Good morning and welcome to the YPF Fourth Quarter and Full Year 2024 Earnings Conference Call and Webcast. All participants are in a listen-only mode. After the speaker's remarks, we'll conduct a question and answer session. [Operator Instructions] As a reminder, this conference call is being recorded. I would like to turn the call over to Margarita Chun, YPF's IR manager. Please go ahead.

Good morning, ladies and gentlemen. This is Margarita Chun, YPF's IR manager. Thank you for joining today in our full year and fourth quarter 2024 earnings call. Before we begin, please consider our cautionary statement on Slide 2. Our remarks today and answers to your questions may include forward-looking statements which are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by these remarks. Our financial figures are stated in accordance with IFRS, but during the presentation, we might discuss some non-IFRS measures such as adjusted EBITDA. During the presentation, we will go through the main aspects and events that explain the annual and Q4 results, and then we will open the floor for Q&A session. Today's presentation will be conducted by our Chairman and CEO, Mr. Horacio Marin, our CFO, Mr. Federico Barroetavena, and our Strategy, New Businesses, and Controlling Vice President, Mr. Maximiliano Westen. I will now turn the call over to Horacio. Please go ahead.

Thank you, Margarita, and good morning to everyone present on this call. Let me begin by highlighting that 2024 was a transformational year of YPF. We have deployed our 4X4 plan designed to increase the value of the company. In the afternoon statement, we are reshaping our oil production matrix, leaving conventional mature fields and targeting to increase our shell oil production share from 50% to a minimum of 80%. As of today, we achieved significant progress in the majority of the total of 49 mature blocks. We signed SPAs for 24 blocks, and we're in the final stage of agreement to transfer and or revert 18 blocks located in the province of Santa Cruz and Tierra del Fuego. On the other hand, we are ready the largest shell oil production of the country, and we continue expanding in the coming years, reallocating and concentrating our investments on Vaca Muerta. In parallel, we are leading the missing project development of VMOS, a new oil export dedicated pipeline, engaging and consolidating the effort of all major producing in Argentina to ramp up production to 180,000 barrels per day in the second half of '26, jumping to more than 0.5 a million barrels per day by second half of '27. The contraction has already started and YPS initial capacity will be 120,000 barrels per day, accounting for 27% stake and expecting to reach more than $3 billion of additional export by the second half of '27. In the Downstream segment, despite challenging macro context, we have returned to a 100% free market where we were able to fully normalize local price of fuels and converging them to international parties. On the other hand, along '24, we have been implementing multiple operational efficiency measures to enhance productivity across all businesses. In the Upstream…

Thank you, Horacio, and hello to everyone. Turning to our annual and fourth quarter financial results, revenues reached $19.3 billion in 2024, marking an 11% annual increase, mainly driven by the rebounded fuel prices and a rise in oil exports. These gains were partially offset by a contraction in fuel demand, which was exceptionally high during the second half of 2023, due to reduced fuel prices coupled with more than 200% gap between the official and the parallel FX rates. Adjusted EBITDA totaled $4.7 billion in 2024, reflecting a 15% annual increase, mainly boosted by higher revenues in hydrocarbon production. However, as mentioned before, 2024 was affected by mature fields and Patagonia weather, while 2023 was impacted by a high level of fuel imports and a wide gap to import parties. Net results improved substantially, posting a gain of $2.4 billion in 2024, compared to a loss of $1.3 billion in the previous year. In 2023, the company recorded a non-cash impairment charge from mature fields, while in 2024, there was a positive income tax accrual, driven by lower future tax payables. Investments and free cash flow was also explained in the previous slide, and as a result, our net debt rose to $7.4 billion, a 9% increase from 2023, but we successfully reduced our net leverage ratio to 1.6 times, fully aligned with the target. Now, let me briefly explain the quarter results. Fourth quarter revenues were 10% down sequentially, mostly due to the lower seasonal sales of gas and international reference prices, partially offset by higher demand of fuels. Fourth quarter adjusted EBITDA was 39% down sequentially, primarily explained by lower revenue set before, reduced value of inventories of fuel and oil in line with price, and marginally, a $60 million of extraordinary environmental provision in the downstream…

