Q3 2025 YPF SA Earnings Call
Good morning, ladies and gentlemen. This is Margarita Chum. Ypf a manager. Thank you for joining us today. In our third quarter, 2025 earnings call.
Today's presentation will be conducted by our chairman and CEO Marine our finance people and our strategy new businesses and controlling DP Mr. Maximilliano Weston
During the presentation, we will go through the main aspects and events that shape the quarter results. And then we will open the floor for Q&A session together with our management team.
Before we begin, please consider our cautionary statement on slide 2, 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 the material LED different from the expectations contemplated by this remarks.
Our financial figures are stated in accordance with IFRS, but during the presentation, we might discuss some nonis measures such as adjusted Ava.
I will now turn the call over to rasio. Please go ahead.
Thank you Margarita. And good morning everyone.
Let me start by highlighting that this was another quarter in which we continue to deliver solid operational performance.
Despite the contraction, international prices will maintain strong profitability levels compared to last year, giving us further operating efficiency and consolidating the tremendous program that has been achieved in our shell operations.
Revenues are mounted to 4.6 billion dollars.
12% below the previous year in line with the 13% year-on-year, decline in the brand price, in addition to other offsetting effects such as Eva reach approximately 1.4 billion dollars. Representing a sequential increase of more than 20% while remaining flat versus the previous year.
The sequential Improvement reflects higher shell production.
Coupled with the successful strategy of reducing exposure to Conventional mature fields.
The year-on-year comparison shows why PFS ability to maintain its profitability, despite the contraction in international prices there, even by an improved production, mix with the higher proportion of shell and continuous Improvement in operational performance.
Lifting cost reduction of 28% quarter over quarter and 45% year over year.
During the third quarter, I was interaction increased by 35% in only reaching 170,000 miles per day.
more recently in October eliminate a few years, indicate they oil production expanded by another 12% over, the average of the third quarter,
Totaling around 190,000 barrels per day. This production level is fully aligned with our annual Target of shale oil production of roughly 1 family 65,000 bars per day.
Moreover, it will enable us to slightly exceed the December 2025 production target of 190,000 barrels per day.
Furthermore, the higher sales and oil output have generated a remarkable shift in our production mix, which has allowed us to improve our EBITDA by around $1.3 billion on an annual basis compared to two years ago.
Topics continue to refocus on, developing our unconventional. Resources representing 70% of our total quarterly investment at the same time. We maintain our focus on achieving further, operational efficiency in our shell operation.
In that sense, let me highlight that during the quarter, ypf completed, the dreaming of the longest well ever in Baka Market.
Exceeding 8, South 200 m, with the horizontal length of nearly 5,000 m at our low market block.
Moreover.
During September in America, we completed the drilling of a 4,000 M horizontal well in just 15 days.
Sitting the record as the fastest, well, ever real in.
lastly in the early October with real 1 of the fastest, well in the real and the Block located in the South half of Wacom Market,
This world has a lateral vein of more than 3,000 meter, and was completed in just 11 days.
Moving on to our Downstream training. During the third quarter with a team, strong operational performance, reaching the highest processing level since 2009, at 326,000 BS per day.
This processing level was 9% higher than last year represented a solid, not illustration rate of 97%.
In that sense, we are pleased to announce the laboratory. Finally, it was named Refinery of the Year in Latin America by the War Refinery Association.
Additionally, the refinery ranked in the first quartile across several KPIs in Solomon Global. The final benchmarking.
Based on 2024 results.
This recognition represents the results of the successful implementation of the third pillar of our.
Based on operational excellence and technological innovation. On the financial side, free cash flow was negative as expected for a total amount of 70059 million this negative free cash flow position is mostly explained by external effects related to the recent acquisition of the shell asset from the total of trial for 523 million and the impact of the match of field exit strategy as a result. Net debt, increase to 9.6 billion.
Pushing our net leverage ratio up to 2.1 time.
However, excluding the acquisition of total assets.
Negative free cash flow. ProForm will have been 1 172 million.
