Q2 2024 YPF Sociedad Anónima Earnings Call

August 9, 2024

Mandeep: Thank you for standing by. My name is Mandeep, and I'll be your operator today. At this time, I'd like to welcome everyone to the YPF 2Q-2024 Earnings Webcast presentation call.

Operator: I would like to welcome everyone to the YPF 2Q 2024 earnings webcast presentation call. All lines have been placed on mute to prevent any background noise.

Operator: Welcome everyone to the YPF 2Q-2024 Earnings Webcast Presentation. All lines should be placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Margarita Chun, IR Manager. You may begin.

Operator: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you.

Mandeep: All lines be placed on mute to prevent any background noise.

Mandeep: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you.

Margarita Chun: I would now like to turn the call over to Margarita Chun. I.R.

Operator: Manager, you may begin.

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

Margarita Chun: Good morning, ladies and gentlemen. This is Margarita Chun, YPF I.R. Manager. Thank you for joining us today in our second quarter 2024 earnings call. This presentation will be conducted by our CEO, Mr. Horacio Marin, and our CFO, Mr. Federico Barroetaveña. During the presentation, we will go through the main aspects and events that explain the quarter results, and then we'll go to open the floor for a Q&A session together with our senior management.

Mandeep: You may begin.

Speaker Change: and many more. Thank you. Thank you.

Margarita Chun: Good morning, ladies and gentlemen. This is Margarita Chun, YPF's IR Manager.

Speaker Change: i

Margarita Chun: Good morning, ladies and gentlemen. This is Margarita Chun, YPF IAR Manager. Thank you for joining us today in our second quarter 2024 earnings call. This presentation will be conducted by our CEO , Mr. Horacio Marin, and our CFO , Mr. Federico Barroetave.

Margarita Chun: Thank you for joining us today for our second quarter 2024 presentation. This presentation will be conducted by our CEO, Mr. Horacio Marn, and our CFO, Mr. Federico Barroetave. During the presentation, we will go through the main aspects and events that explain the quarter results, and then we will go open the floor for Q&A sessions, together with our senior management. Before we begin, please consider our cautionary statement on slide

Speaker Change: During the presentation, we will go through the main aspects and events that explain the quarter results, and then we will go to open the floor for Q&A session, together with our senior management.

Margarita Chun: Before we begin, please consider our cautionary statement on slide two. Our remarks today and answer 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 this remark. Our financial figures are stated in accordance with IFRS, but during the presentation, we might discuss some non-IFRS measures such as adjusted EVDA. On the other hand, as of this quarter, the company decided to actively define topics instead of reporting the total TPNE acquisitions as the best approximation. In this sense, we also included acquisitions of intangible assets and excluded items charged to operating costs during the period, among others.

Margarita Chun: Our remarks today and the answer to your questions may include forward-looking statements, which are subject to risk and uncertainties that could cause actual results to be materially different from the expectations contemplated by this remark. Our financial figures are stated in accordance with IFRS, but during the presentation, we might discuss some non-IFRS measures, such as adjusted VTA. On the other hand, as of this quarter, the company decided to actively define CAPEX instead of reporting the total PP&E acquisitions as the best approximation.

Speaker Change: Before we begin, please consider our cautionary statement on slide 2.

Speaker Change: 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.

Speaker Change: Our financial figures are stated in accordance with IFRS, but during the presentation we might discuss some non-IFRS measures, such as adjusted EBTA.

Margarita Chun: In this sense, we have also included acquisitions of intangible assets and excluded items charged to operating costs during the period, among others. It is worth mentioning that this new definition does not alter the accounting standards of the company. It simply provides a clearer view of capital. Therefore, the analysis of CAPEX since this quarter and the comparative period is based on the new definition. I will now turn the call over to Horacio. Please go ahead.

Speaker Change: On the other hand, as of this quarter, the company decided to actively define CAPEX instead of reporting the total PP&E acquisitions as the best approximation.

Speaker Change: In this sense, we also included acquisitions of intangible assets and excluded items charged to operating costs during the period, among others.

Margarita Chun: It is worth mentioning that this new definition does not alter the accounting standards of the company. It simply provides a clearer view of the topics. Therefore, the analysis of topics since this quarter and the comparative periods is based on the new definition.

Speaker Change: It is worth mentioning that this new definition does not alter the accounting standards of the company. It simply provides a clearer view of the capex.

Speaker Change: Therefore, the analysis of CAPEX since this quarter and the comparative period is based on the new definition.

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

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

Horacio Marín: Thank you, Marietta, and good morning, everyone. Let me start today's presentation by describing the key milestone and development of the quarter. First of all, during the future, we will produce 20% more shareloy than the future last year, highlighting our strategy to focus on back-and-mortar formation. In line with this growth, we are able to support 25% more crude oil to the trans-Andean pipeline compared to the previous quarter. This was combined with zero fuel imports in our downstream business, while continuing to reduce the gap between local fuel price to import quality to 5%.

Horacio Marín: Thank you, Margarita, and good morning, everyone. Let me start today's presentation by describing the key milestones and development of the court. First of all, during Q2, we produced 20% more shale oil than in Q2 last year, highlighting our strategy to focus on the back-and-forth transformation. In line with this growth, we were able to export 25% more crude oil to the Trans-Andean pipeline compared to the previous quarter. This was combined with zero fuel imports in our downstream business while continuing to reduce the gap between local fuel price and import parity to 5%. Operationally, in the afternoon, we hit a new record in drilling and fracking speed. Both key metrics in terms of efficiency are fully in line with our guidance for the year.

Horacio: Thank you, Margarita, and good morning, everyone. Let me start today's presentation by describing the key milestone and development of the quarter.

Horacio: First of all, during Q2, we will produce 20% more shale oil than Q2 last year.

Horacio: Highlighting our strategy to focus on back and mortar formation.

Horacio: In line with this growth, we are able to export 25% more crude oil to the Trans-Andean pipeline compared to the previous quarter.

Horacio: This was combined with zero fuel imports in our downstream business, while continue to reduce the gap between local fuel price to import parity to 5%.

Horacio Marín: Operationally, in the afternoon, we hit a new record in drilling and frying - Joaquin Speed, both key metrics in terms of efficiency and full in line with our guidance for the year. In the Downstein segment, we also reach an all-time high productions record of gasoline in May at La Plata refinery.

Horacio: Operationally, in the afternoon, we hit a new record in drilling and fracking speed.

Horacio: Both key metrics in terms of efficiency are fully in line with our guidance for the year.

Federico Barroetave: In the downstream segment, we also reached an all-time high production record of gasoline in May at La Plata Refinery. And a few days ago, we made significant progress in the ANDES project. We successfully executed six SPAs for six clusters, representing a cornerstone for the transformation of our production matrix in order to maximize our profitability. We also started the construction of the first tranche of Paca Muerta's South Oil Pipeline. And we are making progress putting together the producing consortium for the second term.

Horacio: In the downstream segment, we also reached an all-time high production record of gasoline in May at La Plata Refinery.

Horacio Marín: A few days ago, we made significant progress in the cornerstone for the transformation of our production matrix in order to maximize our profitability. We also started the construction of the first branch of Paca Marta South Oil Pipeline, and we are making progress putting together the producing consortium for the second branch. Finally, together with our strategy partner, we select the location of the Argentine LNG production in the process of the province of Rio Negro.

Horacio: A few days ago, we made significant progress in the ANDES project.

Horacio: We successfully executed 6 SPAs for 6 clusters, representing a cornerstone for the transformation of our production matrix in order to maximize our profitability.

Horacio: We also started the construction of the first tranche of Paca Muerta's South Oil Pipeline.

Horacio: And we are making progress putting together the producing consortium for the second tranche.

Federico Barroetave: Finally, together with our strategic partner, we selected the location of Argentine LNG production in the province of Rio Negro. We'll be sharing details regarding all the news after presenting the quarter results. Now, I will turn the call over to Federico to go through the details of the second quarter's figures.

Horacio: Finally, together with our strategic partner, we selected the location of the Argentine LNG production in the province of Rio <expletive> .

Horacio Marín: We will be hearing the details regarding all the news after presenting the quarter result.

Horacio: We will be sharing details regarding all the news after presenting the quarter results.

Federico Barroetave: Now, I will turn the call over to Federico to go through the details of the second quarter's figures. Thank you, Racio. Revenue's reach nearly $5 billion, 15% sequentially, mainly driven by higher seasonal sales of gas and local diesel demand, as well as very few prices and growing oil exports to Chile.

Horacio: Now, I will turn the call over to Federico to go through the details of the second quarter's figures.

Federico Barroetave: Margarita Chun, Federico Barroetave,

Federico Barroetave: Revenues reached nearly $5 billion, 15% up sequentially, mainly driven by higher seasonal sales of gas and local diesel demand, as well as better fuel prices and growing oil exports to Chile. However, these effects were partially offset by gasoline demand contraction and lower conversion production that affected our Patagonia operation due to extreme snowstorms and climate conditions that started by mid-June and continued until early August. Interannually, revenues grew 13%, mostly on the back of a rebound in fuel prices, plus even higher oil exports, partially offset by a 6% drop in fuel demand.

Federico Barroetave: Thank you.

Federico Barroetave: These effects were partially offset by gasoline demand contraction and lower conversion production that affected our Patagonia's operation due to extreme snowstorms and climate conditions that started by mid-June and continued until early August. Inter annually, Revenue's grew 13% mostly on the back of a rebound in fuel prices, plus even higher on exports, partially offset by a 6% drop in fuel demand. I just said a VDA total $1.2 billion, 3% down sequentially due to a cost increase in dollar times, reflecting the catch-up with December's devaluation and a drop in conventional output that I mentioned before. Inter annually is recorded an expansion of 20%, maintaining a steady VDA margin of 24%.

Speaker Change: These effects were partially offset by gasoline demand contraction and lower conversion production

Speaker Change: that affected our Patagonia's operation due to extreme snowstorms and climate conditions that started by mid-June and continued until early August .

Speaker Change: Interannually, revenues grew 13%, mostly on the back of a rebound in fuel prices, plus even higher oil exports, partially offset by a 6% drop in fuel demand.

Federico Barroetave: Adjusted EVDA total $1.2 billion, 3% down sequentially due to a cost increase in dollar terms, reflecting the catch-up with December's devaluation and a drop in conventional output that I mentioned before. Interannually, an expansion of 20 percent was recorded, maintaining a steady BDA margin of 24 percent. This consistently highlights our operational efficiency despite challenging conditions, such as we had in Patagonia during this period.

Speaker Change: Adjusted EVDA totaled $1.2 billion, 3% down sequentially due to a cost increase in dollar terms, reflecting the catch-up with December's devaluation and a drop in conventional output that I mentioned before.

Speaker Change: Interannually, it recorded an expansion of 20%, maintaining a steady EBDA margin of 24%. This consistently highlights our operational efficiency despite challenging conditions as we had in Patagonia during this period.

Federico Barroetave: This consistently highlights our operational efficiency despite challenging conditions as we had in Patagonia during this period.

Federico Barroetave: Our bottom line continued positive at $535 million, 19% down sequentially, mainly due to lower equity income and increased exploration expenses. Inter annually, the bottom line was 41% up on the back of very operating performance besides lower amortization linked to the impairment of conventional material fields. Total hydrocarbon production averaged 539,000 barrels of oil equivalent per day, rising 2% sequentially and 5% interannually driven by solid performance in our shared operations, which is our core business and current fall. In terms of investments, we deployed $1.2 billion, 3% up sequentially, and we started with the construction of the first change of Baca Morte Azul Ol pipeline, in addition to the investments in refineries to reduce sulfur content.

Horacio Marín: Our bottom line continued to be positive at $535 million, 19% down sequentially, mainly due to lower equity income and increased exploration expenses. Inter-annually, the bottom line was 41% up on the back of better operating performance besides lower amortization linked to the impairment of conventional material fields. Total hydrocarbon production averaged 539,000 barrels of oil equivalent per day, rising 2% sequentially and 5% interannually, driven by a solid performance in our shale operations, which is our core business and current focus.

Speaker Change: Our bottom line continued positive at $535 million, 19% down sequentially, mainly due to lower equity income and increased exploration expenses.

Speaker Change: Interannually, the bottom line was 41% up on the back of better operating performance besides lower amortization linked to the impairment of conventional material fields.

Speaker Change: Total hydrocarbon production averaged

Speaker Change: $539,000 of oil equivalent per day, rising 2% sequentially and 5% interannually, driven by a solid performance in our shale operations, which is our core business and current focus.

Horacio Marín: In terms of investment, we deployed $1.2 billion, 3% up sequentially, and we started with the construction of the first tranche of the Baca-Muerta-Sur oil pipeline, in addition to the investment in refineries to reduce sulfur content. Interannually, CAPEX was 6% down, mainly as a consequence of last year's inflationary context. Notably, over 70% of the quarter's investment was concentrated in the upstream, mostly for shale operations. On the financial side, we reported a negative free cash flow of $257 million.

Speaker Change: In terms of investments, we deployed $1.2 billion, 3% up sequentially, and we started with the construction of the first tranche of Baca Muerta Sur oil pipeline, in addition to the investment in refineries to reduce sulfur content.

Federico Barroetave: Interannually, CapEx was 6% down, mainly as a consequence of last year's inflationary context. Notably, our 70% of the quarters investment was concentrated in the absence mostly for share operations.

Speaker Change: Interannually, CAPEX was 6% down, mainly as a consequence of last year's inflationary context.

Speaker Change: Notably, over 70% of the quarter's investment was concentrated in the upstream mostly for shale operations.

Federico Barroetave: On the financial side, we reported the negative recaselo of $257 million, although the adjusted the BDA was similar to the deployment of our CapEx. Q2 was mainly affected by higher seasonal sales, thus increasing working capital, in addition to regular debt service, partially upset by a dividend collection from affiliates. As a result, we posted a slightly higher net debt of $7.5 billion while maintaining net leverage ratio at 1.7 times, fully aligned with the target of the year.

Speaker Change: On the financial side, we reported a negative free cash flow of $257 million.

Horacio Marín: Although the adjusted EBDA was similar to the deployment of our CAPEX, Q2 was mainly affected by higher seasonal sales, thus increasing working capital in addition to regular debt service, partially offset by dividend collections from affiliates. As a result, we posted a slightly higher net debt of $7.5 billion while maintaining a net leverage ratio of 1.7 times, fully aligned with the target for the year. Now, I will turn back the call to Horacio to continue with the operating performance.

Speaker Change: Although the adjusted EBDA was similar to the deployment of our CAPEX, Q2 was mainly affected by higher seasonal sales, thus increasing working capital in addition to regular debt service, partially offset by a dividend collection from affiliates.

Speaker Change: As a result, we posted a slightly higher net debt of $7.5 billion while maintaining net leverage ratio at 1.7 times, fully aligned with the target of the year.

Horacio Marín: Now, I will turn back the call to Arasio to continue with the operating performance. Thank you, Federico. In the acting segment, the total hydrocarbon production grew by 2% quarter and quarter, and 5% year and year, driven once again by Shell contribution, which continue its award-trend and now represent more than half of the total output. Net crude oil production continued at high levels, reaching almost 250 thousand parts per day. On the back of a 20% international expansion offsetting the drop in conventional production due to extreme climate conditions in Patagonia. Our operational activities were affected by heavy snow, the result in the shutdown of our facilities for safety reasons.

Speaker Change: Now, I will turn back the call to Horacio to continue with the operating performance.

Horacio Marín: Thank you, Federico. In the Afton segment, total hydrocarbon production grew by 2% quarter-on-quarter and 5% year-on-year, driven once again by Shell's contribution, which continued its upward trend and now represents more than half of the total output. Net crude oil production continues at high levels, reaching almost 250,000 barrels per day, on the back of a 20% interannual shell expansion offsetting the drop in conventional production due to extreme climate conditions in Patagonia. However, our operational activities were affected by heavy snow that resulted in the shutdown of our facilities for safety reasons.

Horacio: and many more. Thank you. Thank you.

Horacio: Thank you, Federico. In the afternoon segment, the total hydrocarbon production grew by 2% quarter-on-quarter and 5% year-on-year, driven, once again, by Shell's contribution.

Speaker Change: which continues its upward trend and now represents more than half of the total output.

Speaker Change: Net crude oil production continues at high levels, reaching almost 250,000 barrels per day.

Speaker Change: on the back of a 20% interannual shell expansion offsetting the drop in conventional production due to extreme climate conditions in Patagonia.

Speaker Change: Our operational activities were affected by heavy snow that resulted in the shutdown of our facilities for safety reasons.

Horacio Marín: During June, our production decreased by around 45,000 bars per day for 13 days. Since the beginning of August, the climate has improved, and we continue to resume activities at normal levels. Despite this contraction, it's worth highlighting that 9% of the conventional output came from tertiary production, increasing by 6% interannually and minimizing this impact and the natural decline in mature fields. Beyond crude oil, natural gas production grew by 7% in line with increased evacuation capacity from the Neuquenia Basin through the new Nestor-Kirchner pipeline. Additionally, the installation of the new tuber spanner in Nomal Elantra contributed to a 10% increase in NGL's production.

Horacio Marín: During Shun, our production decreased by around 45 thousand bars per day during 13 days. Since the beginning of August, the climate has improved, and we continue to resume activities to normal levels. Despite this contraction, it's worth highlighting that 9% of the conventional output came from tertiary production, increasing by 6% internally and minimizing this impact on the natural decline in major fields. Beyond crude oil, natural gas production grew by 7% in line with increased evacuation capacity from Neokina-based through the new Nestor Kidner Pipeline. Additionally, the installation of the new tour funder in Loma Lelatra contributed to a 10% increase in initials production.

Speaker Change: During June , our production decreased by around 45,000 barrels per day during 13 days.

Speaker Change: Since the beginning of August , the climate has improved and we continue to resume activities to normal levels.

Speaker Change: Despite this contraction, it's worth highlighting that 9% of the conventional output came from tertiary production, increasing by 6% interannually and minimizing this impact and the natural decline in mature fields.

Speaker Change: Beyond crude oil, natural gas production grew by 7% in line with increased evacuation capacity from Neuquena Basin through the new Nestor-Kirchner pipeline.

Speaker Change: Additionally,

Speaker Change: The installation of the new tuber spanner in Loma de la Tierra contributed to a 10% increase in end-yields production.

