YPF SA (YPF) 2025 Q3 法說會逐字稿

Good morning, ladies and gentlemen. This is Margarita Chun YPF IR Manager. Thank you for joining us today in our Third Quarter 2025 Earnings Call. Today's presentation will be conducted by our Chairman and CEO, Mr. Horacio Marin; our Finance VP, Mr. Pedro Kearney, and our Strategy, New Businesses and Controlling VP, Mr. Maximiliano Westen.

During the presentation, we will go through the main aspects and events that shape the quarter results. And then we will open the floor for a Q&A session together with our management team.

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.

I will now turn the call over to Horacio. Please go ahead.

Thank you, Margarita, and good morning, everyone. Let me start by highlighting that this was another quarter in which we continued to deliver solid operational performance. Despite the contraction in international prices, we maintained strong profitability levels compared to last year, giving further operating efficiency and consolidating the tremendous progress that has been achieved in our shale operations.

Revenues amounted to $4.6 billion, 12% below the previous year, in line with the 13% year-on-year decline in the Brent price in addition to other offsetting effects. Adjusted EBITDA reached approximately $1.4 billion, representing a sequential increase of more than 20%, while remaining flat versus the previous year. The sequential improvement reflects higher shale production, coupled with the successful strategy of reducing the exposure to conventional mature fields. The year-on-year comparison shows YPF ability to maintain its profitability despite the contraction in international prices, driven by an improved production mix with a higher proportion of shale and continuous improvement in operational performance. That exit strategy led us to an impressive lifting cost reduction of 28% quarter-over-quarter and 45% year-over-year.

During the third quarter, our shale oil production increased by 35% internally, reaching 170,000 barrels per day. More recently, in October, [eliminate] figures indicate shale oil production expanded by another 12% over the (inaudible) of the third quarter totaling around 190,000 barrels per day. This production level is fully aligned with our annual target of shale oil production of roughly [165,000] barrels per day. Moreover, it will enable us to slightly exceed the December 2025 production target of 190,000 barrels per day. Furthermore, the higher shale oil output that generate a remarkable shift in our production mix has allowed us to improve our EBITDA by around $1.3 billion on an annual basis versus 2 years ago.

CapEx activity continue to refocus on developing our unconventional resources, representing 70% of our total quarterly investment. At the same time, we maintain our focus on achieving further operational efficiency in our sale operation. In that sense, let me highlight that during the quarter, completed the drilling of the longest well ever in Vaca Muerta Marta, exceeding [8,] 200 meters with horizontal length of nearly 5,000 meters at our Loma Campana block. Moreover, during September, in [Margacica], we completed the drilling of its 4,000 meter horizontal well in just 15 days, setting the record as the fastest well ever drill in Vaca Muerta. Lastly, in early October, we drilled one of the faster well in the [Real Grande] block locating the south half of Vaca Muerta.

This well has a lateral length of more than 3,000 meter and was completed in just 11 days.

Moving on to our downstream segment during the third quarter, we achieved strong operational performance reaching the highest processing level since 2009 at 326,000 barrels per day. This processing level was 9% higher than last year, represented a solid utilization rate of 97%. In that sense, we are pleased to announce the La Plata refinery, who was named refinery of the year in Latin America by the (inaudible) Refinery Association. Additionally, La Plata refinery ranked in the first quartile across several in Solomon Global Refinery benchmarking based on 2024 results. This recognition represent the results of the successful implementation of the third pillar of our 4x4 plan, our efficiency program based on operational excellence and technological innovation.

On the financial side, free cash flow was negative as expected for a total amount of $759 million. This negative free cash flow position is mostly trained by extraordinary effects related to the recent acquisition of the shale assets from the total of (inaudible) for $523 million and the impact of the [Materiel] exit strategy. As a result, net debt increased to $9.6 billion pushing our net leverage ratio up to 2.1x. However, excluding the acquisition of total assets and one-off costs related to mature fields, the negative free cash flow pro forma would have been $172 million with a net leverage ratio pro forma at 1.9x. Additionally, a few days ago, we have successfully retapped our [231] international bond issued $500 at 8.25% yield, the lowest invest rate for the international bond of the last years, replacing and improving our [Abetas] life and financing costs.