Thank you, Max. Switching to the financials, let's start with cash flow evolution. In 2024, we posted a negative free cash flow of $760 million. First of all, although our CapEx of 2024 was lower than 2023, it was not fully offset by the improvement in our adjusted EBITDA. It is important to highlight that this annual EBITDA includes two negative effects, around $300 million from mature fields and about $85 million from severe climate in Patagonia. From a cash flow consideration, in 2024, we also recorded a negative $133 million from mature fields, which includes a negative $269 million of additions of assets held for sale, net of $136 million of divestment net proceeds. Finally, when analyzing the company cash performance, during 2024, we must consider that we paid $166 million of temporary deferred import liabilities from 2023, collected lower dividends from affiliates and disbursed higher debt service. In terms of financing, in Q4, we issued $2 bonds with a tenure of four years totaling $150 million at a yield ranging between 6.5% and 7%. Also, we added $100 million of syndicated loan and around $60 million of short-term trade financing facilities. After the closing of 2024 in January, we successfully issued a nine-year unsecured international bond for $1.1 billion at the yield of 8.5%. The proceeds were mainly allocated to refinance the $757 million of the 2025 notes and to acquire 54% of Sierra Chata block, one of the most prospective Vaca Muerta shale gas block. Regarding the 2025 notes, we executed a cash tender offer prepaying $315 million and the make-hold call options for the balance in February. Additionally, last month, we issued $2 MEP local bonds, $140 million with a two-year tenure at 6.25% and $60 million with a six-month tenure at 3.5%. With these last…

Thank you, Federico. Before concluding our presentation and jumping to the Q&A session, let me briefly announce that after important knowledge, results, and experience of the new management team during this first year, on April 11th, we'll be holding our Investor Day at the New York Stock Exchange. There, we will present our five-year plan and go through the main drivers of our 4X4 plan, focusing on our financial and production outlook, including certain sensitivity analysis, productivity metrics, in Vaca Muerta and the progress of our main project, among other key aspects of our strategy. This presentation will be led by YPF executive team, followed by Q&A session. We are pleased to invite you to our Investor Day and look forward to your participation. Finally, let me close today's presentation by saying we are confident that investors have appreciated the significant agenda that YPF has deployed along last year in almost all critical areas of the company, focusing primarily on profitability and growth. We are very focused in making value and putting YPF as one of the best energy companies. This has been just the beginning. We will continue driving our 4X4 plan during 2025 with even more knowledge, confidence, and conviction. So, with this, we conclude our presentation and open the floor for questions.

[Operator Instructions] Our first question comes from Andres Cardona from Citigroup. Please go ahead. Your line is open.

Hi. Good morning, everyone. Horacio, Max. Looking forward to the strategy update. My question, it's about the Vaca Muerta expansion and how we should expect the ramp-up. How confident are you to add in the 180,000 barrels by the fourth quarter 2026? Because when talking with some industry players, they doesn't seem to count with those volumes by then. They only expect to see the incremental capacity by the third quarter 2027. And, yes, we want to understand why is the different perception and why are you so confident to deliver by the fourth quarter 2026? Hi. Can you hear me?

I was muted. Sorry. Sorry. I don't know who talked mute. Now, you are hearing me? You are here?

Yes.

Okay. I'm sorry. I was muted. I don't know why. We are very confident that the demos we are going to deliver in the fourth quarter 2026 and also in the second half of 2027. We are very exciting that we are -- all the partners are in. We finish with -- all are in. So, the tariff will be very low comparing what we expect at the beginning because we expect more than 0.5 million that was, I don't know how you say, the committee for everybody. And what I can answer you specifically for the fourth quarter, I don't know which person you are talking about, but I'm talking about the production of YPS. We are going to deliver that. I think that it will be efficient that we have production that we have. The thing that we have in the afternoon, I think we can deliver more, but I expect that, okay? So, I'm not totally -- I'm very confident that from YPS we are going to deliver what we say.

Thank you.

Our next question comes from Daniel Guardiola from BTG Pactual. Please go ahead. Your line is open.

Hi. Thank you. And good morning, Horacio, Federico, and Max. Thank you for the presentation. I would like to touch on two topics, one on prices and the second one on the Sierra Chata decision. On prices, I would like to know, guys, if you could please share with us at which price are you currently selling your goods? And considering that recently we saw a very mixed and bearish movement in our prices, I would like to know if -- or if you can share with us at which levels of prices would you consider to start reducing your CapEx for 2025? And in this environment, if you are considering to hedge a portion of your expected production for 2025. So, that's on prices. And the second one is a very short question on Sierra Chata. Can you please share with us, guys, what is the price that you pay for the acquisition of this stake of Exxon in this field? And what is the expected run path in terms of production? Thank you very much.

Okay. Because I'm a very transparent guy, and if we have a problem with the microphone, I will ask people that have better English than me because at the beginning, I'm in the third field.

Daniel, we couldn't -- I couldn't hear you the last part of the first question.