Horacio Marín: Moving to lifting costs, we record $16.2 per Chu, remaining stable internally, but 25% higher sequentially, primarily due to the catch-up costs in dollar terms with December devaluation, capital with the lower commensional production already measured before. This cost inflation also impacted the listing costs of our core hub blocks that is two at $4.7 per barre of oil equivalent on the gross basis, recording a larger increase due to specific higher pooling and maintenance costs. Regarding prices in the after-in-segment, crude oil realization prices average $71 per barrel in Q2, 4% up quarter on quarter as a result of a better pricing environment in the local market, and now we're trained in international prices.

Horacio Marín: Moving to lifting costs, we record $16.2 per barrel of oil equivalent in Q2, remaining stable interannually but 25% higher sequentially, primarily due to the catch-up of costs in dollar terms with December's devaluation, coupled with the lower conventional production already measured before. This cost, inflation, also impacted the listing cost of our core hub blocks, which stood at $4.7 per barrel of oil equivalent on the gross basis, recording a larger increase due to specific higher pooling and maintenance costs.

Speaker Change: Moving to Lifting Costs with Record

Speaker Change: $16.2 per barrel of oil equivalent in Q2.

Speaker Change: Remaining stable interannually, but 25% higher sequentially.

Speaker Change: primarily due to the catch-up of costs in dollar terms with December devaluation.

Speaker Change: Coupled with the lower conventional production already measured before.

Speaker Change: This cost inflation also impacted the listing cost of our core hub blocks that stood at $4.7 per barrel of oil equivalent on the gross basis.

Speaker Change: Recording a larger increase due to specific higher pooling and maintenance costs.

Horacio Marín: Regarding prices, in the Afton segment, crude oil realization prices averaged $71 per barrel in Q2, 4% up quarter-on-quarter as a result of a better pricing environment in the local market and an upward trend in international prices. On the natural gas side, prices reached $4 per million, mostly driven by the seasonal winter price of plant gas that started in May. Now, I will walk through the performance of our shell activities.

Speaker Change: Regarding prices, in the upstream segment, crude oil realization prices averaged $71 per barrel in Q2, 4% up quarter-on-quarter as a result of a better pricing environment in the local market, an upward trend in international prices.

Horacio Marín: On the natural gas size, prices reach $4 per million video, most driven by the seasonal winter price of plant gas that started in May. Now walking through the performance of our shell activities in Q2 with real 50A horizontal wells in our operating blocks, all of them oil, 35% more than quarter on quarter and 26% more year on year. It's worth noting that Shell oil production hit a new record, delivering 130 thousand barrels per day. 87% of the Shell oil production came from our core hub oil blocks, Loma Campana, La Marga Chica, Banduria Sur, and Aguada El Genier.

Speaker Change: On the natural gas side, prices reach $4 per million BTU, mostly driven by the seasonal winter price of plant gas that started in May.

Speaker Change: Margarita Chun, Federico Barroetave,

Horacio Marín: In Q2, we drilled 58 horizontal wells in our operating blocks, all of them oily 35% more than quarter-on-quarter and 26% more year-on-year. It's worth noting that shale oil production hit a new record, delivering 130,000 barrels per day. Eighty-seven percent of the shale oil production came from our core half-oil blocks, Loma Campana, La Marga Chica, Bandurria Sur, and Aguadalchaa. In terms of efficiency within our shale operation, we achieved another quarter of a standing drilling and fracking metric.

Speaker Change: Now walking through the performance of our shell activities. In Q2, we drilled 58 horizontal wells in our operating blocks, all of them oil.

Speaker Change: 35% more than quarter-on-quarter and 26% more year-on-year.

Speaker Change: It's worth noting that shale oil production hit a new record, delivering 130,000 barrels per day.

Speaker Change: Eighty-seven percent of the shale oil production came from our core half-oil blocks, Loma Campana, La Marga Chica, Bandurria Sur, and Aguada El Chañar.

Horacio Marín: In terms of efficiency within our shell operation, we achieve another quarter of a standard drilling and fracking metrics, averaging 200 and 92 meters per day of drilling and 237 stages per set per month on fracking, fully in line with our guidance for the year. Also, it's worth mentioning that last year we achieved the highest lateral length drilling speed for one shell well in Aguadura Sur block, surpassing 1,500 meters in a single day. Considering all these metrics, we plan to ramp up Shell oil production in the second half of the year to achieve the target of more than 120 thousand barrels per day on average for 2024.

Speaker Change: In terms of efficiency within our shale operation, we achieved another quarter of a standing drilling and fracking metrics.

Horacio Marín: Averaging 292 meters per day of drilling and 237 stages per set per month on fraction, fully in line with our guidance for the year. Also, it's worth mentioning that last June, we achieved the highest lateral length drilling speed for one shale well in the Angostura Sur block, surpassing 1,500 meters in a single day.

Speaker Change: averaging 292 meters per day of drilling and 237 stages per set per month on fracking.

Speaker Change: Fully in line with our guidance for the year.

Speaker Change: Also, it's worth mentioning that last June , we achieved the highest lateral length drilling speed for one shale well in Angostura Sur block, surpassing

Horacio Marín: Considering all these metrics, we plan to ramp up shale oil production in the second half of the year to achieve the target of more than 120,000 barrels per day on average for 2024. As a final conclusion, let me highlight that today's production has reached nearly 120,000 barrels per day, in line with our target average for the year. Moving on to our downstream segment, processing levels average 299,000 barrels per day, recording a refinery utilization rate of about 90%.

Speaker Change: 1500 meters in a single day.

Speaker Change: Considering all these metrics, we plan to ramp up shale oil production in the second half of the year to achieve the target of more than 120,000 barrels per day on average for 2024.

Horacio Marín: As a final conclusion, let me highlight that today's production has reached nearly 120 thousand barrels per day, in line with our target average of the year.

Speaker Change: As a final conclusion, let me highlight that today's production has reached nearly 120,000 bars per day, in line with our target average of the year.

Horacio Marín: Moving on to our downstream segment, processing level averaged 200 and 99 thousand barrels per day, recording refinery utilization rate of about 90%. Although the processing level was essentially flat compared to the previous course. Carter, in decreased 2% internally, mainly due to limited availability of the La Plata Refinery affected by a shutdown, extreme weather condition, and a brief direction in the pipeline during a few days which was already restored. Despite this climb, let me mention that we set the record high gasoline production at La Plata Refinery. Thanks to the new gasoline hydro-trainment plan and the revamping of existing units as part of our new fuel specification projects to reduce sulfur content and improve fuel's quality.

Speaker Change: Moving on to our downstream segment, processing level averaged 299,000 barrels per day, recording refinery utilization rate of about 90%.

Horacio Marín: Although the processing level was essentially flat compared to the previous quarter, it decreased 2% interannually, mainly due to limited availability of the La Plata refinery affected by a shutdown, extreme weather conditions, and a brief disruption in the pipeline for a few days, which was already restored. Despite this decline, let me mention that we set the record high gasoline production at the Lata refinery. Thanks to the new gasoline hydro treatment plant and the revamping of existing units as part of our new fuel specification project to reduce sulfur content and improve fuel quality.

Speaker Change: Although the processing level was essentially flat compared to the previous quarter, it decreased 2% interannually, mainly due to limited availability at the La Plata Refinery, affected by a shutdown.

Speaker Change: Extreme weather conditions and a brief disruption in the pipeline during a few days, which was already restored.

Speaker Change: Despite this decline, let me mention that we set the record high gasoline production of LATAM Refinery.

Speaker Change: Thanks to the new Gasoline Hydro Treatment Plan and the revamping of existing units as part of our new fuel specification project to reduce sulfur content and improve fuel quality.

Horacio Marín: In this sense, during the future, we also continue making progress on the revamping of Luján de Cucho Industrial Complex, expected to be fully operational by next year. Few sales volume, as per the sequential reduction of 2%, mostly due to an 11 drop in gasoline sales, mainly due to a contraction in retail premium demand. It was partially offset by a 5% expansion in diesel sales on the back of the seasonal demand from agri, business and higher sales to the industrial segment. It's worth noting that, beside the solid performance of our refineries, we effectively address the increased diesel demand by reducing inventory levels, thereby avoiding fuel imports.

Horacio Marín: In this sense, during Q2, we also continue making progress on the revamping of the Lujan de Cuyo Industrial Complex, expected to be fully operational by next year. Fuel cell volume experienced a sequential reduction of 2%, mostly due to an 11.5% drop in gasoline sales, mainly due to a contraction in retail premium demand. It was partially offset by a 5% expansion in diesel sales on the back of seasonal demand from agribusiness and higher sales to the industrial sector.

Speaker Change: In this sense, during Q2, we also continue making progress on the revamping of Lujan de Cuyo Industrial Complex, expected to be fully operational by next year.

Speaker Change: Fuel cell volume experienced a sequential reduction of 2%, mostly due to an 11 drop in gasoline sales.

Speaker Change: mainly due to a contraction in retail premium demand.

Speaker Change: It was partially offset by a 5% expansion in diesel sales on the back of the seasonal demand from agribusiness and higher sales to the industrial segment.

Horacio Marín: It's worth noting that, besides the solid performance of our refineries, we effectively address the increased diesel demand by reducing inventory levels, thereby avoiding fuel imports. Interannually, fuel sales declined by 6%, particularly affected by diesel demand contraction across both retail and industrial sectors.

Speaker Change: It is worth noting that, besides the solid performance of our refineries, we effectively address the increased diesel demand by reducing inventory levels, thereby avoiding fuel imports.

Horacio Marín: Internally, fuel sales declined by 6%, particularly affected by diesel demand contraction across both retail and industrial segments. However, let me point out that we are witnessing roughly a 5% demand recovery in July versus June. In terms of prices, during Cucho, we continue adjusting local fuel prices, mainly aiming to mitigate the impact of the devaluation and narrowing the gap to international parities. As a result, average fuel prices measured in dollars increased by 3% sequentially and 14% internally. While the spread versus import parity decreased to 5% in Cucho compared to 7% in Cucho 1 and 13% in Cucho last year.

Speaker Change: Interannually, fuel sales declined by 6%, particularly affected by diesel demand contraction across both retail and industrial segments.

Federico Barroetave: However, let me point out that we are witnessing roughly a 5% demand recovery in July versus June. In terms of prices, during Q2, we continue adjusting local fuel prices, mainly aiming to mitigate the impact of the devaluation and narrow the gap with international parties. As a result, average food prices measured in dollars increased by 3% sequentially and 14% interannually, while the spread versus import parity decreased to 5% in Q2, compared to 7% in Q1 and 13% in Q2 last year.

Speaker Change: However, let me point out that we are witnessing roughly a 5% demand recovery in July versus June . In terms of prices, during Q2, we continue adjusting local fuel prices, mainly in July .

Speaker Change: aiming to mitigate the impact of the devaluation and narrowing the gap to international parities.

Speaker Change: As a result, average food prices measured in dollars increased by 3% sequentially and 14% interannually.

Speaker Change: While the spread versus import parity decreased to 5% in Q2 compared to 7% in Q1 and 13% in Q2 last year.

Horacio Marín: Lastly, efficiency-wise, since the beginning of the year, we have been focusing on the optimization of our cost structure, implemented several measures such as the reduction of a specific fuel consumption. Also, during Cucho, we created a new specified and focused team to plan, monitor, and promote the new efficiency and productivity standard within the downstream business.

Federico Barroetave: Lastly, efficiency-wise, since the beginning of the year, we have been focusing on the optimization of our cost structure, implementing several measures, such as the reduction of specific fuel consumption of boilers and logistic rearrangement, among others. Also, during Q2, we created a new dedicated and focused team to plan, monitor, and promote the new efficiency and productivity standard within the downstream bins. I will now turn the call over to Federico to go through our financial results for the quarter.

Speaker Change: Lastly, efficiency-wise, since the beginning of the year, we have been focusing on the optimization of our cost structure.

Speaker Change: implemented several measures.

Speaker Change: such as the reduction of a specific fuel consumption of boilers and logistic rearrangement, among others.

Speaker Change: Also, during Q2, we created a new specified and focused team to plan, monitor, and promote the new efficiency and productivity standards within the down-to-earth business.

Federico Barroetave: I will now turn the call over to Federico to go through our financial results for the quarter. Thank you very much. Sweet into the financial front, let us start with cash flow evolution. Although our adjusted the VDA was similar to the deployment of our Capix, working capital items pressured the liquidity, such as increased seasonal billing of natural gas, payment of imported goods and services deferred from last year, and higher purchases of crude oil to serve parties due to lower conventional production, partially upset by late collections from Q1. These effects were partially upset by dividend collection from affiliates, considering also the regular, inter-espainments. Free cash flow came at a negative $257 million.

Speaker Change: I will now turn the call over to Federico to go through our financial results for the quarter.

Federico Barroetave: Switching to the financial front, let us start with cash flow evolution. Although our adjusted VDA was similar to the deployment of our CAPEX, working capital items pressured liquidity, such as increased seasonal billing for natural gas, payment of imported goods and services deferred from last year, and higher purchases of crude oil to third parties due to lower conventional production, partially offset by late collections from Q1. These effects were partially offset by dividend collection from affiliates.

Speaker Change: i

Federico Barroetave: Thank you, Gracia.

Federico Barroetave: Switching to the financial front, let us start with cash flow evolution.

Federico Barroetave: Although our adjusted VDA was similar to the deployment of our CAPEX,

Speaker Change: Working capital items pressure the liquidity, such as increased seasonal billing of natural gas.

Speaker Change: Payment of imported goods and services differ from last year and higher purchases of crude oil to third parties due to lower conventional production, partially offset by late collections from Q1.

Speaker Change: These effects were partially offset by dividend collection from affiliates.

Federico Barroetave: Considering also the regular interest payments, free cash flow came at a negative $257 million. In terms of financing, during Q2, we paid the amortization of two international bonds for a total of $268 million, and we issued a local hard dollar bond for $178 million at a yield of 6% with a two-year maturity. Additionally, we continued securing trade facilities and other loans. After Q2, we issued a local dollar-link bond for $185 million at a 0% yield with a two-year maturity and promissory notes for $100 million at 0% yield with maturities of up to 18 months.

Speaker Change: Considering also the regular interest payments, free cash flow came at a negative $257 million.

Federico Barroetave: In terms of financing, during Q2, we paid a mortisation of two international bonds for a total of $268 million, and we issued a local heart dollar bond for $178 million at the yield of 6% with a two-year maturity. Additionally, we continued securing trade facilities and other loans. After Q2, we issued a local dollar link bond for $185 million at a 0% yield bond, with a two-year maturity and promising notes for $100 million at 0% yield with maturity of up to 18 months. On the liquidity front, our cash and short-term investment decreased by 13% sequentially to $1.4 billion as of the end of June.

Speaker Change: In terms of financing, during Q2, we paid the amortization of two international bonds for a total of $268 million.

Speaker Change: and we issued a local hard dollar bond for $178 million at a yield of 6% with a two-year maturity. Additionally, we continued securing trade facilities and other loans.

Speaker Change: After Q2, we issue the local dollar-linked bond for $185 million at a 0% yield with a two-year maturity and promising notes for $100 million at 0% yield with maturities of up to 18 months.

Federico Barroetave: On the liquidity front, our cash and short-term investments decreased by 13% sequentially to $1.4 billion as of the end of June. Therefore, our net debt increased to $7.5 billion while maintaining a stable net leverage ratio of 1.7 times. Regarding our maturity profile, as of the end of June, the company faces dead maturities in the next 12 months for $1.4 billion, mostly short-term trade facilities for $611 million, both with local and international banks, which we are planning to refinance. The remaining portion includes international bonds for $312 million and local bonds for $177 million, among other loans. I will now turn back to Horacio to continue with the presentation.

Speaker Change: On the liquidity front, our cash and short-term investment decreased by 13% sequentially to $1.4 billion.

Federico Barroetave: Therefore, our net debt increased to $7.5 billion while maintaining a stable net-level adjuration of 1.7 times. Regarding our maturity profile, as of the end of June, the company faces dead materialities in the next 12 months for $1.4 billion, mostly short-term trade facilities for $611 million, both with local and international banks, which we are planning to refinance. The remaining portion includes international bonds for $312 million and local bonds for $177 million among other loans.

Speaker Change: As of the end of June . Therefore, our net debt increased to $7.5 billion while maintaining a stable net leverage ratio of 1.7 times.

Speaker Change: Regarding our maturity profile, as of the end of June , the company faces dead maturities in the next 12 months for 1.4 billion dollars.

Speaker Change: Mostly short-term trade facilities for $611 million.

Speaker Change: both with local and international banks, which we are planning to refinance.

Speaker Change: The remaining portion includes international bonds for $312 million and local bonds for $177 million, among other loans.

Horacio Marín: I will now turn back to Arasio to continue with the presentation.

Speaker Change: I will now turn back to Horacio to continue with the presentation.

Horacio Marín: Thank you, Federico. Let me briefly recap on the progress we made regarding our conventional major field strategy. Last February, we obtained the approval of our board of directors to exit from around 50 blocks that contributed less than 1% of the company adjusted every day in 2023, with an investment of around $800 million. This important move allowed us to reallocate resources to our most profitable assets located in Baca, Moarta. Enhancing our focus on high return shell projects and optimizing our overall portfolio.

Horacio Marín: Thank you, Federico. Let me briefly recap the progress we made regarding our conventional mature field strategy. Last February, we obtained the approval of our Board of Directors to exit from around 50 blocks that contributed less than 1% of the company's adjusted EBITDA in 2023, with an investment of around $800 million. This important move allows us to reallocate resources to our most profitable asset located in Bacamon. Enhancing our focus on high-return shell projects and optimizing our overall performance.

Speaker Change: Subs by www.zeoranger.co.uk

Horacio: Thank you, Federico. Let me briefly recap on the progress we made regarding our conventional mature field strategy.

Horacio: Last February , we obtained the approval of our Board of Directors to exit from around 50 blocks that contributed less than 1% of the company's adjusted EBITDA in 2023, with an investment of around $800 million.

Horacio: This important move allows us to reallocate resources to our most profitable assets located in Baca Muerta.

Horacio: Enhancing our focus on high-return-share projects and optimizing our overall portfolio.

Horacio Marín: In April, we launched the first stage called Andes Project, making the official size of 30 blocks, grouped into 11 classes. During the virtual data room phase and Q&A session, we attracted significant interest, totaling over five hand interactions from various players.

