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

Good morning, ladies and gentlemen. This is Pablo Calderone, YPF IR Manager. Thank you for joining us today in our Second Quarter 2022 Earnings Call. Today, we will have some introductory remarks from our new CEO, Pablo Iuliano; and then our CFO, Alejandro Lew, will go through the main aspects of our second quarter results. Before we begin, I would like to draw your attention to our cautionary statement on Slide 2. Please take into consideration that our remarks today and answer to your question may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by these remarks. Also, note the exchange rate used in calculations to reach our main financial figures in U.S. dollars. Our financial figures are stated in accordance with IFRS, but during the call, we may discuss some non-IFRS measures such as adjusted EBITDA. Now let me turn the call to Pablo Iuliano.

Thank you, Pablo. Good morning, and thanks, everyone, for joining today. I am delighted to be with you for the first time to report our second quarter results. And before getting into specific, I would like to begin my remarks by thanking our now former CEO, Sergio Affronti, who 2 years ago, trusted me to rejoin YPF to lead our unconventional operations. Sergio took the hand of the company at an extremely difficult time, not only for YPF and Argentina, but for all the economies worldwide and navigated through the strong with affirmed determination, successfully putting the company back on the path of profitable growth. Therefore, the positive results that we are presenting today are the outcome of Sergio's strong leadership and the outstanding job performance by the more than 20,000 employees and more than 40,000 people that indirectly contributed with us, with whom, we will continue working to deliver on our ambitious target. I would like to also express how proud and honored I am to assume the responsibilities to lead the largest integrated energy company in the country, with my firm commitment and that of the entire Board of Directors and of the executive team of taking YPF to the next level, by growing consistently in a profitable way to become an exporter of energy within the next 2 years. All the while, we maintain our proven and healthy financial strategy and having safety and sustainability of our operation at the forefront of our day-to-day decisions. Now moving into the very purpose of this call, let me start highlighting that this was a very robust quarter, in which we continued delivering solid operational and financial results. We continued expanding our profitability, gaining for the operating efficiency and consolidating the production growth that we have been delivering for over a year leveraging, amongst others, on the tremendous progress that has been gained in our Vaca Muerta operations in the post-pandemic. We, therefore, feel very comfortable with our ability to deliver on our ambitious guidance established at the beginning of the year and further adjustment them to establish more challenging goals, as Alejandro will go through by the end of his remarks. I now turn the call to Alejandro to go through our results for the second quarter.

Thank you, Pablo, and good morning to you all. During the quarter, our total hydrocarbon production averaged 504,000 barrels of oil equivalent per day, remaining essentially flat vis-à-vis the previous quarter, but consolidating a 9% growth when compared to the previous year, primarily leveraging on the very positive performance of our shale operations. Adjusted EBITDA reached a strong quarterly mark of $1.5 billion, expanding 54% from the previous quarter and 38% on a year-over-year basis. This outstanding increase in adjusted EBITDA was primarily the result of higher prices across the board, including those of fuels sold in the local market, other refined products sold locally and abroad and the seasonal increase in the average realization price for our natural gas production. In addition, the sustained oil and gas production and the increased refining processing levels also contributed to the interannual improvement in adjusted EBITDA. On the negative side, however, total OpEx jumped 34% when compared to the same quarter of last year, primarily as a result of the overall accelerated inflationary environment, the wage agreements negotiated with the unions and incremental transportation and energy costs given the increased activity levels. In turn, the strong operating results translated into the highest quarterly bottom line in the company's history, with net income reaching $798 million, accumulating over $1 billion in net income during the first 6 months of the year. In terms of our investment activities, CapEx totaled $932 million in Q2, representing an increase of 25% on a sequential basis and 61% on a year-over-year basis, accumulating almost $1.7 billion in the first half of the year. After a slower start in the first quarter, during the second quarter, we have gained momentum and are now expecting not only to meet, but even probably surpass our initial investment plan for the…

[Operator Instructions]. Our first question will come from the line of Frank McGann with Bank of America.