With a net level, ratio performer at 1.9 time.
Additionally, a few days ago, we have successfully reached our 2031 international bond issue 500 at 3.25% year.
The lowest interest rate for the international bond of the last years replacing and improving our average life and financial cost.
On a final note. Let me briefly comment on the recent announcement regarding Argentina LNG project.
in nearly October within the state, 3 of the project, we signed a technical FID with a and I for a full integrate, energy project of 12 million tons per year, expandable to 18
Moreover, recently, last week, we signed a preliminary framework agreement with a new partner.
there are company unlock
In addition, we continue working with Face 1 and Face 2.
All in all the project continued to demonstrate the interest of
international players in long-term investment, in Baka morta, which is essentially for creating a solid potion ship, the structure for the development and financing of the project.
In summary, during the third quarter, we continue to provide to achieve the ambitious targets for the year, delivering solid financial comparisons of itself. We continue to train and prepare for new and even more challenging roles in the future.
I now turn to Max to go through some details of our operating and financial results for the quarter.
Thank you, and good morning to you all. Let me begin by expanding on Russia's comments about the evolution of our oil and gas production.
During the quarter total hydrocarbon production average 523,000 barrels of oil equivalent today. Declining 4% on a sequential basis and 6% on a year-over-year basis, as a result of the investment program of mature conventional Fields, partially of set, by the expansion of our sales production that accounted for approximate,
Li 70% of the total output, increasing its portion once again. And as expected, this service, the previous quarter,
All production reached 240,000 barrels per day. 3% below the previous quarter and 6% down against last year. Nevertheless, it is worth. Highlighting that Shale oil, production recorded, an impressive growth of 35% against last year and 17% versus the previous quarter. Almost neutralizing, the conventional production decline grieving by the successful exit. Strategy of our mature conventional Fields, then accounted to only 14,000 barrels per day in the quarter.
Beyond crude natural gas production totaled 38.4 million cubic meters per day, down 3% on a sequential basis. This decline reflects an 18% contraction in conventional production from our Cure Fields, partially mitigated by an expansion of 5% in shale gas production.
Regarding prices within the Upstream. Segment, crude oil, realization price, average $60 per barrel. And the third quarter, essentially flat on a sequential basis and Contracting, 12% year-over-year aligned with the variations of brands.
Natural gas prices increased by 6% quarter-over-quarter to an average of $4.30 per mmbtu, supported by the seasonal factor included in the plan and gas program between the months of May and September.
Now, let me dive into the evolution of our Shell Oil output, wipees reinforces its leading position and the development of Baca oil accounting for roughly 1/3 of the countries share.
Performance driven, not only from our key core Hub assets, but also from contributions from the North and South Hub. Blox.
in the third quarter of 2025 Shale oil, production delivered, an impressive growth rate of 55% when compared
23 levels.
Based on preliminary figures, October production reached an all-time high of 190,000 barrels per day, representing a strong increase of 70% versus November 2023 and ahead of schedule.
As Horacio Marin previously mentioned, based on the current production levels, we expect to comply with the average production target announced for the full year 2025 of around 165,000 barrels of oil per day. We expect to slightly exceed the exit rate of 190,000 barrels of oil per day as of December 2025.
In the third quarter, we continued with the strategy of developing Baka morta beyond our core have blocks in this context. Let me point out the success story of Lango tour, our Flagship South have block 100% owned by ypf under a unconventional.
concession valid through 20159 underscoring, the long-term potential of the south of Baca, morta for yps,
Over the past 12 months Shell Oil output from this block has jumped from only 2,000 barrels of oil per day in October of last year to more than 35,000 barrels per day. In October this year, representing in financial terms, a field with a performer annual EVGA of more than 500 million dollars.
The results achieved so far are impressive.
Moreover, the block expects to reach a production plateau of over 80,000 barrels of oil per day in the upcoming years, with a very competitive rate. Even prices below $40 demonstrate resilience amid evolving global dynamics.
