YPF - Earnings call transcript Q2 2022

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Operator

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the YPF Second Quarter 2022 Earnings Webcast Presentation. . I would now like to turn the conference over to Pablo Calderone, YPF IR Manager. ahead. go Please

Pablo Calderone

some and Lew, Manager. ladies our is Calderone, aspects then second will Pablo Quarter CEO, our our Good Iuliano; of go Pablo you gentlemen. through for IR and have we Today, Thank Earnings CFO, in results. remarks joining YPF from XXXX new Alejandro morning, our Call. This introductory will us quarter Second main today the

X. our I to in to begin, draw risks like take main cautionary financial to our statement that in materially by be would expectations reach U.S. Slide and include your forward-looking to figures contemplated answer to we Before dollars. statements, subject your uncertainties remarks on used which that to Please these remarks. may actual the and calculations consideration into results from note the are attention cause today our different Also, question could rate exchange

stated we but are IFRS, in with some figures as EBITDA. such discuss financial measures may Our adjusted accordance call, the during non-IFRS

me the Pablo to turn call Iuliano. let Now

Pablo Iuliano

of operations. growth. employees I outstanding presenting our determination, deliver having the entire And begin growing while, I would we positive XX,XXX Thank the to CEO, the are getting assume team and the to with company through our indirectly Sergio with economies and report for the am back years navigated the target. hand I our by trusted to largest our people to successfully that consistently the an of Directors YPF more today. and worldwide X strong of Sergio YPF my leadership Board time taking to with the affirmed we to that today Argentina, Sergio's safety more ago, results us, thanks, exporter quarter former and are the the of the of to way not company you, an than the of me financial my rejoin be next second that the path the proven company remarks strong the profitable of took honored operation results. healthy and morning, we All contributed years. also the all by proud by for joining with lead on putting sustainability in than energy delighted I the to and decisions. a outcome profitable on of with you specific, X difficult and ambitious and integrated for Therefore, the day-to-day at the country, extremely and to lead level, time, to but only and am working everyone, our energy maintain performance the strategy within become job whom, forefront continue into for firm and how in unconventional Good would now of XX,XXX Pablo. commitment express like first before our thanking responsibilities YPF Affronti, who next like of executive will our at to

call, delivering continued very which in results. solid moving operational this robust financial very purpose the into let a quarter, highlighting Now was start this we of and that me

quarter. very through by leveraging, for comfortable progress of has been delivering Alejandro gaining turn expanding continued our our gained challenging the tremendous over go I that Alejandro therefore, on the to others, call second feel have ability We production for to consolidating Muerta Vaca will the in to profitability, the at established efficiency our amongst his through them end growth the we to guidance post-pandemic. now the in our deliver with further more goals, been our the beginning year of the go that ambitious the adjustment operating and We, on operations year as and results establish a for remarks.

Alejandro Lew

and all. you Pablo, morning Thank you, good to

the the During of in quarter essentially a the the was primarily market, Adjusted other growth board, the sold mark for from hydrocarbon barrels year-over-year vis-à-vis a quarter, total quarter, on our our in of remaining fuels price strong sold and flat primarily performance realization a shale in leveraging abroad per the increase billion, prices products EBITDA XX% including production and and natural expanding to increase consolidating our X% very but on previous when refined the adjusted compared seasonal the equivalent higher $X.X the outstanding those averaged reached previous basis. average of result positive of This local of XXX,XXX production. oil year, EBITDA the previous operations. across day, locally gas quarterly XX%

In and addition, EBITDA. in improvement adjusted sustained to and the gas increased also the processing levels oil production interannual the refining contributed

strong into levels. On with as a the months the the the transportation income the first of $XXX of compared reaching $X environment, net agreements turn, negotiated the inflationary quarterly the given billion bottom translated history, In the the operating and the company's accelerated accumulating negative side, unions however, million, in year, same increased last during X results primarily income in total highest net year. activity over line of incremental result energy costs XX% with OpEx to quarter jumped overall when and wage the

the to in terms representing in we basis, totaled are billion $XXX investment half half. year-over-year accumulating expecting a almost momentum increase and initial in some a year. sequential of XX% QX, activities, the now quarter, investment not and plan second the on of on additional million the first activity After during In CapEx first year, planning for surpass $X.X have second of even we slower a given start our for our the basis an the quarter, only probably meet, but gained are XX%

the into our X.Xx. of net first balance declined This, financial side, was quarter strengthening during net cash of billion, year. sheet accumulating Finally, pushing down turn, for million positive to ninth as half consecutive translated million, debt at the flow $XXX our the ratio on free $X.X $XXX our in over the leverage further to

quarter, our and flat production production, per gas production although previous of we XXX,XXX the during relatively on the have which day quarter, oil in the was crude oil quarter. averaged evolution our versus the barrels Focusing expanding continued total

