Q2 2026 Pampa Energia SA Earnings Call

Speaker #1: You have joined the meeting as an attendee and will be muted throughout the meeting.

Operator 2: To Pampa Energía Q2 2026 results Video Conference. We would like to inform you that this event is being recorded. All participants will be in listen-only mode during the presentation. After the company's remarks, there will be a Q&A session. Please send your questions in writing through Zoom chat. If anyone needs assistance, please send us a Zoom message. Before continuing, please read the disclaimer on the second page of our presentation. Let me mention that forward-looking statements are based on Pampa Energía's management beliefs and assumptions and information currently available to the company. They involve risks, uncertainties, and assumptions because they are related to future events that may or may not occur.

Speaker #3: Welcome to Pampa Energy's second quarter 2026 results video conference. We would like to inform you that this event is being recorded. All participants will be in listen-only mode during the presentation.

Speaker #3: After the company's remarks, there will be a Q&A session. Please send your questions in writing through the Zoom chat. If anyone needs assistance, please send us a Zoom message.

Speaker #3: Before continuing, please read the disclaimer on the second page of our presentation. Larry mentioned that forward-looking statements are based on Pampa Energy's management beliefs and assumptions, and information currently available to the company.

Speaker #3: They involve risks, uncertainties, and assumptions because they are related to future events that may or may not occur. Investors should understand that general economic and industry conditions, as well as other operating factors, could also affect the future results of Pampa Energy and could cause results to differ materially from those expressed in such forward-looking statements.

Operator 2: Investors should understand that general economic and industry conditions and other operating factors could also affect the future results of Pampa Energía and could cause results to differ materially from those expressed in such forward-looking statements. Now, I will turn the Video Conference to Lida.

Speaker #3: Now I will turn the video conference to Lida.

Lida Wang: Hi, everybody. Good morning. Thank you for joining us. First, I would like to give you a quick summary of our announcement on fertilizers. This is a new business. Then a quick summary of the quarter, we can move on to the Q&A. Today, we have only our CFO. We have a small inconvenience with Gustavo, but I think we both can do it, right? Yeah. Let me go to slide three, which you can see, last July, our board approved the FID for the construction of, so far, Latin America's largest urea plant, officially marking Pampa's entry into the fertilizer business. Granular urea is critical to agricultural production and global food security, and it is primarily used in the production of corn, wheat, sugarcane, and barley.

Speaker #4: Hi everybody. Good morning. Thank you for joining us, and first I would like to give you a quick summary of our announcement on fertilizers.

Speaker #4: This is a new business. And then a quick summary of the quarter. So we can move on to the Q&A. Today we have only our CFO.

Speaker #4: We have a small inconvenience with our Gustavo, but I think we both can do it, right? Yeah. So let me go to the slide 3, which you can see last July.

Speaker #4: Our board approved the FID for the construction of Latin America's so far Latin America's largest. Will we apply? Officially marking Pampa's entry into the fertilizer business.

Speaker #4: Granular urea is critical to agricultural production, and food global food security. And it is primarily used in the production of corn, wheat, sugarcane, and barley.

Speaker #4: Because natural gas, it is its main feedstock, is the natural gas. Urea production is highly concentrated in a few countries, while Argentina and its neighboring countries currently rely on imports from distant regions to the exposed to significant geopolitical uncertainty.

Lida Wang: Because its main feedstock is natural gas, urea production is highly concentrated in a few countries, while Argentina and its neighbor countries currently rely on imports from distant regions, today exposed to significant geopolitical uncertainty. The investment thesis is straightforward. It is just we aim to monetize the vast shale gas reserves that Pampa holds in Vaca Muerta through the development of high value added businesses. Natural gas and electricity account for approximately 70% of the production cost of urea and will be supplied by Pampa, reinforcing the competitive advantages of our vertically integrated business model while enhancing the project operating efficiency and long-term profitability. Beyond diversifying Pampa's revenue base, the fertilizer business will also help Argentina's foreign currency generation through import substitution. We are substituting imports and increasing exports, with an annual contribution of approximately $1 billion.

Speaker #4: The investment thesis is straightforward. It's just we aim to monetize the best shale gas reserves that Pampa holds in Vaca Muerta. Through the development of high-value added businesses, natural gas and electricity account for approximately 70% of the production cost of urea, and will be supplied by Pampa reinforcing the competitive advantages of our vertical integrated business model, while enhancing the project's operating efficiency and long-term profitability.

Speaker #4: So, beyond diversifying Pampa's revenue base, the fertilizer business will also help Argentina's foreign currency generation through import substitution. We are substituting imports and increasing exports.

Speaker #4: With an annual contribution of approximately $1 billion, Brazil, which currently imports between 7 and 8 million tons of urea per year, together with the rest of the southern cone, which has an annual deficit of about 2 million tons, will be the project's primary market.

Lida Wang: Brazil, which currently imports between 7 and 8 million tons of urea per year, together with the rest of the Southern Cone, which has an annual deficit of about 2 million tons, will be the project's primary market. Moving on to the project details. The plant will be located in Bahía Blanca, on a proprietary site, strategically positioned next to one of Argentina's main export ports, Bahía Blanca, with direct connection to Vaca Muerta pipelines, existing pipelines, and close to Pampa's thermal and renewable power generation assets. This is a $2.7 billion investment to build on a turnkey basis, a 2.1 million ton per annum plant, consuming 3.3 million cubic meters per day average year, and 75 MW of power, again, supplied by Pampa. The plan is scheduled to be completed by the end of 2029.

Speaker #4: Moving on to the project details, the plant will be located in Bahía Blanca, on a proprietary site, strategically positioned next to one of Argentina's main export ports, Bahía Blanca.

Speaker #4: With direct connection to Vaca Muerta pipelines, existing pipelines, and close to Pampa's thermal and renewable power generation assets. This is a $2.7 billion investment to build, on a turnkey basis, a 2.1 million ton per annum plant consuming 3.3 million cubic meters per day on average per year, and 75 megawatts of power, again supplied by Pampa.

Speaker #4: The plant is scheduled to be completed by the end of 2029. Now that we have reached the FID, so the next milestones are obtaining the REHI and the Buenos Aires REHI approvals, which are essential to the development of the project.

Lida Wang: Now that we have reached the FID, the next milestones are obtaining the RIGI and the Buenos Aires RIGI approvals, which are essential to the development of the project. Last Friday, the evaluation committee of the RIGI cleared FertiPampa's presentation, we are waiting for the formal approval to be published in the official gazette. Thus, Pampa continues to strengthen its industrial profile further through the several projects presented under the RIGI framework. You see, we are currently participating in seven projects across oil, gas, midstream, LNG, fertilizers, and NGLs. Last June, following the FID, TGS, our affiliate, filed an application for the $3 billion investment on an integrated NGL project. Also, TGS's Iniciativa Privada, which consists in expanding the Perito Moreno pipeline, the Sama Diaz dedicated pipeline for the LNG project, and the Rincón de Aranda. All those RIGI applications got approved.

Speaker #4: Last Friday, the evaluation committee of the REHI cleared Fertil Pampa's presentation. So we are awaiting the formal approval to be published in the official Gazette.

Speaker #4: Thus, Pampa continues to strengthen its industrial profile further through the several projects presented under the REHI framework. You see we are currently participating in seven projects across oil, gas, mistream, LNG, fertilizers, NGLs, last June, following the FID at TGS, our affiliate filed an application for the $3 billion investment in an integrated NGL project.

Speaker #4: Also, TGS's private initiative, which consists in expanding the Perito Moreno pipeline, the Zamatias dedicated pipeline for the LNG project, and the Rincón de Aranda, all those REHI applications got approved.

Lida Wang: Overall, these projects provide a clear roadmap for Pampa's long-term growth, supporting Argentina's export expansion, and enable us to monetize Vaca Muerta's resources further. Well, now moving on to the Q2 results. Let me tell you, the adjusted EBITDA amounted to $415 million, highlighted by a quarterly all-time high production of 107.5 thousand BOE per day due to the sustained ramp of Rincón de Aranda and gas self-supply. The new regulatory framework also had a positive impact on our power generation segment, which benefited from the strong spot margins as high fuel costs impact and grow the marginal costs up the system. That helped. Also, we have more B2B PPA sales. To the lesser extent, increasing the national prices also boosts the petchem business, which recorded its highest quarterly EBITDA since 2023, three years ago.

Speaker #4: Overall, this project provides a clear roadmap for Pampa's long-term growth, supporting Argentina's export expansion and enabling us to monetize Vaca Muerta's resources further. Well, now moving on to the second quarter results.

Speaker #4: Let me tell you the adjusted BDA amounted to $415 million. Highlighted by a quarterly all-time high production of 107.5 thousand barrels of oil equivalent per day.

Speaker #4: Due to the sustained ramp-up at Rincón de Aranda, and gas sales supply. The new regulatory framework also had positive impact on our power generation segment, which benefited from the strong spot margins and high fuel cost impact and drove the marginal cost up of the system.

Speaker #4: So that helped. And also we have more B2B PPA sales. To the lesser extent, increasing the national prices also boosts the PETChem business. Which recorded its highest quarterly EBITDA since 2023, three years ago.

Lida Wang: Quarter-on-quarter, EBITDA grew 28%, supported by gas seasonality, stronger spot power margins, and increased petchem prices. CapEx dropped 21% year-on-year to $279 million during the quarter, of which $165 million were destined to Rincón de Aranda. It is worth noting that we already invested last year, $900 million in Rincón de Aranda, and we expect to invest an additional $700 million this year as we move toward the 45,000 barrels per day production plateau, once the CPF and Vaca Muerta Sur Pipeline are both online next year. Moving on to slide seven. The oil and gas adjusted EBITDA was $182 million, more than double last year, driven again by Rincón de Aranda production ramp-up. Gas self-supply to our power plants, resulting in higher output at stronger prices as fuel costs pass-through increased.

Speaker #4: Quarter on quarter, EBITDA grew 28%, supported by gas seasonality, stronger spot power margins, and increased PETChem prices. CapEx dropped 21% year on year, to $279 million during the quarter, of which $165 million were destined to Rincón de Aranda.

Speaker #4: It is worth noting that we already invested last year $900 million, in Rincón de Aranda, and we expect to invest an additional $700 move toward the 45,000 barrels per day production plateau, once the CPF and Vaca Muerta Sur oil pipeline are both online next year.

Speaker #4: So moving on to the slide seven, the oil and gas adjusted BDA was $182 million. More than double last year, driven again by Rincón de Aranda production ramp-up.

Speaker #4: The gas sales supply to our power plants resulted in higher output. Billion at stronger prices. As fuel costs pass through, increased this factor were partially upset, but I lower realized crude oil prices due to the hedge.

Lida Wang: These factors were partially offset by lower realized crude oil prices due to the hedge. Quarter-on-quarter, EBITDA increased by 74%. This is mainly explained by gas seasonality. Total lifting costs grew 30% year-on-year. This is primarily driven by Rincón de Aranda ramp-up, partially offset by the divestment at El Dordicho, and lower activity at El Mangrullo gas block. Cost per BOE, however, remained broadly flat at $7.70 on average, as production growth offset the increase in lifting costs. If we do double-click, oil lifting cost per barrel actually declined 28% to $15 in Q2. However, it increased quarter-on-quarter following the commissioning of the second TPF at Rincón de Aranda that increased the crude oil treatment from 20,000 barrels to 28,000 barrels per day.

