demand started to slightly increase in the second half of 2024.

During the year, YPF maintained a strong fuel sales market share of 56%, fully in line with our historical levels and leadership in the market.

In terms of processing levels, it was 301,000 barrels per day in 2024, 2% higher than 2023, and surpassing our annual target.

This was mainly driven by the revamping of topping day at La Plata refinery in November 2023, combined with the completion of additional works within the new fuel specification projects framework.

In addition, We also expanded our oil pumping capacity from o Hernandez to Lujan de Cujo complex during 2024.

It is worth mentioning that the utilization rate remained around 90% in 2024.

Now let me provide a brief update on the progress achieved in the oil midstream expansions to unlock the evacuation capacity in the Neuquina basin.

By the end of 2024, Oldelval achieved a total transportation capacity of 330,000 barrels per day, and during this month, its capacity will jump to 540,000 barrels per day.

YPF holds 25% shipping state in Oldelval.

It is worth mentioning that the filling process will be gradual, aligning with the production ramp up and after successfully passing the testing period.

We plan to use this additional capacity to deliver our shale oil to La Plata refinery.

Achieving another major objective that the management team targeted for 2024.

Last December we formally announced the signing of the project documents and initial shipping commitments to start construction of Vemos together with the major oil producers of Vaca Muerta.

The project consists of a 440 kilometers oil export dedicated pipeline and a marine terminal.

Capable of receiving VLCCs to deliver Vaca Muerta shale oil to Asian markets.

YPF initially shipping capacity will be 120,000 barrels per day, roughly 27% of over 450,000 barrels per day committed capacity at COD targeted by 2027.

The design of the pipeline allows to further increase the capacity to roughly 700,000 barrels per day if needed.

The construction of the facilities already started last January and now follows with contractors' mobilization, earth moving works, and line pipe delivery.

In parallel, Demos is making progress on two key avenues.

First, the rigging application for governmental approval.

Second, the process to secure project finance, targeting 70% debt and 30% equity.

On this front, Vemos has just mandated five international banks for an initial syndicated loan of $1.7 billion.

I will now turn the call over to Federico to go through the financials.

Thank you, Max.

Switching to the financials, let's start with cash flow evolution.

In 2024, we posted a negative free cash flow of $760 million.

First of all, although our CapEx of 2024 was lower than 2023, it was not fully upset by the improvement in our adjusted the EBITDA.

It is important to highlight that this annual EBITDA includes two negative effects around $300 million from mature fields and about $85 million from severe climate in Patagonia.

From a cash flow consideration in 2024, we also recorded a negative $133 million from mature fields, which includes a negative $269 million of additions of assets held for sale, net of $136 million of divestment net proceeds.

Finally, when analyzing the company cash performance during 2024, we must consider that we paid $166 million of temporary deferred import liabilities from 2023, collected lower dividends from affiliates, and dispersed higher debt service.

In terms of financing, in Q4, we issued $2 bonds with a tenure of four years totaling $150 million at a yield ranging between 6.5% and 7%.

Also, we added $100 million of syndicated loan and around $60 million of short-term trade financing facilities.

After the closing of 2024 in January, we successfully issued a nine-year unsecured international bond for $1.1 billion at a yield of 8.5. The proceeds were mainly allocated to refinance the $757 billion of the 2025 notes and to acquire 54% of Sierra Chata block, one of the most prospective Vaca Muerta shale gas blocks.

Regarding the 2025 notes, we executed a cash tender offer prepaying $350 million and the make whole call options for the balance in February.

Additionally, last month we issued $2 local bonds, $140 million with a two-year tenure at six and one quarter and $60 million with a six-month tenure and 3.5.

With this last international bond issuance, we successfully completed our initial plan to derisk the company debt profile aligning it with our four-by-four plan.

The company now faces less than $1 billion of manageable and mostly local maturities during 2025, consisting of $400 million of short-term trade facilities with local and international banks, $281 million of mainly export back bonds, $147 million of local bond and $51 million with cash.

Having achieved the refinancing of our 2025 bond early this year and considering that most of our '26 maturities consist primarily of bank trade lines and issuance with the local capital markets.

As of today, we do not need to re-enter the international bond market until approaching the 2027 bond maturity.