Finally, we are thrilled with the promising productivity levels demonstrated in the block during the initial stage of development. These levels underscore their long-term potential, recording an estimated ultimate recovery of around 1.3 million BOE per well, including oil and natural gas.
Furthermore, the high potential is also driven by a total inventory of roughly 350 wealth of which less than 15% has been developed.
Regarding our Upstream cost structure. Let me point out that the combined strategy, of divesting mature, conventional fields, and growing. Our shell business has enabled us to generate significant Savings in our average lifting cost of more than 40% over the last 2 years. Moving from 16 dollars per doe in the third quarter of 2023 to $9 per doe in the third quarter this year.
This remarkable cost Improvement was achieved due to the significant shift in our production, mix where unconventional production increased from about 45% of the total output in the third quarter of 2023 to nearly 70% in the third quarter of the 2025 while conventional production portion sell from around 55% to 30%. In the same period,
As a result since shell, lifting cost remained at a very competitive range of 4 to 5 dollars per VOE. Ypf was able to improve its cost structure and therefore its annualized, savings would amount to approximately 1.3 billion dollars.
Ypf will continue and deepen. This strategy supported by the competition of the sale and reversal of mature. Conventional blocks by the end of 2025 the and this 1 project and the sale of the rest of the Performing conventional Fields than these 2 projects, which initial results are expected by the end of this year.
Pure sell player with an efficient listing cost structure of around $5 per view in the near future.
Now let me walk you through the performance of our shell activities in the third quarter. We drilled 54 horizontal oil wells on a gross basis, primarily in operated blocks, with a networking interest of 58%, bringing the year-to-date total to 159 horizontal oil wells on a gross basis.
This keeps us on track to achieve our full-year target of 205 West in 2025.
In terms of completion and tying of oil wells during the quarter we recorded modest level of activity compared to last year but year to date. We continued growing and the third quarter we completed 63 horizontal oil, wells and tied in 64 on a gross basis. However in the first 9 monthly period of this year, we completed 186 Wells and tied in 187 Wells, growing around 20% compared to the same period of last year.
In terms of efficiencies within our sales operations during the third quarter, we continued setting new records in drilling and fracking performance. We averaged 337 meters per day in drilling in our core Hub, while we recorded 279 stages per set per month on fracking and unconventional blocks, increasing by 7% and 16%, respectively. When compared to the same quarter of 2024,
As we have been flagging in previous calls this constant Improvement in operation. Metrics is the result of the implementation of our real time Intelligence Center and the joint efforts of our technical team and key contractors that work relentlessly to introduce further efficiencies to our operations.
Finally, regarding the CapEx composition within the Upstream business, it is worth noting how YPF managed to significantly transform the portfolio by reallocating investments from conventional to shale activity in the last two years. In this regard, in 2023, investments in the conventional business represented 35% of the total Upstream portfolio, while in the last 12 months as of September 2020.
25.
Copics in conventional assets, only represented 5%.
Furthermore, within the shell, portfolio Investments and Facilities were presented at significant portions of total capex over the last 2 years, which is expected to remain steady in 2026 and begin to gradually declined starting in 2027.
Switching to our Midstream and downstream segment. The third quarter processing levels, average, 326,000 barrels per day, a record high. Since 2009, with our Refinery utilization at 97%, we presenting an increase of 9 and 8% versus the third quarter 2024 and the second quarter 2025 respectively,
This remarkable success is mainly driven by the record processing levels of 208,000 barrels per day achieved in September at La Plata Refinery, combined with record production of middle distillates, reducing full imports to almost zero.
Domestic sales of diesel and gasoline remain strong in the quarter with dispatch volumes, Rising 3%, quarter on quarter and 6% year-over-year reflecting higher, demand across all commercial segments, retail, agree, business, and Industrial. Moreover, we managed to modify expand our leading market share to 57%. Rich increases up to 60% considering gasoline and Diesel produced by ypf and dispatched at the third party. Gas stations furthermore in the third quarter, ypf achieved an improvement in the premium mix in, both gasoline and decent sales.
Local fuel prices remain, broadly aligned with International authorities alvite dropping against the previous quarter based on a very volatile environment.