Speaker #4: Quarter on quarter, EBITDA increased by 74%. This is mainly explained by gas seasonality. Total lifting cost grew 30% year on year. This is primarily driven by Rincón de Aranda ramp-up, partially upset by the divestment at El Bordillo, and lower activity at El Mangrucho.

Speaker #4: Gas block, cost per BOE, however, remained broadly flat at 7.7 dollars per on average, as production growth offset the increase in lifting costs. If we do double-click, oil lifting cost per barrel actually declined 28% to $15 in Q2.

Speaker #4: However, it increased quarter on quarter, following the commissioning of the second TPF at Rincón de Aranda, that increased the crude oil treatment from 20,000 barrels to 28,000 barrels per day.

Lida Wang: Gas lifting costs also decreased 13% year-on-year to $1 per million BTU, but slightly decreased 6% sequentially due to the maintenance cost at El Mangrullo. Focusing on crude oil only, production increased three times year-on-year, purely explained by Rincón de Aranda. Realized price averaged nearly $59 per barrel. This is a little bit below last year due to the oil hedge. Without the hedge, the prices would have been $91 per barrel, resulting in approximately $64 million more of sales. Exports accounted 57% of total volume sold in Q2 2026. This is very similar year-on-year and quarter-on-quarter. Rincón de Aranda contributed one third of oil and gas EBITDA, up from 6% last year. Last year was only 6%, and this year is one third this year's quarter. This is continuing to diversify the production mix.

Speaker #4: Gas lifting cost also decreased, 13% year on year, to $1 per million BTU, but slightly decreased 6% sequentially, due to the maintenance cost at El Mangrucho.

Speaker #4: So focusing on crude oil only, production increased three times year on year. Purely explained by Rincón de Aranda, realized price averaged nearly $59 per barrel, this is a little bit below last year due to the oil hedge.

Speaker #4: Without the hedge, the prices would have been $91 per barrel, resulting in approximately $64 million more in sales. Exports accounted for 57% of total volume sold in Q2 '26.

Speaker #4: This is very similar year on year and quarter on quarter. Rincón de Aranda contributed one third of oil and gas EBITDA, up from 6% last year.

Speaker #4: So last year was only 6%, and this year is one third. This year's quarter. This is continuing to diversify the production mix now, oil accounting 22% of the total output.

Lida Wang: Oil accounting 22% of the total output. At Rincón de Aranda, the ramp-up continues. As you can see, the performance is comparable to the best blocks in the Core Hub, reaching a new record of 27,000 barrels per day on 21 May, actually, specifically. Since March, we have not tied any new wells, just producing from 43 wells. Even so, Rincón de Aranda averaged 22,000 barrels per day, up 22% quarter-on-quarter. The quarter's exit rate was 16,000 barrels, temporarily affected by chokes of certain wells while we completed other neighboring pads, so we avoid the frac hit. These 10 wells in said 2 pads were completed in July and will be tied in in August. Well, which will support a rebound in production. In Q2, we also drilled another 10 wells for 2 pads.

Speaker #4: At Rincón de Aranda, the ramp-up continues, as you can see, the performance is comparable to the best locks in the core hub, reaching a new record of 27,000 barrels per day on May 21, actually, specifically.

Speaker #4: Since March, we have not high tidying new wells. Just producing from 33 wells. Even so, Rincón de Aranda averaged 22,000 barrels per day. Up 22% quarter on quarter.

Speaker #4: The quarter's exit rate was 16,000 barrels temporarily affected by chokes of certain wells while we completed other neighboring paths so we avoid the frack hit.

Speaker #4: This 10 wells in said paths said two paths were completed in July, and will be tidying in August. Well, now. Which will support rebound in production.

Speaker #4: In Q2, we also drilled another 10 wells from for two paths. Currently, we have two high-spec rigs and one frack fleet operating in the block.

Lida Wang: Currently, we have two high-spec rigs and one frac fleet operating in the block. For the remainder of the year, we expect to tie in those 10 wells that we drill, and to reach an exit rate of 28,000 barrels per day. Our target remains a production plateau of 45,000 barrels per day, once the CPF and the Vaca Muerta Sur Pipeline are online next year. Regarding RIGI, well, as we said previously, the application was formally approved on 21 July as long-term strategic export project. The application includes the drilling and completion of 259 wells from 21 July on. The construction of the CPF, we're already building. Oil and gas pipelines and water treatment plants, facilities to treat the water fallback. Total estimated investment amounts to $4.5 billion, and it is expected to be deployed through 2041.

Speaker #4: For the remainder of the year, we expect to tidying those 10 wells that we drill, and to reach an exit rate of 28,000 barrels per day.

Speaker #4: Our target remains a plateau production plateau of 45,000 barrels per day, once the CPF and the Vaca Muerta oil pipeline are online. Next year.

Speaker #4: Regarding reheat well, as we said previously, the application was formally approved on July 21 as a long-term strategic export project. The application includes the drilling and completion of 259 wells, for now, from July 21 on, and the construction of the CPF we are already building.

Speaker #4: Oil and gas pipelines and water treatment plants facilities to treat the flow back, the water flow back. Total estimated investment amounts to $4.5 billion.

Speaker #4: And it is expected to be deployed through 2041. So the reheat approval represents a significant milestone for Rincón de Aranda. Providing a stable framework for tax, customs, and FX incentives for 30 years, long-term strategic export projects are also eligible for a specific benefits, in particular the exemption to waiver on export duties starting in the second year of operation.

Lida Wang: The RIGI approval represents a significant milestone for Rincón de Aranda, providing a stable framework for tax, customs, and fiscal incentives for 30 years. Long-term strategic export projects are also eligible for specific benefits, in particular, the exemption, the waiver on export duties starting in the second year of operation, after the enrollment. In this sense, Pampa expects to explore all of Rincón de Aranda's production through Vaca Muerta Sur Pipeline, which is estimated to generate approximately $17 billion over the project's useful life. Moving on to gas, production increased 10% year on year and 4% sequentially, reaching over 14 million cubic meters per day, driven by the gas self-supply to our CCGTs under the new power market framework, partially offset by lower volume sold under Plan Gas.Ar, and to a lesser extent, reduced deliveries to large users.

Speaker #4: 30 enrollment. In this sense, Pampa expects to explore all of Rincón de Aranda's production through Vaca Muerta soil pipeline, which is estimated to generate approximately $17 million billion over the project's useful life.

Speaker #4: Moving on to gas, production increased 10% year-on-year and 4% sequentially, reaching over 14 million cubic meters per day. This was driven by gas sales supply to our CCGTs under the new power market framework, partially offset by lower volumes sold on the plant gas, and to a lesser extent, reduced deliveries to large users.

Lida Wang: Seasonal demand from retail and CAMMESA explained the quarter-on-quarter growth, offset by lower self-supply procurement since we have faced transportation restrictions in the gas pipelines. During Q2, we tied in four new wells at Sierra Chata, bringing production to a new all-time high. At El Mangrullo, there were no new development activity, with production supported by the existing well base. At Río Negro, four new tight gas wells were drilled, and two were connected. For the H2 of the year, our plan includes drilling activity in Sierra Chata and in El Mangrullo. This is aligned with our 2027 activity production plan, which considers the recently awarded transportation capacity at Perito Moreno Gas Pipeline, in which gas transported through new infrastructure is able to capture the full spot margin.

Speaker #4: Seasonal demand from retail and CAMESA explained the quarter on quarter growth, how offset by lower sub-supply procurement since we have faced transportation restrictions in the pipeline, gas pipelines.

Speaker #4: During Q2, we tied in four new wells at Sierra Chata, bringing production to a new all-time high. At El Mangrucho, there was no new development activity, with production supported by the existing well base. At Río Neuquén, four new tight gas wells were drilled, and two were connected for the second half of the year.

Speaker #4: We our plan includes drilling activity in Sierra Chata and El Mangrucho. This is aligned with our 2027 activity production plan, which considers the recently awarded transportation capacity at El Perito Moreno pipeline, in which gas transported through new infrastructure is able to capture the full margin the full spot margin.

Speaker #4: In Q2, 56% of our gas was sold under plant gas GSA through CAMESA and retailers, down from 80% last year following the transfer of these GSAs to our power plants for sales supply.

Lida Wang: In Q2, 56% of our gas was sold under Plan Gas.Ar GSA through CAMMESA and retailers, down from the 80% last year, following the transfer of this GSA to our power plants for self-supply. As a result, intersegment consumption increased to 31% of our total sales. This is compared to just 3% last year. Under the new framework, we expect approximately 40% of this year's production to procure our own power plants' needs. Export volumes remain flat year on year at 1.2 million cubic meters per day. Industrial volumes declined as we prioritized self-supply demand, and which is priced at a higher price because of the higher pass-through allowed by CAMMESA. This is seasonal, and the regulation guidelines. Gas prices average $4.6 per MMBTU. This is 15% higher than last year.

Speaker #4: As a result, intersegment consumption increased to 31% of our total sales. This is compared to just 3% last year. Under the new framework, we expect approximately 40% of this year's production to procure our own power plants.

Speaker #4: Needs. Export volumes remain flat year on year, at 1.2 million cubic meters per day. Industrial volumes declined as we prioritize sales supply demand. And which is priced at a higher price because of the higher pass-through allowed by CAMESA.

Speaker #4: This is seasonal. And deregulation guidelines. Gas prices average $4.6 per million BTU. This is 15% higher than last year. This is reflecting fuel higher fuel pass-through in power generation, by CAMESA.

Lida Wang: This is reflecting higher fuel pass-through in power generation by CAMMESA, again, because of the winter season, plus higher retail prices following tariff increases above pace of devaluation. Turning to power generation, we posted an adjusted EBITDA of $155 million in Q2. This is 39% higher than last year and 8% higher than last quarter, mainly driven by stronger spot margins and B2B margins under this new regulatory framework, as well as LNG procurement margin. However, this was offset by the mandatory maturity of Energía Plus contract, the outage of Loma Lata's gas turbine number 4, that is under a PPA, which is remunerated under a PPA, and the PEPE wind farms underperformance.

Speaker #4: Again, because of the winter season. Plus a higher retail prices following tariff increases above peso devaluation. Turning to power generation, we posted an adjusted BDA of $155 million in Q2.

Speaker #4: This is 39% higher than last year and 8% higher than last quarter. Mainly driven by stronger spot margins and B2B margins. Under this new regulatory framework, as well as LNG procurement margin.

Speaker #4: However, this was offset by the maturity mandatory maturity of energía plus contract, the outage of Loma de Latas gas to line number 4 that is under a PPA, which is remunerated under a PPA, and the PPA wind farms underperformance.

Speaker #4: As you know, the new guidelines introduced marginal costs as part of the spot pricing methodology, which meant that marginal costs overshot during the quarter.