Horacio Marín: In April, we launched the first stage called this project, making the official say of $30,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000, Blocks, Group in 11 Clusters. During the virtual data-run phase and Q&A session, we attracted significant interest, totaling over 500 interactions from Bayroof players. By June, we open bids and receive more than 60 offers from the over 30 local and international independent companies. Following a 30-day compression analysis of all qualified bidders, this week, we have enabled to execute six SPAs with different companies for six clusters. Also, we are currently progressing on the SPAs of the remaining clusters. Regarding the blocs that are not included in the undisputed version, most of them located in the promises of Santa Cruz and Terralo Fuego, we have already initiated a negotiation and expected to move forward with needed assignment and a reversion to the provincial energy companies in the near future.

Horacio: In April , we launched the first stage called Andes Project, making the official size of 30 blocks, grouped in 11 clusters. During the virtual data room phase and Q&A session, we attracted significant interest.

Horacio: totaling over five hand interactions from various players.

Horacio Marín: By June, we opened bids and received more than 60 offers from over 30 local and international independent companies. Following a 30-day compression analysis of all qualified bidders, this week, we were able to execute six SPAs with different companies for six classes. Also, we are currently progressing on the SPAs of the remaining classes. Regarding the blocks that are not included in the project, most of them locating the promises of Santa Cruz and Tierra del Fuego, we have already initiated negotiations and are expected to move forward with needed assignments and a reversion to the provincial energy companies in the near future. Otherwise, we will consider the possibility to include these blocks in the second project.

Horacio: By June , we opened bids and received more than 60 offers from the over 30 local and international independent companies.

Operator: I would like to welcome everyone to the YPF 2Q 2024 earnings webcast presentation call. All lines have been placed on mute to prevent any background noise.

Horacio: Following a 30-day compression analysis of all qualified bidders, this week we have been able to execute six SPAs with different companies for six clusters.

Operator: After the speaker's remarks will be a question and answer session. If you'd like to ask a question during this time, simply press star, follow by the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you.

Horacio: Also, we are currently progressing on the SPAs of the remaining clusters.

Margarita Chun: I would now like to turn the call over to Margarita Chun. I.R.

Horacio: Regarding the blocks that are not included in the ANDES project, most of them locating the promises of Santa Cruz and Tierra del Fuego, we have already initiated negotiations and expected to move forward with needed assignments and a reversion to the provincial energy companies in the near future.

Margarita Chun: Manager, you may begin. Good morning, ladies and gentlemen. This is Margarita Chun, YPF I.R. Manager. Thank you for joining us today in our second quarter, 2024 earnings call.

Horacio Marín: Otherwise, we will consider the possibility of including these blocks in the second undisputed version. As an updated summary of this strategy initiative, we maintain our confidence about closing the transcriptions for all the blocs by EORN on track with the prospective timeline and terms approved by our BOR class February.

Horacio: Otherwise, we will consider the possibility to include these blocks in the second ANDES project.

Margarita Chun: This presentation will be conducted by our CEO, Mr. Horacio Marin, and our CFO, Mr. Federico Barroetaveña. During the presentation, we will go through the main aspects and events that explain the quarter results, and then we'll go to open the floor for Q&A session together with our senior management.

Horacio Marín: As an updated summary of this strategy initiative, we maintain our confidence about closing the transaction for all the blocks by year end on track with the prospective timeline and terms approved by our board last February. Now, let me comment on the progress achieved in the oil midstream expansion to unlock the evacuation capacity in the Naukina Basin. Regarding the evacuation to the Atlantic, by the end of May, we initiated the construction of the first tranche of what we name the Baca Muerta South Oil Pipeline or BEMOS Project, connecting the Baca-Morta Formation to ALEN.

Horacio: As an updated summary of this strategy initiative, we maintain our confidence about closing the transaction for all the blocks by ERN, on track with the prospective timeline and terms approved by our board last February .

Horacio Marín: Now, let me comment on the progress achieved in the oil misting expansion to unlock the evacuation capacity in the Neuquina Basin. Regarding the evacuation to the Atlantic by the end of May, we initiated the construction of the first tranche of what we named Baca Morta South Oil Pipeline, or Bemosprochet, connecting Baca Morta formation to Allen. Currently, Allen serves as the accent point to the oil system, facilitating transport to the promise of Buenos Aires. Once the second tranche of Vemos is operational, it will also be connected to the oil export-dedicated port of Punta Colorado in the province of Rio Negro.

Margarita Chun: Before we begin, please consider our cautionary statement on slide two. Our remarks today and answer to your questions may include forward-looking statements, which are subject to risk and uncertainties that could cause actual results to be materially different from the expectations contemplated by this remark. Our financial figures are stated in accordance with IFRS, but during the presentation, we might discuss some non-IFRS measures such as adjusted EVDA. On the other hand, as of this quarter, the company decided to actively define topics instead of reporting the total TPNE acquisitions as the best approximation.

Horacio: Now, let me comment on the progress achieved in the oil midstream expansion to unlock the evacuation capacity in the Neuquena Basin.

Horacio: Regarding the evacuation to the Atlantic by the end of May, we initiated the construction of the first tranche.

Horacio: of what we name Vaca Muerta South Oil Pipeline, or VEMOS Project, connecting Vaca Muerta Formation to Allen. Currently, Allen serves as the access point to the LVAL system, facilitating transport to the province of Buenos Aires.

Horacio Marín: Currently, ALEN serves as the access point to the LVAL system and facilitates transport to the Province of Buenos Aires. Once the second type of REMUS is operational, it will also be connected to the oil export dedicated port of Punta Colorada in the province of Rio Negro. The first stretch has a length of around 130 kilometers with a capacity of roughly $200 million. We expect this facility to become online in Q1 next year with a starting capacity of more than 350,000 barrels per day to be initially utilized without DelVal's ongoing expansion expected by year end.

Margarita Chun: In this sense, we also included acquisitions of intangible assets and excluded items charged to operating costs during the period, among others. It is worth mentioning that this new definition does not alter the accounting standards of the company. It simply provides a clearer view of the topics. Therefore, the analysis of topics since this quarter and the comparative periods is based on the new definition.

Horacio: Once the second type of REMS is operational, it will also be connected to the oil export dedicated port of Punta Colorada in the province of Rio <expletive> .

Horacio Marín: The first tranche has a length of around 130 kilometers with a capacity of roughly $200 million. We expect this facility to become online in Q1 next year, with a starting capacity of more than 350,000 barrels per day to be initially utilized, currently without the last ongoing expansion expected by EORN. The Bemosfor tranche's capacity shall be expected to over 450,000 barrels per day by the second half of 2026 when the second tranche starts its operation. The second tranche of Vemos has a length of roughly 440 kilometers with a capacity of about $2.5 billion. The design starting capacity is 180 cents per day, planned to be expanded to around 500 by 2027.

Horacio: The first trench has a length of around 130 kilometers with a capacity of roughly 200 million dollars.

Horacio: We expect this facility to become online in Q1 next year.

Horacio: with a starting capacity of more than 350,000 barrels per day to be initially utilized currently without DelVal's ongoing expansion expected by ERN.

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

Horacio Marín: Thank you, Marietta, and good morning, everyone. Let me start today's presentation by describing the key milestone and development of the quarter. First of all, during the future, we will produce 20% more shareloy than the future last year, highlighting our strategy to focus on back-and-mortar formation. In line with this growth, we are able to support 25% more crude oil to the trans-andian pipeline compared to the previous quarter. This was combined with zero fuel imports in our downstream business, while continuing to reduce the gap between local fuel price to import quality to 5%.

Horacio Marín: The Bemos 4 tank capacity shall be expected to exceed 450,000 barrels per day by the second half of 2026, when the second tank starts its operation. The second tranche of BEMOS has a length of roughly 440 meters, with a capex of about 2.5 billion dollars. The design starting capacity is 180,000 barrels per day, planned to be expanded to around 500 by 2027.

Horacio: The Bemos 4 tanches capacity shall be expected to over 450,000 barrels per day by the second half of 2026.

Horacio: when the second tank starts its operation.

Horacio: The second tranche of BEMOS has a length of roughly 440 meters.

Horacio: kilometers with a capex of about 2.5 billion dollars.

Horacio: The design starting capacity is 180,000 barrels per day.

Horacio: Planned to be expanded to around 500 by 2027. Also, the pipeline system will be designed to reach more than 7,000 bars per day of total capacity if devising requires.

Horacio Marín: Also, the pilot system will be designed to reach more than 7,000 bars per day of total capacity if the pricing requires. This project is a game changer for YPF and Argentina, increases significantly the export capacity and the bottlenecking's share resources of Vaca Morta Formation. This tranche of Vemos will be a fully export dedicated infrastructure, and its offshore terminal will be located at the deep water port that will be allowed BLCC, the old mega vessels that transfer around 2 million bars. Besides lower tariff, this vessel opens up new international market opportunities for all of Argentina produces, such as the Asian market.

Horacio Marín: Also, the pipeline system will be designed to reach more than 7,000 bars per day of total capacity if necessary. This project is a game-changer for YPF and Argentina, increasing significantly the export capacity and de-bottlenecking shared resources of the Bacchus-Montan formation. This tranche of VEMOS will be a fully export-dedicated infrastructure, and its offshore terminal will be located at the deep water port that will be allowed BLCCs, the old mega vessels that transport around 2 million barrels. Besides lower tariffs, this vessel opens up new international market opportunities for all Argentinan producers, such as the Asian market.

Horacio Marín: Operationally, in the afternoon, we hit a new record in drilling and frying- Joaquin Speed, both key metrics in terms of efficiency and full in line with our guidance for the year. In the Downstein segment, we also reach an all-time high-productions record of gasoline in May at La Plata refinery.

Horacio: This project is a game changer for YPF and Argentina, increasing significantly the export capacity and debottlenecking shell resources of Vaca Morta Formation.

Horacio: This tranche of VEMOS will be a fully export-dedicated infrastructure.

Speaker Change: And its offshore terminal will be located at the deep water port that will be allowed VLCCs, the old mega vessels that transport around 2 million bars.

Speaker Change: Beside lower tariff, this vessel open up new international market opportunities for all Argentina produces, such as the Asian market.

Horacio Marín: YPF is currently leading the development of the project as the main shipper, and we are starting it as an export consortium pipeline by which the local oil producing operator in the Vaca Muerta Formation shall be able to commit to and secure a portion of transportation capacity. In terms of progress to date on this strategic initiative, let me share that from the technical point of view, we have already completed the basic design engineering for the pipeline.

Horacio Marín: YPF is currently leading the development of the process at the main ship, and we are starting it as an export consortium pilot by which the local oil producing operator of Vaca Morta formation shall be able to commit and secure a portion of the transportation capacity. In terms of progress to date of this strategic initiative, let me share that, from the technical point of view, we have already completed the basic design engineer for the pipeline, and we are progressing the design review of the Torres terminal and voice system. Simultaneously, we have secured all key governance approvals and environmental permits, and we are in the process of receiving final quotations for the EPC and live pipes supply.

Speaker Change: YPF is currently leading the development of the project as the main shipper, and we are starting it as an export consortium pilot.

Horacio Marín: We will be hearing the details regarding all the news after presenting the quarter result.

Speaker Change: by which the local oil producing operators of Vaca Muerta Formation shall be able to commit and secure a portion of transportation capacity.

Federico Barroetave: Now, I will turn the call over to Federico to go through the details of the second quarter's figures. Thank you, Racio. Revenue's reach nearly $5 billion, $15% sequentially, mainly driven by higher seasonal sales of gas and local diesel demand, as well as very few prices and growing oil exports to Chile.

Horacio Marín: And we are progressing the design review of the storage terminal and void system. Simultaneously, we have secured all key government approval environmental permits, and we are in the process of receiving final quotations for the EPC and light pipe supply. Right now, we are focusing on all efforts to speed up the progress of receiving LOIs from the different export producers based on terms that will allow the project finance arrangements to start. So far, we have received LOIs covering around two-thirds of the total project transportation capacity, and we are optimistic about concluding this project during Q3.

Speaker Change: In terms of progress to date of this strategic initiative, let me share that from the technical point of view, we have already completed the basic design engineering for the pipeline and we are progressing the design review of the storage terminal and void system.

Speaker Change: Simultaneously, we have secured all key government approval environmental permits, and we are in the process of receiving final quotations for the EPC and light pipe supply.

Federico Barroetave: These effects were partially offset by gasoline demand contraction and lower conversion production that affected our Patagonia's operation due to extreme snowstorms and climate conditions that started by mid-June and continued until early August. Inter annually, Revenue's grew 13% mostly on the back of a rebound in fuel prices, plus even higher on exports partially offset by a 6% drop in fuel demand. I just said a VDA total $1.2 billion, 3% down sequentially due to a cost increase in dollar times, reflecting the catch-up with December's devaluation and a drop in conventional output that I mentioned before. Inter annually is recorded an expansion of 20%, maintaining a steady VDA margin of 24%. This consistently highlights our operational efficiency despite challenging conditions as we had in Patagonia during this period.

Horacio Marín: Right now, we are focusing on all efforts to speed up the progress or receiving LOIs from the different export-producer base on terms that will allow to start the project finance arrangement. So far, we have received LOIs covering around 2-3 of total project transportation capacity, and we are optimistic to conclude the process during Q3. Also, we have been patient to apply for their rigidity once fully regulated.

Speaker Change: Right now, we are focusing on all efforts to speed up the progress of receiving LOIs from the different export producers based on terms that will allow to start the project finance arrangement.

Speaker Change: So far, we have received LOIs covering around two-thirds of total project transportation capacity and we are optimistic to conclude this project during Q3.

Horacio Marín: Also, we have the intention to apply for RIGI once fully regulated, and we will continue our focus on growing oil exports and accelerating evacuation to the Pacific. During Q2, we increased our oil exports to Chile, delivering 29,000 barrels per day through the Trans-Saharan pipeline, reaching an export revenue of nearly $220 million. Note that this is $25 more than Q1 and represents now 11% of our oil production. This report, one year ago, was only 3%.

Speaker Change: Also, we have the intention to apply for the RIGI once fully regulated.

Horacio Marín: Continue our focus on growing our export-accelerating evacuation to the Pacific during Q2 wing crisis, our oil export to Chile delivering 29,000 bodies per day through the Trans-Ainian pipeline, reaching an excess per revenue of nearly $220 million. Note that this is 25 more than Q1 and represents now 11% of our oil production. This for one year ago, were only 3%.

Speaker Change: Continue our focus on growing oil exports and accelerating evacuation to the Pacific.

Speaker Change: During Q2, we increased our oil export to Chile, delivering

Speaker Change: 29,000 barrels per day through the Trans-Saharan pipeline, reaching an excess for revenue of nearly $220 million.

Speaker Change: Note that this is 25 more than Q1 and represents now 11% of our oil production. This export one year ago were only 3%.

Federico Barroetave: Our bottom line continued positive at $535 million, 19% down sequentially, mainly due to lower equity income and increased exploration expenses. Inter annually, the bottom line was 41% up on the back of very operating performance besides lower amortization linked to the impairment of conventional material fields. Total hydrocarbon production averaged 539,000 Bares of oil equivalent per day, rising 2% sequentially and 5% inter annually driven by solid performance in our shared operations, which is our core business and current fall.

Horacio Marín: Before ending our presentation and going to Q&A, let me briefly comment on the progress made regarding our energy process. by Enofiulai, YPF, and its strategic partner defined the location of the process in the province of Rio Negro. The decision was taken after the deep analysis of technical, economic, environmental, geographic, fiscal, and regulatory aspects. In this sense, YPF decided to hire, at this expense, art to the little who reconfigured our analysis conclusion. Also, let me recall all the importance of this project, which once completed is a pay-tick to contribute around $15 billion annually to Argentina as per revenues, significantly boosting the country's balance of payments.

Horacio Marín: Before ending our presentation and going to Q&A, let me briefly comment on the progress made regarding our LNG process so far. By the end of July, YPF and its strategic partner will define the location of the project in the province of Rio Negro. The decision was taken after a deep analysis of technical, economic, environmental, geographic, fiscal, and regulatory aspects. In this sense, YPF decided to hire, at its expense, Arthur De Lito, who reconfirmed our analysis conclusion.

Speaker Change: and many others. Thank you. Thank you.

Speaker Change: Before ending our presentation and going to Q&A, let me briefly comment on the progress made regarding our LNG process so far.

Speaker Change: By end of July , YPF and its strategic partner define the location of the project in the province of Rio <expletive> .

Speaker Change: The decision was taken after a deep analysis of technical, economic, environmental, geographic, fiscal, regulatory aspects.

Speaker Change: In this sense, YPF decided to hire, at its expense, Arthur De Lido, who reconfirmed our analysis conclusion.

Federico Barroetave: In terms of investments, we deployed $1.2 billion, 3% up sequentially, and we started with the construction of the first change of Baca Morte azul ol pipeline, in addition to the investments in refineries to reduce sulfur content. Interannually, CapEx was 6% down, mainly as a consequence of last year inflationary context. Notably, our 70% of the quarters investment was concentrated in the absence mostly for share operations.

Horacio Marín: Also, let me recall the importance of this project. It is expected to contribute around $15 billion annually to Argentine export revenues, significantly boosting the country's balance of payments. As I mentioned in my previous call, we expect to own between 25 to 30% of the total energy capacity, engaging the rest of the industry to join this project. On the other hand, it's worth mentioning that a few weeks ago the initiative regime for large-scale investment, also known as RIGI, was enacted, providing a series of incentives we consider as a key way to place back mortal shale gas in the global markets, transforming So with that, we conclude our presentation and open the floor to questions.

Speaker Change: Also, let me recall the importance of this project, which once completed is expected to contribute around $15 billion annually to Argentinian export revenues, significantly boosting the country's balance of payments.

Horacio Marín: I will mention in previous call, we expect to own between 25 to 30% of the total energy capacity, engaging the rest of the industry to show this project.

Speaker Change: As we mentioned in previous call, we expect to own between 25% to 30% of the total energy capacity, engaging the rest of the industry to join this project.

Horacio Marín: On the other hand, it's worth mentioning that a few weeks ago, the initiative regime for large-scale investment, also known as a regime, was enacted. Providing a serious incentive, we considered the key way to place back a mortality gas in the global markets, transforming YPF Argentina in the work-class energy sector.