with natural X% side, for XXX,XXX declined gas our July, to plan other XXXX X.X% sequential us barrels should the completely the NGLs oil area, transportation healthy the slightly, a equivalent August. the during constraints production nonoperated for increasing of La our lifted same allowing pace, production per total at interannual while a On and preliminary in of Nevertheless, keep figures of investment is course year production to as hydrocarbon be growth recently, result resuming had primarily standing growth Calera, that a above quarter in production with day. more contraction,

the costs. previous to $XX.X XX% on quarter, an per costs primarily environment activity an increases of during increased Lifting inflationary of overall barrel currency depreciation. increase pace pulling that upstream the operations, versus slower-than-expected accelerated and and Moving of Higher with impacted this the combined averaged wage equivalent oil across back energy of our quarter. the

efficiencies to compensated of reduction hub our to costs shale $X.XX barrel implemented quarter, general we than levels as segregate cost during managed production, higher we operations, core lifting with a sequential the combined achieve more However, the for X% oil per when pressures.

while gas shale production sequential QX, in as seasonal and XX%, by crude local XX% to to average XX.X oil growth crude, year, on gas oil by averaged to fuels prices our compared average fresh million the shale the realization Regarding production natural within cubic shale day, made Total gas X% in Gas of quarter regards adjustments to gas prices shale it by the operations, production prices averaged although previous respectively. quarterly when an with specifically, increased shale possible barrels increasing during shale continue still almost year, increases the by to increased price to remarkable expanded oil the meters X.X%, price while XX,XXX basis records. XX%. over More new oil side, shale improve by increased also a price both of while per contracts. over to per within segment, previous per And compared export marking XX% And and million almost the $XX barrel the day local on per parity. discount at Btu Plan on of showing the the back upstream $X.X

a of of we our increased of In completed terms we activity XX wells during new of operated blocks, total the oil-producing In Furthermore, beyond mark but XX completion horizontal drilled this in filling the inventory a the XX of enlarge the our what first with during of total representing flexibility a completed during wells last [indiscernible] second were of quarter, QX, quarter, the year. drilled total we the in in to operating wells horizontal of order line activity, reaching activity. activity during which to we XX during wells, anticipated have quarterly calls. drilling recover in highest sense, that earnings uncompleted of terms blocks, in new half

QX, Muerta largest PAD of in length. X-well horizontal worth in hub, the the which YPF. block, development during within Loma records length, contains a also During wells Campana, we meters Vaca new X,XXX in drilling of of established horizontal terms X which at all our we fully quarter, in is shale by oil second the the also owned drilled highlighting that core Chañar And Aguada our it del is newest part over

in operations, which, during drilling records we stages month a achieved fracking the when set of previous as performance, quarter meters quarterly efficiencies day new averaging and XX% significant This fracking, relentlessly barrel. of the to the of This XX% key gasoline the dispatched for by demand, increasing the of and almost which hub sector, compared standing of in operations. by versus mainly of shale In per per diesel the Consequently, effects high operating quarter and our increased this costs seasonality supply transportation mining the fair when second the higher-than-usual core border diesel ever cost and to given our a record over average such to by Switching certain from setting previous metrics. terms with demand of and to levels development provinces continued It level normal pre-pandemic XXXX. operations in country, of to XX% further further both historical decreased and consumers. improvements quarter per reaching of increased new any of keep same in to within rising X% counteract countries. early that our XXX compared efforts contractors some driven of highest jumping supply of compared came low diesel June, combined stressed quarter, the last over on above XXX per context result of drilling respectively, our by same our demand and the logistics May that downstream the with some within result the to that Domestic is late demand high collaboration as in year, when $X.X quarter teams agribusiness was neighboring in regions record high-diesel in quarter, certain and industrial sales and to XX% working led technical introduce our demand historical improvements the with accelerating segments in to our quarter, inflation. previous in XX%, comment the causing particularly diesel disruptions in

imports, the YPF, restore it broad is to demand dependence record first refinery achieved on we to managing than through to partially supply that, the reduce processing in top noting high of historical middle worth order gradually through in of during gasoline face greater imports. half this thus led and distillates biofuels portion the of a drawing and production of inventories, on at we normal a of blend levels, However, exceptional effort conversion sector a the our that higher maximizing levels diesel. increased high year, On

that wholesale imported impact the diesel policies running QX diesel combining by XX% our on gasoline local refunds a the compared versus regular the increases, when we strategy XX%, international products continued to And with former gradually gap diesel, pronounced introduced of terms increases to avoid levels. of approach extent, the prices, import to In measured our both average prices higher tax conjunction in stressing previous maintaining aiming premium by during while our mitigate, prices. quality, to local quarter, segments. dedicated Average to prices of more large when the reduce fuels the increased in imported for advanced with affordability parity in on of clients. we managed dollars, in parties, diesel temporary volumes above Therefore, retail and were price economic at a to and government normal with aligning quarter