Lida Wang: As you know, the new guidelines will introduce marginal costs as part of the spot pricing methodology, which that marginal cost overshot during the quarter, especially during the winter season, reflecting higher fuel prices, in particular, using LNG and liquid fuel oil, diesel oil. The spot margins widened specifically for the CCGTs. Though that margin is capped at 15%. We only can capture 15% of that margin. That's what I mean. The current framework allows full margin, so you can capture the whole margin if you're using new infrastructure, such as a gas pipeline, which, that's the case for Perito Moreno pipeline, that will be online next May 2027. This full margin thing is not only benefiting power generation, it's also benefiting E&P, which will be producing more gas, that now has security to be transported through this Perito Moreno expansion.

Speaker #4: Especially during the winter season, reflecting higher fuel prices in particular using LNG and liquid fuel oil, diesel oil. So the spot margins widened specifically for the CCGTs.

Speaker #4: Though that margin is capped at 15%. We can only capture 15% of that margin. That's what I mean. The current framework allows for the full margin, so you can capture the whole margin if you are using new infrastructure, such as a gas pipeline.

Speaker #4: That's the case for the Perito Moreno pipeline, which will be online next May, 2027. This full margin thing is not only benefiting power generation; it's also benefiting E&P.

Speaker #4: Which will be producing more gas that now has security to be transported through this Perito Moreno expansion. So full capture, the FRA, the FRA equals to one instead of 15%.

Lida Wang: Full capture, the FRA equals to 1 instead of 15%. Pampa was awarded 3.2 million cubic meters per day in the Buenos Aires bound trench. It will be used to procure the gas needs of the legacy, Genneia CCGT. Right? We also participate in the second tender, for the remainder of the Perito Moreno. We are waiting for the results. If the regulator grants the clearance, we should add another 0.7 million cubic meters per day to the Buenos Aires trench, plus another 1.3 million cubic meters per day in the Bahía Blanca trench. Total availability fell to 88% during the quarter, mainly due to the ongoing outage in Willis, which now is currently, since 31 July, is no longer part of Pampa. We had some outages also in Güemes and in the mentioned Loma de la Lata number 4. Barragán also had some scheduled maintenance.

Speaker #4: Pampa was awarded $3.2 million cubic meters per day in the Buenos Aires bound tranche. So it goes to the it will be used to procure the gas needs of the legacy Genela CCGT.

Speaker #4: Right? And we also participated in the second tender for the remainder of the Perito Moreno. We are waiting for the results. If the regulator grants the clearance, we should add another 0.7 million cubic meters per day to the Buenos Aires tranche.

Speaker #4: Plus another $1.3 million cubic meters per day in the Bahía Blanca tranche. Total availability fell to 88% during the quarter, mainly due to the Huiles.

Speaker #4: Which now is currently since July 31st is no longer part of Pampa. And we had some outages also in Güemes and in the mentioned Loma de Lata TG number 4.

Speaker #4: Barragán also has some scheduled maintenance. Even though it's 88% availability, we continued to outperform the peers in the national grid. 35% of the capacity was contracted.

Lida Wang: Even though it's 88% availability, we continued to outperform the peers in the national grid. 35% of the capacity was contracted, slightly higher than Q2 last year. This is reflecting the new guidelines that boosted the B2B PPAs. Now, going to the financial part, turning on to the cash flow in slide 11, we present the parent company figures, which aligns to our bond parameter. Free cash flow was -$128 million in Q2, but improved year-on-year and quarter-on-quarter. This is mainly due to stronger EBITDA generation and lower CapEx at Rincón de Aranda, and receivables due to the better collection, though this is impacted by higher winter sales. Quarter-on-quarter improvement is explained by the release of collateral on our Brent hedge as oil prices declined.

Speaker #4: Slightly higher than Q2 last year. This is reflecting the new guidelines that boosted the B2B PPAs. Now, going to the financial part. Turning on to the cash flow and slide 11, we present the parent company figures which aligns to our bond perimeter.

Speaker #4: Free cash flow was negative $128 million. In Q2, but improved. Year on year. And quarter on quarter. This is mainly due to stronger ABDA generation and lower capex at Rincón de Arenda.

Speaker #4: And receivables due to the better collection. Though, this is impacted by higher winter sales. Quarter-on-quarter improvement is explained by the release of collateral on our brand hedge as oil prices declined.

Speaker #4: As a result, cash and cash equivalents stood at $1.3 billion at the quarter end. $604 million more than Q1. Finally, on the balance sheet, gross debt as of June was $2.6 billion.

Lida Wang: As a result, cash and cash equivalents stood at $1.3 billion at the quarter end, $604 million more than Q1. Finally, on the balance sheet, gross debt as of June was $2.6 billion. This is mainly because of the re-tap of 2037 notes priced at the lowest spread to the T-Bills, US T-Bills in Pampa's debt issuance history, and corporate history, I must say, Argentine corporate history. Net debt rose to $1.3 billion, representing net leverage of 1.4x to the last 12 months EBITDA. This presentation concludes now. The floor is open for questions. If you have a question, please send it through the Zoom chat. We will read it first in, first served. Make sure your name and your company is there, otherwise we can just read it, and so we can also reintroduce you to the audience.

Speaker #4: This is mainly because of the re-tap of $237 notes. Priced at the lowest spread to the TBLs US TBLs. In Pampa's debt issuing history.

Speaker #4: And corporate history, I can say—Argentine corporate history—net debt rose to $1.3 billion, representing a net leverage of 1.4 times for the last 12 months' EBITDA.

Speaker #4: So concludes now this presentation. The floor is open for questions. If you have a question, please send it through the Zoom chat. If you have a we will read it first thing first, the first receives.

Speaker #4: First served. Make sure your name and your company is there. Otherwise, we can't read it. And so we can also reintroduce you to the audience.

Lida Wang: Should any participant have assistance, just send us a chat through the platform. Thank you. Wait while we poll for questions. Bueno. Should we start? With the new expansion projects that Alejandro Demichelis from Jefferies is asking, how do you see CapEx in the next two to three years? At what level do you expect that to leverage to peak?

Speaker #4: Should any participant have assistance, just send us a chat through the platform. Thank you. Wait for while we pull for questions. Bueno. Should we start?

Speaker #4: With the new expansion projects that Alejandro de Micheles from Jefferies is asking. Do you see cap what do you how do you see capex in the next two to three years at what level?

Speaker #4: Do you expect debt to leverage to peak?

Speaker #1: Good morning. Thank you for the question. Yeah. Evidently, we're facing challenging capex deployment, especially with Urea project. But also, bear in mind that EBITDAs looking forward should increase as well.

[Company Representative] (Pampa Energía): Good morning. Thank you for the question. Yeah. Presently, we're facing challenging CapEx deployment, especially with urea project. Also bear in mind that EBITDA, looking forward, should increase as well. Right? Once we achieve maturity of the Rincón de Aranda investment and the Southern Energy and San Matías pipeline investments by 2028, cash flow generation will be increasing and stable. What we foresee is that net leverage should increase from current levels up to a maximum of around 2x. The ratio should vary between one and a half and 2x for the next two to three years until we finish the investment in the urea project.

Speaker #1: Right? Once we achieve maturity of the Rincón de Arenda investment and the Southern Energy and San Matías pipeline investments by 2028, cash flow generation will be increasing and stable.

Speaker #1: So what we foresee is that net leverage should increase from current levels up to a maximum of around two times. And this and the ratio should vary between one and a half and two times for the next two to three years, until we finish the investment in the Urea project.

Lida Wang: Great. Cómo se llama, the CapEx this year is basically around $1 billion, right?

Speaker #2: Great. But the capex this year is basically it's around one billion. Right?

[Company Representative] (Pampa Energía): Yeah, the CapEx this year is around $1 billion, mainly the Rinconada project. Next year.

Speaker #1: Yeah. The capex this year is around one billion. Mainly the Rincón de Arenda project. Next year. Yeah. It's lower. Separating Urea project. It will be around $700 million capex next year.

Lida Wang: It's a little lower.

[Company Representative] (Pampa Energía): It's lower. Separating the urea project, it will be around $700 million CapEx next year. Again, mainly Rinconada project. After that, Pampa will have only maintenance CapEx of all the business units in around.

Speaker #1: Again, mainly Rincón de Arenda project. And after that, Pampa, we have only maintenance capex of all the business units in around $600. Right? We have to add to that the equity contributions from Pampa to Fertil Pampa.

Lida Wang: 600

[Company Representative] (Pampa Energía): 600.

Lida Wang: Yeah.

[Company Representative] (Pampa Energía): We have to add to that the equity contributions from Pampa to FertiPampa. Yeah?

Speaker #1: Yeah.

Lida Wang: Cool. Guido Bizzozero and Santiago Herrera from Alaria, they're asking, after this 23 jump in EBITDA for H1 2026, how do you expect to evolve the H2 and 2027 power generation? Considering in 2027 that, in H2, it starts rolling out the PPAs. Do you want to?

Speaker #2: Cool. Guido Vizocero and Santiago Herrera from Alaria, they're asking after this 23 jump in EBITDA for the first half of 26, how do you expect to evolve the second half and 27 on power generation?

Speaker #2: And considering in '27 that in the second half it starts falling, it starts rolling out the PPAs. Do you want to know?

[Company Representative] (Pampa Energía): Yeah. The H2 of the year, remember that always the Q4 for Pampa is the weakest due to the seasonality of gas.

Speaker #1: Yeah. So the second half of the year, remember that always the last quarter for Pampa is the weakest because of due to the seasonality of gas.

Speaker #1: So-. And power demand. So bear that in mind. Always the last quarter is a little bit weaker. But it will be partially offset by the increase in the production of Rincón de Arenda.

Lida Wang: Power demand.

[Company Representative] (Pampa Energía): Power demand.

Lida Wang: Power demand.

[Company Representative] (Pampa Energía): Bear that in mind, always the last quarter is a little bit weaker, but it will be partially offset by the increase in the production of Rinconada. The oil business will keep growing, but remember the seasonality in the other segments, right?

Speaker #1: So the oil business will keep growing. But remember the seasonability in the other segments. Right?

Lida Wang: I think he specifically only refers to power generation. Q3 is going to be high, higher than this one. Well, that's what we expect.

Speaker #2: But I think he specifically only refers to power generation. So Q3 is going to be high, higher than this one. Well, that's what we expect.

Speaker #2: Because winter is.

Speaker #1: Q4 always is.

[Company Representative] (Pampa Energía): Q4 always is.

Lida Wang: H1 is $299 million of EBITDA. We expect $600 million for this year. Basically, it jumps up in Q3 if winter allows and then goes down. It is specifically because of El Niño, right? There is more water, so it means lesser thermal power demand. In 2027, it is a combination. H2 starts rolling out PPAs, but we also have Transportadora de Gas del Sur S.A.'s private initiative that, hey, we have 3.2 million cubic meters per day confirmed that we will inject it through Genelba's legacy CCGT. Actually, it is going to start before the winter, so most of the impact will be monetized next year, though it starts in May. Next year's EBITDA, it could go up. We are expecting $600 million, well, a delta of around $100 million should the winter and the liquid fuel consumption, energy consumption remains pretty much similar.

Speaker #2: Yeah. Yeah. Yeah. Yeah. So first half is 300 $299 million of EBITDA. We expect $600 for this year. Yes. A little bit yeah. $600 million for this year.

Speaker #2: So it basically it jumps up in Q3. If winter allows. And then goes down. And it's specifically because the Niño. Right? There's more water.