On a final note, let me briefly comment on the recent announcement regarding Argentina LNG project. In early October, within the Stage 3 of the project, we signed a technical FID with [89] for a full [internet] energy project of 12 million tons per year [expandable] to 18. Moreover, recently last week, we signed a preliminary framework agreement with a new partner, the Arab company (inaudible). In addition, we continue working with the Phase 1 and 2. All in all, the project continued to demonstrate the interest of international players in long term investment in Vaca Muerta, which is essentially for creating a solid [importionship] structure for the development and financing of the project.

In summary, during the third quarter, we continue progressing to achieve the ambitious targets for the year, delivering solid financial and (inaudible) results where we continue to strength and prepare (inaudible) for new and even more challenging role in the future.

I now turn to Max to go through some details of our operating and financial results for the quarter.

Thank you, Horacio, and good morning to you all. Let me begin by expanding on Horacio's comment about the evolution of our oil and gas production. During the quarter, total hydrocarbon production averaged 523,000 barrels of oil equivalent per day, declining 4% on a sequential basis and 6% on a year-over-year basis as a result of the divestment program of mature conventional fields, partially offset by the expansion of our shale production that accounted for approximately 70% of the total output increasing its portion once again and as expected vis-a-vis the previous quarter.

Oil production reached 240,000 barrels per day, 3% below the previous quarter and 6% down against last year. Nevertheless, it is worth highlighting that shale oil production recorded an impressive growth of 35% against last year and 17% versus the previous quarter, almost neutralizing the conventional production decline driven by the successful exit strategy of our mature conventional fields that accounted to only 14,000 barrels per day in the quarter. Beyond crude, natural gas production totaled 38.4 million cubic meters per day, down 3% on a sequential basis. This decline reflects an 18% contraction in conventional production for mature fields, partially mitigated by an expansion of 5% in shale gas production.

Regarding prices within Upstream segment, crude oil realization price averaged $60 per barrel in the third quarter, essentially flat on a sequential basis and contracting 12% year-over-year, aligned with the variations of Brent. Natural gas prices increased by 6% quarter-over-quarter to an average of $4.3 per MBtu, supported by the seasonal factor included in the plan gas program between the months of May and September.

Now let me dive into the evolution of our shale oil output. YPS reinforces its leading position in the development of Vaca Muerta oil accounting for roughly 1/3 of the country's share. In the third quarter, we continued to deliver a solid performance, driven not only from our key core hub assets, but also from contributions from the North and South Hub blocks. In the third quarter of 2025 shale oil production delivered an impressive growth rate of 55% when compared to 2023 levels. Based on preliminary figures, October production reached an oil time high of 190,000 barrels per day, representing a strong increase of 70% vis-a-vis November 2023 and ahead of schedule.

As Horacio previously mentioned, based on the current production levels, we expect to comply with the average production target announced for the full year 2025 of around 165,000 barrels of oil per day, and we expect to slightly exceed the exit rate of 190,000 barrels of oil per day as of December 2025.

In the third quarter, we continued with the strategy of developing Vaca Muerta beyond our core hub blocks. In this context, let me point out the success of La Angostura Sur, our flagship south hub block 100% owned by YPF under an unconventional concession valued through 2059 underscoring the long-term potential of the south of Vaca Muerta for YPF. Over the past 12 months, shale oil output from this block has jumped from only 2,000 barrels of oil per day in October of last year to more than 35,000 barrels per day in October this year, representing in financial terms as sealed with a pro forma annual EBITDA of more than $500 million. The results achieved so far are impressive. Moreover, the block expects to reach a production plateau of over 80,000 barrels of oil per day in upcoming years, with a very competitive breakeven price below the $40 demonstrating resilience amid evolving global dynamics.