this to inventory level quarter but cash $X.X in the operations of from cash XX% on revenues total have recorded previous close this and international on noncash we from the the which in market, Despite for adjustment a in the have quarter quarter commercial operations $X.X quarter, prices, natural continued the previous consecutive last the during enhancing the activity the during for slightly almost adjusted the result of products the accumulating seasonal quarter Cash free deployment below on of flow previous quarter, higher in it based flow refined benefiting the lower primarily ninth the is nonfuel segment. gas to refined was for our plan even increased as continued the Further for that investment basket as quarter, quarter. high flow correlation that the billion, ramp-up In the variation, Asian came addition, and after in year, represent capital worth pricing international diesel working recorded EBITDA second XX% negative other in in our billion same $X year. territory compared environment quarter. amounted highlighting our topic, of products. positive gasoline XX% second from the versus we our high the with further than Nevertheless, factors higher about a demand positive than strengthening well to relations a the billion

the On bonds X.X% decline in heightened the compared as affected local position which financial cash investments slightly a liquidity to of the June volatility our value front, financial investment XX. of and the treasury particularly market Part as resulting portion entire the in billion to this March of our position. in when short-term from to $X.X liquidity our sovereign declined of billion market investment of a portfolio over and June, notes, resulted $X.X our market loss total XX marking

XX, be in are our However, they expected was our recorded sovereign are in not an the our Nevertheless, net leading started. Therefore, our the reflected June thus held fully improved was the fully position X%. entire compared investment of since than this volatility maturity. consolidated less on portfolio situation liquidity portion to impact as impact a after booked market market performance before value further an in almost to of market recovered to bonds basis to accrual

to debt debt a to worth free leverage we exposure proactive reduction the peso-denominated mentioning swap to interest quarter, a would less almost financial due thus $X.X quarter billion also the end that movements. ratio north quarter maturities our the our about to we further $XXX as rate of part Therefore, position. software-based the exposure improving, quarter, $XX to relevant rate cash debt just to XX flow positive our profile, hedge have our due of XXXX. end taking Turning It debt comfortably Part healthy as an no reduction into loan $XXX that equivalent all syndicated that cash of in with fully net in loan in net relation And of in this next than doubling down X.Xx. March, second to the of was continues the the the for financial as entered during in disbursed million as interest us leaving of the the gross within months, came the short-term coming to led due year. coming until prepayment along the cost this highlight, the is global further coming covers by from to position to amount of like million minimize of our financial situation strategy liquidity carry I of global of previous the a our

adding and Muerta the like this economic Q&A, of budget Golfo updated of year. activity plan, the incorporating drilling the incremental would Jorge a investment for have for our with well In rest completion our outlook I campaign Vaca basin. expanding an XXXX, Finally, so upstream as reviewed before left the going Better-than-expected year. context, and far to in generation segment more rest also others, as the guidance for performance flow provide constructive in we enhanced in the the cash us among into our our San to

in anticipating We This XXX,XXX even of estimating year an turn billion. to more barrels budget achieve the relevant, to above growth to in our by increase an of to and of increasing oil year our in leveraging expanded about and end allow XX,XXX oil about growth, shale on point now percentage are, an day per estimate us production barrels full production target oil $X raising fourth CapEx X XXX,XXX in CapEx by activity year-over-year about therefore, XX% target XX,XXX gas that should about per quarter, further X%, day of period. for production hydrocarbon production average by

we year addition, land our which major billion, we coming In adjusted in the to operations in expect EBITDA area affect no $X full for introducing are of guidance months. distortions assuming macroeconomic

though its to than call open CapEx and levels, leverage to our even year are X.Xx your a stay we end Xx. estimating ability maintain plan below level presentation our confident questions. I with previous adjusting higher compared in current with Finally, for commitment not leverage today to With conclude outwards, we the current within net feel our ratio the our for this, net of

Operator

[Operator Instructions].

the McGann question of will with Bank America. line first come from Our Frank of

Frank McGann

what how if the capacity coming the questions, just wondering years, just that pressure, how the transportation production have could. increases next able And benefits you're environment capacity? so in terms price need in inflation seeing given side of of bring the place you're the on stream incremental price I little put comment seeing, could bit, in secondly, order be your second And increases? will prices much you see to that to been then A the of fill down the a you couple you share of of what terms I'm One, in half, on far? particularly over additional oil of for couple international on

Alejandro Lew

we Well, Thank of than in second quarter. the in case you, your far, start terms for average a to averaged so our prices most bit which diesel, or of gasoline for below. for on about is XX% basically on prices commenting and as final ones June, the primarily the the we we adjustment of just we in questions. on recent higher, Primarily today that half, adjusted That views slightly month while the of Frank, the in running only we the little the that diesel second higher result for are of our prices, are gasoline. adjustment performed are in not

as Going with the for in -- forward, -- way the for to continue a compensate deploying at the been continue the have international this with -- we expect the gap minimum of Basically that and as prices during adjust most long -- year. strategy to parties. possible reducing for evolution depreciation currency to in to we trying of the

we we or on where our distortion So practically has and to reduction diesel. international above we a gasoline higher and closer slightly international far, parities we are case the higher imparity. significantly aligned of ourselves gasoline, And on diesel, import of combining gap. segments for products, in diesel a in for are situation prices a in diesel both aligned see translated Brent also average, increases in the are import parity where lower fully premium retail, much primarily the quality into wholesale comfortable the combination we having In and aligned are that being with where on

a at evolution, to parities on to be pump that way also in gap the partially adjustments to for compensate We currency current the having reduce probably international the gasoline. price least we at are with only the to introduce not in but expect future near able

making continue look expect, constant evolves. adjustments the all, we price possible, products as I with and as clearly, keeping adjustments our and the how our the clearly local affordability of but to clients. looking don't all for So into as by sure in that environment said, during mentioned possibility as long macroeconomic interfere with the would overall presentation, our And a

of cost we seeing related higher -- are environment mentioned, So the pressures as currency. clearly, your your the in pressures inflation to first the second of inflationary leg also question, running devaluation global a and Argentina the than

