YPF Q1 2026 Earnings Call - Record Shale Output and Free Cash Flow Drive Balance Sheet Repair

Bruno Montanari, Analyst, Morgan Stanley1: Hello, everyone. Thank you for joining us, and welcome to YPF first quarter 2026 earnings presentation. After today’s prepared remarks, we will host a question and answer session. I will now hand the conference over to Margarita Chun, Investor Relations Manager. Margarita, please go ahead.

Margarita Chun, Investor Relations Manager, YPF: Good morning, ladies and gentlemen. This is Margarita Chun, YPF’s IR Manager. Thank you for joining us today in our first quarter 2026 earnings call. Before we begin, please consider our cautionary statement on slide 2. Our remarks today and answer to your questions may include forward-looking statements, which are subject to 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. Today’s presentation will be conducted by our Chairman and CEO, Mr. Horacio Marín, our Finance Vice President, Mr. Pedro Kerney, and our Strategy, New Businesses and Controlling Vice-President, Mr. Maximiliano Westen.

During the presentation, we will go through the main aspects and events that shape Q1 results, and finally, we will open the floor for Q&A session together with our management team. I will now turn the call over to Horacio. Please go ahead.

Horacio Marín, Chairman and Chief Executive Officer, YPF: Thank you, Margarita, and good morning, everyone. We are glad to report a robust beginning of the year across our key operational and financial metrics, delivering on our ambition and guidance for the year. Let me translate the key milestones of the quarter into numbers. Revenues were $4.95 billion, growing 9% quarter-over-quarter, primarily explained by the rising trend of international prices since March, coupled with our policy to align domestic prices of gasoline and diesel with international parities. On a yearly basis, revenue increased by 7%, reflecting a strong local fuel demand and record high refinery processing level. Adjusted EBITDA for the quarter amount to nearly $1.6 billion, represented the highest first quarter level in YPF’s history, with an outstanding margin of 32%.

This represents an increase of 24% and 28% on a sequential and interannual basis, materially exceeding revenue expansions. The main factor that explained this growth was higher shale oil production, improved pricing dynamics, and the cost matrix transformation of the upstream segment, now focused on the shale business. On the production side, our shale oil output reached 205,000 barrels per day. That mark represents an increase of 5% versus last quarter and a remarkable growth of 39% against a year ago, representing 76% of our total oil production. This milestone positions us on track to achieve our full year target of approximately 215,000 barrels per day with a December exit rate of 250,000 barrels per day. Let me highlight several operational efficiencies achieved during the first months of the year.

First, we set a new fracturing record during the first quarter, pumping continually for almost 110 hours and completing 52 stages in less than 5 days on a pad at Loma Campana field. Moreover, in April, we signed a strategic agreement with the service company Halliburton to incorporate 4 fracturing sets in Vaca Muerta through a new electrical fracturing technology. This new contract transformed YPF into the first company outside the U.S. to develop this technology, improving efficiency by reducing the use of diesel engine, saving costs of the operation. In terms of investment, we deployed nearly $1 billion during Q1, with 78% allocated to our conventional operations. On a sequential basis, CapEx decreased by 10%, primarily due to increased maintenance activities in the downstream segment during Q4 2025, and it’s a lower pace of investment in upstream facilities.

Interannually, the lower investment is explained by the reduced exposure to conventional assets and the impact of one-off item booked last year to secure several unconventional concessions. Consistent with the production expansion expected for the rest of the year, we expect to accelerate capital deployment in the following quarters, reaffirming our guidance of the year in the range of $5.5 billion-$5.8 billion. Finally, let me point out that a standout result of the quarter was our free cash flow, which read an outstanding $871 million. This mark represented an improvement of $1.8 billion against a year ago. This exceptional cash generation was supported by our strong operating performance and the collection of a strategic M&A proceeds of around $500 million.