Speaker Change: On the other hand, it's worth mentioning that a few weeks ago, the Initiative Regime for Large-Scale Investment, also known as the RIGI,

Federico Barroetave: On the financial side, we reported the negative recaselo of $257 million, although the adjusted the BDA was similar to the deployment of our CapEx, Q2 was mainly affected by higher seasonal sales, thus increasing working capital, in addition to regular debt service, partial upset by a dividend collection from affiliates. As a result, we posted a slightly higher net debt of $7.5 billion while maintaining net leverage ratio at 1.7 times, fully aligned with the target of the year.

Speaker Change: All the best. Thank you.

Speaker Change: Providing a series of incentives.

Speaker Change: We consider it a key way to place back a mortal shale gas in the global market, transforming YPF Argentina in a world-class energy exporter.

Horacio Marín: So, with this, we conclude our presentation and open to the floor questions. Thank you.

Operator: Thank you. We will now begin the question and answer session. If you've dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you'd like to withdraw your question, simply press star 1 again. If you're called upon to ask your question or are listening via the loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: Thank you. We will now begin the question and answer session. If you've dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you'd like to withdraw your question, simply press star 1 again.

Horacio Marín: Now, I will turn back the call to Arasio to continue with the operating performance. Thank you Federico. In the acting segment, the total hydrocarbon production grew by 2% quarter and quarter, and 5% year and year, driven once again by Shell contribution, which continue its award-trend and now represent more than half of the total output. Net crude oil production continued at high levels, reaching almost 250 thousand parts per day. On the back of a 20% international expansion offsetting the drop in conventional production due to extreme climate conditions in Patagonia.

Operator: If you're called upon to ask your question or a listing, be a loudspeaker on your device. Please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: If you are called upon to ask your question or are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Operator: For today's session, we ask that you please limit yourself to one question and one follow-up question. Again, press star 1 to join the queue.

Operator: For today's session, we ask that you please limit yourself to one question and one follow-up question. Again, press star 1 to join the conversation. Our first question comes from the line of Bruno Montanari with Morgan Stanley. Please go ahead. Good morning.

Speaker Change: For today's session, we ask that you please limit yourself to one question and one follow-up question.

Speaker Change: Again, press star 1 to join the queue.

Bruno Montanari: Our first question comes from Alina Bruno Montenari with Morgan Stanley. Please go ahead. Good morning, everyone. Thank you for taking my questions. I'll have two quick ones here.

Speaker Change: Margarita Chun, Federico Barroetave,

Speaker Change: Our first question comes from the line of Bruno Montanari with Morgan Stanley . Please go ahead.

Bruno Montanari: Good morning, everyone. Thank you for taking the time to answer my questions. I have two quick ones here. The first one is, would the company still be interested to look at potential shale oil acreage which is available for sale in Argentina? It's widely known that Exxon is leaving the country, so to the extent you could comment on that, it would be great how it would potentially complement the company's portfolio and be much more focused on shale. And the second question is about lifting costs.

Bruno Montaneri: Good morning, everyone.

Bruno Montanari: The first one, would the company still be interested to look at potential share oil acreage, which is available for sale in Argentina? It's widely known that Exxon is leaving the country, so to the extent you could comment on that, it would be great how it would potentially complement the company's portfolio and much more focused on share.

Bruno Montaneri: Thank you for taking my questions. I have two quick ones here.

Bruno Montaneri: The first one...

Bruno Montaneri: Would the company still be interested to look at potential shale oil acreage, which is available for sale in Argentina? It's widely known that Exxon is leaving the country, so to the extent you could comment on that, it would be great.

Horacio Marín: Our operational activities were affected by heavy snow, the result in the shutdown of our facilities for safety reasons. During Shun, our production decreased by around 45 thousand bars per day during 13 days. Since the beginning of August, the climate has improved and we continue to resume activities to normal levels. Despite this contraction, it's worth highlighting that 9% of the conventional output came from tertiary production, increasing by 6% internally and minimizing this impact on the natural decline in major fields.

Speaker Change: It would potentially complement the company's portfolio and much more focused on shale.

Bruno Montanari: The second question is about lifting costs. We understand the reasons behind the increase in the quarter, so looking for any trends you can provide us for the coming quarters, if lifting costs would remain stable at the levels from queue 2, or if there could be any relief into the coming quarters, that would be great. Thank you very much.

Bruno Montanari: We understand the reasons behind the increase in the quarter, so looking for any trends you can provide us for the coming quarters, if lifting costs would remain stable at the levels from Q2, or if there could be any relief in the coming quarters, that would be great. Thank you very much.

Speaker Change: And the second question is about lifting costs. We understand the reasons behind the increase in the quarter, so looking for any trends you can provide us for the coming quarters, if lifting costs would remain stable at the levels from Q2, or if there could be any relief into the coming quarters, that would be great. Thank you very much.

Horacio Marín: Okay, thank you very much, Bruno. For the question, as you mentioned, the pillar 1 of YPF is to focalise in the most profitable... Asset or I got this back and more of the oil. So, for our goal, always we are going to win when there is a selling of very good asset because it's a way to improve the profitability and the profitability for all the shareholders.

Horacio Marín: Okay, thank you very much, Bruno. Very quick.

Speaker Change: Okay, thank you very much Bruno, for the question.

Horacio Marín: As you mentioned, the Pillar 1 of YPF is to focalize in the most profitable.., and asset or or or or or or or or or or or or or, So, for our... Let's go and... All goods we are going... When there is, Sponsored ADR Class D and the profitability for all the shareholders. Saying that, this is a confidential process, so I cannot... Sorry about that, but I cannot give you more information on that, okay?

Horacio Marín: Beyond crude oil, natural gas production grew by 7% in line with increased evacuation capacity from neokina-based through the new Nestor Kidner Pipeline. Additionally, the installation of the new tour funder in Loma Lelatra contributed to a 10% increase in initials production. Moving to lifting costs, we record $16.2 per Chu, remaining stable internally, but 25% higher sequentially, primarily due to the catch-up costs in dollar terms with December devaluation, capital with the lower commensional production already measured before.

Speaker Change: As you mentioned, the Pillar 1 of YPF is to focalize in the most profitable...

Speaker Change: and Igotis Vaca Muerta Oil.

Speaker Change: So, for our...

Speaker Change: Goal.

Speaker Change: Always we are going to see when there is...

Speaker Change: selling of very good assets because it's a way to improve the profitability and the profitability for all the shareholders.

Horacio Marín: Saying that this is a confidential process, so I cannot, sorry about that, but I cannot give you more information on that. Regarding the listing cost, in this quarter we have particularly issues, but your question is for what I think, I think that it will be in the second half and we are foreseen and we are working to have an average for all. I would think that we will have a different listing cost in both quarters, but we are increasing. Remember that we are producing today; yesterday our production of unconventional, the daily report was 127 bars per day, but this is a very good increase.

Speaker Change: Saying that, this is a confidential process, so I cannot, sorry about that, but I cannot give you more information on that, okay?

Horacio Marín: Regarding the lifting cost... In this quarter, we have some particular issues, but your question is about what I see. I think that it will be in the second half.

Horacio Marín: This cost inflation also impacted the listing costs of our core hub blocks that is two at $4.7 per barre of oil equivalent on the gross basis, recording a larger increase due to specific higher pooling and maintenance costs. Regarding prices in the after-in-segment crude oil realization prices average $71 per barre in Q2, 4% up, quarter on quarter as a result of a better pricing environment in the local market, and now we're trained in international prices.

Speaker Change: Regarding the lifting cost...

Speaker Change: In this quarter we had particular issues, but your question is for what I see. I think that it will be in the second half. And we are foreseeing and we are working to have an average for all.

Horacio Marín: And we are foreseeing, and we are working to have an average for all I... We think that we will have a different listing cost in both quarters, but we are increasing. Remember that we are producing today, yesterday, our production of unconventional, the daily rate, the daily report was 127 bars per day. But this is a very good increase. We are foreseeing that by the end of the year, we will have 140,000 bars a day of unconventional, which is totally our focus right now. And we are foreseeing that the lifting cost for the second half will be 4.4. $1.00 per bottle. It sounds okay; the answer for...

Speaker Change: We think that we will have a different listing cost in both quarters.

Speaker Change: But we are increasing. Remember that we are producing today, yesterday, our production of unconventional, the daily rate, the daily report was 127 bars per day.

Horacio Marín: On the natural gas size, prices reach $4 per million video most driven by the seasonal winter price of plant gas that started in May. Now walking through the performance of our shell activities in Q2 with real 50A horizontal wells in our operating blocks, all of them oil, 35% more than quarter on quarter and 26% more year on year. It's worth noting that shell oil production hit a new record, delivering 100 and 30 thousand barrels per day.

Bruno Montanari: We are foreseen that for the end of the year we have 140 thousand bars a day of unconventional and this is totally our focus right now and we foreseen that the listing cost for the second half it will be $4.4 per bar. It sounds okay; the answer for you?

Speaker Change: But this is a very good increase. We are foreseeing that for the end of the year, we will have 140,000 barrels a day of non-conventional goodies.

Speaker Change: Totally our focus right now and we foreseen that the lifting cost for the second half it will be 4.4 billion.

Speaker Change: Dollar per barrel.

Bruno Montanari: Sure, just to follow up, this 4.4 is just for Core Share Hub, right?

Bruno Montanari: Sure, just to follow up, this 4.4 is just for the core shale hub, right? For core, yeah. Yeah, yeah. What is important? The important thing for our EBITDA is the uncomissioned. Remember that we have the answer, the Andes project, and we are going out of our conventional field. All right.

Speaker Change: It sounds okay, the answer for you?

Speaker Change: Sure, just to follow up, this 4.4 is just for Core Shale Hub, right? For Core, yeah, yeah, yeah, what is important? The important for our EBITDA is the unconventional.

Horacio Marín: Yes, yes, yes, what is important, the important for our everyday is the unconventional.

Horacio Marín: 87% of the shell oil production came from our core hub oil blocks, Loma Campana, La Marga Chica, Banduria Sur, and Aguada El Genier. In terms of efficiency within our shell operation, we achieve another quarter of a standard drilling and fracking metrics, averaging 200 and 92 meters per day of drilling and 237 stages per set per month on fracking, fully in line with our guidance for the year. Also, it's worth mentioning that last year we achieved the highest lateral length drilling speed for one shell well in Aguadura Sur block, surpassing 1500 meters in a single day. Considering all these metrics, we plan to ramp up shell oil production in the second half of the year to achieve the target of more than 120 thousand barrels per day on average for 2024.

Horacio Marín: All right, remember that we have the answer; the end is the project and we are going out of our unconventional pills.

Speaker Change: Remember that we have the answer, the answer is the project and we are going out of our conventional appeals.

Bruno Montanari: All right.

Speaker Change: All right.

Luiz Carvalho: Our next question comes from a line of Luis Carvalo with UBS. Please go ahead. Hi everyone, I would like to touch base into two main points here. The first one is about the free cash flow profile for the next couple of years, right? I mean, the companies are likely to generate cash this year, of course, because of the investments that has been made. But when I look to the debt profile in 2025, you have something close to $2 billion to be paid, and sequentially in 26 and 27. So my point here is that I would like to understand from you how you see the external risks like...

Luiz Carvalho: Our next question comes from the line of Luiz Carvalho with UBS. Please go ahead.

Speaker Change: Our next question comes from the line of Luiz Carvalho with UBS. Please go ahead.

Luiz Carvalho: Hi everyone. Hi Horacio, Federico, and Margarita.

Luiz Carvalho: Hi everyone. Hi Horacio, Federico, Margarita. Thank you for taking the questions and congratulations on the results. I would like to touch base on two main points here. The first one is about the free cash flow profile for the next couple of years, right? I mean,

Luiz Carvalho: Thank you for taking the questions, and congratulations on the results. I would like to touch base on two main points here. The first one is about the free cash flow profile for the next couple of years. I mean, companies are likely to generate cash this year, of course, because of the investments that have been made. But when I look at the debt profile, in 2025, you have something close to $2 billion to be paid, and sequentially in 2026 and 2027.

Speaker Change: The company is unlikely to generate cash this year, of course, because of the investments that have been made.

Speaker Change: But when I look to the upside of that profile,

Speaker Change: In 2025, you had something close to $2 billion to be paid, and sequentially in 2026 and 2027.

Luiz Carvalho: My point here is that I would like to understand from you how you see the external risks, like if the crude prices drop or if there's any delays in terms of the production ramp-up or the pipeline construction being implemented in order to allow you to flow the production or any kind of other bottlenecks that could put your, I don't know, your balance sheet in a bit more. You know, a bit forward.

Horacio Marín: As a final conclusion, let me highlight that today's production has reached nearly 120 thousand barrels per day in line with our target average of the year. Moving on to our downstream segment, processing level averaged 200 and 99 thousand barrels per day, recording refinery utilization rate of about 90%. Although the processing level was essentially flat compared to the previous course. Carter, in decreased 2% internally, mainly due to limited availability of the La Plata Refinery affected by a shutdown, extreme weather condition and a brief direction in the pipeline during a few days which was already restored.

Speaker Change: My point here is that I would like to understand from you how you see the external risks like if the

Speaker Change: Crude prices drop or if there's any delays in terms of the production ramp up or the pipeline construction being implemented in order to allow you to flow the production or any kind of other bottlenecks that

Luiz Carvalho: The second thing is about crude and fuel prices. Of course, we've seen a significant improvement when we compare them to the past. But when we look in terms of CAPEX and OPEX, it seems there's still, I would say, at a bit higher level. So, if you can share a bit of your expectations in terms of CAPEX and OPEX reduction or, you know, efficiency gains for the second half of this year and 2025, it would be great. Thank you.

Speaker Change: could put your, I don't know, your balance sheet in a bit more dedicated situation, you know, a bit forward. The second thing is about the crude and fuel prices, of course.

Luiz Carvalho: The second thing is about the crude and few prices. Of course, we've seen a significant improvement when we compare to the past, but when we look in terms of topics and topics, it seems there's still a bit higher level. So, if you can share a bit of expectations in terms of topics and topics reduction or efficiency gains for the second half of this year and 2025, it would be great. Thank you.

Speaker Change: We've seen a significant improvement, you know, when we compare to the past. But when we look in terms of CAPEX and OPEX, it seems they're still, I would say, at a bit higher level. So if you can share a bit of your expectations in terms of...

Horacio Marín: Despite this climb, let me mention that we set the record high gasoline production La Plata Refinery. Thanks to the new gasoline hydro-trainment plan and the revamping of existing units as part of our new fuel specification projects to reduce sulfur content and improve fuel's quality. In this sense, during the future, we also continue making progress on the revamping of Luján de Cucho Industrial Complex, expected to be fully operational by next year. Few sales volume, as per the sequential reduction of 2%, mostly due to an 11 drop in gasoline sales, mainly due to a contraction in retail premium demand, it was partially offset by a 5% expansion in diesel sales on the back of the seasonal demand from agri, business and higher sales to the industrial segment.

Speaker Change: CAPEX and OPEX reduction or, you know, efficiency gains for the second half of this year and 2025 will be great. Thank you.

Horacio Marín: Thank you, Luis.

Horacio Marín: Thank you, Luiz. I'll start with the first one. Yeah.

Horacio Marín: And so, with the first one? Yeah, that is. It's a lot of questions.

Speaker Change: Thank you, Luis. We can start with the first one. Yeah.

Horacio Marín: It's a lot of questions. I will say, for a second language guy, it's a very long question, OK? Luiz, and thank you for the question.

Horacio Marín: I would say, for the second and with Guy, it's a very long question. Luis, and thank you for the question. I know you personally. So, I remember you.

Speaker Change: It's a lot of questions, I would say.

Speaker Change: For a second language guide.

Speaker Change: It's a very long question, okay? Luiz, and thank you for the question. I know you personally, so I remember you. If I not answer what you are expecting, please...

Horacio Marín: I know you personally, so I remember you. If I do not answer what you are expecting, please ask me again, because it was a long question. I will tell you the, I will try to answer the first part. M.

Horacio Marín: If I'm not answerable, you are expecting, please ask me again because it was a long question. I tell you, I try to answer the third part of the question. Our expectation of net casual are exactly the same as when we arrived here. And we are following very well the track of the results. For 24, we will be a balance of neutral inoperational point of view. So, our net casual will be negative because of our interest payments or depth. For next year, we are foreseen that it will be neutral in the order of neutral. But we are working so hard, so hard, so hard that maybe you will have some difference for going up because we are working so hard in efficiency.

Speaker Change: Ask me again, because it was a long question, but I try to answer the first part of the question.

Horacio Marín: Our expectations of net cash flow are exactly the same as when we arrived here, and we are following the results very well. For 24... And we will be... a balance of neutral in operational point of view. So our net cash flow will be negative because of our interest payment or debt, okay? For next year, we are foreseeing that it will be neutral, in the order of neutral. But we are working so hard, so hard, so hard that maybe you will have some difference, okay? For going up, okay?

Speaker Change: M...

Speaker Change: Our expectations of net cash flow are exactly the same as when we arrived here. And we are following very well the track of the results. For 24...

Horacio Marín: It's worth noting that, beside the solid performance of our refineries, we effectively address the increased diesel demand by reducing inventory levels, thereby avoiding fuel imports. Internally, fuel sales declined by 6% particularly affected by diesel demand contraction across both retail and industrial segments. However, let me point out that we are witnessing roughly a 5% demand recovery in July versus June. In terms of prices, during Cucho, we continue adjusting local fuel prices, mainly aiming to mitigate impact of the devaluation and narrowing the gap to international parities.

Speaker Change: will be

Speaker Change: a balance of neutral in operational point of view. So our net cash flow will be negative.

Speaker Change: because of our interest payments, okay, or debts, okay? For next year, we are foreseeing that it will be neutral. In the order of neutral...

Horacio Marín: As a result, average fuel prices measured in dollars increased by 3% sequentially and 14% internally. While the spread versus import parity decreased to 5% in Cucho compared to 7% in Cucho 1 and 13% in Cucho last year. Lastly, efficiency wise, since the beginning of the year, we have been focusing on the optimization of our cost structure, implemented several measures such as the reduction of a specific fuel consumption. Also, during Cucho, we created a new specified and focused team to plan monitor and promote the new efficiency and productivity standard within the downstream business.

Speaker Change: But we are working so hard, so hard, so hard that maybe you will have some difference, okay? For going up, okay? Because we are working so hard in deficiency.