On the other hand, following the upgrade in sovereign rating as well as country risk improvement and current perspectives, two global rating agencies have just raised YPF trade rating.

Moody's upgraded from CAA3 to CAA1 with a stable outlook, and S&P upgraded from CCC to B minus.

On the liquidity front, by the end of 2024, our cash and short-term impairments increased 9% versus previous year to $1.5 billion in line with our net debt increase, which amounted to $7.4 billion.

Despite the increase in net debt, higher adjusted EBITDA reduced the net leverage ratio from 1.7 to 1.6 times, in line with the target for the year.

Now I will return the call to Horacio for final remarks.

Thank you, Federico.

Before concluding our presentation and jump into the Q&A session, let me briefly announce that after an important knowledge, results and experience of the new management team during this first year, on April 11, we'll be holding our Investor Day at the New York Stock Exchange.

There, we will present our five-year plan and go through the main drivers of our 4x4 plan, focusing on our financial and production outlook, including certain sensitivity analysis, productivity metrics in Vaca Muerta and the progress of our main products, among other key aspects of our strategy.

This presentation will be led by YPF executive team, followed by Q&A session.

We are pleased to invite you to our Investor Day and look forward to your participation.

Finally, let me close today's presentation by saying we are confident that investors have appreciated the significant had deployed last year in almost all critical areas of the company, focusing primarily on profitability and growth.

We are very focused in making value and putting YPF as one of the best energy company.

This has (inaudible) at the beginning, we will continue driving our 4x4 plan during 2025 with more knowledge, confidence and conviction.

So with this, we conclude our presentation and open the floor for questions.

(Operator instructions)

Andres Cardona, Citigroup.

Good morning, everyone.

Horacio, looking forward to the strategy update.

My question, it's about the Vaca Muerta South (inaudible) in Vaca Muerta shale expansion and how we should expect the ramp-up?

How confident are you to add in the 180,000 barrels by the fourth quarter 2026 because when talking with some industry players, they doesn't seem to count with those volumes by then, they only expect to see the incremental cast by the third quarter 2027.

And yes, we want to understand why is the different perception.

And why are you so confident to deliver by the third quarter -- the fourth quarter '26?

Hi, can you hear me?

It was mute.

Sorry, I don't know who talked mute -- Now you hear me

--

Hello?

Okay.

Sorry.

I was on mute , I don't know why.

We are very confident that with Vemos, we are going to deliver in the fourth quarter '26 and also in the second half of '27.

We are very exciting.

We are -- all the partners are, we finished with, the tariff will be very low, comparing what we expected because we expect more than $0.5 million that was I don't know if I say being committed for everybody.

And what I can answer you for the fourth quarter, person you are talking about.

But I'm talking about the production of YPF's, we are going to deliver that.

I think that it will be efficiency that we have, production that we have, the team that we have in drafting, I think we can deliver more.

But I expect that, okay?

So I'm not totally -- I'm confident from YPF, we are going to deliver what we say.

Thank you.

Daniel Guardiola, BTG Pactual.

Hi, thank you, and good morning, Horacio, Federico and Max.

Thank you for your presentation.

I would like to touch on two topics, one on prices and the second one on the Sierra Chata acquisition.

On prices, I would like to know, guys, if you could please share with us on which price you're currently selling your crude?

And considering that recently, we saw a very significant bearish movement in oil prices.

I would like to know if -- or if you can share that at which levels of prices will you consider to start reducing your CapEx for 2025?

And in this environment, if you are considering to hedge a portion of your expected production for 2025?

So that's on prices.

And the second one is a very short question on Sierra Chata.

Can you please share with us guys what is the price that you pay for the acquisition of this stake of Exxon in this field?

And what is the expected ramp up in terms of production?

Okay because I'm very transparent by and we have a problem with the microphone, I will have people that have better than me because at the beginning and in the third

--

(inaudible) I couldn't hear you the last part of the question -- problem because the quality of the microphone.

Okay.

Horacio, can you share with us at which prices are you selling your crude right now?

Price of the crude oil?

Yes, at which prices are you selling your crude right now?

Your oil right now?

Yes, yes.