Vaca local fixed That your also online. in with nominal entire will closed recently up few for also question, already XXXX, level project about we some some capacity least is April with least goes But for some oil increased -- through players. the based and our how agreements analyze of already Vaca a Muerta be And pump 'XX the of at flows basically vis-à-vis the continue by side, beyond It's to evacuation next period. into terms in 'XX. of for for of strategy from Oldelval environment that negotiations. or evacuation increases since further to were transportation we of we projects virtual second online that in in then will oil March also We benefited some of that to related achieved was wage top those been the in taking years months the idle have our the we other inflationary rest swaps oil of the have the sense, expect to from to that, in our on capacity still unions transportation through terms that, ends bring landing Oldelval a for total Mendoza many Cuyo YPF consideration from And transportation of pipeline have since we be that continue a for of additional to put in to affects negotiated -- how operation refinery that That our evacuation de the the cost was of capacity through XX%. to X Lujan stations for reversion back -- Muerta that we'll -- of an What that of we -- and that to seen goes the wage Oldelval the already they increase XX% seen of structure. that inflation. combination prices And the total by on have views our evacuation in at out capacity period April. have fuels. for XX% the the midstream And terms beginning for be at have about

of in quarter been are operation, all has quarter already Whereby, we previous that back jointly that incremental pulling Chevron. together the about and see to ENAP final have year year. that be end in mentioned own expansion XX% capacity the leg combination online, leg has XXXX. what XX we Rosales. of of loops, and Oldelval first connecting the bringing of the of Neuquén of we the we March which expect stations going also about of going be to gradually quarter the the capacity cubic pipeline XX,XXX the and should that, through seen to that a part of Puerto those contribution of meters addition should with early on upgrade to XXX transforming of in gradually that through by the XX,XXX through that And also next and pipeline -- an X of expansion Oldelval in months. per XXXX current the pump the in final kilometers further about are first that, last is day take cubic by first And loops based So the forward, per in day. calls, of probably And also should total of the with we of about XX% of capacity -- incremental capacity That that Atlantic first of first to the by the meters see about we next the total other

of of that state We analysis pipeline. are currently undergoing a the full

expect about combination should expect the add barrels the have, to That would then are be of additional next to end be Muerta operation in already pipeline before day should probably second that build XXXX. that the identified. And of back half is We total of year. transportation new we of the in in in of with XXX,XXX next XX,XXX Vaca early to We no out to by year. capacity starting situation major end this a in in if that year, a operations pipeline

basically and production. that of that's for the -- are couple grow years, we to term next the for projects able to the least be So oil the near our at identifying total

Operator

Montanari next Stanley. will Our come from question Bruno Morgan from

Bruno Montanari

if may? about The little three, I first talking one, fields. a bit conventional I have

You a at Manantiales have progress been now for the mentioning while Behr.

you So if you us similar more you which to can is just could of for importing? running production curious the And more question you're still comment what wondering that give running a newer little and type that with question, wells is third other about recently then how normal wells if a on apply diesel, of could bit from idea extract to now situation a be come type Or techniques areas, versus and Are drilled. the the you the then can an talk were And to logistics and production area? you second again, you about about complement harder are to there, the the refineries unconventional? from demand just The would those normalized? on nice your what doing super so differentials confirm, in much long you longer position wells now?

Alejandro Lew

Bruno, thanks for questions. your

In terms Behr. say production Manantiales of tertiary hard see are going production, to we how to growth further in it's

positive results. providing very far, it continues So

very We existing started and producing is of some results. rotating Behr, units them to all in injection to redeploy have already that Manantiales into areas new positive of the

it's continue, going to expect would production trend are growth hard we further how exactly that to we predict to So but see there.

in as Los areas Perales In and other deploying new terms such further for of are El example. we pilots opportunities, Trébol,

results. are positive they initial far rendering So

we of to potential projects total by year expect on about if the would early of these year. year, and production we we talk some that massification we see a -- so those And start the next probably end of The speaking. and this process see over seeing can given XX% between a number, total but still tertiary probably projects, probably EOR, an XX% in all increase generally something in about of low now coming next from clearly