Finally, well drilled in the block during the initial stage of development has demonstrated promising productivity levels that underscore the long-term potential, recording an estimated ultimate recovery of around 1.3 million BOE per well, including oil and natural gas. Furthermore, the high potential is also driven by a total inventory of roughly 350 wells, of which less than 15% has been developed.

Regarding our upstream cost structure, let me point out that the combined strategy of divesting mature commercial fields and growing our shale business has enabled as to generate significant savings in our average lifting cost of more than 40% over the last 2 years, moving from $16 per BOE in the third quarter of 2023 to $9 per BOE in the third quarter this year. This remarkable cost improvement was achieved due to the significant shift in our production mix where unconventional production increased from about 45% of the total output in the third quarter of 2023 to nearly 70% in the third quarter of 2025 while conventional production portion fell from around 55% to 30% in the same period. As a result, since shale listing costs remained at a very competitive range of $4 to $5 per BOE, YPF was able to improve its cost structure and therefore, its unannualized savings would amount to approximately $1.3 billion.

YPF will continue and deepen this strategy, supported by the completion of the sale and reversal of mature conventional blocks by the end of 2025. The [Andes One] project and the sale of the rest of the performing conventional fields and these 2 projects, which initial results are expected by the end of this year. Consequently, YPF will become 100% pure shale player with an efficient listing cost structure of around $5 per BOE in the near future.

Now let me walk you through the performance of our shale activities. In the third quarter, we drilled 54 horizontal oil wells on a gross basis, primarily in operated blocks with a net working interest of 58% bringing the year-to-date to 159 horizontal oil wells on a gross basis. This keeps us on track to achieve our full year target of 205 wells in 2025.

In terms of completion and tie-in of oil wells, during the quarter, we recorded modest level of activity compared to last year. But year-to-date, we continued growing. In the third quarter, we completed 63 horizontal oil wells and tied in 64 on a gross basis. However, in the first 9-month period of this year, we completed 186 wells, and tied in 187 wells, growing around 20% compared to the same period of last year.

In terms of efficiencies within our shale operations, during the third quarter, we continued setting new records on drilling and fracking performance. We averaged 337 meters per day in drilling in our core hub while we recorded 279 stages per set per month on fracking in unconventional blocks, increasing by 7% and 16%, respectively, when compared to the same quarter of 2024. As we have been flagging in previous calls, this constant improvement in operational metrics is the result of the implementation of our Real-Time Intelligence Center and the joint efforts of our technical team and key contractors that work relentlessly to introduce further efficiencies to our operations.

Finally, regarding the CapEx composition within the Upstream business, it is worth noting that how YPF managed to significantly transform the portfolio by reallocating investments from conventional to shale activity in the last 2 years. In this regard, in 2023 investments in conventional business represented 35% of the total Upstream portfolio, while in the last 12 months of September 2025 CapEx in conventional assets only represented 5%. Furthermore, within the shale portfolio, investments in facilities represented a significant portion of total CapEx over the last 2 years, which is expected to remain steady in 2026 and begin to gradually decline starting in 2027.

Switching to our Midstream and Downstream segment, the third quarter processing levels averaged 326,000 barrels per day, a record high since 2009 with our refinery utilization at 97%, representing an increase of 9% and 8% versus the third quarter 2024 and the second quarter 2025, respectively. This remarkable success is mainly driven by the record processing levels of 208,000 barrels per day achieved in September at La Plata refinery combined with record production of mill distillates reducing to almost 0 full imports. Domestic sales of diesel and gasoline remained strong in the quarter, with dispatch volumes rising 3% quarter-on-quarter and 6% year-over-year, reflecting higher demand across all commercial segments, retail, agribusiness and industrial. Moreover, we managed to modestly expand our leading market share to 57%, which increases up to 60%, considering gasoline and diesel produced by YPF and dispatched at third-party gas stations.