What we have is the, what the gasoline, our prices in the import parity product, I was in the other are not -- I will say two months ago.

And what I said to everybody that we are going to increase the price of gasoline when the price of oil goes up, and we are going to go down when the price goes down.

And why that?

Because we try to maintain the import parity of product.

What is the price that we sell on the export -- export parity?

What the price that we buy to export parity?

What's the price of the gasoline, import parity product.

I don't know if I answered that question.

So But I mean as a concern that oil prices are below $70 in terms of Brent -- you're selling right now your oil?

No, the, remember that the oil when you sell the oil, there is a time frame when you make an average of the of the price, okay?

I don't know if that the price of that the oil will be, if it will be more I would say three months we are going to sell index export parity and the price will go down $5 compared with last week.

The same will happen with the gasoline.

In the gasoline we have and strategy that like I know is playing here because our competition if I explain how we work, but we have a, like say procedure to put the prices to avoid, I would say short and spikes, I would say spikes up, spikes down.

A majority because Argentina was Argentina was not the country to in in general from now on it's like this and I'm sure that we will continue with this President that we are going to be open.

And so a free market and so in that way people are not accustomed to go up and down or as in the United States or Europe and so we prepare like a procedure to avoid spikes so people will not be nervous, but at the end for YPF it's the same.

Thank you.

And at which prices?

--

Yeah, sorry--

I just wanted to ask you, at which level of oil prices will you consider to start reducing your CapEx for 2025?

Great.

Okay.

Remember, we are going out almost I would say, not your question, but I think in two or three months from now, we are almost out of all the mature field and you can calculate your simple way of that we are refiling for daily, but also is what happened and the brand of for sure, we are going to have changes, okay, for sure.

We don't think that today is the date to do that.

But if we continue going down and it maintains for sure, we will see because remember what our CFO, always said, is capital -- strict capital allocation.

Okay.

And the last question was on Sierra Chata?

Yes.

Thank (multiple speakers) with Sierra Chata?

Yes.

Sierra Chata is very difficult to see there because remember that we buy a company.

But what I can tell you that we think that we make it a very good business because all I will say, all the undeveloped call you as you want, resources or on results because this is unconventional one, we buy $0.02 per million BTU.

What I think is a very good price.

Thank you.

Thank you, Horacio and guys on team.

Bruno Montanari, Morgan Stanley.

Hi, good morning, everyone.

Thanks for taking my questions.

The first question is about your free cash flow profile for 2025.

I know you will give more color on the Investor Day, but just focusing on next year, the company has been in a way, pointing to neutral cash flow in 2025.

So I wanted to confirm if that is still the plan if the base case is for neutral cash flow in 2025?

My second question is if you can provide us with an update on the LNG projects.

So when we could expect the final investment decisions for both the Golar project and then the YPF led project?

And my third question is about your lifting costs.

I assume that part of the cost decrease in the fourth quarter was because of the strong peso.

So wondering what we can expect now in the first quarter of the year in terms of lifting costs?

Thank you very much.

Okay.

Free cash flow, you talk on CapEx, we are going -- I'm going to present on April 11 Investor Day all that in very detail, you can ask a question when you went there.

We said the free cash flow that will be neutral.

It depends what you call neutral, and we think we are going to deliver that idea.

It will be minus, plus what is logical company, okay?

But I'm going to present -- we are going to present but personally, I'm going to present that on April.

Update of LNG, we are in a very good situation we will see there.

And also, I will explain in more detail on April 11 because at that moment, I think we will have a better and will be more sure that I have to deliver.

But I'm very positive with the Argentina project, very positive the Argentina and YPF itself, it will be delivered this project and for us, for the country and for the, okay?

The last is the cost, as you see, we are maintaining the cost because we work every day in efficiency.

Our goal every day that I come 6:45 is to deliver efficiency.

You can know in how is the guy obtain.

Every day, I go to him on I don't know how he asked me today because every day I go and we are working in efficiency line by line.

That's why we are very good on that.

And I don't know if there is another one.

No, that was it.

Thank you.

Tasso Vasconcellos, UBS.

Thanks for taking my questions here.

Let me start with one here on the M&A activity.

We are actually seeing some increased activity in Argentina.