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

Thank you, Frank, for your questions. Well, to start commenting on our views for the second half, so far, in terms of prices, our average prices as of today are a little bit higher than the ones that we averaged in the second quarter. Primarily on in the case of diesel, we are running about 10% higher, while on gasoline we are just slightly below. That basically is the result primarily of the final adjustment or the most recent adjustment that we performed in the month of June, in which we only adjusted prices for diesel and not for gasoline. Going forward, we expect to continue with the strategy that we have been deploying -- in -- during most of this year. Basically trying to -- for the -- at the minimum adjust prices in a way to compensate for the evolution of the currency depreciation and for as long as possible to continue reducing the gap with international parties. So far, we see ourselves in a much comfortable situation in diesel, where the combination of the reduction in international Brent prices has translated into a lower import parity for diesel. And also for gasoline and combining that with the increases in diesel we are significantly closer to international parities on average, primarily being aligned and fully aligned on our premium quality diesel products, both on retail, where we are practically aligned and wholesale segments where we are slightly above import imparity. In the case of gasoline, we are having higher distortion or a higher gap. We expect to be able in the near future to probably introduce price adjustments at the pump in a way to not only compensate for the currency evolution, but also to reduce at least partially the current gap that we are having with international…

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

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

Bruno, thanks for your questions. In terms of tertiary production, it's hard to say how further production growth we are going to see in Manantiales Behr. So far, it continues providing very positive results. We have already started to redeploy some of the existing injection units to rotating them into new areas in Manantiales Behr, and all of that is producing very positive results. So we would expect that trend to continue, but it's hard to predict exactly how further production growth we are going to see there. In terms of further opportunities, we are deploying new pilots in other areas such as Los Perales and El Trébol, for example. So far they are rendering initial positive results. And so we would expect to start probably a process of massification on some of those projects by the end of this year and early next year. The -- if we talk about the total potential that we see in EOR, given all these projects, we can probably see an increase in total tertiary production of about 50% clearly coming from still a low number, but probably seeing something over 50% between now and next year, generally speaking. In terms of your second question about logistics on our downstream operations. Clearly, the supply constraints that we faced in the peak of late May and early June already subside. That was through a combination of things, as we have mentioned in the call. But clearly, we are now running on higher levels of imports compared to the second quarter. Clearly, that's been managed also in a positive economic way given the adjustments on premium grade diesel to international parties to import parity. And so now the -- clearly, the problem is the last-mile transportation logistics, which is running at practically full capacity given…

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

Two questions here. The first one is follow-up the cost. I mean we saw some power increases over the past let's say, over the past year and sequentially quarter-over-quarter. So just trying to -- center page of your trend as in the past, the lifting cost was somehow stable/dropping. The second question is about the debt maturity now and congrats on managing that over the past couple of quarters. But still looking to 2022 to '25, you still have some increase of $3.5 billion on debt, that is expiring. So I'm just trying to understand I think better what will be the , management here in terms of expanding or extending -- sorry the maturity of the debt in order to try to distribute better the cash flow for the coming years.

Thank you, Luiz, for your questions. In terms of lifting, clearly, what we are seeing is a different trend in conventional versus unconventional, whereby, the production growth in our shale operations in unconventional is allowing us to continue reducing the overall lifting cost of our operations there. And of course, as we continue to see a higher proportion of shale within our total production mix, we would expect that to continue helping the average lifting cost down the road. Clearly, on the opposite side, the combination of the inflationary pressures in pesos and with a slower devaluation of the currency, clearly translating into dollar denominated cost pressures. And the decline in production although clearly at significantly lower pace than the natural decline that we would see in our conventional operations, should we not had the contribution of tertiary and also the further efforts that we are putting on secondary production. Clearly, the impact in our lifting costs for conventional would be even worse. But -- so combining those 2 factors and given the continuous expectation for inflation running above the valuation of the currency during the rest of the year, combining all of that, we would expect the overall lifting cost to remain relatively flat in the second half compared to the second quarter that we are just releasing. So basically, we will be -- we should be able to counteract the effects of higher inflation through the high proportion of shale and the stabilization of our production in conventional and the higher production in our shale operations. And going to your second question in terms of our debt maturity profile, we clearly see a jump in maturities in 2025. Of course -- and this is mostly related to international bonds. While on the other hand, in 2023, 2024, we…

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

Well, clearly, it's a moving target. Of course, so far, the local market continues to provide a very nice, a very attractive arbitrage in terms of cost of debt. So any debt that you replace from the international markets with the local market, given current conditions, it would imply a cost -- a total cost reduction in overall cost of financing. On the other hand, when you look at bank financing, the most recent experience that we had was with the CAF led transaction which clearly was slightly above our average cost of debt, but not significantly higher. So all in all, I would say that we are constructing in terms of being able to maintain our average cost of debt in the range of 7.5% to 8%, but that will also depend on the overall interest rate environment globally, of course. As of today, we have no relevant exposure, as mentioned in the presentation, no relevant exposure to value or to interest rates. The key -- or the largest loan that we have on variable rates, which was the CAF loan, has already been hedged, fully hedged. So we have no exposure to variable interest rates. And in terms of the refinancing, it will depend on how the local market continues to perform and whether it continues to provide a potential arbitrage vis-a-vis international financing.