Furthermore, in the third quarter, YPF achieved an improvement in the premium mix in both gasoline and decent shale. In terms of prices, during the third quarter, local fuel prices remain broadly aligned with international parties at dropping against the previous quarter based on a very volatile environment. More recently, October preliminary figures show a narrowing of the gap between local fuel prices and improprieties while recovering on a healthy midstream and downstream adjusted EBITDA margins of nearly $70 per barrel.

Now let me briefly comment on the progress of the quarter regarding the efficiency program for the Upstream and Downstream businesses. Thanks to the supervision of our Upstream Real-Time Intelligence Center, we managed to drill 100% autonomously more than 30 horizontal wells in real time using AI complemented with traditional techniques. While in fracking, we became the first company worldwide to perform 100% autonomous fracture remotely from our Real-Time Intelligence Center using predictive algorithms. Additionally, we have successfully executed 24 hours of continuous pumping in our fracking operation during 63 hours, fully supervised by our Upstream Real-Time Intelligence Center.

Regarding the Downstream segment, as Horacio already noted at the beginning of the call, our La Plata refinery was awarded as the Refinery of the Year in Latin America. Also, this refinery achieved the first quarter in several KPIs of [Solomon's] Benchmarking, such as net cash margin, return of investment operational availability and personnel efficiencies categories. Finally, the record high processing levels in our refineries have started generating a surplus of gasoline and meet this delays, allowing YPS to export refined products to neighboring countries and replace imports of YPF and other local refineries. For instance, in the third quarter 2025, YPF exported around 30,000 cubic meters of jet and gasoline to Uruguay. And during the first 9 months of the year, we replaced more than 230,000 cubic meters of gasoline and middle distillates imports.

Now let me share further details regarding the Argentina LNG project. As briefly anticipated by Russia regarding the Phase 3 of the project in early October, we signed a technical FID with [E&] I for a fully integrated LNG project of 12 MTPA expandable to 18 MTPA. And more recently, during the last weeks [Auditex] conference in Abu Dhabi, we signed a preliminary framework agreement with a new partner, the Arab company, [ADNOC], that formally announced their intention to join the Argentina LNG project.

Moreover, during the quarter, we continued working on the Phase 1 and 2. The project considers the development, design, construction and operation of a fully integrated natural gas, LNG plus natural gas liquids, NGL projects based on wet gas upstream fields located in the Vaca Muerta reservoir. The infrastructure involved in the project includes our liquefaction capacity of 12 MTPA expandable to 18 MTPA through 2 or 3 floating LNG vessels of 6 Mtpa of capacity each a dedicated 520 kilometers gas pipeline, a dedicated 650 kilometers [Y-grade] pipeline for NGLs and onshore facilities, including fractionation, storage and port facilities. The CapEx for the entire project is estimated at around $20 billion with a potential expansion to $25 billion in both cases, including the financial costs.

Leverage of that project is expected to be around 70% on the total project cost in addition to the upstream investments required to accelerate shale natural grass production. Consistent with [President] LNG transactions the project is intended to be financed through nonrecourse financing with multiple sources of funding, including ECAs, development banks and commercial banks as potential anchors of the financial structure. The FID is expected by the first half of next year, while the commercial operations for the first floating LNG is estimated by 2030 and following ones from 2031 and 2032.

In summary, Vaca Muerta has the scale, the quality and cost competitiveness to position Argentina as leading global LNG exporter and Argentina's LNG project will unlock Vaca Muerta's full potential, enabling exporting its unconventional shale gas production to the world.

Now I will turn the call over to Pedro.

Thank you, Max, and good morning, everyone. On the financial front, the third quarter with a negative free cash flow position as expected, that amounted to $759 million, mainly explained by the recent acquisition of the shale assets like [Coronado] and (inaudible) blocks (inaudible) closed at a purchase price of $523 million by the end of September.