So, we have a problem because if Margarita doesn't understand me, so we have a very bad microphone.

The quality of the microphone, we are sorry.

So, I'm going to go one more time?

Yes.

Okay. Horacio, can you share with us at which prices are you selling your crude oil right now?

Price of the crude oil?

Yes. At which prices are you selling your crude oil right now? Your oil right now?

Yes, yes. What we have is the -- what is the gasoline, our prices in the import quality product. I was on a TV -- in the TV the other -- no, the other day, I would say two or three months ago, and what I said to everybody that we are going to increase the price of gasoline when the price of oil goes up, and we are going to go down when the price goes down. And why that? Because we try to maintain the import quality of product, okay? What is the price that we sell when we export? Export quality. What's the price that we buy? Export quality. What's the price of the gasoline? Import quality of product. I don't know if I answered that question.

Of course. But I mean, considering that oil prices are below $70 in terms of Brent, at which levels are you selling right now your oil?

No, no. The -- remember that the oil -- when we sell the oil, there is a time frame when you make an average of the price, okay? I don't know if that's the price of that -- the oil will be -- if it will be more, I would say, three months, we are going to sell in the export quality, and the price will go down $5 compared with last week. The same will happen with the gasoline. In the gasoline, we have a strategy that I cannot explain here because our competition is explaining how we work, but we have a procedure to put the prices to avoid, I would say, short spikes, I would say. Spikes up, spikes down. The majority of Argentina was not the country to -- in general from now on, it's like this, and I'm sure that we will continue this precedent, that we are going to be open and so free market, and so in that way, people are not accustomed to go up and down as in the United States or Europe, and so we prepare like a procedure to avoid spikes so people will not be nervous. But at the end for YPS, it's only the same, okay?

Thank you, Horacio. And at which prices…

Yes, sorry, sorry?

I just wanted to ask you, at which level of oil prices would you consider to start reducing your CapEx for 2025?

Okay. Remember, we are going out almost -- I would say it's not your question, but I think in two, three months from now, we are almost out of all the mature field, and you can calculate in your simple way of seeing YPS that we are receiving for very low prices. But also, if that happens and the Brent goes down, down, down, down, down, and maintains, for sure, we are going to have changes, okay? For sure. I don't think that today is the day to do that, but if it continues going down and it maintains, for sure, we will see, because remember what our CFO always says, it's capital, strict capital allocation.

Okay. And the last question was on Sierra Chata.

Does that answer your question?

Yes, thank you, Horacio. And on Sierra Chata?

Yes. With Sierra Chata, which is very difficult to see there, because remember that we are a company, but what I can tell you is that we think that we make a very good business, because all, I would say, all the undeveloped call you as you want, resources or results, because this is a conventional way. We buy in $0.02 per million BTU, which is what I think is a very good price.

Thank you. Thank you, Horacio and guys and team.

Our next question comes from Bruno Montanari from Morgan Stanley. Please go ahead. Your line is open.

Hi, good morning, everyone. Thanks for taking my questions. The first question is about your free cash flow profile for 2025. I know you will give more color on the Investor Day, but just focusing on next year, the company has been in a way pointing to neutral cash flow in 2025. So I wanted to confirm if that is still the plan, if the base case is for neutral cash flow in 2025. My second question is if you can provide us with an update on the LNG project, so when we could expect the final investment decisions for both the Golar project and then the YPS-led project? My third question is about your lifting costs. I assume that part of the cost increase in the fourth quarter was because of the strong peso. So I'm wondering what we can expect now in the first quarter of the year in terms of lifting costs? Thank you very much.

Okay. Free cash flow when you talk on CapEx, I'm going to present on April 11 Investor Day all that in very detail. You can have a question on there. We say the free cash flow will be neutral. It depends what you call neutral. We think we are going to deliver that idea. It will be minus plus what is logical in this company, okay? But I'm going to present -- we are going to present, but personally I'm going to present that on April. Update of LNG, we are in a very good situation. We will see there, and also I will explain in more detail on April 11 because at that moment I think we will have a better way and we'll be more sure what I have to deliver. But I'm very positive with the two, with the Argentine LNG project. Very positive that Argentina and YPF itself will deliver this project for us, for the country, and for the shareholders, okay? The last is the cost. As you see, we are maintaining the cost because we work every day in efficiency. Our goal every day that I come 6:45 is to deliver efficiency. You cannot imagine how is the guy, the VP, or a thing. Every day I go to him and I don't know how he loves me today because every day I go and we are working in efficiency line by line. That's why we are very good on that. I don't know if there is another one.