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

Most of my questions were actually already answered. I have just one follow-up, maybe on the CapEX side. So you have updated the guidance for the year for 2022. And it seems at least for me that we should expect CapEx to accelerate in the second half of the year, right? I -- just -- I was just wondering I mean, what drives that acceleration. If you could provide some additional color on what -- do you need to meet these prospects. If there is any effect of maybe CapEx inflation there? So I mean an overall comments on what you expect in terms of CapEx for the second half of this year?

Marcelo, thanks for your question. Clearly, an unfortunate portion of the CapEx increase is related to inflation pressures. But to the largest extent is related to increased activity that we are projecting for the second half. This is clearly the result of better performance than anticipated in the first half, that is allowing us to anticipate some activity that was expected for next year. And that is a combination of increased drilling and completion activity in our shale operations, primarily in oil in our core hub, whereby, we are expecting to drill over 2 -- drill and complete about 20 additional wells. When we provided guidance for the year, we anticipated about 100 of completing or tying in about 100 wells in our fourth half. We are moving now to probably over 120. So that is increasing our total activity there by about 20%, which also correlates with the comments that we made in terms of increased oil production expected for the fourth quarter of this year in our shale operations. So probably we are raising. Even though we have not provided guidance specifically before on what we had expected in terms of shale oil production, today, we introduced the number of 85,000 to 90,000 in terms of net production for YPF, 85,000 to 90,000 barrels per day in our core hub. And I would -- sorry, in our total net shale production, which is clearly a significant increase versus our previous estimate, and that is related to this increased activity in drilling and completion. So that is on the one hand, we are also expecting some incremental drilling activity in some of our shale gas blocks primarily in La Calera. And then finally, we are also moving forward or anticipating the construction of some facilities in -- primarily in…

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

Congratulations on your results. I'd like to pose a question on your refinery diet. You are focusing CapEx in Panama, which produces light sweet Medanito oil. Now does that mean that you will need to purchase proportionally more oil from producers with heavier blends? And another question. Since a significant portion of YPF's revenues are denominated in pesos. Could you give us your view of the impact of a steep devaluation on the company's financials, let's say, what could we expect if the peso fell by 30% overnight?

Constantino, first of all, thanks for your congratulations. In terms of the refinery diet, clearly, the evolution of the portfolio of lighter crudes versus heavier crudes evolves over time. I would say that in the long run, we are preparing for that higher proportion of lighter crude through the revamping of our refineries, the topping B that will allow us to improve or modify the diet to be able to process a higher proportion of lighter crudes, clearly the Medanito crude vis-à-vis heavier crude. So in the short run, we have been managing efficiently to work on that. And as I mentioned, as was mentioned in the presentation, we even have the highest refinery margins in terms of production margins or efficiency in the history of our refineries during the second quarter. So we've been through I would say, through smaller adjustments of our refining processes, we've been able to manage these higher proportion of lighter crudes. And in the long run, we are -- the part of the major multi-annual investments that we are doing in our refineries, both in the Lujan de Cuyo and the La Plata, that would allow us to process the higher proportion of lighter crudes in the mix in coming years. And then on your second question, well, let me just say that, yes, clearly, as you have mentioned, is our revenues -- a good portion of our revenues, I would say, roughly 60% of our revenues are peso-denominated in the short-term peso denominated. Those are clearly the revenues that come from the sale of fuels in the local market. On top of that, roughly 35% to 40% is dollar denominated, which is a combination of the market of further refined products that do follow international prices. And then also our natural gas sales…

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

You have one question about your EBITDA guidance, $5 billion. If you can share with us what are the key assumptions for crude realization prices and the adjusted EBITDA for downstream, it was $21.1 per barrel as per your press release. So I would like to understand what are your assumptions for the second half of the year for this key variable realization price of crude and downstream -- adjusted downstream margin -- EBITDA margin?