But Clearly, late peak things, mentioned clearly, higher In second call. a given about on terms June economic the we May have on adjustments as faced import the in that's to That supply constraints compared premium already diesel positive of the our operations. way of your we we quarter. running grade logistics combination managed are Clearly, in that the downstream and was now in imports through a to levels question early parity. international of second on to the also subside. been parties of

clearly, running market full -- practically the so is well. share the at capacity And as which now given is transportation problem logistics, our the last-mile increased

So it's the overall high diesel share in part total and a combination of is which on market also dispatched, diesel. volumes record higher demand our increase of

are to relevant terms having where late stations. having by diesel. supply we premium that doing on all regular have basically whereby, our in have we best disruptions both quality in May reduced not June quality our declined And constraints been last a capacity way, in and mile in very has logistics. constraint and any the significant supply very at regular of and disruption also disruption But significantly, XX% our reduced of premium adjust generally So in quality speaking, seen transportation are in expanding some early our we gas now about

to last still heightened running So a facing but all, our much mile our at into trucks logistics on capacity. are mentioned logistics today, situation environment transportation or trying comfortable be incorporate and to we to, our potential our early overall risk still wells, the more capital and all in further capacity finally, more And logistics it's fleet the to I in given longer say. demand able expand full before, as

the X,XXX system, light event rotate the on late acquired and -- that also local pushing snubbing, Neuquén, -- at without horizontal mentioned the new some Evangelista. early was is because wells company the a given and XXXX actually AESA, of called of issues of which forward. it's available gas our subsidiary, and that our that in ability clearly only Alfredo any are run. by to Argentine in on is here on in one with that here has and oil boundaries over in XXXX, technology legs our That's is meters also can the event, which possible yesterday the owned work owned has a stoppers equipment, province where simulator I which is wholly pretty in impressive major that We pressure was the is -- I equipment Neuquén market

So legs that us in is which having a YPF, total grow factor for of differentiation our to horizontal equipment that clearly, and expand is boundaries the allowing wells.

we EOR, terms to feel we response high come way and these In I further confident from a an of to -- estimate longer comfortable to sharing able you. have be with up as with that should probably in said, wells

Operator

of next will Luiz from come Your line question with Carvalho the UBS.

Luiz Carvalho

Two questions here.

say, The follow-up cost. the and quarter-over-quarter. some first one is year the over mean saw past we let's the over past power increases I sequentially

the So trend page your of was just lifting as cost center trying in past, to -- the stable/dropping. somehow

of $X.X still The some have is to maturity managing quarters. past question is second to on of the the you XXXX debt over and that that increase still expiring. billion 'XX, about now couple on debt, congrats But looking

to or maturity of sorry for the think just -- to in expanding the extending management understand cash be better try coming here better will I'm flow what years. the debt the in the So terms to order trying , of I distribute

Alejandro Lew

Luiz, your you, Thank for questions.

a whereby, terms expect the reducing those of the tertiary conventional production contribution at natural allowing within a we conventional of our further putting average proportion the Clearly, of operations operations, the impact and production. in are also us shale significantly worse. down are is into the And compared clearly our opposite the the overall lower currency the year, the in cost to of to half would flat remain continue lifting for continuous be shale continue rest secondary would unconventional we X even cost for combination and operations lifting, lifting second the the valuation inflation we we with dollar of and higher of lifting during there. currency, above clearly, conventional running second costs of our that of see But releasing. see a versus so on factors that In our that, combining Clearly, what clearly should that different in pace quarter lifting all as not we had decline than are trend seeing overall And -- our the in efforts the the the the slower inflationary denominated we course, combining to cost devaluation we expectation that production of pesos in just given we cost on the the in would relatively would total is to the the translating the of unconventional, continue side, to in pressures. pressures expect in production mix, road. helping although growth decline

-- through in higher conventional in of our will shale question of in your high see in to production counteract a profile, able our And maturity going basically, terms maturities higher inflation So be clearly should of second the debt shale stabilization the and XXXX. production we to and we be operations. of the effects we in the jump proportion our

international -- course this bonds. and Of mostly to is related

hand, maturities a While about international XX% on financing. XXXX, local bank being are XXXX, and bond remainder of amortizations in only the based on other portion bonds the and we have the

we capital main or as in ability lowest financing. of and sitting our institutions our -- refinancing, today, see to an Further the bank markets local relationship over we are as counter bank. are level major to of better the a on -- -- financial exposure to calls, situation in the previous and that bonds So we and mentioned easier rolling local that, clearly

rollover probably new relationship to markets that see our basically to banks. international capital the capacity raise and XXXX, debt in replacing the local is exposure we international capital XXXX, the So coming financing bonds should due exposure to markets through in through allow and there that us from the ample

most that. we we probably a and would ambitious so the So move we we have the consider been more for if But doing potentially even far production CapEx We an part, continue way that and our -- budget to assume for grow next the could manage we to don't expect into year, have if we in that even clearly, to believe we that come. year plan if we XXXX, even project years for next yet.