Horacio Marín: Because we are working so hard in physics. For their own sake, we are foreseeing positive cash flow. All of that is without... Not talking about LNC, we are looking for project finance, no, no, not investing a lot in the next year, so it will be different, different, different. And also, it will be without M&A. Okay.

Horacio Marín: For the unknown, we are foreseen positive cash flow.

Horacio Marín: All of that is with that without not talking about anything that we are looking for for positive finance and not invest a lot in the next year, so it will be different. And also with our M&A, regarding the prices, the price goes up, you will have much better results. And why we decide to go out for the mature field because we are not efficient on that because in that way this company with lower pay will be no receiving. But from next year on, because our program, our focus and where we are going, we will be resilient for very low prices because we will be almost, I would say almost.

Speaker Change: For their own, we are foreseeing positive cash flow. All of that is without...

Speaker Change: I'm not talking about LNG, that we are looking for purchase finance, no, no, not to invest a lot in the next year, so it will be different. And also it will be without M&A, okay?

Horacio Marín: Regarding the... The price is going up, you will have... much better results. Okay, much better results. And why we decided to go out for the mature field because we are not deficient in that, because in that way, this company with a lower price will not be resilient. But from next year on, because of our program, our focus, and where we are going, we will be resilient at very low prices because we will be almost, I would say almost, an unconventional company with a very efficient way of working.

Speaker Change: Regarding the...

Speaker Change: The prices, if the prices goes up, okay, you will have the...

Speaker Change: Much better results, okay? Much better results.

Speaker Change: And why we decide to go out for the match of fields? Because we are not deficient on that, because in that way this company with lower price will be not resilient.

Speaker Change: But from next year on, because of our program, our focus and where we are going, we will be resilient for very low prices because we will be almost, I would say, almost.

Federico Barroetave: I will now turn the call over Federico to go through our financial results for the quarter. Thank you very much.

Horacio Marín: Now, an unconventional company with a very efficient way of work, we are the best company in the results of the operational. So, I am very happy to work in this company with all the team because we are going to have very good efficiency.

Speaker Change: No, I'm unconventional.

Horacio Marín: We are the best company in the results of the operations, so we are very happy to work for this company, and we work hard with all the team because we are going to have very low efficiency. We start, it's not in the question, maybe for everybody and to share with you, on the Astrin side, we started a new program, what we call Toyota World, and we signed a contract with the Toyota company. We are going to try to improve the efficiency of the car industry in the world. That is a very disruptive program.

Speaker Change: Company

Speaker Change: with very efficient way of work. We are the best company in the results of the operational. So, I'm very happy to work in this company, work hard with all the team because we are going to have very low efficiency. We start...

Federico Barroetave: Sweet into the financial front, let us start with cash flow evolution. Although our adjusted the VDA was similar to the deployment of our Capix, working capital items pressured the liquidity, such as increased seasonal billing of natural gas, payment of imported goods and services deferred from last year, and higher purchases of crude oil to serve parties due to lower conventional production, partially upset by late collections from Q1. These effects were partially upset by dividend collection from affiliates, considering also the regular, inter-espainments, free cash flow came at a negative $257 million.

Horacio Marín: If not in the question, maybe for everybody and to share with you, for the acting side, we are going to try to put the efficiency of the current industry in the world. That is a very rapid program. Everybody is very happy on that. And also, I would say, the service company come to see me from United CEOs, from Europe, and everybody knows that it will be a... change in efficiency in Argentina. This is very disruptive, and it will be extraordinary for the efficiency of work because we will be focused in reducing the well-cycle and that they will deliver much more evidence for the coming years from now.

Speaker Change: It's not in the question maybe for everybody and to share with you, for the acting side...

Speaker Change: We started a new program, what we call Toyota World, and we signed a contract with the Toyota company.

Speaker Change: We are going to try to put the...

Luiz Carvalho: Everybody is very happy about that, and also, I would say the service companies come to see me from the United States, the CEOs from Europe, and everybody knows that it will be a... Change in efficiency in Argentina is very disruptive, and it will be extraordinary for the efficiency way of working because we will be focused on reducing the wealth cycle and that they will deliver much more EBITDA for the coming years from now from the downtown park. We already have a very, very ambitious program called Growing by Efficiency, and we have more than 100 initiatives in La Plata.

Speaker Change: The efficiency of the car industry in the world. That is very disruptive program.

Speaker Change: Everybody is very happy on that, and also, I would say the...

Speaker Change: The service company come to see me from the United States, the CEOs from Europe and everybody knows that it will be a...

Speaker Change: change in efficiency in in Argentina. This is very disruptive and it will be extraordinary for the efficiency way of work because we will be focused

Speaker Change: in reducing the wealth cycle and that they will deliver much more EBITDA for the coming years from now.

Horacio Marín: From the downstream part, we already have a very, very ambitious program that is called Growing by Efficiency, that we have more than 100 initiatives in the planter. We do the planter refinery because it is the biggest that we have, the biggest of this in Argentina and it's a very big refinery. We have more than 100 initiatives that they will put the margin much more up. My goal when I come with YPF and all the team of downstream is to have the margin in this refinery and the refinery, YPF, in a very good benchmark with the American refinery. So we need to increase by efficiency our margin and we are in there.

Speaker Change: From the downstream part...

Federico Barroetave: On the liquidity front, our cash and short-term investment decreased by 13% sequentially to $1.4 billion as of the end of June. Therefore, our net debt increased to $7.5 billion while maintaining a stable net-level adjuration of 1.7 times.

Speaker Change: We already have a very, very ambitious program that is called Growing by Efficiency.

Luiz Carvalho: We do the La Plata Refinery because it's the biggest that we have and the biggest that is in Argentina, and it's a very big refinery. And we have more than 100 initiatives that will put the margin much higher. My goal when I come with YPF and all the downstream team is to have the margin in this refinery and the YPF refinery in a very good benchmark with the American refinery. So we need to increase by efficiency our margin, and we are there. I don't know if I answered your question. If I lose something that you ask me, please repeat, and I will answer.

Speaker Change: that we have more than 100 initiatives in La Plata. We do La Plata Refinery because it's the biggest that we have, the biggest that is in Argentina, and it's a very big refinery.

Speaker Change: And we have more than 100 initiatives that they will put the margins.

Federico Barroetave: Regarding our maturity profile, as of the end of June, the company faces dead materialities in the next 12 months for $1.4 billion, mostly short-term trade facilities for $611 million, both with local and international banks, which we are planning to refinance. The remaining portion includes international bonds for $312 million and local bonds for $177 million among other loans.

Speaker Change: Much more up. My goal when I come with YPF and all the team of downstream

Speaker Change: is to have the margin in this refinery and the refinery YPF in a very good benchmark with the...

Speaker Change: with the American Refinery, so we need to increase by efficiency our margin and we are in there, okay? I don't know if I answered your question or you need...

Luiz Carvalho: I don't know if I answered your question. If I lose something that you have to me, please repeat and I will answer.

Horacio Marín: I will now turn back to Arasio to continue with the presentation.

Speaker Change: If I lose something that you ask me, please repeat and I will answer.

Horacio Marín: Thank you Federico. Let me briefly recap on the progress we made regarding our conventional major field strategy. Last February, we obtained the approval of our board of directors to exit from around 50 blocks that contributed less than 1% of the company adjusted every day in 2023, with an investment of around $800 million. This important move allowed us to reallocate resources to our most profitable assets located in Baca, Moarta. Enhancing our focus on high return shell projects and optimizing our overall portfolio.

Luiz Carvalho: No, no, that's very clear, and I'm thankful for the complete answer and looking forward to seeing you person again. Thank you. Okay, thank you.

Horacio Marín: Note to note, very clear, and thank you for the complete answer. I am looking forward to seeing you in person again soon. Thank you. Okay.

Speaker Change: No, no, that's very clear and thanks for the complete answer and looking forward to seeing you in person again soon. Thank you.

Vasant Phalanga: Our next question comes from the line of Vasant Phalanga with Bradesco. Please go ahead.

Vesant Phalanga: Our next question comes from a line of Vesant Phalanga with Bradesco. Please go ahead. Hello, everybody. Thank you for taking my questions. I have to also.

Speaker Change: Okay, thank you.

Speaker Change: Our next question comes from the line of Vasant Phalanga with Bradesco. Please go ahead.

Vasant Phalanga: Hello everybody, thank you for taking my questions. I have two also.

Vasant Phalanga: The first one, congratulations on the drilling speed metrics. Do you think there's still room to increase the 1,500 meters per day? Or are you already close to a limit? What will be your dream target here in terms of meter drills per day? Then my second question is, when will YPF and the other interested parties decide on how to split the interest in the Vaca-Muerta-Suud pipeline? Could we have a decision already this year, maybe next?

Vasant Phalanga: Hello everybody. Thank you for taking my questions. I have two also. The first one, congratulations on the drilling speed metrics.

Vesant Phalanga: The first one, congratulations on a drilling speed metrics. Do you think there's still room to increase the 1,500 meters per day, or are you already close to a limit? What will be your dream target here in terms of your growth per day?

Vasant Phalanga: Do you think there's still room to increase the 1,500 meters per day or are you already close to a limit? What will be your dream target here in terms of meter drills per day?

Horacio Marín: In April, we launched the first stage called[inaudible] Blocks, Group in 11 Clusters. During the virtual data-run phase and Q&A session, we attracted significant interest, totaling over 500 interaction from Bayroof players. By June, we open bids and receive more than 60 offer from the over 30 local and international independent companies. Following a 30-day compression analysis of all qualified bidders, this week, we have enabled to execute six SPAs with different companies for six clasters.

Vesant Phalanga: Then my second question, when will YPF and the other interested parties decide on how to split the interest on the Vakamurta smooth pipeline? Could we have a decision already this year, maybe next? Thank you very much.

Vasant Phalanga: Then my second question, when will YPF and the other interested parties decide on how to split the interest on the Vaca Muerta sewer pipeline? Could we have a decision already this year, maybe next? Thank you very much.

Horacio Marín: First of all, I would like you to know, thank you, Vesant, for the question. But first of all, I would like for you to know me because I am a crazy guy, okay? I'm not using using Adidas in my life. Sorry if I say to Adidas, but I love it. Impossible is nothing in life.

Vasant Phalanga: Thank you very much.

Horacio Marín: First of all, I would like you to know, thank you, Vicente, for the question. First of all, I would like you to know me because I am a crazy guy, okay? I'm not using Adidas in my life. I'm sorry if I say I took them, but I love them.

Speaker Change: First of all, I would like you to know... Thank you, Vicente, for the question. First of all, I would like for you to know me because I am a crazy guy, okay? I'm not using Adidas in my life. I'm sorry if I say I took Adidas, but I love. Impossible is nothing in life.

Horacio Marín: There is nothing impossible in life. So what I'm going to, I don't really, the technical limit for me is the ceiling. I don't care if I cannot improve, but I push, and always when you push, you always obtain something.

Horacio Marín: So what I'm going to do, I don't really, the technical limit for me is the ceiling. I don't care after if I cannot improve, but I push, and always when you push, always you obtain something.

Speaker Change: So what I'm going to... I don't really... the technical limit for me is the ceiling. I don't care if I cannot improve, but I push and always when you push, always you obtain something.

Horacio Marín: Also, we are currently progressing on the SPAs of the remaining clasters. Regarding the blocs that are not included in the undisputed version, most of them located in the promises of Santa Cruz and Terralo Fuego, we have already initiated a negotiation and expected to move forward with needed assignment and a reversion to the provincial energy companies in the near future. Otherwise, we will consider the possibility to include these blocks in the second undisputed version. As an updated summary of this strategy initiative, we maintain our confidence about closing the transcriptions for all the blocs by EORN on track with the prospective timeline and terms approved by our BOR class February.

Horacio Marín: Every time that you see, I arrive the limit, you have to go out of the company, but means that I am an old man, but means that you are an old man from the mind, so I like you to know me. I am a crazy guy; I don't want, I don't like that you arrive to the limit. For me, it's not the limit.

Horacio Marín: Every time that you see that I arrive at the limit, you have to go out of the company. That means that you are a... I am an old man. That means that you are an old man in your own mind. So, I would like you to get to know me. I am a crazy guy. I don't want, I don't like that you reach the limit. For me, it's not the limit. The guys in downstream, they don't imagine what I am here. As soon as we have that margin, we will have another new problem. Okay, that is for the first part... For the second part, you ask me.

Speaker Change: Every time that you see I arrive at the limit, you have to go out of the company.

Speaker Change: I am an old man. That means that you are an old man from the mind. So, I like you to...

Speaker Change: to know me. I am a crazy guy. I don't want, I don't like...

Speaker Change: that you arrive to the limit. For me, it's not the limit. The guys of DownTrend, they don't imagine what I'm here. As soon as we have that margin, we will have another new program. Okay, that is for the first part.

Horacio Marín: As soon as we have that margin, we will have another new problem. Okay, that is for the first part. For the second part, you ask me? We have already signed a two-third of the compromise for the project. I am totally focused; I am focusing everything, but we are totally focused on that because I don't want to make losing money for the shareholders like payment my salary. And so we cannot delay one day, okay? We are, you know that we are discussing one big company in United States, and we are in a good shape, but as soon as we have an agreement, I will tell you.

Horacio Marín: Okay, we have already signed two-thirds of the compromise for that project. I'm totally focused, I'm focusing everything, but we are totally focused on that because I don't want to lose money for the shareholders that pay me my salary, and so we cannot delay one day, okay? You know that we are in discussions with a big company in the United States and we are in good shape, but as soon as we have an agreement, I will tell you.

Speaker Change: For the second part, you ask me...

Speaker Change: Thank you.

Speaker Change: Okay, we have already signed two-thirds of the compromise.

Speaker Change: for the project. I'm totally focused on that because I don't want to make losing money for the shareholders.

Speaker Change: pay me my salary, and so we cannot...

Speaker Change: Thank you very much.

Horacio Marín: Once the second tranche of Vemos is operational, it will also be connected to the oil export dedicated port of Punta Colorado in the province of Rio Negro. The first tranche has a length of around 130 kilometers with a capacity of roughly $200 million. We expect this facility to become online in Q1 next year, with a starting capacity of more than 350,000 barrels per day to be initially utilized currently without the last ongoing expansion expected by EORN.

Horacio Marín: But we are; our problem is to mobilize the equipment in November, and that the problem is the problem. Yesterday we said that we are doing that with all the industry in the same table, and we think that in a couple of weeks we will have 100% already signed, and it's our focus.

Horacio Marín: We are, our program is to mobilize the equipment in November, and that the program is the program. Yesterday, we said that we were doing that with all the industry at the same table, and we think that in a couple of weeks we will have 100% already signed, and that's our focus. From the part of the split, remember, YPF has to lead the industry, and we are leading the industry, and our idea is to make it as simple as possible, the more simple, because the mainstream is not the focus of our company or any company in the upstream, the other. So the focus is to make and increase the production a lot. We are going to increase production a lot and conventional.

Speaker Change: We are, our program is to mobilize the equipment in November , and that the program is the program.

Speaker Change: Yesterday we said that we are doing that with all the industry in the same table and we think that in a couple of weeks we will have 100% already signed and it's our focus.

Horacio Marín: From the part of the split, remember, YPF has to lead the industry, and we are leading the industry, and with the idea is to do a simple as possible, the more simple, because the mainstream is not the focus of our company, or any company of the other. So the focus is to make an increase a lot of the production. We are going to increase a lot of the production and the conventional. So, as soon as it is, what we are doing is the following: the percentage of your paying is the percentage of your capacity. And we are going to make like an SPB for with all the companies, and at the beginning we are saying to not to have a lot of partners. Is that any partner that has more than 10% of the year will have a share in the world of that company.

Speaker Change: The... from the part of the plate...

Horacio Marín: The Bemosfor tranche's capacity shall be expected to over 450,000 barrels per day by the second half of 2026 when the second tranche starts its operation. The second tranche of Vemos has a length of roughly 440 kilometers with a capacity of about $2.5 billion. The design starting capacity is 180 cents per day, planned to be expanded to around 500 by 2027. Also, the pilot system will be designed to reach more than 7,000 bars per day of total capacity if the pricing requires.

Speaker Change: Remember, YPF has to lead the industry and we are leading the industry.

Speaker Change: And our idea is to do as simple as possible, the more simple because the mainstream is not the focus of our company or any company of the upstream, the others.

Speaker Change: So, the focus is to make and increase a lot the production. We are going to increase a lot the production and conventional. So, as soon as, as simple as it is, what we are doing is the following.

Vasant Phalanga: So, as simple as it is, what we are doing is the following. The percentage of your pain is a percentage of your capacity, and we are going to set up an ISPB with all the companies, and at the beginning, we say not to have a lot of partners; any partner that has more than 10% of the shares will have a share on the board of that company. If you have less than 10%, we should not have a board because, if not, it will be very difficult to manage the company. Okay, I think I answered your question. Tell me if you are comfortable or if you need more details.

Speaker Change: The percentage of your pain is a percentage of your capacity.

Speaker Change: And we are going to make like an ISPB.

Speaker Change: for with all the companies and at the beginning we are saying to not to have one a lot of a partners

Horacio Marín: This project is a game changer for YPF and Argentina, increases significantly the export capacity and the bottleneckings share resources of Vaca Morta Formation. This tranche of Vemos will be a fully export dedicated infrastructure and its offshore terminal will be located at the deep water port that will be allowed BLCC, the old mega vessels that transfer around 2 million bars. Besides lower tariff, this vessel opens up new international marker opportunities for all of Argentina produces, such as the Asian market.

Speaker Change: is that any partner that has more than 10% of the share will have a share in the board of that company. If you have less than 10% we are not to have a board because if not it will be very difficult to manage the company.

Horacio Marín: If you have less than 10%, we are not to have a board because it will be very difficult to manage the company.

Horacio Marín: Okay, I think I answered your question.

Vesant Phalanga: Tell me if you are comfortable or you need more details. Yes, no, that was very complete and interesting.

Speaker Change: Ok, I think I answered your question. Tell me if you are comfortable or if you need more detail.

Vasant Phalanga: Yes, no, that was very complete and interesting. Thank you, and I'm looking forward to meeting you soon. Thank you very much.

Vesant Phalanga: Thank you, Erin, and looking forward to meeting.

Speaker Change: Yes, no, that was very complete and interesting. Thank you and I'm looking forward to meeting you soon. Thank you very much.

Alejandro DeMichelis: So thank you very much. Our next question comes from a line of Alejandro Demichelis with Jeffries. Please go ahead.