More recently, October preliminary figures show a narrowing of the gap between local fuel prices and improper fuel pricing while recovering on a healthy midstream and downstream adjusted average margins of nearly $70 per barrel.
Now let me briefly comment on the progress of the quarter regarding the efficiency program for the upstream and downstream businesses.
Thanks to the supervision of our Upstream, real time Intelligence Center, we managed to dwell 100% autonomously more than 30, horizontal wealth in real time. Using AI complemented with traditional techniques. While in fracking, we became the first company worldwide to perform 100% autonomous structure remotely from our real time Intelligence Center using predictive algorithms
Additionally, we have successfully executed 24 hours of continuous pumping in our fracking operation during 63 hours.
Fully supervised by our Upstream real-time Intelligence Center.
Regarding the downstream segment as far as you already noted at the beginning of the call. Our laplata Refinery was awarded, as the refinery of the year in Latin America.
Also, this Refinery achieved the first quarter in several kpis of Solomon's benchmarking such as net cash margin, return of investment, operational, availability and personal efficiency categories.
finally, the record high processing levels in our refineries have started generating a surplus of gasoline and make distillate allowing ypf to export, refined products to neighboring, countries and replace Imports of wipees and other local refineries
For instance, in the third quarter of 2025 ypf exported around 30,000, cubic meters of Jet and gasoline to Uruguay. And during the first 9 months of the year, we replaced more than 230,000, cubic meters of gasoline and middle distillate Imports.
Now let me share further details regarding the Argentina LNG project as briefly, anticipated by Russia regarding the phase 3 of the project, in early October, we signed a technical. FID with eni for a fully integrated LNG project of 12, mtpa expandable to 18, mtpa and more recently during the last week's Adipex conference in Abu Dhabi, we signed a preliminary framework agreement with a new partner, the Arab company idno. That formally announced their intention to join the Argentina LNG project
Moreover, during the quarter, we continued working on the phases 1 and 2.
The project considers the development design, construction and operation of a fully integrated natural gas LNG. Plus Natural, Gas Liquids, and GS projects based on wet, gas app, stream fields located in the Baka mortar Reservoir.
The infrastructure involved in the project includes our liquid function capacity of 12 Mtpa, expandable to 18 Mtpa through 2 or 3 floating LNG vessels of 6 Mtpa capacity each, a dedicated 520-kilometer staff pipeline, and a dedicated...
650 kilometers wide grade pipeline for NGS and onshore Facilities including fractionation storage and Port facilities.
The capex for the entire project is estimated at around $20 billion, with a potential expansion to $25 billion, in both cases including the financial costs.
Leverage of the project is expected to be around 70% of the total project cost, in addition to the upstream investments required to accelerate shale natural gas production.
Records financing with multiple sources of funding including ecas development Banks and Commercial Banks as potential anchors of the financial structure.
The FID is expected by the first half of next year. While the commercial operations for the first floating energy are estimated to begin by 2030, the following ones are projected for 2031 and 2032.
In summary, Pakam Morta has the scale, the quality, and cost competitiveness to position Argentina as a leading global LNG exporter. Argentina's LNG project will unlock Pakam Morta's full potential, enabling the export of its unconventional shale gas production to the world.
Now, I will turn the call over to Pedro.
Thank you, Max, and good morning, everyone.
On the financial front, the third quarter and in with a negative free position as expected that amounted to 759 million dollars. Let me explain by the reason acquisition of the Shale assets, like Cairo and Rita blocks to total of 12, close at the purchase price of 523 Million, by the end of September,
Moreover, if by the third quarter, just a bit of surprise capex, employment, and regular interest payment, we recorded negative working capital associated with the discontinued operations in our material Fields income tax payments from our subsidiary and longer collection dates from natural gas clients, and the planned gas program that started to normalize in October.
It is worth noting that excluding the impact of items related to the Mana transactions and the negative impact of the material fields, our limited free cash flow would have amounted to $172 million in an environment of lower international prices. Exit strategy.