our previous along so we oil XXXX, to expect grow the double continue our clearly production call, expecting years. to that are by in mentioned the As that production to implies gradually we

somewhere to So cash to continue given flow would us that, to that, so healthy our due free should to would expenses. still the market say the a our be have early local taking to flow be have combination rolling negative and then or should adjust to either plan that ample which clearly in flow say. have we from allow that cash of were debt increased And be if well, we additional our stance it's given to coming our CapEx it rolled into generation. maturities exposure or easy be relationship the flow CapEx generation, cash to capacity in and have flow, raise cash we the over operations, banks. But we -- the allow we consideration in us capacity should cash We the too cash that in line because a otherwise generation flow when neutral interest would with

of the opportunity X.Xx us see for staying below increase the further we to remain if leverage along remain level that further cash all, manage different in leverage. of as say this provides our through our the X.X through a in That case plan. growing of need and So in lines we in operating Xx years terms CapEx all ambitious to in financial calls, room would coming be in or maintaining next previous committed net current in the of year, Clearly, within production what we of should terms very being and that, flow able Clearly, to given increase approach, our expectations in optimistic we the that year. next to markets. I tackled prudent

Luiz Carvalho

do Okay. a I just And follow-up here. may if

debt of you debt, see of In company somehow, cost bit mean, better of the maybe and of finance perspective. course, -- if more would right? this do from So persuaded I'm your the the a by I situation of see refinancing challenge, But getting, gas a sheet cost still not balance the to structure? of capacity terms potential I situation how may is if country say,

Alejandro Lew

target. moving a it's clearly, Well,

far, to of terms so continues provide course, market cost the very attractive of Of a arbitrage a in nice, local debt. very

So that markets replace local a reduction in cost of from given -- financing. conditions, would market, cost the any you it imply total overall a current cost the debt with international

which but higher. not most the cost financing, slightly debt, hand, above the On had experience was bank was other our significantly the transaction at that when you led clearly with recent look we of CAF average

able average depend all in globally, in that would maintain that environment I So overall range in we being debt rate on are course. terms of X.X% also interest all, the but our of of say constructing cost of to will the X%, to

the As CAF largest rates. been today, fully presentation, mentioned we have interest was exposure relevant the value -- hedged, the which loan key has of have as loan, to variable already relevant we rates, or on no hedged. or no exposure, in The to that

it potential vis-a-vis continues will have the and whether to perform depend a arbitrage exposure in we So refinancing, to variable interest provide terms international local of no financing. it And on rates. continues to how market the

Operator

the come of Your next Credit Suisse. line with will Marcelo from Gumiero question

Marcelo Gumiero

the maybe answered. side. Most of just have already my questions were I one CapEX actually on follow-up,

it the that that right? the And updated year, -- year what accelerate -- wondering XXXX. guidance for have to expect we for you CapEx the mean, So of me the least drives I should in second I just just for was I at seems acceleration. half

year? second provide of could I expect you comments you to overall what on If of any mean what you this of half an need effect If there for terms So on inflation maybe additional meet these in -- CapEx color CapEx prospects. some is the do there?

Alejandro Lew

about or and whereby, over drill provided expected year. XXX we X guidance unfortunate the portion first that And and clearly primarily to us of thanks of core the the to Marcelo, pressures. related that that the performance additional next increased -- question. largest about CapEx in operations, for allowing we are we is complete in in are to tying wells for that half. in a XXX the drilling half. result drill was our the than an XX activity completion projecting our combination for fourth to your inflation half, wells. in increase hub, related of activity is completing better But is is anticipate increased some of about year, activity extent This for When anticipated we Clearly, expecting in our shale to anticipated is oil second

We over are probably moving now XXX. to

So total the for XX%, about there quarter of of terms the that correlates in our production this fourth made our year shale expected in by comments operations. is we activity oil with increasing increased that which also

I we total barrels not in number increased in though terms terms expected today, XX,XXX XX,XXX Even production raising. YPF, shale oil guidance introduced increase -- our for day sorry, of is per related what and on our to are have to of production, in XX,XXX drilling XX,XXX net estimate, of shale the significant provided we core versus would net hub. this previous And to probably clearly in had which activity So and a we completion. specifically before production, our in is that we

evacuation is we anticipating construction and la available in year. the start on block. That's -- our the for drilling in line construction X some we for new in years through related we There, in are of Arena gas of are also a production primarily plan for our forward we next probably further part that we and to commitments. to for -- anticipating have is half or moving So plant was projected some are continue -- That of coming were planned second XXXX, couple gas to projecting be that now we of further then plan, supply year. be for second And also the XXXX. that to then La expect also the for finally, activity blocks incremental deliver the are build of new processing is to was facilities that to solid the hand, CapEx incremental second when And in idea the the some our Calera. to capacity production the of that And processing ready plants. this next de primarily plant commitments on pipeline, one gas One related the why Aguada a expected gas we expecting that, hopefully second facility. the first -- shale

want to capacity to we of incremental well. to that able ready be supply as So part be

refinery say I that Chile. are our also, to core oil, drilling but mentioned before, pipeline would it's also operations, construction oil shale the accelerating we some able to mostly of our to in primarily the that oil -- oil in the facilities Neuquén then Trans-Andean connect part be gas. of also to in export shale I pipeline connects So completion in hub some and our the And and to operations supply both to pipeline de the northern Lujan Cuyo with the

projected So the we also CapEx some for year. are of originally that bringing for next was year pipeline that this to forward

portion I pressures, the that aspects to cost pressures. increase. And at also a the beginning, So CapEx relates inflationary the that's as main basically unfortunately, of mentioned of