Speaker #2: So it means lesser thermal power demand. So in 27, it's yeah. It's a combination. Second half starts rolling out PPAs. But we also assets in private initiative that, hey, we have 3.2 million confirmed.

Speaker #2: Then we will inject it through Genelvas legacy CCGT. That and actually, it's going to start before the winter. So most of the impact will be monetized next year, though it starts in May.

Speaker #2: So next year's EBITDA it could go up. We are expecting $600 well, a delta of around $100 million things should things the winter and the fuel consumption the liquid fuel consumption, energy consumption remains pretty much similar.

Speaker #2: But in 2028, as you correctly said, it goes down. So it's a combination that in 27, the PPAs roll out. Doesn't much reflect because it's towards the end of the year.

Lida Wang: In 2028, as you correctly said, it goes down. It is a combination that in 2027, the PPAs rollout does not much reflect because it is towards the end of the year, but, in 2028, you should see that it is a little bit low. It is $40 million less, because the PPAs roll out, but at the same time, they join the spot market. Loma de la Lata, out of the PPAs that roll out, two of them are at Loma de la Lata. Loma de la Lata is highly competitive because it does not require any gas transportation, and they are a very efficient machine, so they kind of rank senior among the thermal units in the system. I hope that answers the question. How do you expect to increase the stake of gas used and sold to power generation since we noticed an increase from 3% to 31% year-on-year basis?

Speaker #2: But in 28, you should see that. It's a little bit low. It's $40 million less. Because the PPAs roll out, but at the same time, they join the spot market Loma La Lata out of the PPAs that roll out.

Speaker #2: Two of them are at Loma La Lata. Loma La Lata is highly competitive because they doesn't require any gas transportation. So they and they are very efficient machines.

Speaker #2: So they kind of rank senior among the thermal units in the system. I hope that explains answers the question. How do you expect to increase the stake of gas use and sole to power generation?

Speaker #2: Since we noticed an increase from three to 31 percent year-on-year basis. Well, basically, as I said in the call, we the average of this year, it's around 40 percent.

Lida Wang: Well, basically, as I said in the call, the average of this year is around 40%. It should pick up in Q3, and actually picks more. It is highly reliant on self-supply on Q4. Even though the demand and gas demand goes down, we expect no troubles in the gas transportation system. Going forward, 2026 is a gradual year. It is a transition year. 2027 and onwards, you should expect the following. Pampa, the thermal units consume around 10 million cubic meters per day. Only Pampa, not including Ensenada and Vareado. 10 million cubic meters per day, of which, 8 goes to the CCGTs. 8 Loma de la Lata CCGT, and the two CCGTs are Genelba. The CCGTs are the flat consumption of gas for self-supply. That is what you should expect going forward. Third question from Alaria people.

Speaker #2: It will pick up it should pick up in Q3. And actually, peaks more. It's highly reliant on self-supply on Q4, even though that demand and gas demand goes down.

Speaker #2: We expect no troubles in the gas transportation system. Going forward, 26 is a gradual year. It's a transition year. 27, and onwards, usually expect the following.

Speaker #2: Pampa consumes the thermal units consume around 10 million. Only Pampa. Not including Encina Barragán. 10 million cubic meters per day. Of which 8 goes to the CCGTs.

Speaker #2: 8 Loma La Lata CCGT. And the two CCGTs are Genelva. So the CCGTs are the flat consumption of gas for self-supply. That's what you should expect going forward.

Speaker #2: First question from Alaria people. How do you expect petrochemical business to evolve in the future, considering the 5 percent contribution to the consolidated EBITDA in this quarter?

Lida Wang: How do you expect petrochemical business to evolve in the future, considering the 5% contribution to the consolidated EBITDA this quarter, when it usually is negative or slightly or breakeven. What it is, right?

Speaker #2: When you usually is negative or slightly or break even. What it is. Right?

[Company Representative] (Pampa Energía): Yeah. We expect to continue contributing marginally to the EBITDA.

Speaker #1: Yeah. We expect to continue contributing marginally to the EBITDA.

Speaker #2: Yeah. It was something like circumstantial.

Lida Wang: Yeah. It was something circumstantial.

Speaker #1: Yeah. Due to the war and the high prices and bigger margins that we have this quarter in some of the products that we export.

[Company Representative] (Pampa Energía): Yeah. Due to the war and the high prices and bigger margins that we have this quarter in some of the products that we export, we don't expect that to hold in the long term.

Speaker #1: But we don't expect that to hold in the long term.

Lida Wang: Correct. Can you give any color on how do you plan to finance the $3 billion capital urea project and the deployment along the 41 months work?

Speaker #2: Correct. Can you give any color on how do you plan to finance the $3 billion capex that you reapproject and the deployment along the 41-month work?

Speaker #1: Yeah, sure. So, since the beginning of the year, we've been working intensively on the financing. The idea is to finance the project through a project finance loan with limited recourse on Pampa.

[Company Representative] (Pampa Energía): Yeah. Sure. Since the beginning of the year, we've been working intensively in the financing. The idea is to finance the projects through a project finance loan with limited recourse on Pampa. With that in view, we started in February, a very thorough due diligence. We've been working in six open fronts with different independent consultants to complete that due diligence and make the deal bankable. We are close to finalizing the due diligence process. We hope to end the process in August. We are negotiating the terms of the loan. I cannot disclose much more today, but I will tell you that we are well advanced. We are discussing the terms. We expect to finance a proportion around 60/40 equity loan ratio. The deployment of the equity is more or less even except 2028.

Speaker #1: With that in view, we started in February a very thorough due diligence. So, we’ve been working in six open fronts with different independent consultants.

Speaker #1: To complete that due diligence and make the deal bankable, we are close to finalizing the due diligence process. We hope to end the process in August.

Speaker #1: And we are negotiating the terms of the loan. So I cannot disclose much more today. But I will tell you that we are well advanced.

Speaker #1: We are discussing the terms. And we expect to finance a proportion around $60, $40 equity loan ratio. The deployment of the equity is more or less even, except 2028.

Speaker #1: There is a big, big spike of the capex is concentrating mainly on 2028. I will say one-third of the capex is on 2028. And the rest is evenly distributed.

[Company Representative] (Pampa Energía): There is a big spike of the CapEx concentrated mainly on 2028. I would say one third of the CapEx is on 2028, and the rest is evenly distributed on the remaining years. I will think that we start contributing capital to the project this year. The financing will be closed by Q4 of the year, probably. The big contributions, both of debt and capital, will be on 2028. I think that covers the question.

Speaker #1: On the remaining years. So I will think that we start contributing capital to the project this year. The financing will be closed by the last quarter of the year, probably.

Speaker #1: And the big contributions, both of debt and capital, will be on 2028. I think that covers the question.

Lida Wang: Yeah. How much revenues and EBITDA we may expect to come from this urea project on a consolidated basis, considering more electricity and gas will be needed to produce urea?

Speaker #2: Yeah. So how much revenues and EBITDA we may expect to come from this UEA project? And on a consolidated EBITDA basis, considering more electricity and gas will be needed to produce UEA?

Speaker #1: Yeah. Well, the revenues, I think we already disclosed that on.

[Company Representative] (Pampa Energía): Yeah. Well, the revenues, I think we already disclosed that on-

Lida Wang: Where? $1 million. Yeah.

Speaker #2: Where? 1 billion. Yeah.

[Company Representative] (Pampa Energía): Yeah. $1 million.

Speaker #1: Yeah. 1 billion.

Lida Wang: $1 million.

Speaker #2: 1 billion.

[Company Representative] (Pampa Energía): The math is pretty simple. Depending on the price of urea you take, you multiply 2.1 million tons of urea per year times the price of urea you would like to choose, $400, $450, $500. That will give you the revenues. EBITDA will be around 65% of that. Again, you have to factor in the price and the net backs, whether you sell to Brazil or to Argentina, or what combination, those are the big numbers that you can easily compute. What's the rest of the question?

Speaker #1: So the amount is pretty simple. Depending on the price of UEA you take. But you multiply 2.1 million tons of UEA per year, times the price of UEA you like to choose, 400, 450, 500.

Speaker #1: And that will give you the revenues. EBITDA will be around 65 percent of that. Again, you have two-factor in the price and the net backs, whether you sell to Brazil or to Argentina or what combination.

Speaker #1: But those are the big numbers that you can easily compute. And what's the rest of the question?

Lida Wang: No, how much impact on Pampa's E&P and power? It's a very good question.

Speaker #2: No. How much impact on Pampa's EMP and power? It's a very good question.

[Company Representative] (Pampa Energía): Very good question. Yeah. Remember that starting 2028, the GSA starts to mature.

Speaker #1: Very good question. Yeah. Remember that starting 2028, the GSA starts to mature.

Lida Wang: Correct.

Speaker #2: Correct.

[Company Representative] (Pampa Energía): It's not clear that we are going to increase gas production for the project or substitute current production from one market to the project, okay? That is something we will have to decide moving forward.

Speaker #1: So if it's not clear that we are going to increase gas production for the project or substitute current production from one market to the project.

Speaker #1: Okay? That is something we will have to decide moving forward.

Lida Wang: But assuming-

Speaker #2: But assuming?

[Company Representative] (Pampa Energía): Assuming, if we increase gas production only for this project, it's around $90 million-

Speaker #1: Assuming it's around if we increase gas production, only for this project, it's around 90 million dollars of EBITDA additional to the gas segment. But again, it's a decision that we will have to make in the next three years.

Lida Wang: $90 million

[Company Representative] (Pampa Energía): of EBITDA additional to the gas segment. Again, it's a decision that we will have to make in the next three years. Okay.

Speaker #1: Okay? The price is $3.

Lida Wang: The price is around $3.

[Company Representative] (Pampa Energía): The price is $3.

Lida Wang: $3 is the internal GSA.

Speaker #2: $3 is an internal GSA. Yeah. And.

[Company Representative] (Pampa Energía): Internal GSA. Yeah.

Lida Wang: Yeah.

[Company Representative] (Pampa Energía): Consumption is 3.3 on year average.

Speaker #1: The consumption is 3.3 on average, year average.

Lida Wang: Yeah. It picks up.

Speaker #2: Yeah. It picks up and. In winter.

Speaker #1: In winter. But on average, it's 3.3 million cubic meters of gas per day.

[Company Representative] (Pampa Energía): In winter.

Lida Wang: Winter

[Company Representative] (Pampa Energía): On average, it's 3.3 million cubic meters of gas per day.

Lida Wang: In power, we are not planning to build new power facilities for this.

Speaker #2: And then in power, we are not planning to build new power facilities for this. Well, we don't.

[Company Representative] (Pampa Energía): Not for this.

Speaker #1: Not for this. Not for this. We will see.

Lida Wang: Not for this.

Speaker #2: Not for this. We will.

[Company Representative] (Pampa Energía): We will see.

Lida Wang: We will.

Speaker #1: Again, the power contribution is marginal. The big contribution here is gas.

[Company Representative] (Pampa Energía): Again, the power contribution is marginal.

Lida Wang: Marginal.

[Company Representative] (Pampa Energía): The big contribution here is gas.