Andres, generally speaking, what we would expect -- or is assumed in our guidance is to have relatively stable prices and margins in dollar terms for the second half. What we are seeing is, as I mentioned, in terms of pricing strategy, we would expect to be able to continue adjusting prices in a way to compensate for the devaluation of the currency. And further to that, expecting to and primarily in the near term to really use at least partially the gap that we have today in gasoline. So based on that we would assume a fairly stable pricing of crude in the local market. And that's why probably maintaining margins both on the upstream and downstream segments relatively stable in the second half to what we have seen in the second quarter. But again, that it all depends on how the different variables continue to evolve in coming months, both in terms of international prices and in terms of the key local macroeconomic dynamics such as inflation and devaluation. But generally speaking, that is what has been assumed.

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

Thank you very much, Andres.

Your next question will come from the line of Ezequiel Fernández with Balanz. Ezequiel Fernández: This is Ezequiel Fernández from Balanz. So it was great to see such results. I joined -- indeed congratulations. And thanks to the Investor Relations team for the very complete material portfolio. Sorry to take up some more of your time after an extended call. My questions should be quick. I have 3 of them. If we could go one by one, that would be great. The first one is a follow-up on the -- or related to Trans-Andean. If I understood correctly, you need to build another pipe that connects back more to that pipe that goes through [indiscernible]. Is that correct? And then would that export capacity would be available to other players in Argentina? Or it would be dedicated just to exports from maybe YPF and Chevron?

First of all, thank you, Ezequiel, for your congratulations and for recognizing the work of our IR team, which constantly looks into ways to provide the information in the best possible way to help our jobs. So thanks for recognizing that. In terms of your question, once the Trans-Andean pipeline is put in service, which we expect that to happen unless some surprise takes place once we finish the passing of the intelligent equipment that is undergoing the inspection of the pipe, and that is going to take place in the coming weeks. And it's been -- going to be finalized relatively soon. Assuming that is as expected. We should be able to have that pipeline back in operation by the end of this year, early next year. So the first volumes that will be able to be exported or transported through the pipeline are going to be the result of the reversion in the existing pipelines that are already taking place and that we are finally putting in service through new pumping equipment, and that should be available in the first quarter of next year. That will probably allow for total export capacity of about 5,000 cubic meters a day as early as the first quarter of next year. Beyond that, and clearly, the total capacity of the of the Trans-Andean pipeline is significantly higher than that at 18,000 barrels -- sorry, at 18,000 cubic meters per day, about 110,000 barrels a day of total capacity for the OTA -- Trans-Andean pipeline. The way to achieve the total capacity or in a way to get to that total capacity, we see the need to have this new oil pipeline that we have already started to move forward with and that construction should start in the next couple of months.…

Clearly, our plans as of today is not to tap the markets in the second half at all. Ezequiel Fernández: Okay. Perfect. And my final question is related to, if you have any updates on potential farm-outs or selling of noncore areas through mature concessions?

Okay. Yes, in terms of M&A activity, on the one hand, in terms of Vaca Muerta, we are not planning any major transactions. Clearly, we do analyze opportunities, and we do analyze with some of our partners' ideas and explore opportunities for joint ventures such as the one that was published with ENAP, for example, that clearly is something that we constantly explore opportunities, but not in a way to allow us to move forward. With the development of Vaca Muerta, we feel that today, our capital structure and our financial condition allows us to move forward with our projects without the need to divest or to farm out any significant area in Vaca Muerta, but we definitely constantly look into opportunities to have further partnerships with our key relationships. In terms of the noncore mature assets, we continue to look into that. It's something that it's an efficient portfolio management that allows us to also focus our attention in the key -- in our key operations, that are both Vaca Muerta and then also in conventionals in those areas where we see potential for tertiary production for EOR. So beyond that, we are constantly looking into the possibility of divest or disinvest in some of the other mature areas that are nonkey, noncore for us. But there is no specific schedule, no timeframe to move forward with any particular transaction. We, at some point, we were looking into some portfolio that was considered to be put up for potential disinvestment. And it's a moving target. It's a dynamic, and it also depends on the general market environment and our need to release cash flow for other operations. Today, clearly, we are in a more comfortable situation. So there is no need to urgently move forward. But there's always opportunities, there are always opportunities to have an efficient management of the portfolio. And so we will constantly look into that and move forward, if we see any specific opportunity to disinvest in a particular area that makes sense, not only for us, for the potential acquirer and for the problems as well, right? If there is a way for some niche operator, to make or to perform a more efficient operation of some mature area, we will definitely look into moving forward with that.

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

Well, thank you very much, everyone, for joining us today. Thanks for your congratulations. We are very proud of the results that we have achieved. And we hope to continue having you on board following our names in -- our name in the future. Thank you very much, and have a great day.

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