Operator

from of line comes question next [indiscernible]. Your the

Unidentified Analyst

refinery Congratulations on I'd your diet. question your a results. on pose to like

which are oil. Medanito CapEx Panama, You light in sweet produces focusing

view by of the mean producers that of on of portion steep with revenues could need a you proportionally your from peso in give what that XX% impact we devaluation Since company's does blends? fell expect the Now heavier Could the significant And purchase more to if let's us are another a will you denominated overnight? pesos. YPF's financials, oil question. say,

Alejandro Lew

Constantino, first of all, thanks for your congratulations.

heavier lighter proportion us for to to preparing crude of process be over crude crudes lighter modify the run, improve clearly diet portfolio the higher lighter or through refinery that are In the terms the allow vis-à-vis evolution will in that proportion refineries, clearly, diet, of we B the Medanito the the crude. of to of say crudes the evolves a long heavier higher would I able time. our topping crudes, that of revamping versus of

refineries the we work to we have presentation, production in our second been the margins as as on the during of I mentioned history even quarter. run, in or have refinery mentioned, So in short managing efficiently terms that. the efficiency highest of margins in was And the

long good And revenues in the come refining would run, doing multi-annual the proportion we've that would So I -- clearly And we manage us and then revenues have portion the the Lujan lighter these part adjustments a of short-term would -- say peso coming our clearly, well, just local of processes, in the through refined the Those we've investments revenues, And the the of denominated, are that XX% Plata, of our in mentioned, then through I higher is of allow been the sale are La let smaller to in XX% second major that, revenues follow in to of denominated. both mix combination top also peso-denominated of market. a of dollar that prices. from are de products crudes. which say, international of been our of that, is we crudes Cuyo say, the refineries, on lighter your process me sales higher years. question, as proportion are our in to our in you natural denominated. are the roughly XX% the fuels yes, do further roughly our dollar gas which that market On able is

specifically will adjust the also accordingly. that look into the we prices So you ability have it on peso-denominated depend to will when revenues,

also CapEx to And an analysis of our and sensitivity any because prices both translate costs, doing into ability significant OpEx pump devaluation also depends important that local peso-denominated. it's on into So then complex there, prices. and portion it is pretty fuel

which that into whether on in roughly peso-denominated, about hedged OpEx. -- roughly is the impact OpEx a to partially speaking, CapEx we XX%, cost our impact are you depending into or roughly positive XX% through revenues the steep look XX% the and So combining -- devaluation CapEx, devaluation have more structure,

is Clearly, So a immediately the It which impact is compensated then in for slightly fuel will depend through impact, full savings to speed managed And devaluation that prices. the the have to adjust much as we accordingly. the with on the reductions the will as velocity, steep how denominated And -- long below passed negative then a of would but the the impact not terms prices or second it a -- of XX%. quarter clearly, costs our will was in total that our liquidity deterioration net liquidity, And course, we increased, has some in there, have in is our I are by in also dollars. roughly on of position... finally, our end say exposure

Operator

Our come line from with Andres Citi. the next Cardona will question of

Andres Cardona

$X You billion. have guidance, EBITDA one about question your

what for press share was release. as the assumptions it are with adjusted and barrel crude If key can you downstream, for us realization the your per EBITDA prices per $XX.X

are realization So key I of of for EBITDA to crude like variable second what your half assumptions this would price the the margin? and year margin for adjusted -- understand downstream -- downstream

Alejandro Lew

gasoline. have Andres, generally guidance are half. in I we today -- the use the to strategy, speaking, terms And for stable partially adjusting least What to gap continue prices to what the of primarily second we to the would terms to way is really to in in to able a in relatively assumed currency. expecting that we margins mentioned, have is and in compensate is, we devaluation in near further be that, and would dollar for pricing of expect at our seeing the as prices or term expect

terms seen upstream So assume pricing why and we the the half based maintaining would the local stable that segments downstream But the second have second relatively on in stable a probably quarter. speaking, what in crude variables what fairly And generally on that that's it on both margins we how assumed. market. to of in and of the in dynamics such But all in of inflation been prices international depends to devaluation. both the months, is and that key local terms macroeconomic continue has in again, coming different evolve as

Andres Cardona

also Congratulations which for strong. is guidance, the very strong second quarter and the very

Alejandro Lew

much, Thank Andres. you very

Operator

line question next Your Fernández from Ezequiel Balanz. will of with come the

Ezequiel Fernández

This is Balanz. Ezequiel Fernández from

results. -- the for portfolio. it And So great joined was congratulations. Investor such Relations very team the complete see material indeed thanks to I to

some could call. that one, take by I your extended be great. one we questions time Sorry X up of more would to after of My an quick. be them. have should If go

that first pipe available would [indiscernible]. Argentina? you And one to correct? other Or dedicated would goes it correctly, export maybe to on If that players just to that related back another Chevron? -- follow-up that capacity I is from connects YPF The a need Trans-Andean. then the pipe more understood in exports to build would and through that to be be Is or