Speaker #2: Yeah. But imagine, like, well, today we are selling B2B PPAs at $65, monomic price. Right? This is considering capacity—$65 to $70. Well, we were talking about the B2B PPAs boost in this quarter.

Lida Wang: Yeah. Imagine, well, today, we are selling B2B PPAs at $65, monomic price. This is consuming capacity, $65 to 70. Well, we were talking about the B2B PPAs boost in this quarter, basically because people are seeing the prices in the spot. If you go to the spot, the prices are really high. That's why when this deregulation started, the industrials didn't start to get into the B2B market, and now they're getting into because they seem highly seasonal, better pay more flat than pay flat a certain price of around $65 to 70 per megawatt hour, which this is what we expect to sell in the-

Speaker #2: Basically because people are seeing the prices in the spot. If you go to the spot, the prices are really high. That's why when this deregulation started, the industrials didn't start to get into the B2B market.

Speaker #2: And now they're getting into because they see highly seasonal, better pay more flat than pay flat at a certain price of around 65 to 70 dollars per million hour, which is this is what we expect to sell in this.

[Company Representative] (Pampa Energía): Yeah. It's around $68, and the consumption is 27 megawatt hours. Again, it will be additional energy capacity rather than replacement of-

Speaker #1: Yeah. It's around 68 dollars. And the consumption is 77 megawatts hour. So but again, it won't be additional energy capacity rather than replacement of.

Lida Wang: I imagine myself using our renewable wind power.

Speaker #2: I imagine myself using our renewable wind power.

[Company Representative] (Pampa Energía): That's the plan. Yeah.

Speaker #1: That's the plan. Yeah.

Lida Wang: Yeah. Back up with our thermal unit.

Speaker #2: Yeah. And backup with our thermal.

[Company Representative] (Pampa Energía): Exactly.

Speaker #1: Exactly.

Lida Wang: Yeah. Well, another question from Alaria people saying, Considering the current production levels at Rincón de Aranda, and the 10 wells are scheduled to be connected in August, what kind of production ramp-up can we expect between now and the end of the year?

Speaker #2: Yeah. Well, another question from Alaria. People saying considering the current production levels at brink on the Aranda. And the 10 wells is scheduled to be connected in August.

Speaker #2: What kind of production ramp-up can we expect between now and the end of the year?

Speaker #1: Okay. Remember that the goal this year is to reach 28,000 barrels of water per day. This increase is like a CISO. Okay? You are tidying up wells, closing, tidying up, closing.

[Company Representative] (Pampa Energía): Okay. Remember that the goal this year is to reach the 28,000 barrels of oil per day. This increase is like a seesaw. Okay? You are tying up wells, closing, tying up, closing, you will see these peaks and throws of production, but the goal is to achieve the 28,000 barrels of oil per day by the end of the quarter. Again, it's not constant. The same will happen next year when you try to reach the 45,000 barrels of oil per day. The increase will be like a seesaw and a ramp-up until the 45.

Speaker #1: So you will see this peaks and throws of production. But the goal is to achieve the 28,000 barrels of water per day by the end of the quarter.

Speaker #1: Again, it's not constant. The same will happen next year when we reach when you try to reach the 45,000 barrels of water per day, the increase will be like a CISO and 45.

Lida Wang: Who else? Bruno Montanari from Morgan Stanley. He asks, How can we think about Pampa's long-term peak gas production considering the volumes to Cesa, to their project, the sole procurement for power generation? Well Si, si.

Speaker #2: What else? Bruno Montanari from Morgan Stanley. He asks, how can we think about Pampa's long-term big gas production considering the volumes to CESA, to UEA project, to sell procurement for power generation?

Speaker #2: Well, it's easy.

[Company Representative] (Pampa Energía): Yeah.

Speaker #1: Yeah. So what.

Lida Wang: Well, that's flat, actually.

Speaker #2: Well, that's flat, actually.

Speaker #1: Yeah. So what we foresee and this is not a projection. It's not a projection. It's a budget, if you like. Imagine that we can procure to our own power business around 10, 10.5 million cubic meters of gas per day.

[Company Representative] (Pampa Energía): Yeah. What we foresee, and this is not a projection. It's not a projection, it's a budget, if you like. Imagine that we can procure to our own power business around 10.5 million cubic meters of gas per day, another three and a half to our urea plant, another six to the floating LNG, to Cesa, to floating LNG project.

Speaker #1: Another 3 and a half to our Urea plant. Another 6 to the floating LNG to CESA, to the floating LNG project. 1.5 for exports.

Lida Wang: 1.5 for export.

[Company Representative] (Pampa Energía): 1.5 for exports. If you would add up.

Speaker #1: If you would add up.

Lida Wang: A little bit during the peaks, around 20.

Speaker #2: A little bit during the peak is around 20.

[Company Representative] (Pampa Energía): Yeah. It's around $20 million, between $20 to $22-

Speaker #1: So it's around 20 million. Between 20 and 22.

Speaker #2: Peak.

Lida Wang: Peak

Speaker #1: Peak.

[Company Representative] (Pampa Energía): peak.

Lida Wang: Peak. Average is $20 million.

Speaker #2: Peak. Flat is average is 20.

[Company Representative] (Pampa Energía): Yeah. It's around 20 million cubic meters of gas per day. Quite constant because we are selling intercompany, so we avoid the seasonality. Yeah, that is what we foresee in the next 3 to 4 years when all our projects are online.

Speaker #1: Yeah. So it's around 20 million cubic meters of gas per day. Quite constant because we are selling intercompany. So we avoid the seasonability. But yeah, that is what we foresee for the next in the next three to four years when all our projects are online.

Speaker #2: So as you can see here, no retail. Assuming no retail.

Lida Wang: As you can see here, no retail, assuming no retail.

[Company Representative] (Pampa Energía): Yeah, assuming no retail-

Speaker #1: Yeah. Assuming no retail.

Lida Wang: No CAMMESA or circumstantial or in the winter.

Speaker #2: No Cameza or circumstantial during the winter.

[Company Representative] (Pampa Energía): Yes. 10 to our plants, three to our urea plant, six to our floating LNG plant.

Speaker #1: Yeah. It's 10 to our plants. 3 to our Urea plant. 6 to our floating LNG plant.

Speaker #2: Yeah. Ten is assuming all the plants. CCGTs only is eight, which is the baseline. Right?

Lida Wang: Yeah. 10 is assuming all the plants.

[Company Representative] (Pampa Energía): Yeah.

Lida Wang: CCGT is only.

[Company Representative] (Pampa Energía): Yeah

Lida Wang: which is the baseline, right? Bruno also asked a very good question, Once we reach this peak, how long can we sustain it at the plateau? And what will be required CapEx to sustain at that level? It's a very good question because we have a lot of gas. Well, let's do very conservative. Assuming 20 million cubic meters per day of annual production, and with the current, not saying resources, but 2P reserves is around securely 25 years of average life. This is only 2P, not even including the 3P.

Speaker #1: Yeah.

Speaker #2: Bruno also asked a very good question. How much once we reach this peak, how can we how long can we sustain it at the plateau?

Speaker #2: And what will be required capex to sustain at that level? It's a very good question because on the we have a lot of gas.

Speaker #2: And so assuming 22 well, let's do very conservative. Assuming 20 million cubic meters per day of annual production, and with the current not saying resources, but 2P reserves is around securely 25 years of average life.

Speaker #2: This is only 2P. Not even including the 3P, yeah, the resources and so on. How much required capex? Well, if we're doing the math and assuming the average well type of our shale gas blocks is around 250 to 300 million and obviously consume considering also the capex to maintain the treatment plants is around 250 to 300 million dollars of capex per year.

[Company Representative] (Pampa Energía): Resources

Lida Wang: yeah, the resources and so on. How much required CapEx? Well, if we're doing the math and assuming the average well type of our shale gas blocks is around 250 to 300 million, and obviously considering also the CapEx to maintain the treatment plants, it's around $250 to $300 million of CapEx per year. Okay. Can you talk about the funding strategy of urea? We talk about it, right? The funding of urea project, the strategy. We talk about it.

Speaker #2: Okay. Can you talk about the funding strategy for Urea? We talked about it, right? The funding of the Urea project, the strategy we talked about.

Speaker #1: Yeah. The resources. Yeah. Well, it's what Lida presented. On the one side is to monetize our gas reserves, which is a perfect fit. On the other hand, the Urea business per se, which as Lida explained, the region needs a lot of Urea.

[Company Representative] (Pampa Energía): Yeah.

Lida Wang: The function. Yeah.

[Company Representative] (Pampa Energía): Yeah. Well, it's what Lida presented. On the one side is to monetize our gas reserves, which is a perfect fit. On the other hand, the urea business per se, which, as Lida explained, the region needs a lot of urea, and it's coming from far away regions, very unstable regions, so it makes total sense to reduce logistics cost and procure ourself our own urea for the region, and don't depend from wars or geopolitical risks. The third opportunity is the reg framework, which makes this project possible. The fourth, I will say opportunity is our balance sheet. We have a lot of cash and low leverage. We've always been asked why we have so much cash, and one of the reasons is for this. We were waiting for opportunities like these ones to show, and we are ready to deploy the cash.

Speaker #1: And it's coming from far away regions, very unstable regions. So, it makes total sense to reduce logistics costs and procure our own urea for the region, and not depend on wars or geopolitical risks.

Speaker #1: The third opportunity is the regie framework, which makes this project possible. And the fourth, I will say, opportunity is our balance sheet. We have a lot of cash and low leverage.

Speaker #1: We've always been asked why we have so much cash, and one of the reasons is for this. We were waiting for opportunities like these ones to show up.

Speaker #1: And we are ready to deploy the cash. We are not afraid to use our balance sheet. That is very unleveraged and take this grab this opportunities and profit from them.

[Company Representative] (Pampa Energía): We're not afraid to use our balance sheet that is very unleveraged and grab these opportunities and profit from them. These are the four main angles of the project.

Speaker #1: So these are the four main angles of the project.

Lida Wang: Well, actually, it's not a bad timing to just say this. It's 100% owned by Pampa.

Speaker #2: Well, actually, it's not bad to it's not a bad time to say this. It's 100% owned by Pampa.

[Company Representative] (Pampa Energía): Yeah.

Speaker #1: Yeah.

Speaker #2: Right? Bruno is also asking, well, about the debt. Can you share something about the tenor, the interest cost?

Lida Wang: Right. Bruno is also asking, Well, about the debt, can you share something about the tenor, the interest cost?

Speaker #1: Well, I cannot share about the interest cost yet. We are negotiating. But what we can say, which is obvious, is given there is a project finance, we have a spread over our bonds, for example.

[Company Representative] (Pampa Energía): Well, I cannot say about the interest cost yet. We are negotiating. What we can say, which it is obvious, is given there is a project finance.

[Company Representative] (Pampa Energía): We have a spread over our bonds, for example. Okay. We will see finally where we land the cost, but we cannot foresee that. For sure, most likely, the profile will be four years grace period, while we build the plant. The maturity, it is not close, but it will be closer to seven, eight, seven years or something like that, give or take.

Speaker #1: Okay? So we will see finally where we land the cost. But we cannot foresee that. For sure, most likely, the profile will be four years grace period, like we build the plant.