Alejandro DeMichelis: Our next question comes from the line of Alejandro Demichelis with Jeffreys. Please go ahead.

Speaker Change: Our next question comes from the line of Alejandro Demichelis with Jeffreys. Please go ahead.

Horacio Marín: YPF is currently leading the development of the process at the main ship, and we are starting it as an export consortium pilot by which the local oil producing operator of Vaca Morta Formation shall be able to commit and secure a portion of the transportation capacity. In terms of progress to date of this strategic initiative, let me share that from the technical point of view, we have already completed the basic design engineer for the pipeline and we are progressing the design review of the Torres terminal and voice system.

Alejandro DeMichelis: Hi, good morning, all. Thank you very much for taking my questions. That's two questions, if I may. The first one is you mentioned the sale growth that you're expecting by the end of this year: 140,000 bars a day. What can we expect, say, for 225, 226, 227? That's for the first question. Then the second question is: you gave us a good update on Andres, but also, when we look at the quarter, you mentioned that some of the margin, refining margin impact was because of third parties on purchases. So once you are out of those commercial fields, should we also expect that you're refining margin structurally lower because you need to buy more third party oil?

Alejandro DeMichelis: Hi, good morning all. Thank you very much for taking my questions. I'll ask you two questions, if I may. The first one is, you mentioned the share growth that you're expecting by the end of this year, 140,000 bars a day. What can we expect, say, for 2025, 2026, and 2027?

Speaker Change: Thank you for watching. I hope you enjoyed it. And if you do, please hit the like button. And if you're new to the channel, make sure to hit the subscribe button. I'll see you in the next one.

Speaker Change: Hi, good morning all. Thank you very much for taking my questions. I'll ask you two questions, if I may, please. The first one is, you mentioned the share growth that you're expecting by the end of this year, 140,000 barrels a day. What can we expect, say, for 2025, 2026, 2027? That's probably the first question.

Alejandro DeMichelis: That's probably the first question. Then the second question is, you gave us a good update on AMBERS, but also, when we look at the quarter, you mentioned that some of the margin, refining margin impact was because of third-party oil purchases. So once you are out of those conventional fields, should we also expect that your refining margin is structurally lower because you need to buy more third-party oil?

Speaker Change: Then the second question is, you gave us a good update on AMDES, but also when we look at the quarter, you mentioned that some of the margin, refining margin impact was because of third party oil purchases.

Horacio Marín: Simultaneously, we have secured all key governance approval and environmental permits, and we are in the process of receiving final quotation for the EPC and live pipes supply. Right now, we are focusing on all efforts to speed up the progress or receiving LOIs from the different export-producer base on terms that will allow to start the project finance arrangement. So far, we have received LOIs covering around 2-3 of total project transportation capacity and we are optimistic to conclude the process during Q3. Also, we have been patient to apply for their rigidity once fully regulated.

Speaker Change: So, once you are out of those conventional fields, should we also expect that your refining margin is structurally lower because you need to buy more third-party oil?

Alejandro DeMichelis: Thank you so much.

Alejandro DeMichelis: Thank you so much. We can start with the first question, Ale, and then, if you can, you can repeat the second question, if you don't mind. The first question was about shade production. Okay. Twenty-five onwards. Twenty-five onwards. We are working, thank you, Alejandro, for the question. We are working on... short-term, medium-term, and long-term strategies all day. I prefer to give you guidance, and I compromise here with you and also with all the guys that are on this call that the day you invest or next year, I give you guidance for three years with very good certainty. It's not that I cannot tell you because there are some issues or things that I would have a better idea for by the next year, and I prefer, if you don't mind, in March. I think it's in March. I prefer It's okay for you, or not, or...

Horacio Marín: We can start with the first question on it, and then if you can, you can repeat the second question if it is mine.

Speaker Change: Thank you so much. We can start with the first question, Ale, and then if you can, you can repeat the second question, if you don't mind.

Horacio Marín: The first question was about the shape production of 25 or more. 25 onwards. We are working; thank you, Alejandro, for the question. We are working in short term, minimum term, and long term strategy all day.

Speaker Change: The first question was about the shade production of the 25 onwards. We are working, thank you Alejandro for the question, we are working in...

Speaker Change: Short-term, medium-term, and long-term strategy or lay.

Horacio Marín: For I would like, I prefer to give you the guidance, and I compromise here with you and also with all the guys that they are in this call that they invest on next year. I give you the guidance for the three years with very good. It's not that I cannot tell you because there are some issues or things that I will have a better idea for by the next of the year.

Speaker Change: I would like, I prefer to give you the guidance and I compromise here.

Horacio Marín: Continue our focus on growing our export-accelerating evacuation to the Pacific during Q2 wing crisis, our oil export to Chile delivering 29,000 bodies per day through the Trans-Ainian pipeline reaching an excess per revenue of nearly $220 million. Note that this is 25 more than Q1 and represent now 11% of our oil production. This for one year ago, were only 3%.

Speaker Change: With you and also with all the guys that they are in this call that the day you invest the next year I give you the guidance for the three years with very good...

Speaker Change: It's not that I cannot tell you, because there are some...

Speaker Change: Some issues or things that I will have a better idea for by the next of the year.

Horacio Marín: I prefer, if you don't mind, in March, I think it's in March, I prefer to give you a very clear answer for everybody and with my personal compromise on the result, if you don't mind. It's okay for you, or yeah, it is, it is okay, but can you give us then so many more rigs to expect? You are saying 25 then? Okay, it depends on several questions that you have; they were today. Today we think that it will be 15 because next year it will be a year of not growing because it will be a growing capacity on the wall.

Speaker Change: And I prefer, if you don't mind, in March, I think it's in March already, in March, I prefer I give you a very clear answer for everybody.

Horacio Marín: Before ending our presentation and going to Q&A, let me briefly comment on the progress made regarding our energy process, by Enofiulai, YPF, and its strategic partner defined the location of the process in the province of Rio Negro. The decision was taken after the deep analysis of technical, economic, environmental, geographic, fiscal, regulatory aspects. In this sense, YPF decided to hire, at this expense, art to the little who reconfigured our analysis conclusion. Also, let me recall, all the importance of this project, which once completed is a pay-tick to contribute around $15 billion annually to Argentina as per revenues, significantly boosting the country's balance of payments. I will mention in previous call, we expect to own between 25 to 30% of the total energy capacity, engaging the rest of the industry to show this project.

Speaker Change: And with my personal compromise on the result, okay? If you don't mind. It's okay for you, or...

Horacio Marín: Yeah, it is okay. But can you give us then how many more weeks you expect to add, say in 2025?

Speaker Change: Yeah, it is okay. But can you give us, then, how many more weeks do you expect to add, say, in 2025, then?

Horacio Marín: Okay, it depends on several questions that you have; they work today. Ed, today we think that it will be 15 because next year it will be a year of not growing at all because there will be a growing capacity at Odelval. Remember that Odelval will increase the total capacity for all the industry by the end of December to the order of 15,000 barrels a day and in April to 200,000. So we are always going to grow efficiency, reducing working capital as much as we can and fill our capacity.

Speaker Change: Okay, it depends on several questions that you have. They work today.

Speaker Change: Ehhh...

Speaker Change: Today we think that it will be 15 because next year it will be...

Speaker Change: A year of not growing at all because there will be a growing capacity on Odelval. Remember that Odelval...

Horacio Marín: Remember that the wall by the end of December, they will increase the total capacity for all the industry in the organ of 15,000 bars today and in April 200,000. And so we are going to always, we are going to go efficiency, reducing work capital as much as we can so and feel our experience. Capacity, is because we have a fair capacity and we don't have the rig to reach. For sure, we're going to agree and remember that it's an open access gear. And also, always I will look at the evidence, with the graphics and profitability of the company.

Speaker Change: By the end of December , they will increase the total capacity for all the industry in the order of 15,000 barrels a day.

Speaker Change: and in April 200,000. And so we are going to always, we are going to go efficiency, reducing work capital as much as we can so...

Horacio Marín: On the other hand, it's worth mentioning that a few weeks ago, the initiative regime for large-scale investment also known as a regime was enacted. Providing a serious incentive, we considered the key way to place back a mortality gas in the global markets, transforming YPF Argentina in the work-class energy sector.

Fidel Alvarado: And, and, feel, feel our, our, um...

Horacio Marín: Capacity. It's because you have spare capacity and we don't have the... The race to reach, for sure, we are going to agree and remember that it's an open access agreement here, ok? And also, always I will look at the EBITDA, CAPEX, and profitability of the company. I'm not going to be crazy about higher rates and not deliver efficiency for all the shareholders, ok?

Fidel Alvarado: Capacity. If we have spare capacity and we don't have the...

Speaker Change: The Rage to Rage

Speaker Change: For sure we are going to...

Horacio Marín: So, with this, we conclude our presentation and open to the floor questions. Thank you.

Speaker Change: to agree and remember that it's an open access key, okay? And also, always, I will look at the EBITDA, CAPEX, and...

Operator: We will now begin the question and answer session. If you've dolled in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you'd like to withdraw your question, simply press star 1 again. If you're called upon to ask your question or a listing, be a loudspeaker on your device. Please pick up your handset and ensure that your phone is not on mute when asking your question. For today's session, we ask that you please limit yourself to one question and one follow-up question. Again, press star 1 to join the queue.

Horacio Marín: I'm not going to be crazy into higher breaks and not deliver efficiency for all this year's holidays. Okay.

Speaker Change: Profitability of the company. I'm not going to be crazy into higher rates and not deliver efficiency for all the shareholders.

Horacio Marín: That's great. Thank you. And yes, so the second question that Margarita asked me to repeat was... Once you get out of the conventional fields, you will need to buy more conventional oil from third parties for your refiners, right? So the question is, would that also put a bit of an impact or pressure on your refining margins?

Alejandro DeMichelis: That's great. Thank you.

Horacio Marín: And yes, sorry, the second question that Margarita has to repeat was, once you get out of the conventional fields, you will need to buy more conventional oils from parties for your refinements, right? So the question is, good that also put a bit of an impact or pressure on your refined margins structurally. Yes, but remember that in that I have to talk about Argentina, Argentina. We are almost now in international prices; the policy of the Argentina, the change of Argentina in the oil is to go in that region. So they will be not different to have or not to have that.

Speaker Change: That's great, thank you. And yes, so the second question that Margarita asked me to repeat was...

Speaker Change: Once you get out of the conventional fields, you will need to buy more conventional oil from third parties for your refineries, right?

Margarita Chun: So the question is, would that also put a bit of an impact or pressure on your refining margins structurally?

Bruno Montanari: Our first question comes from Alina Bruno Montenari with Morgan Stanley. Please go ahead.

Horacio Marín: Yes, but remember that I have to talk about Argentina. Argentina, we are almost in an international crisis; the policy of Argentina, the change of Argentina in oil, is to go into that region. So, it will not be different to have or not have that.

Bruno Montanari: Good morning, everyone. Thank you for taking my questions. I'll have two quick ones here. The first one, would the company still be interested to look at potential share oil acreage, which is available for sale in Argentina? It's widely known that Exxon is leaving the country, so to the extent you could comment on that, it would be great how it would potentially complement the company's portfolio and much more focused on share.

Speaker Change: Yes, but remember that I have to talk about Argentina. Argentina, we are almost now in...

Speaker Change: In international prices, the policy of the Argentina and the change of Argentina in the oil is to go in that region.

Speaker Change: They will be no different to have or not to have that. And remember also that we have an increase in our production. And also we have some exits.

Alejandro DeMichelis: And remember also that we are increasing our production and also we are with some exits that we have in the Andes. We have some agreements for buying the oil. In the Mendoza part, we are, for everybody, the best way, the most efficient way, to sell the oil is to YPF because it's a hinterland that is like clouds. It's not easy to open that, so that is more easily decreased. The other is also some Medanito from us, it will be, as it is today, it will be at the refinery, but our goal is because we are going to increase the production in the next years, I cannot say next year because it will be another, we are also focused on export.

Horacio Marín: And remember also that we have increasing in our production. And also, we are, we have some exit that we have in the, in the end, we have some agreements of buying the oil in the Mendoza part. We are the, for everybody, the best way efficiency to sell the oil is to YPS because it's a hinterland that is like close. It's not easy to open that.

Horacio Marín: The second question is about lifting costs. We understand the reasons behind the increase in the quarter, so looking for any trends you can provide us for the coming quarters, if lifting costs would remain stable at the levels from queue 2, or if there could be any relief into the coming quarters, that would be great. Thank you very much. Okay, thank you very much, Bruno. For the question, as you mentioned, the pillar 1 of YPF is to focalise in the most profitable... Asset or I got this back and more of the oil. So, for our goal, always we are going to win when there is a selling of very good asset because it's a way to improve the profitability and the profitability for all the shareholders.

Speaker Change: that we have in the Andes, we have some agreements of buying the oil. In the Mendoza part, we are the, for everybody, the best way, efficiency.

Speaker Change: To sell the oil is to YPF because it's a hinterland that is like closed.

Horacio Marín: So that is more entirely to the other is also some metadata from us, it will be to as it is today, they will be at the refinery, but the overall, because we are going to increase the production in the next years. Of course, I cannot say next year because it will be the other. We are focused also in the next, as soon as we increase a lot, I think that that question down, it will be out because you realize that we are going to be company that we can buy here easily and we can, and we can spoil a lot.

Speaker Change: It's not easy to open that, so that is more...

Speaker Change: The other is also San Medanito from us. It will be as it is today.

Speaker Change: They will be at the refinery, but our goal is because we are going to increase the production in the next years, I cannot say next year because it will be the other, we are focused also in...

Alejandro DeMichelis: As soon as we increase a lot, I think that question doubt will be out because you realize that we are going to be a company that we can buy here easily and we can export a lot, okay?

Speaker Change: in the export. As soon as we increase a lot, I think that

Horacio Marín: Saying that this is a confidential process, so I cannot sorry about that, but I cannot give you more information on that. Regarding the listing cost, in this quarter we have particularly issues, but your question is for what I think, I think that it will be in the second half and we are foreseen and we are working to have an average for all I would think that we will have a different listing cost in both quarters, but we are increasing, remember that we are producing today, yesterday our production of unconventional, the daily report was 127 bars per day, but this is a very good increase.

Speaker Change: Question doubt, it will be out, because you realize that we are going to be a company that we can buy here easily and we can export a lot, ok?

Horacio Marín: Okay, that's great. Thank you very much.

Andres Cardona: That's great. Thank you very much.

Andres Cardona: Oh, thank you. Our next question comes from a line of Andre's, Cardona with city. Please go ahead.

Speaker Change: That's great, thank you very much.

Andres Cardona: Our next question comes from a line from Andres Cardona with Citi. Please go ahead.

Speaker Change: Oh, thank you.

Speaker Change: Our next question comes from a line of Andres Cardona with Citi. Please go ahead.

Andres Cardona: I Good morning. I'm not sure if I didn't come back from the on the resource I have a two questions, the first one. It's about any progress on non-core asset divestiture beyond the conventional crude processes that you have mentioned. If we can expect any announcement or the next 12 months, I remember you wanted to focus on the core business and mention some assets that could be divested there. So, any update on the second one? Is there were some interesting highlights. So, if you can't share some thoughts about those, thank you. Okay, thank you, Andres, for your question.

Andres Cardona: Good morning, Horacio, Fede. Congratulations on the results. I have two questions. The first one...

Andres Cardona: Good morning, Horacio, Fede, congrats on the results. I have two questions. The first one...

Andres Cardona: It's about any progress on non-core asset divestiture beyond the conventional crude processes that you have mentioned, and whether we can expect any announcement over the next 12 months. I remember you wanted to focus on the core business and mention some assets that could be divested there. So, any update? And the second one is, there were some interesting highlights about early results for Palermo AQ. So, could you share some thoughts about those? Thank you.

Andres Cardona: Ehm...

Andres Cardona: It's about any progress on non-core asset divestiture beyond the conventional crude processes that you have mentioned.

Speaker Change: If we can expect any announcement over the next 12 months...

Speaker Change: I remember you wanted to focus on the core business and mention some assets that could be divested there, so any update? And the second one is, there were some interesting highlights about early results on Palermo AQ.

Horacio Marín: We are foreseen that for the end of the year we have 140 thousand bars a day of unconventional and this is totally our focus right now and we foreseen that the listing cost for the second half it will be $4.4 per bar. It sounds okay, the answer for you? Sure, just to follow up, this 4.4 is just for core share hub, right? Yes, yes, yes, what is important, the important for our everyday is the unconventional. All right, remember that we have the answer, the end is the project and we are going out of our unconventional pills.

Speaker Change: So if you can, share some thoughts about those. Thank you.

Horacio Marín: Okay, thank you, Andre, for your question. You hear Margarita, and I don't know why she told me you were Andre, because I know that you're Andre, but anyway, all right? Remember, because they don't like my English, so that's why they always repeat me the names on that, but sorry about my English. It doesn't matter. I will put the best that I can, okay? Ehhmm, For the best, you are talking about Pillar 2, but I'm totally, I always take total control of myself.

Operator: All right.

Speaker Change: Okay. Thank you, Andre, for your question. You hear Margarita and I don't know why she tell me Andre because I know that you're Andre. But anyway.

Horacio Marín: You here, Margarita. I don't know why he told me Andres because I know Daniel Andres. But anyway, remember, because they don't like my English, so that's why always they repeat me the names and that. But sorry by my English, it doesn't matter. I put the best that I can. Okay. For the basis, you're talking about pillar two, but I'm totally I make always always control of myself. The model of the act of approved last month. And we start the process of seeing a proposal. And after we come back, but to sell. So, it's YPF Brazil, but it's a lubricant company.

Speaker Change: Remember, because they don't like my English, so that's why always they repeat me the names on that. But sorry about my English. It doesn't matter. I put the best that I can, okay?

Speaker Change: For the defense, you are talking about pillars too, but I make always control of myself.

Luiz Carvalho: Our next question comes from a line of Luis Carvalo with UBS, please go ahead. Hi everyone, I would like to touch base into two main points here. The first one is about the free cash flow profile for the next couple of years, right? I mean, the companies are likely to generate cash this year, of course, because of the investments that has been made. But when I look to the debt profile in 2025, you have something close to $2 billion to be paid and sequentially in 26 and 27. So my point here is that I would like to understand from you how you see the external risks like...