Finally, on the liquidity front, our cash and short-term investments totaled $1 billion by the end of September, remaining essentially flat compared to the previous quarter.
In terms of financing during the third quarter, we continue progressing on our financial program by securing local loans, obtained from relationship Banks and by tapping the local Capital Market at very attractive. Financing costs.
In that sense, using the third quarter, we should 2 dollars net bonds, for a total amount of 300 million dollars at an interest rate of 7 and a half percent and a 10 of 2 years and a half.
In addition we share 225 million dollars from Dollar Capital bonds with a 5 years tenure and an interest rate of 8 and a half percent gender in the international market to local investors that combined with a hundred million dollars. International bridge loan, allow us to find the recent acquisition of Shane assets
more recently during October, we ensure 100 million dollars, net bond, with a 15 month, tignor at a rate of 6%,
considering this last but infants we should new local bonds for a total amount of 625 million with an average tenure of 3 years and an interest rate of 7.65%
Moreover aiming to reduce the cost of carry and taking a proactive approach towards that investors we schedule for this month, the prepayment of 120 million dollars of our secure notes. Due to genetics painting, a bunch. The last motivation, which matures next year and thereby with the meaningful, the bond ahead of scale.
Finally let me share 2. Very important news regarding ypf Financial strategy.
First during October, we reopened The Syndicate corporate crossboard the loan Market.
We signed an export back loan for $700 million with 10 international banks, with a 3-year tenure and a 6-month availability period as a performance strategy for the financing of our 2026 maturity.
This transaction was possible after several months of work showcasing YPF's ability to access cross-border funding.
Moreover, the loan was always described and attracted participation from new Banks from Central American Asia, demonstrating the market support and confidence in yps.
Finally, as far as your previously mentioned two weeks ago, we successfully returned to the international capital market.
After 2 days of social meetings, with more than 40 International investors, we let the recap of our 2031 International bonds of 500 million dollars at a yield of 8 and 1 quarter.
Patients with international and local investors oversubscribing orders three times, reaching a peak order book demand of $1.5 billion.
The proceeds will be used to fully repay, the bridge loan for the acquisition of total of 12 share assets and to finance, ypf investment plan.
This issuance representing ypf Titus, new issue yield on an international bond issuance in the last 8 years and improve the maturity of file of itself. Extending its average life.
So with this, we conclude our representation and open the floor for questions.
At this time, if you would like to ask a question, press star followed by the number 1 on your telephone keypad.
No, pause for a moment to compile the Q&A roster.
Your first question comes from Alejandro de Maches with Jeffrey.
Yes. Hello. Uh, thank you very much for taking my question. Um please congratulations on on, on the quarter.
Production has been very strong particularly on the Shale, all type of things. Could you have some indication of how you see in production, uh, growing into 2026 2027, that's the first question. And then what else you mentioned? Uh, all of the improvements that we are doing on the refining side and so on, we have seen you recently,
Taking full control of the revenue asset. So, could you please give us some indication of how you see that developing and the rest of the refining portfolio? Thank you.
Okay, good morning. Thank you very much for the questions.
Regarding the production.
We see you. You can expect the same as we talked.
In line, go with C in, in New York this year.
But that average for next year in the order of 215 and 27 in Northern North 290 and we can give you a better number in the next call. But we think that we are going, we are in line with all all the program, okay?
The regarding the refining side, the ref no refor is what was important. But for the
Big rate.
The error was very, very important for wipees because they give us a very good logistical Advantage comparing with our I would say our competitors.
Um, that's why it was to decide that we decide to, to take the stair. Because, you know, it was a difficult situation with the partner in in that, in that matter.
For the gas stations, there is no difference because we were supplying those associations. We are going to take the best one with the YPF brand and we will maintain the others as they are today.
and on the other side in the refinery, which is in Campo, Duran is closed.
But our idea is to create value for all the shareholders. However, by doing something of this sort, what we say in Santa Fe is that we are working in that direction.
Thank you.
Your next question comes from Leonardo Marcondes with Bank of America.