Moreover, despite the third quarter adjusted EBITDA surprise CapEx deployment and regular interest payments, we recorded negative working capital associated with the discontinued operations in our material fields, income tax payments from our subsidiaries and longer collection days from natural gas clients and plan gas program that started to normalize during October. It is worth noting that excluding the one-off items related to M&A transactions and the negative impact of the material fields exit strategy our negative free cash flow will have amounted to $172 million in an environment of lower international prices. Finally, on the liquidity front, our cash and short-term investments totaled at $1 billion by the end of September, remaining essentially flat vis-a-vis the previous quarter.

In terms of financing, during the third quarter, we continue progressing on our financial program by securing local loans obtained from (inaudible) banks and by tapping the local capital market at very attractive financing costs. In that sense, during the third quarter, we issued $2 net bonds for a total amount of $300 million at an interest rate of 7.5% and a tenor of 2.5 years. In addition, we issued $225 million from dollar capital bonds with a 5-year standard annual interest rate of 8.5% tendered in the international market to local investors that combined with a $300 million international bridge [loan] allow us to find the recent acquisition of shale assets.

More recently, during October, we issued $100 million net bond with a 15-month tenure at an interest rate of 6%. Considering this last bond issuance, we issued new local bonds for a total amount of $625 million with an average tenure of 3 years and an interest rate of 7.65%. Moreover, aiming to reduce the cost of carry and taking a proactive approach towards that investors we scheduled for this month, the prepayment of [$120] million of our secured notes due to [2026], pay in advance the last amortization which matures next year and thereby, we reinforce the bond ahead of scale.

Finally, let me share 2 very important news regarding YPF's financial strategy. First, during October, we reopened the syndicate corporate cross-border loan market. We signed an export back loan for $700 million with 10 international banks with a 3-year tenure and a 6-month availability period as a prefunding strategy for the financing of our 2026 maturities. This transaction was possible after several months of work, showcasing YPF's ability to access cross-border timing. Moreover, the loan was oversubscribed and attractive participation from new banks from Central America and Asia, demonstrating the market support and confidence in YPF.

Finally, as Horacio previously mentioned, 2 weeks ago, we successfully returned to the international capital market. After 2 days of [Russian] meetings with more than 4 international investors, we led the recap of our 2031 international bonds of $500 million at a yield of [8.25%]. Demand for this reopening exceed all expectations with international and local investors oversubscribing orders 3 times reaching a peak order book demand of $1.5 billion. The proceeds will be used to fully repay the bridge loan for the acquisition of total [Astral] shale assets and to finance YPF investment plan. This issuance represented YPF (inaudible) new issue yields on our international bond issuance in the last 8 years and improve the maturity profile of itself, extending its average life.

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

(Operator Instructions) Alejandro Demichelis, Jefferies.

Yes. Congratulations on the quarter. Production has been very strong, particularly on the shale oil side of things. Could you give us some indication of how you're seeing production growing into 2026, 2027? That's the first question.

And then Horacio, you mentioned all of the improvements that we are doing on the refining side and so on. We have seen you recently taken full control of the revenue asset. So could you please give us some indication of how you see that asset developing on the rest of the refining portfolio?

Okay. Thank you very much for the question. Regarding the production, we see -- you can expect the same that we talk in line what we see in New York this year but average for next year in the order of 215 and ['27] 290. We can give you a better number in the next call. But we think that we are going -- we are in line with all the programs, okay?

Regarding the refining side, the [Refinor] is what was important for the (inaudible) right. The (inaudible) was very, very important for YPF because they give us a good logistic advertise comparing with our, I would say, our competitors. And that's why that we decided to take that step because it was a difficult situation with the partner in that matter. For the gas stations, there is no difference because we were supplying those gas stations. We are going to take the best one with the YPF brand and we maintain the other (inaudible) as is today.