No, that was it. Thank you.

Our next question comes from Tasso Vasconcellos from UBS. Please go ahead, your line is open.

Hi Horacio, hi Federico, hi Margarita. Thanks for taking my questions here. Let me start with one here on the M&A activity. We are actually seeing some increased activity in Argentina. Exxon recently sold their assets. You actually acquired Sierra Chata. Recent news also indicates that both Total and Equinor could eventually evaluate selling their assets as well. We know that Raizen is looking for a potential buyer for its refinery in Argentina. And amid this context here, YPF is for sure a potential buyer for these assets, right? So maybe split the question into two parts. The first one, does any of these assets actually interest YPF at all? Or do you like one better than the others? And maybe the second part of the question, if not these specific assets that I just mentioned here, any other ones that you would be interested in acquiring in Argentina at the moment? These are my questions. Thank you.

Okay. The first in the capital allocation in Raizen, from my first year I only hear that Raizen, but it's not, I'm not the person to answer that, ask to Raizen or Shell, but I cannot answer that. But even if you are interested to see if you are going to be wanting to buy a new refinery, the answer is no. Okay. We have, so far, you know that we have 58% of the market share. We have, I think we are very good in, we are improving a lot, improving a lot in the refinery sector, YPF, but it's not in our thinking that we are going to increase, not that. The second part would say the Equinor that the other is seen, so I have no official that, even the -- some they say, but in what is the, remember our role, the active management, is something that is in Vaca Muerta, that I would think is in a core, in a very core, and because now we are very selective, I would say very core. The best price, only we are going to see, but it's not the moment today that I tell you that that one. It depends also -- remember the active portfolio management and the strict capital allocation, the, we will see at the moment. That is not for sure for everybody that, that sells there, that sells very good assets here at YPF, and one of the possible active guys to take over that. So I can't answer exactly, as always explained. If something is very good, we will see prices, we will see all that, and if we think that we make value for shareholders, you will see YPF in that process. I don't know if I answered the question, and you need more details, I have no idea.

I think it's very clear. Appreciate it. Thank you.

Our next question comes from Leonardo Marcondes from Bank of America. Please go ahead, your line is open.

Hi, good afternoon, everyone. Hi, Horacio, Federico, and Maximiliano. Thank you for picking my questions here. I have two from my side, specifically on the upstream segments. So the first one, we know that YPF is the largest player in Vaca Muerta, and that the company also owns many blocks in this area, right? So my question is, could you provide a color on what's the company's current well inventory? I mean, how many derisked wells do you guys have, and how many years would it take for YPF to drill all these wells, considering the company's current capacity to tied-in wells per year? My second question is, with the conclusion of the divestment, what should we expect from the development of Vaca Muerta? More times per year, higher RRR, and additionally, the company has improved a lot the development of Vaca Muerta, right? Like a better frac speed and so on. So what is the target there? What else can be done to improve these metrics even further? Thank you.

Okay, thank you for all the questions. I try to follow, okay? Remember, I am a fungi, okay? First, when you say -- I would say some of that well inventory, I will explain that in much more detail on April 11, but if I say roughly number, are you sitting while you're eating up?

Yes, I can't hear.

Okay, okay. We have in the order of 10,000 wells. You can say 50, but I will say gross, okay? Inventory is a gross inventory. I will say that it's in the order of 50% of all but this is a roughly number that I have in my mind, okay? On April 11, we are going -- we will have there the full development of all YPS, and I will answer in detail at that moment, okay? Now, if you see, we are drilling in the order of '28. We are drilling in the order of 200 wells, so the capacity of timing, I don't see it's a problem. Sometimes it's a question of the built-in valve that there is -- and also the first year was the way that YPS had before the way of working with partners. Now, what we are working is to have every, all the budget tied first with the partners, and after we feed up with our 100% blocks, sorry, 100% blocks. Why we are in that? Two reasons. The first reason, the more important reason why we are in the order of 200 wells is because we try not to invest and have tax, okay? Our idea is to make properly, and so now, because of the capacity that we have, the incremental that we see for all the evacuation way, it's not the number. When the demos will be finished, and after it's a question of all CapEx, at that moment, we will increase the activity in the oil, for sure. And the other was the conclusion of the investment of what? Of the other companies. You say, for example, to have the idea you are talking about of ExxonMobil and the others?

The allocation of CapEx?

No, no, I mean...