Everyone, uh, thank you for taking my questions. Uh, I have 2 for my site.
Uh, my first question is regarding Capital location and uh m&as. Uh we have seen yts quite uh active on the many phones, right?
Uh, in this regard, uh, what should we expect from the company going forward? I mean, does the company continued pursuing new Revenue opportunities or, uh, is it time to focus on the development of the assets within the portfolio?
Uh, my second question is regarding the divestments.
Uh and capitalization as well. So could could you uh share your plans for uh Metro gas and also ypf agoro. Uh and when could we expect uh to hear more news on these matters?
Very much.
Okay, thank you very much for the question. First, is our YPF 4 Y4. What is active portfolio management? That means buying and selling. It depends on where you can create more value for shareholders.
We were active out with the budget field and we see the opport. There was a big opportunity this year for the I would say core asset in bad. And that's that's why we we decide to buy the
total, the total asset of aorta.
What you are going to expect? I don't see that it will be a lot of changes in
In our strategy, we don't see that they will be active next year for major acquisitions in Batam, Mortar, and not in the others, okay?
So, that is, is what our thought?
Regarding Metro gas Metro gas, we are in in, in the process of have the extension of 20 year, extension of, of the company, the contract, more than countries, they could send you.
Uh they they tell me concession here because I remember that. I am the old man. I know you don't remember all the wars as there. Are people here that they say you are wrong, is a concession, okay? So it's a conversation.
And the our idea there is that after that we start with with the bank and we are going to solve as soon as possible, okay? And and for the law, we have to solve because
Of the I don't know how the is Herman. That this is a lawyer.
No intervention that they have the company. We, we have to sell before the blank gas is out. And so we are going to sell that. And why PF Aro is not necessary? Capital, allocation. What is there? Is that we are, if white PFO is a wonderful commercial channel that was built by ypf in by say 20 years ago, so, and it's extremely extremely successful. That's why there is. And the other company that are Refinery, also they call with the name and Aro, so they copy the, the the idea of ypf. Our idea is
Because we have nobody with the knowledge of selling, social and the other things is that we have to have a partner that can.
Make more value for us and for all the shareholders, and to have a mixed company where we put the CFO inside.
And uh, we will have 50 and 50%. Okay, that is the idea, and they will be
Uh, very close. Now the the reason on the street, right? Right now. Okay,
And that is the second question that you asked.
Regarding the Lac. You're right. It's a purchase of finance that that we are going to do with with our partners. You're right.
Thank you very much.
Your next question comes from, Louisa Den with Morgan Stanley.
Hi team. Thank you for taking my questions. Uh, first one on my end is, could you give us more color on what drove the working capital loss of this quarter? And what should we expect in terms of working capital gains and losses in the coming quarters, and how this should contribute to free cash flow generation into Q2? Uh, second one is if you could give us more color on what should be our listing cost? Was it just higher shale output, or are there any other factors?
Factors which explain this Decline and how this, how she we should expect this, uh, into for Q as well. Uh, and it's I met a third 1. Uh, if we should expect an acceleration of 425 capex and how should
Versus uh, the the guidance.
A good. The first question after that, we passed to Pedro so he can explain in more detail than I can. I can tell you the motion, but I will pass to Pedro for the second one in the listing cost.
remember that we are
You're increasing a lot of the production, as you see in the presentation in the back of Morta Fields.
So there are several reasons why we use first. We have a here in Pillar 3 that we have to make efficiency every day in our life.
The second thing is going to increase a lot the production, you reduce the fixed cost.
And so you, you have to expect that we are going to maintain already use, but I think to maintain is a good number that we have. I think we are in very low.
Lifting costs. Okay, in order for us, it is very low.
Which more do you ask there? Any other factor? We printed this line. I expected that I explained that.
I I think I answered that and in the full quarter, 25 the capex. Now we we think that we are going to end up in the year with a little less capacity that we say at the beginning of of the year. And we the production. If you see the well you see now you don't see that, but I see the report the daily reports and we are date. Now, we are in more than 190 today. Yesterday was in order than 284.