And on the other side, in the refinery, which is in [Campo Doran], is closed. But our idea is to make value for all the shareholders by doing something of the sort, what we say in [Santa Ferio], okay? So we are working on -- in that direction.

Leonardo Marcondes, Bank of America.

Hi, everyone. I have 2 from my side. My first question is regarding capital allocation and M&A. We have seen YPF quite active on the M&A one, right? In this regard, what should we expect from the company going forward?

I mean, does the company continue pursuing new M&A opportunities? Or is it time to focus on the development of the assets within the portfolio?

My second question is regarding the divestments and capitalization as well. So could you share your plans for Metrogas and also YPS agro? And when could we expect to hear more news on these matters? And lastly, my third question is regarding the LNG projects. I mean how do you expect to fund this project?

And if we should expect any sort of project finance involved there?

Okay. Thank you very much for the question. For the first one, is the pillar 2 our YPF 4x4, what is active portfolio management, that means buy and sell. It depends where you can make more value for shareholders. We were active out with the butcher field and we see there was a big opportunity this year for the, I would say, core assets in Vaca Muerta.

And that's why we decided to buy the total asset of Vaca Muerta.

What you are going to expect? I don't see that there will be a lot of changes in our strategy, but we don't see that we will be active next year for (inaudible) acquisition in Vaca Muerta not in the others, okay? So that is what is our thought.

Regarding Metrogas, we are in the process of having the extension, the 20-year extension of the company, a contract, more than contracts. They tell me concession here because remember the on, I know you don't remember all the words as there are people here that they say you are wrong is a concession, okay? So is a concession. And our idea there is that after that, we start with the bank, and we are going to (inaudible) as soon as possible, okay? And for the law, we have to sell because of the -- I don't know how the -- I ask [Herman] that this is a lawyer, no, okay, the (inaudible) for the vertical integration that we have the company, we have to sell before the plant gas is out.

And so we are going to sell that.

And YPF Agro is not necessary capital allocation. What is there is that we are -- in YPF is a wonderful commercial channel that was built by YPF in a say, 20 years ago or so and it's extremely successful. That's why there is the other company that are refinery also, they call with the name (inaudible) so they copy the name of YPF. Our idea is because we have now the knowledge of selling social on the other things, it to have a strategic partner that can make more value for us and for all the shareholders and to have a mixed company where we put the CFO inside and we will have 50% and 50%, okay? That is the idea, and it will be very close now.

There is on the street right now, okay? And that is the second question that you asked.

Regarding the LNG, you're right, it's a (inaudible) finance that we are going to do with our partners. You're right.

[Luisa Velan], Morgan Stanley.

First one on my end is, could you give us more color on what drove the working capital losses this quarter? And what should we expect in terms of working capital gains a lot is in the coming quarters and how this should contribute to free cash flow generation into 4Q?

Second one is if you could give us more color on what should (inaudible) a listing costs? Was it just higher shale output? Or are there any other factors which explain this decline? And how this -- how should we should expect this into 4Q as well?

And if I may, a third one, if we should expect an acceleration of 4Q '25 CapEx? And how should your CapEx stand in versus the guidance?

With the first question after I will pass to Pedro. So they can explain in more detail than me. I can tell you the (inaudible), but I will pass to Pedro. For the second one in the lifting cost. Remember that we are going out of mature fields and reducing the production from there, but you are increasing a lot of the production, as you see in the presentation, in the Vaca Muerta field.

So there is several reasons why we use first. We have a clear in Pillar 3 that we have to make efficiency every day in our life.

The second thing is when you increase a lot the production, you reduce the fixed cost. So you have to expect that we are going to maintain our reviews. But I think to maintain is a good number. But we have -- I think we are in a very low lifting costs, okay? 4 is very low which more as there any other factor we are doing this decline I expected (inaudible).

I think the answer that.