Speaker #1: And the maturity I cannot it is not close, but it will be closer to seven, eight, seven years or something like that, give or take.

Speaker #2: Well, the last question from Bruno is about lifting costs of oil, obviously. Can you expect a normalization following the recent increase driven by the new TPF?

Lida Wang: Well, the last question from Bruno is about lifting costs of oil, obviously. Can you expect a normalization following the recent increase driven by the new TPF? Well, actually, the TPFs are rentals. They cost around $5 million per month. Basically, we commissioned the second TPF, but the production didn't go up because we choked some wells, so we avoid frac hit in the fracking of other pads. Now that everything is fracked, everything it's done, we can connect all the pads and resume the choke ones, and connect the new ones. Right. Right now, we expect an exit rate of lifting costs of around $10 per barrel with the two TPFs.

Speaker #2: Well, actually, well, the TPFs are rentals. They cost around 5 million dollars per month. Basically, we commissioned the second TPF, but the production didn't grow up because we choked some wells.

Speaker #2: So we avoid frack hit in the fracking of other paths. But now that everything is fracked, everything it's done, we can connect all the paths and resume the choke ones.

Speaker #2: And connect the new ones. Right? So right now, we expect our exit rate of lifting costs of around 10 dollars per bottle. With the tube TPFs.

Speaker #2: But once the CPF is it's online, and also considering the fact that the production will ramp up, we expect in 5 dollars by second quarter of next year.

Lida Wang: Once the TPF is online, and also considering the fact that the production will ramp up, we expecting $5 by Q2 of next year, because we expect the TPF to be ready by Q1 of next year. Alejandro Christensen from Latin Securities, he's asking, how should we think about the shale gas lifting costs over next year, and with Cesar coming online next year? This is a very real question because it's all about, are we going to be highly seasonal or not? Today, it's difficult to think going lower than where we are right now, around $0.80. We are now on an average year of $0.80 to $0.90 per MMBTU. If we are only producing flat volumes, it could go a little bit lower, but not more than $0.60, $0.70. We'll see. Today, this asset is highly seasonal.

Speaker #2: Because we expect the CPF to be ready by first quarter. Of next year. Alejandro Christensen from Latin Securities, he's asking how should we think about the shale gas lifting costs over the next year and with CESAC coming online next year.

Speaker #2: This is a very good question because it's all about are we going to be highly seasonal or not? Today, it's difficult to think going lower than what we are right now, around 80 cents.

Speaker #2: We are on an average year of 80 to 90 cents per million BTU. But if we are only producing flat volumes, it could go a little bit lower, but not more than 60 cents, 70 cents.

Speaker #2: We'll see. Today, this is it. It's highly seasonal. It's becoming more we are flooding more the curve, but still highly seasonal. So and then about following the regie approval, when do you expect to begin drilling acreage in the north of Rincón de Aranda?

Lida Wang: It's becoming more. We are flattening more of the curve, but still highly seasonal. About following the RIGI approval, when do you expect to begin drilling acreage in the north of Rincón de Aranda, and what are your initial expectations for the productivity there?

Speaker #2: And what are you initial expectations for the productivity there?

[Company Representative] (Pampa Energía): It's a good point. I would like to clarify something because we read a report stating that we were closing wells and holding back the completion of wells for the RIGI approval. I want to clarify, this is not the case. Only new drill wells will enter the RIGI. All these wells that Lida explained, the 10 wells that we were fracking and are completing now, they are not in the RIGI project. They are from before. We didn't do that because that does not apply to the RIGI. It has nothing to do with that.

Speaker #1: It's a good point. I would like to clarify something because we read a report stating that we were closing wells and holding back the completion of wells for the regie approval.

Speaker #1: And I want to clarify, this is not the case. Okay? The regie only knew drill wells will enter the regie. So all these wells that we were that Lida explained, the 10 wells that we were fracking and are completing now, they are not in the regie project.

Speaker #1: They are from before. Okay? So we didn't do that because that does not apply to the regie. It has nothing to do with that.

Speaker #1: It's more of a. Yeah. It's a technical thing that not to parent-child effect. So we close some wells to frack anothers, and they don't destroy each other.

Lida Wang: Not to complicate.

[Company Representative] (Pampa Energía): technical. Yeah.

Lida Wang: Yeah.

[Company Representative] (Pampa Energía): It's a technical thing that not to parentize the effect, so we close some wells to frack another, and they don't destroy each other. That's what's the reason. It has nothing to do, as that report stated, that we hold back the completion of the wells.

Speaker #1: That was the reason. It has nothing to do as that report stated that we hold back the completion of the wells. Having said that, the north part.

Lida Wang: Having said that, the North Part.

[Company Representative] (Pampa Energía): Having said that, the North Part.

Speaker #2: Yeah. We have some seismic works before when we started with Rincón de Aranda, but now we are going in September. Yeah. Next month, actually.

Lida Wang: Yeah. We have some seismic works before when we started with Rincón de Aranda, but now we are going in September. Yeah, next month, actually. We are going to start a more comprehensive seismic studies in that area, and do a more detailed work there according to Well, Horacio didn't join us today because of his vacations, but the team already let us know that they're working in the North Part. The north is boundary, the boundaries of Vaca Muerta. Productivity rates, we expect to be lower than the parts that we are developing right now. That is the south strip of the block, right? Once that seismic works are done, and all the studies detail and through, we think that we could start drilling there in next 2028. 2028, end of 2027.

Speaker #2: We are going to start a more comprehensive seismic studies in that area. And do a more detailed work there, according to well, Horacio didn't join us today because he's in vacation, but the team already let us know that they're working in the north part.

Speaker #2: The north is boundary. The boundaries of Bacamorta. So productivity rates we expect to be lower than the parts that we are developing right now.

Speaker #2: That is the south strip of the block. Right? But once that seismic works are done, and we and all the studies detail, and through, we think that we could start drilling there in next '28, 2028.

Speaker #2: End of '27. But so far, we're concentrating the south strip where most of the well inventory is located. On the Perito Moreno expansion, which specific units do you expect to benefit from FRA 1?

Lida Wang: So far, we're concentrating the south strip, where most of the well inventory is located. On the Perito Moreno expansion, which specific units do you expect to benefit from frac 1? We already talked about it, Genelba. If we get awarded in the second trench, we can use it for the peakers in Buenos Aires bound trench, which is Pilar. Ingeniero White is for the Bahía Blanca. Piedra Buena. The peakers will be used, but only seasonally wise, not year-flat. The one that is consistent the whole year is the legacy General Electric. How much of their dispatch could cover? They already awarded the whole legacy CCGT on General Electric.

Speaker #2: We already talked about it. Geneva. But if we get awarded in the second tranche, we can use it for the pickers in Buenos Aires bound tranche, which is Pilar, for the Bahía Blanca.

Speaker #2: Piedra Buena. Piedra Buena. So the pickers will be used, but only seasonally wise, not year flat. The one that is consistent the whole year, it's the legacy Geneva.

Speaker #2: How much of their dispatch could cover? The already awarded, the whole legacy CCGT on Geneva. And a little bit more so the rest we can use it for specific days for trading at City Gate, for trading of gas at Buenos Aires.

Lida Wang: A little bit more, the rest, we can use it for specific days for trading at City Gate, for trading of gas at Buenos Aires, or a little bit to be used in the peakers. We'll see, specifically in the winter season. Beyond the transportation prepayment, will any additional CapEx be required for the plants? No. It's just what it is. With Plan Gas.Ar expire at the end of 2028, do you see integration strategy shifting toward transferring gas at lower prices to your plants and declare more competitive CVPs and maximize dispatch? Actually, this quarter is the proof of that transferring the Plan Gas.Ar belongings to ourselves is better, right? Because if we didn't transfer the Plan Gas.Ar, we will be billing at four and a half. Now, we are billing at higher price because CAMMESA allows a higher pass-through.

Speaker #2: Or a little bit to be used in the pickers. We'll see. Specifically in the winter season. Beyond the transportation prepayment, will any additional capex be required for the plants?

Speaker #2: No. No. It's just what it is. With plant gas expire at the end of 2028, do you see integration strategy shifting toward transferring gas to lower prices to your plants and declare more competitive CVPs and maximize dispatch?

Speaker #2: Actually, the plant gas now it's this quarter is the proof of that transferring the plant gas volumes to ourselves is better. Right? Because should we if we didn't transfer the plant gas we will be billing at 4 and a half.

Speaker #2: Now, we are billing at higher price because Camesa allows a higher pass-through. So I will say average-wise, it must be better than the plant gas's average price.

Lida Wang: I would say average-wise, it must be better than the Plan Gas.Ar's average price. Then we'll see. I think the CCGTs have the most competitive advantage against all other units, right? All other in the peers and in our own portfolio. They will pass through whatever CAMMESA is allowing. That's how they are going to maximize the dispatch. I think what your question is referring to is to the peakers, and that depends. Bueno. Zafra asks about the potential unlock in Rincón de Aranda with the North Part. We already answered it. Expectation for another project this year and next year, we already answered. Cesa, FLNG.

Speaker #2: And then we'll see. I think the CCGTs have the most competitive advantage against all other units. Right? All other in the piers and in our own portfolio.

Speaker #2: They will pass through whatever Camesa is allowing. So that's how they are going to maximize the dispatch. I think what your question is referring to is to the pickers and that depends.

Speaker #2: Bueno. Safra asks about the potential unlock in Rincón de Aranda with the North Park. We already answered it. Expectation for another project this year and next year, we already answered it.

Speaker #2: FLNG.

Speaker #1: Yeah.

[Company Representative] (Pampa Energía): Yeah.

Lida Wang: Urea, right?

Speaker #2: Urea. Right?

[Company Representative] (Pampa Energía): In general, you have to expect any project in our core businesses, which are power, gas, oil, and now fertilizers, we will participate, and we will look at them, and look forward to increase if there is the right opportunity.

Speaker #1: In general, you have to expect any project in our core businesses which are power, gas, oil, and now fertilizers, we will participate and we will look at them and look forward to increase if there is the right opportunity.

Lida Wang: Agustin Pacheco from Grupo Mariva also asks about the financing of urea. Already answered. Alvaro Leyva from BTG is asking the same, already answered. CapEx deployment of our urea project, we already answered. Given the still favorable oil market outlook, at the fact that it generated $64 revenue losses in Q2, would you consider unwinding the hedging position?

Speaker #2: Austin Pacheco from Mario also asks about the financing of Urea. Already answered. Álvaro Leiva from BTG is asking the same. Already answered. Capex deployment about Urea project, we already answered.

Speaker #2: Given the still favorable oil market outlook at the fact that it generated 64 revenue losses in Q2, would you considering would you consider unwinding the hedging position?

[Company Representative] (Pampa Energía): No. No, we won't. I think we answered this in the previous call, that the idea is to keep this level of hedge, and naturally, as production increases, we have a big portion unhedged. We keep current production hedged, and whatever comes on top of that, will remain unhedged. That was the original strategy, was to hedge the ramp up until the 45,000 barrels, and this is what we're doing. Once we reach that plateau, we still have to define, but in general, what we would foresee is that the percentage of hedging will be reduced.

Speaker #1: No. No, we won't. I think we answered this in the previous call that the idea is not to keep this level of hedge and naturally, as production increases, we have a big portion unhedged.