Exxon recently sold their assets, you actually acquire Sierra Chata.

Recent news out indicate that both total and Equinor could eventually evaluate selling their assets as well.

We know that Ryzen is looking for a potential buyer for its refinery in Argentina and amid this context here, YPF is for sure a potential buyer for this asset, right?

No, not sure for interest so in two parts.

The first one, does any of these assets does actually interest right at all?

Or do you like one better than the others?

And maybe the second part of the question. if not the specific assets that I just mentioned here, any other ones that you would be interested in acquiring Argentina at the moment?

These are my questions.

Thank you.

Okay.

The first in the capital allocation rising from my here, I always hear that is not -- I know the person to answer that as to Ryzen, but I cannot answer that.

Even if you are interested to see if we are going to be -- want to buy a new refinery, the answer is no, okay?

We have so far, we have 58% of the market share, we had it.

I think we are very good in -- we are improving improving a lot in the refinery sector in YPF but it's not in our thinking that we are going to increase, not that.

The second part, when we say the Equinor and the other is seen.

So I have no official that even if some will say that in -- what is the -- remember the active management, if this is something that is in Macao, in very because now we are very selective, as we say, very core.

And the best price we are going to see.

But it's not the moment today that I tell you that, it depends also remember the active portfolio management and the strict capital allocation, we will see at the moment.

That is not everybody that sales there that sell very good assets at YPFs, one with possible active guys to take over that.

So I can answer exactly as always explain if something is very good.

We will see pricing, we will see all of that.

And we think that we make value for shareholders, you will see YPF in that process.

I don't know if I answer the question and you need more detail.

I have no idea.

Very clear.

I appreciate it.

Thank you.

Leonardo Marcondes, Bank of America.

Good afternoon, everyone.

I have two from my side, specifically on the Upstream segment.

So the first one, we know that YPF is the largest player in Vaca Muerta and that the company also owns many blocks in this same area, right?

So my question is, could you provide a color on what's the company's current well inventory?

I mean how many derisked wells you guys have?

And how many years would take for YPFs to drill all these wells sitting in the company's current capacity in wells per year?

My second question is with the conclusion of the divestments?

What should we expect from the development of Vaca Muerta per year, higher RRR.

And additionally, the company has improved a lot the development of Vaca Muerta, right, like the better frac fee then so on.

So what is the target there?

What else can be done to improve these metrics even further.

Thank you.

Okay, thank you for all the questions.

I try to follow.

Okay, remember I am a

(inaudible).

Okay, first, when you say I will, I would say summarize when you say well inventory.

I will explain that in much more detail in on April 11th, but I say roughly numbers.

Are you sitting or you're sitting?

(inaudible) up

--

Sorry, I can't hear -- yes.

Okay.

Okay.

We have in the order of I can say 50, I would say, growth of inventory, it's a growth inventory.

I will say that this -- in the order of 50% of all 50% of (inaudible), but this is a roughly number that I have in my mind, okay?

On living, we are going -- we will have there the full development of all YPF, and I will answer in detail at that moment, okay?

Now if you see, we are drilling in the order -- we drill in the order of 200 wells.

So the capacity of timing, I don't see it as a problem.

Sometimes it's a question of the belting but that there is -- and also the first year was the way that YPF has before the way of working with partners.

Now what we are working is to have every -- all the budget type with for with the partners and after we freed up with our 100% active blocks, sorry -- the more important reason why we are in the order of 200 wells is because we try to not to invest and have?

Our idea is to make properly and so now because of the capacity we have, incremental that we see for all the evacuation way is the number.

In, when the VEMOS will be finished and after this a question of on our CapEx at that moment, we will increase the activity oil for sure.

The other was the conclusion of divestment of or the other companies you say, for example, to have the idea, you are talking about Exxonmobil and the other?

(multiple speakers)

Okay.

Okay.

Okay.

Okay.

When -- it's okay.

Now I understood.

Okay.

For the -- when we reduce all the mature field and we did in the Q4 also, we reduced a lot of the investment much as we recur, and we put in Vaca Muerta.

The idea of this is to try to maximize Vaca Muerta and not going to more than we need to feed up all the capacity that we have today, okay?