And in the fourth quarter, (inaudible) the CapEx, no, we think that we are going to end up in the year with a little less CapEx that we say at the beginning, of the year. And with the production, if you see the -- you don't see that, but I see the report -- the new report we are -- now we are in more than 190 -- yesterday was more than [284]. We have some value who are 199.94. So I start discussing with the guy, why it's not to 200, but it doesn't matter. And so we are closed, and we are in better shape than we thought at the beginning of the year.

So we are focusing in looking at the results and looking and the best place to drill. That's why we are expecting those results.

And with the CapEx, as I say, I pass to Pedro so they can explain the -- about the working capital.

Thank you very much for your question. So as you noted, during the third quarter, we recorded a negative working capital by about $360 million and that was driven by multiple regions. The first, the seasonality of natural gas sales that was -- that were accrued in the third quarter and are expected to be collected in the fourth quarter. That's approximately $100 million.

Second, we recorded in the third quarter, longer collection days from the natural gas clients and from the Plan Gas program. That started to normalize during October and November that's approximately $50 million.

Third, in the third quarter, we recorded a positive operation in the Downstream business for about $50 million. That's the result of higher oil purchases to third parties to restock inventories given the inventory drawdown that we recorded in the second quarter. Then we record a particular lag in the OpEx and the CapEx from the mature fields that were out from YPF financial statements since the end of June, and those payments were faced during the third quarter.

And finally, this negative free cash flow includes a decrease in the mark-to-market position of our selling bonds, which increased unchanged for (inaudible) during October and November.

Daniel Guardiola, BTG.

Good morning, and thank you, guys, for taking my questions. I have a couple of questions here. The first one is on costs. And I would like to know if you can share with us how do you envision the trajectory of your lifting and the asset cost for 2026 and eventually, if possible and onwards, it will be great, especially considering the asset sale did of conventional assets and the potential renegotiation of contracts, which with some of the service companies.

My second question is on leverage. Given the fact we saw an increase in leverage during this Q to 2.1x. And I would like to know if you can share with us what is the maximum leverage at which the company feels comfortable operating at. And in that sense, given that leverage has been going up in the last couple of quarters, I would like to know if you guys have ever considered to hedge your exposure to oil prices to offset any potential volatility in oil prices. So those will be my 2 questions.

Okay. With the listing and the drilling and completion costs, I can give you more details in the next quarter. We are working very hard to reducing the unit cost with all the service company, and we are in negotiation during the week, okay? So I cannot tell you exactly, but I think we are going to reduce the unit cost in very important because Argentina is another country. So that's why you are going to work on that.

In the listing, I think I answered that, okay? You have the (inaudible) that we are going to be in that -- in that region, okay? That what we say.

Regarding in our, you say, our debt. I think you have to pay into account that last year, we bought 2 assets, okay? That's why the ratio goes up. We don't go -- we are not going to increase. It's not our goal that we think that we are in the maximum that we want to be.

And during '26, we are going to see a reduction. But taking into account what is we bought to good asset in Argentina. The (inaudible) gas -- I don't -- don't say the best in oil, but one of the core, that is very important. That's why we -- we thought that it was important to buy those assets and make more value in the future, in the near future for all the shareholders.

Guilherme Martins, Goldman Sachs.

(inaudible), is a strong ramp-up of shale operations being seen in the second half of the year. I have 2 quick questions here. My first one is on downstream. I understand you guys were not able to price prices in line with international parity in 2Q, right? I would just like to get a little bit more color on what happened in the competitive environment.

You mentioned a volatile dynamics, but any additional color would be grateful.

And my second question, if you guys could please provide an update on the ongoing divestment of Metro fields. When we should see next divestments being concluded? When we should see production continue to decline following the exit of those assets? And whether we should see additional cash outflow from the exit of those legacy assets? Thank you.

Sorry. Okay. Talking about prices, we have a policy, I cannot open totally open because it's not we are going to say to our competitor but we are moving average because there was -- in the last this quarter, there was a lot of volatility in prices. And remember that we have the exchange rate, the oil price, the bi-fuels and taxes. And so in our country and the consumers met, we are not accustomed to have changes on prices every day, okay?