Ah, okay. It's okay. I now understood. Okay, for the, when we reduce all the mature field, and we did in the '24 also, we reduced a lot the investment, much as we could, and we put in Vaca Muerta. The idea of this is to try to maximize Vaca Muerta and not go into more than we need to fill up all the capacity that we have today, okay? And so for next year, we put -- for '25, you know, $5 billion for all YPF. It's almost maintaining the investment that we had the year before, and we are very confident in incremental of production in Vaca Muerta. After we asked me for the reserve replacement ratio, the reserve replacement ratio is, remember that we have to do, and the way to do it is 1.9. Why that? Because it's a rule. In fact, you have to have a rule that if you make physics, and say the physics, I will explain that better in April 11 that is for location. So there I can explain block by block how many locations that we have, and you can make it very good, and you will have a good feeling of what we have in hand, and the possibility of YPF to increase, and this wonderful company can increase in the next year.

That's very clear. Thank you.

Our next question comes from Vicente Falanga from Bradesco. Please go ahead. Your line is open.

Thank you very much, Horacio, Federico, and Max. I had two questions. Basically, first one on the fourth quarter results. To what extent did the feeling of the Oldelval expansion affect the fourth quarter results? Some of your partners in Vaca Muerta highlighted that because of the fill-up of Oldelval, production did not convert into revenues. I wanted to understand if that's the case for YPF, and do you have an estimate of how much? The second question, one very quick one. With the asset sales for the mature fields hopefully being concluded by the middle of this year, where can we expect the lifting costs to fall to immediately? Thank you very much.

Okay. The Oldelval result, if there is a delay or not, it doesn't change a lot today for YPF. Why? Because I don't know if we were very clear one day that we explained. How we see the evacuation figure or evacuation map for us. Now we export for Chile, we depend for Chile, okay? And the Oldelval for us is internal consumption, okay? So we are not affected a lot in our case, okay? It could affect, I don't know, who company, because I'm not looking at all the companies all day. I'm looking only at YPF. So it's not that. It could be affected if we delay the demo, not here, okay? That is the answer there. With the mature field, hopefully I'm sure that also, hopefully I'm sure, I'm sure, okay, that we are going to be very out there. The holistic going to go to very low number, what is it, 9? No, 9, because it's 9. Because also we have two more mature fields that are the best that you can have. One is in, we have only two, but in the fourth, in the, look at the sub-core that we are in the range of four. So we are very resilient from the future. And that was the initial idea when we come to YPF that is to reduce the -- go out of the mature field because it was not for YPF. That was not the logical way of working for this size of the company. Reduce the lifting cost a lot, as we are doing, and be resilient for very low prices. And so when the price goes up, we make a lot of money. And that is the way that we see YPF.

Great. Thank you, Horacio. Thank you very much.

Our next question comes from Guilherme Martins from Goldman Sachs. Please go ahead. Your line is open.

Thanks so much for having my questions. I have two quick ones from my side here. The first one is on your guidance for shale oil production, right? Please correct me if I'm wrong, but you said you're currently running roughly 150,000 barrels of oil shale, right? While your guidance for 2025 is something above 160. So it could seem as quite conservative, given your current run rate. I know you mentioned you provide further details on your Investor Day on April, but as of today, do you see room for maybe an upward revision of this target? And my second question is on capital allocation. If you could please share your thoughts on what you think global entities are seeking to divest from Argentina and Vaca Muerta, and what are the competitive advantages you believe YPF has over those players? Thanks so much.

Okay. You are anxious like me, okay? I'm anxious, okay? Really, I'm very anxious. April 11th, 40 days from now, Mauricio is going nothing. I will explain later, but I have to, I would like to answer. So today, not today, but the yesterday or the day before yesterday, the production of Vaca Muerta was 156,000 per day. So if you see the guidance, 2025, you can realize that we are investing $3 billion there. I'm very confident that we are going to pass the guidance, okay? That is the first question. Second question, capital allocation in this investment in Vaca Muerta. I explained that before. If the opportunities come and we see that some part is better than we have, we are going to do what we call active portfolio management. And so what we are going to do is to take this and maybe in the full development, if we see that we are not making value for the shareholders, we will sell the others, okay? But that is the way it works, okay? And I think that's what I have to work and what you want from me to do, okay?

Okay. Thank you.

Sorry to those that are still in queue. We are out of time for questions today. I would like to turn the call back over to Horacio Marin for any closing remarks.

Okay. Thank you very much for all the questions. Thank you very much for your help. And we will see in April 11 where you can have hundreds of questions. We are going to be live there. And so we can be up to midnight if you want, okay? Thank you very much.

This concludes today's conference call. Thank you for your participation. You may now disconnect.