Horacio Marín: The board of directors approved it last month, and we start the process. Alfine, And after we come back to sell it, it's YPF Brazil, which is a lubricant company. YPF Chile, we are selling some lubricants and shirts, and those are... If you see, David Dye is not with YPF.

Speaker Change: The Board of Directors approved last month.

Speaker Change: And we start the process.

S.E.A.N.: of S.I.E.N.

Speaker Change: A proposal, and after we come back to sell, is YPF Brazil, which is a lubricant company.

Horacio Marín: YPF Chile, what is it? We are selling. I mean, some lubricants and, and, and, and shed. Those are, if you see, the bidai is not for YPF. So, we are going to sell that. Also, we are in a process to see and sell. Refinore that for us is not a key asset. We start the negotiation and going to the way to go out there because it's not for YPF also. And for if you are talking about Metro gas, we are going to sell, but not today because there, if I sell today, I'm, I think I'm now doing the my shop for you for the shareholder properly.

Speaker Change: YPF Chile, we are selling some lubricants and sheds.

Horacio Marín: So we are going to sell that. Also, we are in a process to see and sell a refinery that, for us, is not a key. ACES, We start the negotiation and go into the way to go out there, because it's not for YPF also. If you are talking about Metro Gas, we are going to sell it, but not today. Because there, if I sell today, I'm...

Speaker Change: Those are...

Speaker Change: If you see, David Dye is not for YPF, so we are going to sell that. Also, we are in a process to see and sell refiner that for us is not a key asset.

Luiz Carvalho: If the crude prices drop or if there's any delays in terms of the production ramp or the pipeline construction being implemented in order to allow you to flow the production or any kind of all the bottlenecks that could put your balance sheet in a bit more dedicated situation, a bit forward. The second thing is about the crude and few prices. Of course, we've seen a significant improvement when we compare to the past, but when we look in terms of topics and topics, it seems there's still a bit higher level. So, if you can share a bit of expectations in terms of topics and topics reduction or efficiency gains for the second half of this year and 2025, it would be great.

Speaker Change: We start the negotiation and go into the way to go out there, because it's not for YPF also. If you are talking about Metro Gas, we are going to sell, but not today, because there, if I sell today, I'm...

Horacio Marín: I think I'm not doing my job for you, for the shareholder, properly because I'm telling you when Argentina will improve a lot in the macro, and when it's reducing, the macro will be stabilized, the price of Metro is up. So, it's not like I'm not focused on that in this company. The guy that is working, the general manager, has the totally the idea that we are going to sell, but we are waiting on that because, as I will repeat, it's better for you and for all the shareholders, okay?

Horacio Marín: Because I'm selling with one, when Argentina, we will improve a lot in the macro. And when the is reducing the, the macro will be stabilized, the price of Metro gas up. So, it's not like I'm not focused on that in this, in this company, the guy that's working them, the general margin manager has totally the idea that we are going to sell, but we are waiting on that. Because I think they are, as I would repeat, it's better for you and for all the shareholders, okay. And a profile, you can say also in the dark, no, it's not a thing, but we're calling gas energy business because it's a profile use our gas is very, very profitable.

Speaker Change: I think I'm not doing my job for you, for the shareholder, properly.

Speaker Change: Because, I'm telling you, when Argentina will improve a lot in the macro and when they are reducing the...

Speaker Change: The market will be stabilized. The price of metrograms will go up.

Speaker Change: So, uh...

Speaker Change: It's not like I'm not focused on that in this in this company the guy that's working them

Speaker Change: The general manager has totally the idea that we are going to sell, but we are waiting on that because I think they are, as I would repeat, it's better for you and for all the shareholders.

Horacio Marín: And pro-fertile, you can say also in the noise down thing, but we call it gas energy, business because it's pro-fertile, use our gas, it is very, very profitable, and so.., because it's very profitable. It's my incoherence in focusing on here in energy, but I have now a good slogan to maintain, that is, gas that makes food. So energy makes food.

Speaker Change #100: And pro-fertile, you can say also in the noise down thing, but we call it gas energy,

Horacio Marín: Thank you. Thank you, Luis. And so, with the first one? Yeah, that is. It's a lot of questions. I would say, for the second and with Guy, it's a very long question. Luis, and thank you for the question. I know you personally. So, I remember you. If I'm not answerable, you are expecting please ask me again because it was a long question. I tell you, I try to answer the third part of the question.

Speaker Change #100: business because it's a pro-fertile use of our gas. It is very, very profitable and so big.

Horacio Marín: And so big. because it's very profitable, it's my insurance, it's a focus in energy, but I have now a good slogan to maintain that is gas that make food, so energy making food, so in there I take out my idea, but it's very profitable, so we are going to maintain, we are going to see what is happening with the senior and the other, and at that moment we are going to look at partners to duplicate the plant, remember, no, remember no, but this is, you don't need to put money, there is a project final or with a new partner, we will see how to do that, okay, and in why take what is the research and development company, we are totally focused now in energy, there is no more talking about harvest or crops or nothing to do with that, and also last month or last weeks, I don't remember exactly the day sorry for that, but I think two weeks ago we started a new program called BAMAS, a class in English class, BAKAMUARDA, what is to work with the whole industry to solve common problems for the industry, I don't know if it's okay for you or you need more details for me.

Speaker Change #100: Because it's very profitable, it's my incoherence in focusing energy, but I have now a good slogan to maintain, that it's gas that makes the world.

Horacio Marín: So in there, I take out my idea. But it's very profitable, so we are going to keep it. We are going to see what happens with the selling on the other. And at that moment, we're going to look at partners to duplicate it. The plant, remember, no, remember no, but this is, you don't need to put money there, it's the project finance, or with a new partner, we will see how to do that, okay.

Speaker Change #100: Food

Speaker Change #100: So, energy, making food, so...

Speaker Change #101: In there, I take out my idea. It is very profitable, so we are going to maintain. We are going to see what happens with the selling on the other. And at that moment, we are going to look at partners to duplicate the...

Horacio Marín: Our expectation of net casual are exactly the same as when we arrived here. And we are following very well the track of the results. For 24, we will be a balance of neutral inoperational point of view. So, our net casual will be negative because of our interest payments or depth. For next year, we are foreseen that it will be neutral in the order of neutral. But we are working so hard, so hard, so hard that maybe you will have some difference for going up because we are working so hard in efficiency.

Speaker Change #102: The plan, remember, no, remember, no, but this is a, you don't need to put money there, it's a project finance or with a new partner we will see how to do that, okay?

Horacio Marín: And in White Tech, which is the research and development company, we are totally focused on energy now. There is no more talking about harvest or crops or anything to do with that. And also last month we, or last week, I don't remember exactly the date, sorry for that, but it was I think two weeks ago we started a new program that we call VACAMUERTA, which is to work with the oil industry to solve a common problem for the industry. I don't know if it's okay for you or you need more detail from me.

Speaker Change #103: In White Tech, what is the research and development company, we are totally focused now in energy. There is no more talking about harvest or crops or nothing to do with that.

Speaker Change #103: and also last

Speaker Change #103: Last month we, or last week, I don't remember exactly the date.

Speaker Change #103: Sorry for that, but it was, I think, two weeks ago we started a new program that we call VA-MAS or PLAS in English, PLAS Vaca Muerta, which is to work with the oil industry to solve

Horacio Marín: For the unknown, we are foreseen positive cash flow. All of that is with that without not talking about anything that we are looking for for positive finance and not invest a lot in the next year, so it will be different. And also with our M&A, regarding the prices, the price goes up, you will have much better results. And why we decide to go out for the mature field because we are not efficient on that because in that way this company with lower pay will be no receiving.

Speaker Change #103: A common problem for the industry.

Andres Cardona: This is a great color, and I just wanted to ask about YPF Luce. What are your thoughts on that asset?

Horacio Marín: Hey, this is great color, and I just wanted to ask about YPF Loose. What are your thoughts on that last? Ah, okay, YPF Loose, no, sorry, sorry, I forgot YPF Loose, YPF Loose is a wonderful company and we are always, we have a positive habit that is good, we are growing, they don't need a capital for YPF group, we always with finance with the new project and we are growing now, we are a company that produce a new world for 700 megawatts and we are a, I know, a company that consumes 420 megawatts, so we are in a good shape in the transition period, you can make the numbers there, I'm sorry, I forgot that but one week ago I would say we are producing only water but it's not, I'm saying that it will be water, because if one week ago we would take out very low water percentage of the, of the fracture, we are in less than 5% of total water that we use in the treatment, it's got a very good pressure, very good pressure, the pressure is double, double the water, what means similar to shelter produce, the reduction on pressure with, we have in a choke of 4 millimeters, it's very good, it's comparing with my experience in another in, in another shelf and the quality, the 700, 750 meter and the rate is very good, we are in 4 millimeters, in 100 and if I know, remember, one is 150, it's 150, what is 1000 Bares a day and so we are expecting and really, I cannot tell you, I cannot tell you, it will be oil, the pressure is a very good index on that and I think in the coming weeks, you will see the, the, the result and we are expecting that the first oil, if it can't come in the next, in the next weeks, okay?

Speaker Change #103: I don't know if it's okay for you or you need more detail from me.

Speaker Change #104: This is Great Color and I just wanted to ask about YPF Luce, what are your thoughts on that asset?

Horacio Marín: YPF Luz, sorry, I forgot YPF Luz. YPF Luz is a wonderful company, and we are always positive. EBITDA is good, we are growing, they don't need capital from the YPF group, we always refinance with the new projects, and we are growing now. We are a company that produces renewable energy at 700 megawatts, and we are an oil and gas company that consumes 420 megawatts, so we are in good shape in the transition period, okay? You can make the numbers larger or smaller here.

Speaker Change #105: Iuliano Westen, Federico Barroetave,

Speaker Change #106: Ah, well, okay. YPF Luz? No, sorry, sorry. I forgot YPF Luz.

Speaker Change #107: YPF Luz is a wonderful company and we are always, we have a bit of positive, a bit that is good, we are growing, they don't need capital from YPF group.

Horacio Marín: But from next year on, because our program, our focus and where we are going, we will be resilient for very low prices because we will be almost, I would say almost. Now, an unconventional company with very efficient way of work, we are the best company in the results of the operational. So, I am very happy to work in this company with all the team because we are going to have very good efficiency.

Speaker Change #108: We always, we finance with the new projects and we are growing now. We are a company that produce renewable for 700 megawatts and we are the oil and gas company that consume.

Speaker Change #108: 420 MW, so we are in good shape in the transition period, ok? You can make the numbers there.

Horacio Marín: Mikey, And Palermo Ayque, sorry, I forgot that, but Palermo Ayque, one week ago, I would have said that we were producing only water, but it's not, I'm saying that it will be water, okay? Because one week ago, we took out a very low water percentage of the fracture. We are in less than 5% of the total water that we use in the treatment.

Speaker Change #108: Mike

Speaker Change #108: I'm Valer Moaike. Sorry, I forgot that, but Valer Moaike.

Speaker Change #109: One week ago, the...

Speaker Change #110: I would say we are producing only water, but it's not like I'm saying that it will be water, okay?

Speaker Change #110: Because one week ago, we take out very low water percentage of the fracture. We are in less than 5% of total water that we use in the treatment.

Horacio Marín: It has a very good pressure, very good pressure. The pressure is double the water, which means it is similar to shells that produce. The reduction of pressure we have in a chalk of 4 millimeters is very good; it's compared with my experience in another shell. And the well is in the order of 700, 760 meters, and the rate is very good. We are in 4 millimeters in 100, and if I remember correctly, it's 150.

Speaker Change #110: It has a very good pressure, very good pressure, the pressure is double the water, which means it's similar to shells that produce.

Speaker Change #110: The reduction in pressure we have in a choke of 4 millimeters.

Horacio Marín: This is very disruptive and it will be extraordinary for the efficiency of work because we will be focused in reducing the well-cycle and that they will deliver much more evidence for the coming years from now. From the downstream part, we already have a very, very ambition program that is called growing by efficiency, that we have more than 100 initiatives in the planter. We do the planter refinery because it is the biggest that we have, the biggest of this in Argentina and it's a very big refinery and we have more than 100 initiatives that they will put the margin much more up.

Speaker Change #110: It's very good, it's comparing with...

Speaker Change #111: My experience is not another in

Speaker Change #112: being another child.

Speaker Change #112: And the well is in the order of 700, 760 meters. And the rate is very good. We are in 4 millimeters in 100, and if I remember wrong, it's 150.

Horacio Marín: It's 150 cubic meters, which is 1,000 barrels a day. And so we are expecting, and really cannot tell you it will be oil. The pressure is a very good index on that. And I think in the coming weeks you will see the result, and we are expecting that the first oil, if it comes, will come in the next weeks, okay?

Speaker Change #113: It's 150 kilometers, which is 1,000 miles a day.

Speaker Change #113: And so we are expecting, and really I cannot tell you, I cannot tell you, it will be oil.

Speaker Change #113: The pressure is a very good index on that.

Speaker Change #113: And I think in the coming weeks you will see the result and we are expecting that the first oil, if it comes, comes in the next weeks, okay?

Horacio Marín: Thank you, guys, and congrats from the progress of your business.

Andres Cardona: Thank you, thank you guys, and congratulations on the progress of your business. Thank you. Our next question comes from the line of Marina Mertens with Latin Securities. Please go ahead. Hi, good morning. Thanks for taking my questions. I have two questions.

Horacio Marín: My goal when I come with YPF and all the team of downstream is to have the margin in this refinery and the refinery, YPF, in a very good benchmark with the American refinery so we need to increase by efficiency our margin and we are in there.

Horacio Marín: Thank you.

Speaker Change #114: Thank you. Thank you guys and congrats on the progress in your business. Thank you.

Marina Mertens: Our next question comes from the line of Marina Mertens with Latin Securities. Please go ahead. Hi. Good morning.

Speaker Change #115: Our next question comes from the line of Marina Mertens with Latin Securities. Please go ahead.

Marina Mertens: Hi, good morning. Thanks for taking my questions. I have two questions. So the gap between local prices and international parities has narrowed significantly. If rent continues

Horacio Marín: I don't know if I answered your question, if I lose something that you have to me, please repeat and I will answer.

Marina Mertens: To decline, how do you foresee local prices adjusting? Could they converge or even exceed export parity?

Marina Mertens: And the second one, regarding the downstream segment, this quarter showed higher prices, reduced volumes, and normalized margins. How do you anticipate these dynamics to play out in the next quarter? Thank you.

Luiz Carvalho: No, no, that's very clear and I'm thankful for the complete answer and looking forward to seeing you person again.

Speaker Change #117: And the second one regarding the downstream segment.

Speaker Change #117: This quarter, it showed higher prices, reduced volumes, and normalized margins. How do you anticipate these dynamics to play out in the next quarters? Thank you.

Operator: Thank you.

Operator: Okay, thank you.

Vesant Phalanga: Our next question comes from a line of Vesant Phalanga with Bradesco. Please go ahead. Hello, everybody. Thank you for taking my questions. I have to also. The first one, congratulations on a drilling speed metrics. Do you think there's still room to increase the 1,500 meters per day or are you already close to a limit? What will be your dream target here in terms of your growth per day? Then my second question, when will YPF and the other interested parties decide on how to split the interest on the Vakamurta smooth pipeline? Could we have a decision already this year maybe next?

Horacio Marín: Okay, first part of the question. With the prime practices of today, our weighted average is in the order of 3% lower than property products. If they continue to reduce that, if your question will reach import parity and when you have import parity, if you are a free market, you have to take into account the free rider could make you in a problem because it can import and make money, okay.

Horacio Marín: Okay, first part of the question. With the current prices of today, our weighted average is in the order of 3% lower than import parity products. If they continue to reduce, that is your question, we will reach import parity, and when you have import parity, if you are a free market, you have to take into account the free riders could put you in a problem because they can import and make money, okay?

Speaker Change #118: Ok, first part of the question. With the current prices of today, our weighted average is in the order of 3% lower than import parity products.

Speaker Change #119: If they continue to reduce, that is your question, we will reach import parity. And when you have import parity, if you are a free market, you have to...

Speaker Change #120: To take into account the free rider could make you in a problem because they can import and make money, okay?

Horacio Marín: So there we have to understand, and I understand that you are abroad and for you, it's very difficult to say now what's happening in Argentina, but so far, what we are doing is a free market. And here we have, you can imagine that the thing that happened is the same and the United States, for saying a country.

Horacio Marín: So there we have to understand and understand that you are a broad and for you is very difficult to now say what happens in Argentina, but so far what we are going is a free market. And here you can imagine that the thing that happens is the same and United States for saying a country. So if you reduce a lot, I always declare that I will be the first guy to reduce the gasoline, but also if the price increases a lot, I will increase the prices.

Speaker Change #120: We have to understand, and I understand that you are abroad and for you it's very difficult to now say what's happening in Argentina, but so far what we are doing is in a free market.

Horacio Marín: Thank you very much. First of all, I would like you to know, thank you Vesant for the question. But first of all, I would like for you to know me because I am a crazy guy, okay? I'm not using using Adidas in my life. Sorry if I say to Adidas, but I love it. Impossible is nothing in life. So what I'm going to do, I don't really, the technical limit for me is the ceiling.

Speaker Change #120: And here you can imagine that the thing that happened is the same as United States for saying a country. So if you reduce a lot, I always declare that I will be the first guy.

Horacio Marín: So if you reduce a lot, I always declare that I will be the first guy to reduce gasoline prices, but also if the price increases a lot, I will increase the price. Sometimes when there is a spike in prices to the third, very, very high, it's happening in all the countries that you cannot increase that in one day, even in different countries also, but we have to, and we are working as if it will be a free market and decide on demand and supply and see what the competence is and all that, okay?

Speaker Change #120: to reduce the gasoline, but also if the price increases a lot.

Horacio Marín: I don't care after if I cannot improve, but I push and always when you push, always you obtain something. Every time that you see, I arrive the limit, you have to go out of the company, but means that I am an old man, but means that you are an old man from the mind, so I like you to know me, I am a crazy guy, I don't want, I don't like that you arrive to the limit, for me it's not the limit.

Horacio Marín: Sometimes when there is a spike in prices to the fruit very high, it's happening in all the countries that you cannot in one day to increase that even in different countries or so, but we have to and we are working as it will be a free market and decide on demand and supply and see what is the competence and on that, okay. I understand that for everybody it is difficult to understand that, but we are doing that.