Uh, we have somebody who had 1 199.94. So I I start discussing with the guy why it's not 200, but it doesn't matter.
And so we are closed, and we are in better shape than we thought at the beginning of the year.
So we are focusing in looking at the results and looking uh and the best place is to drill. That's why we we're expecting those results and we did copies, I say I part 2 so they can explain the in the about the working capital.
Thank you very much for your question.
So as you noted during the third quarter, uh we recorded a negative working capital um by about 360 million dollars and that was driven by multiple retails. The first the sectionality of the natural gas sales.
Uh that was that were created in the third quarter and are expected to be collected in the fourth quarter, that's approximately 100 million dollars.
Second, we recorded in the third quarter a longer collection days from and the the natural gas clients and from the planas program that started to normalize during October and November that's approximately 50 million dollars. Uh, third in the third quarter, we recorded a positive stock variation in the downstream business uh for about about 60 million dollars. That's the result of a higher oil purchases to third parties to re
Inventories and the inventory drawdown that we recorded in the second quarter.
Um, then we record the, a particular lag in the Opex, and the capex from the mature Fields, uh, that were out from ydf financial statements, since uh, the end of June, uh, and those payments were faced during the third quarter. And finally, uh, this negative freak up flow, um, includes a decrease in the Market to Market, uh, position of our selling bonds which, um, increase and change fortunately, during October and November.
Your next question comes from, Daniel Gardella.
With BTT.
Hi, good morning, and thank you guys for taking my questions. I have a couple of questions here, um, the the first 1 is on cost.
And I would like to know if you can share with us how you envision the trajectory of your lifting and the AC cost for 2026? Uh, and eventually, if possible and onwards, it would be great, especially considering the asset sale you did of conventional assets and the potential renegotiation of contracts with some of these service companies. Uh, my second question is on leverage.
Again, if I we saw an increase in leverage during this Q to 2.1 times and I would like to know if you can share with us, what is the maximum leverage at which the company feels comfortable operating at? And in that sense, given the leverage has been going up in the last couple of quarters. I would like to know if you guys have ever considered to hedge your exposure to oil prices, uh, to offset any potential volatility in oil prices. So those will be my, my 2 questions.
We are working very hard to reduce the unit cost with all the...
Service company and we are in negotiation during the last week. Okay. So I cannot tell you exactly but I think we are going to reduce the uni Coastal in very important.
Because Argentina is another country.
So that's why you are going to work on that in the listing. I think I I I I answer that. Okay, you have to spare that we are going to be in that in that regions. Okay now we say regarding in our, you say, our debt and
I think you have to take into account the last year we bought.
2 assets. Okay that's why is is the ratio goes up. We don't go. We are not going to increase. It's not our goal that
We think that we are in the butt maximum that we want to be.
And during 26, we are going to see a reaction but taking into account. What is the we bought 2? Good assets in Argentina. The best in gas and the best. I don't say, don't say the best in oil but 1 of the the core that is very important. That's why we we thought that was important to buy those assets and make more value.
In the future or any other future, we all for all the shareholders.
Our next question comes from Jeremy, Martens with Goldman Sachs.
Hey Margarita, thank you for having. My question is being seen the second half of the year I have 2. Quick questions here. My first 1 is on Downstream. I just seen you guys were not able to, to price prices in line with International Paris in queue, right? I would just like to get a little bit more color on. What happened in comparison environments. Uh, you mentioned volatile Dynamic, but any additional color would be grateful. And my second question is, you guys, could please provide an update on the ongoing investment of metric Fields when we should see next. Uh, divestment has been concluded. Uh, when we should we should see production continued to the client following the act of 2016, and whether we should see additional uh Cash Out flow from the the exit of those, those like assets, thank you.
Sorry. Okay. Uh, talking about prices, we have a policy that I cannot open totally because it's not, we are going to say to our competitors, but we have moving average because there was a, in the last quarter, this quarter, there was a lot of volatility.