Speaker #1: So we keep current production hedged, and whatever comes on top of that, we remain unhedged. So that was the original strategy. It was to hedge the ramp-up until the 45,000 barrels, and this is what we are doing.

Speaker #1: So once we reach that plateau—which we still have to define—but in general, what we foresee is that the percentage of hedging will be reduced.

Lida Wang: Scott Adolci from AdCap Securities, he asks about petrochemicals. We already answered. He also asks about the target gas production long term. We already answered. Mileni Carvalho from JP Morgan. Well, all question answered. From urea, she asked about EBITDA contribution from urea, answered.

Speaker #2: Catarucci from ADCAP, he asks about petrochemicals. We already answered. And he also asks about the target gas production long-term. We already answered. Mileni from Carvalho from JPMorgan.

Speaker #2: Well, all question and answer. Hey, from Urea, she asks about the EBITDA contribution from Urea. Answered. Price the gas price or Urea. Answered. $3 per million TU.

[Company Representative] (Pampa Energía): Yeah.

Lida Wang: The gas price for urea, answered, $3 per MMBTU, the same as FLNG project, right? How much gas is required, answered. Incremental CapEx for E&P for this three and a half, assuming that it's additional. I did the math, it's not much. It's like

Speaker #2: The same as FLNG project. Right? How much gas is required? Answered. Incremental capex for EMP. For this 3 and a half. Assuming that it's additional.

Speaker #2: I did the math, and it's not much. It's like...

[Company Representative] (Pampa Energía): Should be 100 and

Speaker #1: Should we fund them?

Speaker #2: It's 100 million dollars of capex. EBITDA and.

Lida Wang: It's $100 million of CapEx, EBITDA.

[Company Representative] (Pampa Energía): $90 million of EBITDA.

Speaker #1: 90 million dollars of EBITDA.

Lida Wang: $90 million, and less than $50 million of additional CapEx. For the 20 million production, we are calculating a maintenance CapEx of $250 to $300 million. That's the range. A ver. Bueno. Balance, Andres Irigiano asking about the CapEx facing of urea, answered. I'm saying this because we want to be clear.

Speaker #2: 90 million dollars and okay, less than 50. Of additional. Capex. For the 20 million, 20 million production, we are calculating a maintenance capex of 250 to 300 million dollars.

Speaker #2: That's the range. Javier. Bueno. Balance. Andrés Irmigliano asking about the capex phasing of Urea. Answered. I'm saying this because we want to be clear transfer.

[Company Representative] (Pampa Energía): Go around the questions.

Speaker #2: Yeah, transfer. Transparent. Yeah. Puente. Juan Ignacio López. Okay. Sí. Juan Ignacio López from Puente. He's asking we are seeing a better pricing environment for natural gas sales in the domestic markets beyond the usual seasonality.

Lida Wang: Transparent, yeah. Puente, Juan Ignacio Lopez. Okay.

[Company Representative] (Pampa Energía): Si.

Lida Wang: Sí. Juan Ignacio Lopez from Puente. He's asking, "We are seeing a very impressive environment for natural gas sales in the domestic market beyond the usual seasonality. I would like to ask what you attribute this improvement to, effects of the Resolution 400, the deregulation, or increased pressure in the domestic market for high international prices?" How do you expect this dynamic to evolve over the coming quarters? Yes, it's true. Now, CAMMESA, during the winter pass-through, they are linking it, associated with the international prices of LNG. That's why we can pass through higher prices. Also, the Resolution 400 contemplates this deregulation in the procurement of the gas. Remember that before, it was all centralized at CAMMESA, and now it's more and more decentralized. Just to give you an idea, CAMMESA used to be procuring the whole gas in the whole grid.

Speaker #2: I would like to ask, what you attribute this improvement to? Effects of the resolution 400? The deregulation? Or increased pressure in the domestic market for high international prices?

Speaker #2: How do you expect this dynamic to evolve over the coming quarters? So yes, it's true. Now, Camesa during the winter passed through. They are linking it or associated with the international prices of LNG.

Speaker #2: That's why we can pass through a higher prices. But also, the resolution 400 contemplates this deregulation and the procurement of the gas. Remember that before it was all centralized at Camesa and now it's more and more decentralized.

Speaker #2: Just to give you an idea, Camesa used to be procuring the whole gas in the whole grid. Now it's doing it one third actively roughly numbers.

Lida Wang: Now it's doing it one-third actively. Roughly numbers. Another one-third, they say, "Okay, I'm using my Plan Gas.Ar and I'm giving it to you, and you pay me back the price," which is called the assisted by CAMMESA, Plan Gas.Ar. Then the one-third, which mostly is ours, it's self-procure gas from power plants, which is our case. The idea of CAMMESA, it's going more and more to an assisted scheme. When Plan Gas.Ar is roll out, the idea is not to reengage it. It's just all procured by the power generators. Sofia Gancedo. I don't know who is she, but basically, she's asking, the CAMMESA percentage, 26 what?

Speaker #2: Another one-third, they say, okay, I'm using my plant gas and giving it to you, and you pay me back the price, which is called the assisted by CAMMESA gas acuerdo.

Speaker #2: And then the one third, which mostly is ours, it's self-procure gas from power users power plants, which is our case. The idea of Camesa, it's going more and more to assisted scheme and when plant gas is rolled out and the idea is not to re-engage it.

Speaker #2: It's just all procured by the power generators. Sofia Grant—I don't know who she is—but basically, she's asking about the CAMMESA percentage, 26%, okay, gas sales.

Sofia Gancedo: Sales. Gas.

Lida Wang: Gas sales. Gas sales? Sí. Have any of these contracts or volume have been transferred to the power company or self-management to supply or supply? I understood that, well, this is what we can transfer. We couldn't transfer more of this because the one contract outstanding to transfer is Enarsa. The last rounds of Plan Gas.Ar, okay? The 4.2 round, why did I say that? The last round of Plan Gas.Ar, which is around 5 million cubic meters per day, with peaks during the winter, that one hasn't been transferred yet. As you can see, that's why we still are selling to Plan Gas.Ar, specifically to CAMMESA and retailers, 56%. For example, in Q4, it should go down dramatically because CAMMESA Plan Gas.Ar retailers won't demand much gas due to seasonal reasons. Matthew Booth from Fidelity.

Speaker #2: Gas sales. Sí. Have any of these contracts or volume have been transferred to the power company or self-management to that no sé, esta pregunta me es rara.

Speaker #2: well, this is what we can transfer. We couldn't transfer more of this because the one contract outstanding to transfer is Enarsa. The last round of plant gas the 4.2 round, the last round of plant gas with which around 5 million cubic meters per day with peaks on during the winter, that one hasn't been transferred yet.

Speaker #2: So as you can see, as you can see, we still that's why we still are selling to plant gas, specifically to Camesa and retailers, 56%.

Speaker #2: But for example, in Q4, it should go down dramatically because Camesa could go Camesa and retailers won't demand much gas due to seasonal reasons.

Speaker #2: Matthew Boots from Fidelity. He asks about the equity and debt structure for Urea Plant. We already answered.

Lida Wang: He asked about the equity and debt structure for urea plant.

[Company Representative] (Pampa Energía): Yeah

Lida Wang: which I already answered.

[Company Representative] (Pampa Energía): Again, we're not trying to maximize the leverage on the project because the idea is to deploy our cash and future cash flows into this. That's why we're not having any partners, and that's why we're not maximizing the leverage. We expect a structure of around 60/40. 60 debt and 40 equity. Still everything is under negotiations, but we are expecting around $1.4 billion of equity in the next 41 months.

Speaker #1: Again, we are not trying to maximize the leverage on the project, because the idea is to deploy our cash and future cash flows into this.

Speaker #1: That's why we are not having any partners and that's why we're not maximizing leverage. So we expect a structure of around 60/40. 60 debt and 40 equity.

Speaker #1: Giving you that will give you around it's still everything is under negotiations, but we are expecting around 1.4 billion of equity in the next 41 months.

Speaker #2: Can you Santander, Walter Carbesio, he's asking repeated questions as well. But he's asking about the gas production until 2030 breakdown. We already.

Lida Wang: Santander, Walter Carvesio, he's asking repeated questions as well, he's asking about the gas production until 2030 breakdown. We already.

[Company Representative] (Pampa Energía): Discussed that.

Speaker #1: Discussed that.

Lida Wang: discussed that. Andres Cardona from Citi, actually, he's asking, when looking at the diversified portfolio, is there any asset you consider non-core and could be eventually divested?

Speaker #2: Discussed that. Andrés Cardona from Citi. Actually, he's asking: When looking at the diversified portfolio, is there any asset you consider non-core and that could be eventually divested?

Speaker #2: This question?

Speaker #1: I think this was answered when I explained our core businesses.

[Company Representative] (Pampa Energía): I think was answered when I explained our core business.

Lida Wang: Self-explanatory, which is petrochemicals. Ramiro Guerrero, Bull Market, how much volume of Rincón de Aranda remains hedged through May 2027, at what weighted average price, and what additional cash collateral settlement and cash outflow should we expect under different Brent scenarios? How much is hedged from our production? That's the first question. Until when?

Speaker #2: So the self-explanatory, which is petrochemicals. Ramiro Guerrero, Bull Market. How much volume of Rincón de Aranda remains hedged through May 2027 at what weighted average price?

Speaker #2: And what additional cash collateral settlement cash outflow should we expect under different brand scenarios? So, how much is hedged from our production? That's the first question.

Speaker #2: Until when?

[Company Representative] (Pampa Energía): We hedge all our production until Q1 of next year.

Speaker #1: We hedge all our production until next first quarter of next year.

Lida Wang: That's until May, until June.

Speaker #2: We could get until May. Until June.

[Company Representative] (Pampa Energía): First quarter. No, no, but-

Speaker #1: First quarter. No, no, but. First quarter of.

Lida Wang: Si.

Speaker #2: okay. First quarter.

[Company Representative] (Pampa Energía): Q1.

Lida Wang: Q1.

[Company Representative] (Pampa Energía): Little bit less than one year of hedge.

Speaker #1: A little bit less than one year of hedge.

Lida Wang: Yeah. Weighted average price?

Speaker #2: Yeah. Weighted average price?

[Company Representative] (Pampa Energía): 67.

Speaker #1: 67.

Speaker #2: 66.

Lida Wang: 66.

Speaker #1: 67.

[Company Representative] (Pampa Energía): 67.

Speaker #2: 67. Of rent?

Lida Wang: $67 of Brent.

Speaker #1: Yeah. Rent.

[Company Representative] (Pampa Energía): Yeah. Go ahead.

Speaker #2: What additional cash collateral should we expect if, I don't know, different brand scenarios, right? Today is 80, so well, with the price, you can see how much it is.

Lida Wang: What additional cash collateral should we expect if, I don't know, different Brent scenarios, right? Today is $80. Well, with the price, you can see how much it is.

Speaker #1: Depends on the back-to-market. Decisions.

[Company Representative] (Pampa Energía): On the mark to market decisions.

Lida Wang: Ricardo Carvalho from Itaú. Impressive investment pipeline. Thank you. That expands your business franchise phenomenally. Another thank you. How do you define in one sentence what is Pampa now and its vision? Thank you.