Speaker Change #120: I will increase the prices.

Speaker Change #120: Sometimes when there is a...

Mike Embraces: Mike Embraces, uh, uh, uh...

Mike Embraces: to the third, very, very high. It's happening in all the countries that you cannot, in one day, to increase that.

Mike Embraces: Even in different countries also, but we have to, and we are working as...

Mike Embraces: as it will be a free market and decide on demand and supply and see what is the competence and all that, okay? I understand that for everybody it's difficult to understand that, but we are doing that.

Horacio Marín: I understand that for everybody it's difficult to understand that, but we are doing that. And the second part is with the margin, Marina, and the second part, you asked me for the margin of the downstream, no? Yes. Yes.

Horacio Marín: As soon as we have that margin, we will have another new problem, okay, that is for the first part, for the second part, you ask me? We have already signed a two-third of the compromise for the project, I am totally focused, I am focusing everything, but we are totally focused on that because I don't want to make losing money for the shareholders like payment my salary, and so we cannot delay one day, okay, we are, you know that we are discussing, one big company in United States and we are in a good shape, but as soon as we have an agreement, I will tell you.

Speaker Change #122: Margarita Kearney, Federico Barroetave,

Horacio Marín: And the second part is with the margin, Marina. The second part, you asked me for the margin of the downstream, no? Yes? Yes, yes. Okay.

Speaker Change #122: Subs by www.zeoranger.co.uk

Speaker Change #122: And the second part is with the margin, Marina, and the second part, excuse me, for the margin of the downstream, no?

Horacio Marín: Okay, this quarter, particularly because of several problems, several problems, no, because of, um, um, um, maintenance topics, also because of the problems in the, um, in the weather in the south, we couldn't refine even though we had a record, we couldn't refine all the quarter as it was expected because we didn't have the oil to do that because of that problem and maintenance, okay? So as you make two numbers, because you cannot reduce the number, and so that's why our margin, I don't like it also, okay?

Horacio Marín: This quarter particularly because of several maintenance topics also because of the problems in the weather, in the south, we couldn't not refine even though we have a record, we couldn't not refine all the quarter as it's effective because we didn't have the oil to do that because it was also a problem, a problem and maintenance. So as you make two numbers, pick costs, you can already use them in the field and so that's why our margin, I don't like also, our margin was a little less than expected. What we have is you have to pay for the second half; is that you will be better than that, but don't imagine to duplicate.

Speaker Change #123: Yes. Yes.

Speaker Change #123: Okay, this quarter particularly because of several problems, several problems, no, because of, of a, a, a maintenance topic, also because of the problems in the,

Speaker Change #123: In the weather, in the south, we couldn't not...

Speaker Change #123: We could not refine, even though we have a record, we could not refine all the quarter as...

Horacio Marín: But we are, our problem is to mobilize the equipment in November, and that the problem is the problem. Yesterday we said that we are doing that with all the industry in the same table, and we think that in a couple of weeks we will have 100% already signed and it's our focus. From the part of the split, remember, YPF has to lead the industry and we are leading the industry, and with the idea is to do a simple as possible, the more simple, because the mainstream is not the focus of our company, or any company of the other.

Speaker Change #123: It's expected because we didn't have the oil to do that.

Speaker Change #123: because of that problem.

Speaker Change #124: MAHM Rollin or Montanos. Ok.

Speaker Change #124: So, as you make two numbers, because you can not reduce in the figure, and so that's why our margin, I don't like also, ok?

Horacio Marín: Our margin was a little less than expected. What we have is that you have to spare for the second half is that it will be better than that, but don't imagine it being duplicated. Duplication is our program that we call growing by efficiency. That will take time. We are working hard. So I think I answered the question. Tell me if it's okay for you or you need more details.

Speaker Change #125: Our margin was a little less than expected. What we have is, you have to spare for the second half, is that it will be...

Horacio Marín: Duplicate is our program, what we call growing by efficiency, that will take times we are working hard.

Speaker Change #124: And better than that...

Speaker Change #124: But don't imagine to duplicate. Duplicate is our program, what we call growing by efficiency. That will take time. We are working hard.

Marina Mertens: So I think I answer the question, tell me if it's okay for you or you need more details.

Speaker Change #124: So, I think I answered the question. Tell me if it's okay for you or you need more details.

Marina Mertens: No, it's okay, thank you.

Horacio Marín: So the focus is to make an increase a lot of the production, we are going to increase a lot of the production and the conventional. So as soon as it is, what we are doing is the following, the percentage of your paying is the percentage of your capacity. And we are going to make like an SPB for with all the companies, and at the beginning we are saying to not to have a lot of partners, is that any partner that has more than 10% of the year will have a share in the world of that company.

Operator: Thank you, Marina, and since we are running out of time, we are going to take the next question as the last one.

Marina Mertens: Thank you, Marina, and since we are running out of time, we are going to take the next question as the last one.

Speaker Change #126: No, it's okay. Thank you.

Speaker Change #127: Thank you Marina, and since we are running out of time we are going to take the next question as the last one.

Leonardo Marcon: Our final question comes from a line of Leonardo Marcon with Bank of America. Please go ahead, please. Hi guys, good morning. Thanks for speaking my question.

Leonardo Marcon: Our final question comes from the line of Leonardo Marcon with Bank of America. Please go ahead, please.

Speaker Change #128: Our final question comes from the line of Leonardo Marcon with Bank of America. Please go ahead, please.

Leonardo Marcon: Hi guys, good morning.

Leonardo Marcon: Thanks for choosing my question. My first question is related to the divestment of conventional assets. Although the sales for some assets under the divestment plan have already been signed, do you guys see any risk for the conclusion of these sales as they still need approval to be approved by the provinces? And my second question is more regarding capital allocation. With the conclusion of all the assets under sale, their cash generation should improve by around $750 million in the next year, right?

Leonardo Marcon: My first question is related to the investment of the conventional assets. Although the sales for some assets under the investment, under the investment plan, have a rather design.

Leonardo Marcon: Hi guys, good morning. Thank you for picking my questions.

Leonardo Marcon: My first question is related to the divestment of the conventional assets.

Speaker Change #129: Although the sales for some assets under the divestment plan have already been signed,

Leonardo Marcon: Do you guys see any week for the conclusion of these sales as they do need their provost by the provost, as they do need their provost should be approved by the provost and my second question is more regarding the capital location. The conclusion of all the assets under sale, their cash generation should be approved by around $750 million in the next year, right? So I would like to have a better graph on what could we expect from the company in terms of capital location in the next year. So it could provide more color on what are the expectations here.

Speaker Change #129: Do you guys see any risk for the conclusion of these sales, as they still need approval to be approved by the provinces?

Horacio Marín: If you have less than 10%, we are not to have a board because it will be very difficult to manage the company. Okay, I think I answered your question. Tell me if you are comfortable or you need more details.

Speaker Change #130: And my second question is more regarding the capital allocation. With the conclusion of all the assets under sale, their cash generation should improve by around $750 million in the next year, right?

Vesant Phalanga: Yes, no, that was very complete and interesting. Thank you, Erin, and looking forward to meeting.

Leonardo Marcon: So, I would like to have a better grasp on what we can expect from the company in terms of capital allocation in the next year. So, if you could provide more color on what the expectations are here, if we could think about these bands, or if this cash should go to accelerate projects in Guatemala. Thank you. Thank you Leo. Sorry Leo, but I was lost in some of the...

Operator: So thank you very much.

Speaker Change #132: So, I would like to have a better grasp on what could we expect from the company in terms of capital allocation in the next year.

Alejandro DeMichelis: Our next question comes from a line of Alejandro Demichelis with Jeffries. Please go ahead. Hi, good morning, all. Thank you very much for taking my questions. That's a two questions if I may. The first one is you mentioned the sale growth that you're expecting by the end of this year, 140,000 bars a day. What can we expect, say, for 225, 226, 227? That's for the first question. Then the second question is you gave us a good update on Andres, but also when we look at the quarter, you mentioned that some of the margin, refining margin impact was because of third parties on purchases.

Leonardo Marcon: If we could think about these, then, or if this cash should go to accelerate for just being like a marathon. Thank you.

Speaker Change #130: So if you could provide more color on what are the expectations here, if we could think about this event or if this cash should go to accelerate Project Minerva Camarita. Thank you.

Horacio Marín: Thank you, Leo. Sorry, Leo, but I was lost on some of the further questions. To be fair with you, the microphone will be open, and I will ask Margarita to tell me in Spanish. So everybody who knows Spanish will know Margarita.

Horacio Marín: Thank you, Leo.

Horacio Marín: Sorry, Leo, but I was lost in some of the further questions to be fair with you.

Speaker Change #137: and many more. Thank you. Thank you.

Speaker Change #135: Thank you.

Speaker Change #134: Thank you Leo. Sorry Leo, but I was lost in some of the further questions.

Horacio Marín: It will be open the microphone and I will ask Margarita to tell me in Spanish or everybody knows Spanish will know the Margarita, explain me your question and after I answer the question in English. So once a good go ahead. We have already released an advance that we have in mature fields, and if there is any risk in the approvals with the provinces in these transactions. And finally, once we are out of mature fields, the capital location.

Speaker Change #135: To be fair with you, it will be open, the microphone, and I will ask Margarita to tell me in Spanish. So everybody know Spanish, will know the Margarita.

Margarita Chun: Explain to me your question and after I answer the question in English. So, one second. Go ahead. Thank you, Leonardo, for the question. Ehm... Tell me the first thing you told me...

Margarita Chun: Explain me your question and after I answer the question in English. So, one second.

Alejandro DeMichelis: So once you are out of those commercial fields, should we also expect that you're refining margin structurally lower because you need to buy more third party oil? Thank you so much. We can start with the first question on it, and then if you can, you can repeat the second question, if it is mine. The first question was about the shape production of 25 or more. 25 onwards. We are working, thank you Alejandro for the question.

Leo: Go ahead.

Margarita Chun: And if there is any risk in the approvals with the provinces in these transactions. And finally, once we are out of Mature Fields, the capital allocation.

Horacio Marín: Thank you, Leonardo, for the question. Thank you. That is life, okay.

Margarita Chun: Tell me, the first thing you told me...

Leonardo Marcon: Thank you, yeah, but see, that is, that is life, it's life, okay, I'm not ashamed because I have to ask you, digra, digra, okay, eh, we already signed six. I think in six clusters of 11, I think in the, I would say in a couple of days or more, I expect it won't. I will be, how do you say, very optimistic. No, very optimistic, no. I will be...

Speaker Change #140: Thank you, yeah, but see, don't, don't be, that is, it's life, it's life, okay, I'm not ashamed because I have to ask you, dig it out, dig it out, okay, eh, we already signed six.

Horacio Marín: I'm not changed because I have to ask you. Okay. We already signed six. I think in six clusters of eleven. I think in the I would say in the couple of days or more, I expect it is not.

Alejandro DeMichelis: We are working in short term, minimum term, and long term strategy all day. For I would like, I prefer to give you the guidance and I compromise here with you and also with all the guys that they are in this call that they invest on next year, I give you the guidance for the three years with very good. It's not that I cannot tell you because there are some issues or things that I will have a better idea for by the next of the year.

Speaker Change #141: I think in six clusters of 11, I think in the, I would say in the couple of days or more, I expect it will not.

Horacio Marín: I will very have to say, very, no, very of the bit, no, I will be disappointing with the right to work in merchant acquisition. Okay. So I think we are going to sign two more in the next week. The other that they have there, there is one that is impossible because we have to force to discuss a contract. It's for contract with we are trying to give that for contract to another company and after it will be already or way out. The other two, we are negotiating, and I think we are going to be out.

Speaker Change #142: I will be very, how do you say, very optimistic. No, very optimistic, no, I will be...

Horacio Marín: Disappointing with the guys that work in merchant acquisitions, okay? So, I think we are going to sign two more in the next week. The others that they have there, there is one that is impossible, because we have first to discuss an export contract with them. We are trying to give that export contract to another company, and after that, it will already be out. The other two we are negotiating, and I think we are going to be out.

Speaker Change #142: Disappointing with the guy that works in Merchant Acquisition, ok?

Speaker Change #142: So, I think we are going to sign two more in the next week.

Horacio Marín: I prefer, if you don't mind in March, I think it's in March, I prefer to give you a very clear answer for everybody and with my personal compromise on the result, if you don't mind. It's okay for you or yeah, it is, it is okay, but can you give us then so many more rigs to expect you are saying 25 then? Okay, it depends on several questions that you have, they were today.

Speaker Change #144: The others that they have there, there is one that is impossible because we have to first to discuss...

Speaker Change #142: A contract, export contract, we are trying to give that export contract to another company and after it will be already out.

Speaker Change #142: The other two, we are negotiating, and I think we are going to be out. I'm going to be out.

Horacio Marín: I'm going to be out on the 1st of January; I will not have those; if not, I don't know what I will do with the guy of my acquisition, but he will be good; I'm sure that we will have him out of there. Regarding the provinces, we are, as soon as we have that, we discuss it with them, and so when we sign, we know that we expect, because I have to say that, we expect that it will be approved, okay?

Speaker Change #142: First of January we will not have those, if not, I don't know what I will do with the guy of Merchant Acquisition, but it will be good, I'm sure that we will have out of there.

Horacio Marín: Today we think that it will be 15 because next year it will be a year of not growing because it will be a growing capacity on the wall. Remember that the wall by the end of December, they will increase the total capacity for all the industry in the organ of 15,000 bars today and in April 200,000. And so we are going to always, we are going to go efficiency, reducing work capital as much as we can so and feel our experience.

Horacio Marín: Regarding the provinces, we are, as soon as we have that, we discuss with them and so on. When we sign, we know that we expect, because I have to say that we expect that it will be approved. Okay. So I think that we are in very, very, very, the only thing that I ever see from WhatsApp and from people of the industries, congratulations because what we did, people in Argentina, I think that we are superb. I'm not superb. The guy of my acquisition, sometimes they are superb, sometimes they are not, but in that way, they are superb.

Speaker Change #142: Regarding the provinces, as soon as we have that, we discuss with them and when we sign, we know that we expect.

Horacio Marín: So I think that we are in very good shape, really in very good shape. The only thing that I have received from WhatsApp and from people in the industry is congratulations because what we did, people in Argentina think that we are superb. I'm not superb. The guys in my acquisition, sometimes they are superb, sometimes they are not, but in that way, they are superb.

Speaker Change #142: Because I have to say that.

Speaker Change #142: We expect that it will be approved, okay? So, I think that we are in very good shape.

Horacio Marín: So, I'm very happy about that. After that, we have two provinces that we are discussing, and I am also very positive that we are going to be out. Of that, So, what we are doing with the capital, if... If I can put all that capital in Vaca Muerta... I would put, If not, it will be a safer capital for you. Because if I save the capital and make it more efficient... But I have the opportunity to put more production on board.

Horacio Marín: So I'm very happy on that.

Horacio Marín: Capacity, is because we have a fair capacity and we don't have the rig to reach, for sure we're going to agree and remember that it's an open access gear. And also, always I will look at the evidence, with the graphics and profitability of the company. I'm not going to be crazy into higher breaks and not deliver efficiency for all this year's holidays. Okay. That's great. Thank you.

Horacio Marín: After that, we have all, we have two provinces that we are discussing, and also I am very positive that we are going to be out of that.

Horacio Marín: So what we are doing with the, with the, with the capital, if, if I can put all that capital in back a mortar, I will put there. It's not; it will be a safer capital for you, because if I save the capital and make it more a bit, but I have the opportunity to put more production on board, I'm going to lose your money. But next year, because we are going to have, like a bottle neck in the capacity, if we have to say the man, the safe for the next year, we will say for the next year, okay?

Horacio Marín: I'm going to lose your money, but... Next year, because we are going to have like a bottleneck in the capacity. If we have to say the month, say for the next year, we will say for the next year, okay? But we are not going to weigh your money. Never in my life.

Horacio Marín: And yes, sorry, the second question that Margarita has to repeat was, once you get out of the conventional fields, you will need to buy more conventional oils from parties for your refinements, right? So the question is, good that also put a bit of an impact or pressure on your refined margins structurally. Yes, but remember that in that I have to talk about Argentina, Argentina, we are almost now in international prices, the policy of the Argentina, the change of Argentina in the oil is to go in that region.

Speaker Change #142: But <unk>.

Speaker Change #142: Next year, because we are going to have like a bottle neck in the capacity.

Speaker Change #146: If we have to say the mine the say for the next year, we will say for the next year, but we are not going to do two way your money.

Horacio Marín: But we are not going to, to, to weigh your money, never in my life.

Speaker Change #147: Never in my life.

Speaker Change #142: Okay.

Leonardo Marcon: That's very good. Thank you for doing it. Yeah, yeah, yeah.

Speaker Change #142: That is a great day.

Speaker Change #142: No.

Operator: That concludes our Q&A session.

Speaker Change #142: Okay.

Horacio Marín: That concludes our Q&A session. I will now turn the call over to Horacio Moran, CEO, for Closing Remarks.

Ratio Moran: That concludes our Q&A session I will now turn the call over to ratio Moran CEO for closing remarks.

Horacio Marín: I will now turn the call over to Horacio Marin, CEO for Close. We are very happy to have the world that we are doing in YPF, and also we are very happy of your question because it is a way that allows us to improve. Our goal is to improve this profit for you. Okay, this is our goal. There is no other goal. Thank you very much.

Speaker Change #149: Okay. Thank.

Horacio Marín: So they will be not different to have or not to have that. And remember also that we have increasing in our production. And also, we are, we have some exit that we have in the, in the end, we have some agreements of buying the oil in the Mendoza part. We are the, for everybody, the best way efficiency to sell the oil is to YPS because it's a hinterland that is like close.

Horacio Marín: Thank you very much for all the questions, and we are very happy to have the work that we are doing in YPF and also very happy with your questions because they're a way that allows us to improve. Our goal is to improve the profit for you, okay, this is our goal, there is no other goal.

Ratio Moran: Thank you very much for all the question on.

Ratio Moran: We are very happy to have the work that we're doing wide berth.

Ratio Moran: No. So we are very happy of your question because it that way.

Speaker Change #147: Allow us to improve.

Speaker Change #147: Our goal is to improve the profit for you. Okay. This is.

Speaker Change #147: There is no other than thank you very much.

Operator: This concludes today's call. You may now disconnect.

Speaker Change #151: This concludes today's call you may now disconnect.