In prices, we remember that we have the exchange rate, the oil price, the taxes, and the costs to buy fuels.
and so,
In our country, the consumers need to. We are not accustomed to having.
Changes or prices every day. Okay? And big changes. So we have a moving average.
Uh, and I don't know if you remember that we...
We build and and a new real time, intention Center in in the commercial side that is unique. I don't know if you're making, I don't know if you need in the work, okay. And we have, they are everything that you can imagine.
uh we you say I and every a lot of thing I'm from there we are working within the new policy of prices that is a micro pricing and we are working and always trying to to maintain our our policy in in in but the last quarter was
The big volatility in also in Argentina you know that there was a lot lot of volatility and that's why we it was very difficult.
To go up because sometimes it goes south, sometimes it goes down, but now we are in good shape.
And the second one was about the 'think' and 'this' and all that stuff today. In the afternoon, we are going to signal for that. That was the last one, and we have only one.
1. Okay, because it was important for the value of R for shareholders.
But with understood, we are in in the process of negotiating. Now to go out from conventional, those convention are areas that make value for for all but is is very important because we have the determination to go to see to be unconventional if integrated and Commission Company. So that is our goal. And we are going to negotiate in the in the next month to be out the more than we can know, most of the assets and and to be next year, or if we can to be totally unconditional company.
Very clear. Thank you so much.
Your next question comes from toso. That's with DBS.
Pedro. Margarita. Thanks for taking my question. I have 2 here on my side. First, 1 or ask you, can you remind us What legislation, uh, I mean, either new legislation or adjustments on existing ones that like PF is still relies on to move forward with any projects as far as I remember here, there wasn't many new regulations that they only get industry as a whole depend on. But
Are some specific time is on some projects to be included under the rigid. So not sure if there is uh actually not check. There's any kind of discussion on the 8% export taxes for the industry so I think it would be great to have a broader recap on this political or regulation landscape. And the second question actually, a follow up on this domestic prices, you just mentioned about. What did you noticing in terms of upside or downsides? Potential since established more Dynamic pricing model the real time Center and so on. And what can you tell us about? The recent news saying that some politicians in Argentina wanted to create a law in which you need to give us 72 hours notice Advanced before just a few prices those are my 2 questions here. Thank you.
Okay, thank you for the question. I don't know. Thank you for the question, but.
The rating is if you are already aware of the.
Referring to the export duty for conventional, there is on the new... I know exactly what you said in the video because remember, we are YPF. We are a private company, and we are not in the, like we said, regulation side.
So really, I don't know.
Unconventional, remember that? It's not our core now, is it?
But I I read in the news they sent to you that they are they are negotiation on that but I have no idea what will happen. I got to receive for sure, the re he will be apply for lnc and if I supply for instance, if the tractor and for LNG
And unfortunately, we expected that to be in all the chain.
The second one that you mentioned, is that it is? Yes, I read in the newspaper the same as you, but those are regulations. And I have to answer similarly; I'm not working in regulation at all.
There are no further questions at this time. I'll now turn the call back to Wipees management team for closing remarks.
Okay, thank you very much for your attention and for your questions. We always appreciate that. I would like to express my gratitude for this. It is important to note that this is a company that will change a lot about the way we manage and the way we work every day.
I'm very proud of all the work that all the employees are doing now and the energy that we are putting in. And so, you have to spend 26, a very clean year of the results, the problem of this year. And I imagine for you it is very difficult to see because it is dirty with major fees, with taxes, with the 4 only account I can understand. And when they explained, they are confused. So, it's difficult to understand what you're saying.
And you will see there, how we are making the the the value for shareholders is that you can see in this quarter and I I would like to to for you because there are some people that confused with say, the production increasing the price is increasing at about where you're making value because we are reducing the the, the conventional. And if you analyze the value so far, only to change the nature is 1.3 billion. And this quarter, you can see that.
So we are really very proud. We are doing all the videos as an executive committee, and all the videos are working in white here. Thank you very much to all of you.
This concludes today's conference. Thank you for participating. You may now disconnect.