Speaker #2: Ricardo Cabana from Itaú. Impressive investment pipeline, thank you. The expense, your business franchise, phenomenally. Another thank you. How do you define, in one sentence, what is Pampa now and its vision?

Speaker #2: Thank you.

[Company Representative] (Pampa Energía): One sentence.

Speaker #1: One sentence.

Lida Wang: In one sentence.

Speaker #2: In one sentence. Yeah, because it's 12:00 PM, so.

[Company Representative] (Pampa Energía): Oh.

Lida Wang: Yeah, because it's 12:00 PM.

[Company Representative] (Pampa Energía): One sentence.

Speaker #1: sentence. Yeah. We are. We are an urgent company that invests heavily in Argentina and tries to monetize the reserves in Vaca Muerta through all our industrial segments.

Lida Wang: Growth.

[Company Representative] (Pampa Energía): Yeah. We are.

Lida Wang: Growth

[Company Representative] (Pampa Energía): We are an Argentine company that invests heavily in Argentina and tries to monetize the reserves in Vaca Muerta through all our industrial segments. That is power, urea, LNG, etc. I would say that is the two main.

Speaker #1: That is power, urea, LNG, etc. I will say that is the two main headliners that is an Argentinian company that invests heavily in Argentina and is an industrial energy company integrated energy company.

Lida Wang: Headliners

[Company Representative] (Pampa Energía): Headliners. That is an Argentine company that's invested heavily in Argentina and is an industrial integrated energy company. That is the.

Speaker #1: That is the.

Lida Wang: The tweet. The headline. Augusto Soto Baumann from Rosenthal Inversiones, he's asking on the receivables. You mentioned working capital seasonality, but receivables still increase significantly in this quarter. Where are the key drivers on operating cash flow? Very good question. Wide increase because we are selling more gas. Compared to last year, Q2, we are selling 2 million more of gas.

Speaker #2: The tweet. The headline. Augusto Soto Bauman from Rosenthal Inversiones. He's asking on the receivables. You mentioned working capital seasonality, but receivables is still increasing significantly in this quarter.

Speaker #2: And where are the key drag on the operating cash flow? Very good question. Wide increase because we are selling more gas. Compared to last year, Q2, we are selling 2 million more

[Company Representative] (Pampa Energía): Prices.

Speaker #1: And the price is.

Lida Wang: At higher prices, here you have it. We are selling more oil, 3 times more oil than last year, and 22% more than last quarter.

Speaker #2: A higher prices. So here you have it. We are selling more oil. Three times more oil than last year. And 22% more than last quarter.

[Company Representative] (Pampa Energía): Part of the gas, of this working capital, will revert on the following quarters.

Speaker #1: And part of the gas will of this working capital will revert on the following quarters.

Lida Wang: Yeah. Correct. We sell it now, we collect it 45 days later. This is very important. Previous quarter and previous year, the days of sales outstanding was way higher than now. Now we are at 5 days of delay, so it means 47 days of total collection days, while last quarter was 50-something, and previous year was way higher because it was accommodating. DSO is improving, specifically from our largest clients, which is CAMMESA and Enarsa. At the same time, we are selling more. 12 days delay. 12 on top of the 42, it's 54. Math. Could you please understand. Well, was it mainly export timing? No, export is flat. It's 65 days. There is no increase or decrease. It's very certain.

Speaker #2: Yeah. Correct. And we sell it now. We collected 45 days later. This is very important. Previous quarters and previous quarter and previous year, the days of sales are tending with way higher than now.

Speaker #2: Now we are at five days of delay, so it means 47 days of total collection days, while last quarter was 50-something. And previous year was way higher because it was accommodating.

Speaker #2: So DSO, it's improving. Specifically from this our largest clients, which is Camesa and Enarsa. But at the same time, we are selling more. 12 days.

Speaker #2: Delay. So, 12 on top of the 42. So it's 54. Matt. Matt, then could you please understand well, what was it mainly—export time?

Speaker #2: No, export is flat. It's 65 days. It's there is no increase or decrease. It's very certain. Así, porque está diciendo about the receivables. And Camesa or subsidy related balances, how about the Camesa?

[Company Representative] (Pampa Energía): The-

Lida Wang: As a hypothecating all of the receivables. CAMMESA or subsidy related balances, how about the CAMMESA? CAMMESA is paying better.

Speaker #2: Camesa is paying better.

[Company Representative] (Pampa Energía): CAMMESA is paying, yeah.

Speaker #1: Camesa is paying, yeah.

Lida Wang: Better.

Speaker #2: Better?

[Company Representative] (Pampa Energía): No major regulation CAMMESA.

Speaker #1: No major delays in Camesa.

Lida Wang: Yeah. The subsidy, it's very important to say that it's getting smaller in money terms, because something very important is that retail prices are increasing. If the retail prices are increasing, the subsidy part is smaller. Now it's just $15 million per year or something. Should we expect this to normalize in H2, or is it new structural level as exports continue to grow? Exports, forget it.

Speaker #2: Yeah. Subsidy, it's the subsidy, it's very important to say that it's getting smaller in money terms because something very important is that price retail prices are increasing.

Speaker #2: If the retail prices are increasing, the subsidy part is smaller. So now it's just 15 million dollars per year or something. And should we expect this to normalize in the second half, or is it new structural level as exports continue to grow?

Speaker #2: Exports, forget it. It's the receivables of exports. It's the same. We are exploring the same. But wait—Q3, we are going to collect what we sell in Q2, obviously, but Q3 is higher winter prices and higher sales.

[Company Representative] (Pampa Energía): The-

Lida Wang: The receivables of exports. It's the same. We are exporting the same. Wait, Q3, we are going to collect what we sell in Q2, obviously.

[Company Representative] (Pampa Energía): Winter prices.

Lida Wang: Q3 is higher winter prices and higher sales, so you should expect higher receivables. In Q4, usually, we collect. The receivables, it's a surplus, it's a inflow, no outflow. That's how you should think about it. Lilyanna Yang from HSBC, a quick update on TGS. Gracias.

Speaker #2: So you should expect higher receivables. But in Q4, usually we collect the receivables is surplus. It's an inflow, no outflow. That's how you should think about it.

Speaker #2: Liliana Yang from HSBC, a quick update. On TGS. Gracias.

[Company Representative] (Pampa Energía): TGS, well, they have their call already.

Speaker #1: TGS, well, they have their call already.

Lida Wang: Yeah, they have.

Speaker #2: Yeah, and they have a.

[Company Representative] (Pampa Energía): I think that the two main takeouts are the two big projects TGS is performing. One is Iniciativa Privada, that should be commissioned by next winter. The other is the big.

Speaker #1: But I think that the two main takeouts are the two big projects TGS is performing. One is the Iniciativa Privada that should be commissioned by next winter.

Speaker #1: And the other is the big LNG. NGL, sorry. NGL project, as you know. That they are already announced the FID and they're working heavily in the financing and they're awaiting the rigid approval of that project.

Lida Wang: NGL

[Company Representative] (Pampa Energía): NGL, sorry. NGL project, as you know, that they are already announced the FID and they're working heavily in the financing, they're awaiting the RIGI approval of that project. I think those are the two main.

Speaker #1: I think those are the two main drivers. Yeah, main news about TGS. And if you look at the results, they were outstanding. They improved every line of business.

Lida Wang: Drivers.

[Company Representative] (Pampa Energía): Yeah, main news about TGS. If you look at the results, they are outstanding. They improve every line of business.

Lida Wang: Now utilities, the price, the tariff.

Speaker #2: Now, utilities, the price of the tariff.

[Company Representative] (Pampa Energía): Looking forward, it's a very encouraging company.

Speaker #1: Power, it's a very encouraging company. I mean, doing very well.

Lida Wang: Bueno. The last question so far, and that's it. It's Pedro Letelier. I don't know where he is, but I know him. The province of Buenos Aires has its own investment regime, the RPIE.

Speaker #2: Well, the last question so far, and that's it. It's Pedro Letelier. I don't know where. Where he is, but I know him. The province of Buenos Aires has its own investment regime, the REPIE.

Lida Wang: Is there any conflict with the government's RIGI that could impact-

Speaker #2: Is there any conflict with the government's regie that could impact the real project?

[Company Representative] (Pampa Energía): No

Lida Wang: the Rio project?

[Company Representative] (Pampa Energía): Not at all. We filed for both. We filed for the RIGI, that we have been approved by the RIGI committee. We're waiting for the publication of the approval in the official gazette. We also applied to the provincial regime, and we're awaiting approval. There's no conflict at all. On the contrary, they're quite What is it?

Speaker #1: No, not at all. We filed for both. We filed for the regie that we have been approved by the committee, regie committee. We're waiting for the publication of the approval in the official cassette.

Speaker #1: And we also applied to the provincial regime and we are waiting approval. And there is no conflict at all. On the contrary, they're quite what is it?

Lida Wang: Proactive?

[Company Representative] (Pampa Energía): Yeah.

Speaker #1: Yeah, yeah. Complementary. Thank you. They're quite complementary. The additional benefit from the provincial is a tax break on the.

Lida Wang: Complementary?

[Company Representative] (Pampa Energía): Complimentary. Thank you. They're quite complimentary. The additional benefit from the provincial is a tax break on the-

Lida Wang: Gross sales tax.

Speaker #2: Gross sales tax.

[Company Representative] (Pampa Energía): Gross sales tax. Yeah.

Speaker #1: Gross sales tax, yeah. That's the main takeout. So hopefully we'll get that approval as well.

Lida Wang: And if-

[Company Representative] (Pampa Energía): That was the main takeout. Hopefully we get that approval as well.

Speaker #2: Yeah, we talk about this. Regie is pre-approved.

Lida Wang: Yeah, we talk about this. RIGI's pre-approved.

[Company Representative] (Pampa Energía): Yeah.

Speaker #1: Yeah, yeah, yeah. Yeah, but there's no conflict between the two, on the contrary.

Lida Wang: Okay.

[Company Representative] (Pampa Energía): There is no conflict between the two.

Lida Wang: Mm-mm.

[Company Representative] (Pampa Energía): On the contrary.

Lida Wang: That's it.

Speaker #2: That's it.

[Company Representative] (Pampa Energía): Great.

Speaker #1: Great.

Speaker #2: All right. Thank you, everybody, for joining us this call. Thank you, Fito, for taking all the questions. Fito, would you like something more? Say something more?

Lida Wang: All right. Thank you everybody for joining us this call. Thank you, Fito, for taking all the questions. Fito, would you like something more? Say something more?

[Company Representative] (Pampa Energía): One hour. Perfect.

Speaker #1: One hour. Perfect. Thank you very much.

Lida Wang: Perfect.

[Company Representative] (Pampa Energía): Thank you very much.

Lida Wang: Thank you very much. Any questions you may have, just let us know, email us. We are more than available to help you. The next call is due on November. Hope to see you then. Bye. Thank you.

Speaker #2: Thank you very much. Any question you may have, just let us know. Email us. We are more than available to help you. The next call is due on November.

Speaker #2: Hope to see you then. Bye. Thank you.

[Company Representative] (Pampa Energía): Bye.

Speaker #1: Bye.

Lida Wang: Goodbye