Alejandro Lew

the of to First best recognizing way which our Ezequiel, and help the work ways in thank congratulations for for information you, into team, IR constantly our possible of jobs. all, to looks the your provide

that. So thanks recognizing for

take pipeline that terms your the we service, some the finish to is Trans-Andean of place In it's question, equipment is inspection of soon. of once coming passing relatively -- been place put pipe, which surprise weeks. the And the that intelligent that the going we unless to going takes and happen the in in expect to be once is finalized undergoing

expected. is operation pipeline of should that to that this year, early end able We as Assuming be by have next year. in back the

about be that the as place are service export That in and year. of early of day should of So probably transported first quarter be the allow available the cubic through through a able X,XXX volumes pipeline pumping are of will for already to the we putting quarter and equipment, first total are that taking existing going to the in next that pipelines new capacity will year. the next the meters or be as in first be finally that reversion exported result

have should but that with have that also from of construction de And a and -- the of in barrels total couple proportion oil total to barrels at Trans-Andean months. to XXX,XXX see clearly, will capacity already to to day, pipeline XX,XXX a capacity, for that total we pipeline. oil is new refinery move way XX,XXX achieve start per pipeline or we higher need also way the Vaca than this only that, a to in day at -- the of the sorry, get Cuyo. next Beyond connect the Muerta, and pipeline capacity Trans-Andean Lujan cubic of in the our started with meters is supply not to capacity to Trans-Andean that OTA that total that of significantly the The serve forward larger to about

early able -- do we need this available for Trans-Andean, be available beyond that's terms to see the we going our not we that's which of join So together also therefore, going around that we this in or be to go only the XX,XXX that producers pipeline, -- for oil -- not this export in export new effort cubic X,XXX the very YPF, additional the be day barrels be meters initial the the we next year basically, expect to to Muerta for through north. to new putting other but of likely initial to to And goes XX,XXX for capacity also pipeline putting call cubic of need join meters not to probably of year a We Norte, finally beyond do creative. to level be next together, Chile. Vaca capacity a that a day by online expand is pipeline, might up end understanding might us in which

So far, being project this is a is that YPF. XXX% led by

Ezequiel Fernández

before you might little need second -- is related debt second how Okay. That's great. a about local do half, question in That's you talked raise? my much think the And very you clear. bit to to

Alejandro Lew

today as Clearly, all. of is the the at tap in our half second plans to markets not

Ezequiel Fernández

updates Perfect. mature concessions? through related to, Okay. my have selling noncore or any if And potential you farm-outs final on of is question areas

Alejandro Lew

the forward. joint move not to that example, us terms of such analyze planning on activity, analyze but our opportunities, we way in Clearly, with Yes, for we constantly of the Okay. one ideas in some in any of we partners' M&A to that are ENAP, we clearly opportunities hand, with explore do is one for terms not major something Muerta, as that Vaca a published and and explore allow ventures transactions. do was opportunities,

our our farm relationships. projects or the divest out in but have move into and With financial with our partnerships the key without area feel need Muerta, with to that structure capital allows to today, opportunities further any to development we forward we Vaca condition Vaca definitely look significant us our of to constantly Muerta,

our portfolio operations, that terms our we where Vaca management of and noncore to key assets, are something for it's in that continue -- both that. conventionals tertiary to focus also In then for an in in attention key areas efficient that the the also It's Muerta us we EOR. mature allows see into potential look production those in

to situation. of dynamic, environment also for some nonkey, possibility release into clearly, timeframe We, a put moving transaction. specific point, potential with to some constantly on portfolio It's So market no the we beyond for disinvest the are schedule, it But divest And that general the in there a of comfortable into that be and that, are or up areas our are need a it's were we flow is looking looking disinvestment. target. other to was noncore in Today, no operations. more other cash particular mature and considered we move for depends forward us. any at some

there's are management forward. So no efficient there the opportunities always But there move to need have opportunities, portfolio. of is an always to urgently

And of so move look as is look operator, to that. way efficient perform some make only and potential moving we mature us, operation if sense, into we or definitely there into niche forward, particular If we acquirer area, well, problems for more a for will specific right? area not the for a and some in will with makes the forward to for see that that a constantly any disinvest opportunity to

Operator

back time. We no any the turn for remarks. closing conference at this over I'll questions have further

Alejandro Lew

today. Well, joining everyone, for congratulations. for Thanks thank you your us much, very

in board great to names have hope you proud having name -- on very results you that very our achieved. of And the future. following continue We a day. the are Thank we and have we in much, our

Operator

Ladies and all gentlemen, for this Thank concludes today's joining. you call.

disconnect. You may now

YPF Sociedad Anónima (YPF) 11 Aug 222022 Q2 Earnings call transcript