And so for next year, we put for '25 (inaudible) in a $5 billion for all YPF is almost maintaining the investment that we had the year before, and we are very confident in incremental production in Vaca Muerta.

After (inaudible) ask me for the reserve replacement ratio.

The reserve repayment ratio is remember that we have to do and is a way to do that is 1.9. Why that?

Because it's a rule.

In fact, you have to have a rule but if you make physics -- the physics, I will explain that better in April 11 that these four locations.

So there, I can explain block-by-block how many locations that we have and you can make a very good --you have a good feeling of what we have in hand and the possibility of YPF to increase.

And this wonderful company can increase in the next year.

That's very clear.

Thank you.

Vicente Falanga, Bradesco.

I had two questions basically.

First one on the fourth quarter results.

To what extent did the feeling of the older -- expansion affect the fourth quarter results.

Some of your partners in Vaca Muerta highlighted that because of the fill-up of (inaudible) production did not convert into revenues.

I wanted to understand if that's the case for YPF.

And do you have an estimate of how much?

The second question -- with the asset sales for the mature fields, hopefully being concluded by the middle of this year, where can we expect the lifting costs to fall to immediately?

Okay. (inaudible) result, if there is a delay or not, it doesn't change a lot today for YPF, why?

Because I don't know if we were very clear with one day that we explained.

How we see the evacuation figure or -- map for us.

Now we export for Chile will depend for Chile, okay?

And the deal for us is internal consumption, okay?

So we -- they are not affected a lot in our case, okay?

It could affect, I don't know who company because I'm not looking all the company all day looking only.

So it's not that -- yes, it could be affect if we delay the VEMOS (inaudible), okay?

That is the answer there.

With the mature field, hopefully, I'm sure that also hopefully mature, I'm sure, okay, that we are going to be very out there go to a very low number, we have nine more because it's nine, nine because also we have two more mature fields the base that you can have in one we have only two.

But if you look at the half quarter that we are in the range of four.

So we are very resilient from the future.

And that was the initial idea when we come to YPF, is to reduce the rollout of the mature field because it was not for YPF that was not a logical way of working for this size of the company, renew the lifting costs out as we are doing, and we're resilient for very low prices.

And so when the price goes up, we make a lot of money and that is the way that we see.

Great, thank you.

That's clear.

Thank you very much.

Guilherme Martins, Goldman Sachs.

I have two quick ones from my side here.

The first one is on your guidance for share or production, right?

Please correct me if I'm wrong, what you said you are currently running roughly 150,000 barrels of oil in shale, right?

While your guidance for 2025 is something above 160.

So it would seem as quite conservative given your current run rate.

I know you mentioned you provide further details on your Investor Day on April, but as of today, do you see room for maybe an upward revision target?

And my second question is on capital allocation.

If you could please share your thoughts on what you think global E&Ps are seeking to divest from Argentina and Vaca Muerta?

And what are the competitive advantages do you believe YPF has over those players?

Okay.

Your answers like me okay?

I mentioned, okay, real and very anxious.

In April 11, 40 days from now, this is nothing.

I will explain there.

But I have to -- I would like to answer.

So today, not today, but yesterday or the day before yesterday, the production of Vaca Muerta was 156,000 per day.

So if you see the guidance '25, you can realize that we are investing $3 billion there.

I'm very confident that we are going to pass the (inaudible), okay?

That is the first question.

Second question, capital allocation in this divestment in Vaca Muerta, I explained that before, if the opportunities come and we see that some are better than we have.

We are going to do what we call active portfolio manner.

And so what we are doing to do is to take this and maybe in the full development if we see that we are not making value for the shareholders, we will sell the others, okay?

But that is a word, okay?

And I think if that would I have to work and what you want from me to do, Okay?

Okay, thank you.

Sorry to those that are still in queue.

We are out of time for questions today.

I would like to turn the call back over to Horacio Marin for any closing remarks.

Okay.

Thank you very much for all the questions.

Thank you very much for your help, and we will see you in April 11, where you can have family of a question, we are going to be right there.

And so we can be up to midnight, if you want, okay?

Thank you very much.

This concludes today's conference call.

Thank you for your participation.

You may now disconnect.