Big changes. So we have been moving a gas.

And I don't know if you remember that we -- we build a new Real-Time (inaudible) Center in the commercial side that is unique. I don't know if you're making -- I don't know, (inaudible), okay? We have -- they are everything that you can imagine, will use AI and a lot of things. And from there, we are working with the new policy of prices that is micro pricing. And we are working and always trying to maintain our policy in , but the last quarter was the big volatility in -- also in Argentina, you know that there was a lot of volatility.

And that's why it was very difficult to go up because sometimes we're up, sometimes we're down. But now we are in a good shape.

And the second one was about the -- I think (inaudible) all that stuff. Today and in the afternoon, we are going to sign (inaudible) was the last one. And we have only one area that is in [Rio Negro] that we are going to sign very quickly. But after that, we had out of all, (inaudible) we call and (inaudible) okay? Because it was important for the value of shareholders.

But we understood, we are in the process of negotiating now to go out from conventional. Those convention are areas that made value for all but it's very important because we have the determination to go to see -- to be unconventional integrated and commercial company. So that is our goal, and we are going to negotiate in the next month to be out more than we can last of the asset and to be next year or if we can to be totally unconventional company.

Tasso Vasconcellos, UBS.

I have 2 here on my side. First one, Horacio, can you remind us what legislations, I mean, either new legislations or adjustments on existing ones that YPF still relies on to move forward with and projects. As far as I remember here, there wasn't many new regulations that the oil and gas industry as a whole depend on, but there are some specific timing on some projects to be included under the region. So not sure if there is -- actually not check there is any kind of discussion on the 8% export taxes for the industry. So I think it would be great to have a broader recap on this political or regulation landscape.

And the second question, actually a follow-up on the domestic fuel prices. You just mentioned about what did you notice in terms of upside or downside potation since the established a more dynamic pricing model, the real-time center and so on? And what can you tell us about the recent news saying that some politicians in Argentina wanted to create a law which you need to give a 72-hour notice advanced before adjusting fuel prices? Those are my 2 questions here.

Okay. Thank you for the question. I don't know (inaudible) thank you for the question. But the beyond the really is if you are referring to the export duty for conventional, there is on the new. I know exactly what you say in the (inaudible) because remember, we are YPF, we are a private company.

and we are not in the, I would say, regulation side. So really, I don't know. Unconventional, remember that it's not our -- now is not our core, okay? But I read in the news the sent you that they are negotiation on that, but I have no idea what will happen.

Regarding (inaudible), for sure the (inaudible) there will be apply for LNG. And if supply for infrastructure for LNG. And for LNG, we expect it to be in (inaudible)

The second one that you say that this is -- yes, I didn't use paper the same to you, but that is regulation. I have to answer the same. I'm not working regulation at all.

There are no further questions at this time. I'll now turn the call back to YPF management team for closing remarks.

Okay. Thank you very much for your attention, for your questions, and you are always very polite with us. So I would like to say thank you for that. You have to (inaudible) that is a company that will change a lot the way of management, the way of working every day. I'm very proud for all the work that all the employees is doing now on the energy that we are putting.

And so you have to expect '26, a very keen year of the results. The problem of this year, and I imagine for you is very difficult to see because it is dirty with mature fees, with taxes, with deferred taxes that only account, I can understand and when they explain the are confused. So it's difficult to understand what you are saying.

And so you have to spend '26 (inaudible), and you will see there how we are making the value for our shareholders that you can see in this quarter. I would like to for you because there are some people that are confused with say the price increase, and the price increase of where you're making value because we are reducing the conventionals. And if you annualize the value so far only to change the mixture is $1.3 billion. And this quarter, you can see that. So we are really very proud.

We are doing all the people that are an Executive Committee and all the best are working on YPF. Thank you very much for all of you.

This concludes today's conference. Thank you for participating. You may now disconnect.