As a result, our net levered ratio improved to 1.57 times, down from 1.9 times in Q4 2025. Let me recall that in Q3 2025, we reached the peak of 2.1 times, driven by the M&A of buying new Vaca Muerta assets. Before moving into the financial detail of the quarter, I would like to address a significant commercial decision announced at the beginning of April regarding our local fuel pricing strategy. Due to a sharp increase in international prices, driven by the ongoing conflicts in the Middle East, during March, we were able to largely pass through this increase at the pump. However, in the last week of March, demand began to show signs of contraction for the first time in a while, particularly in gasoline.

In response, in April, YPF decided to temporarily postpone further pass-through of international prices increases to customers for a period of 45 days. This mechanism operates as a buffer, enabling the reduction of the gap between local prices and import parities after this period by recovering the buffer compensation through additional pump price. Importantly, let me clarify that this decision was made proactively with our own initiative by analyzing supply and demand by our commercial real-time intelligence center without any government interference and was subsequently adopted by all major operators in the industry. The final objective of this commercial decision was to mitigate potential adverse effect in local demand while reaffirming our import parity strategy in a free market environment. It’s also worth noting that during April, YPF maintained a very competitive fuel price level.

Moreover, in April, according to our preliminary figures, our Midstream and Downstream segment reached a very healthy adjusted EBITDA margin of around $24 per barrel. The 45-day period will end around mid-May, at which point we will assess the evolution of Middle East situation, international prices, domestic demand, and microeconomic condition. I would like to dedicate a few minutes to share with you the successful development of Lanotura Sur, a block that, in our view, perfectly captures what YPF is capable of when we combine operational excellence with a strategic vision. Just 18 months ago, Lanotura Sur produced 2,000 barrels per day of shale oil. Today, it’s producing approximately 55,000 barrels per day. This remarkable ramp-up is roughly 25 times growth in one year and a half.

Lanotura Sur is now ranked as the number 5 Vaca Muerta block, and it currently represents approximately 25% of YPF total shale oil production. What makes this block even more compelling from an investment standpoint is its economics. With a break-even price below $40 per barrel, lifting cost of around $3 per barrel, and a development level of approximately 19%, there is substantial upside ahead, and an unconventional concession value through 2059. Our plateau target for this block is approximately 100,000 barrels per day. We have 100% of the equity stake in Lanotura Sur. This means YPF capture the full value of this world-class asset. Lanotura Sur is not just a production story, it’s a proof of concept. It demonstrated YPF’s ability to rapidly develop Vaca Muerta at scale with capital discipline at competitive cost.

We are committed to replicating this model across our portfolio. Now, I turn the call to Pedro to analyze in detail our financial results.

Bruno Montanari, Analyst, Morgan Stanley2: Thank you, Horacio, and good morning to you all. Let me walk through our consolidated financial results for the first quarter of 2026. The headline is clear: This was a quarter of exceptionally strong free cash flow, which drove and accelerated the leveraging of our balance sheet, fueled by strategic M&A collections and a strong adjusted EBITDA. As Horacio briefly explained, M&A activity resulted in a net contribution of $504 million to the cash flow of the quarter. This was mainly driven by the final proceeds from the Profertil divestiture, totaling approximately $410 million. Additionally, during the quarter, we received about $85 million as partial payment from the sale of the conventional Manantiales Behr field. Total price of this field amounted $410 million, with an earn-out of up to $40 million.

The remaining balance is expected to be collected throughout the rest of this year, 2027, and 2028. These proceeds were partially offset by an initial payment of $16 million related to the acquisition of a portion of Equinor assets in Vaca Muerta through a joint venture with Vista Energy, which was closed yesterday and resulted in a total price of around $204 million. Together with upcoming divestment of Metrogas and the remaining conventional assets from the Proyecto Andes program, these transactions will further strengthen our financial position and provide greater flexibility to focus on our most profitable core business, Vaca Muerta. The solid free cash flow evolution was also driven by our outstanding performance in all our operations, navigating international volatility and profitable margins and cost efficiencies, as well as operating refineries at full capacity and continually expanding our shared operation.

The higher first quarter adjusted EBITDA comfortably covered investment and interest payment of the quarter. This substantial improvement in operational cash flow for the quarter led to an increase in the company’s liquidity, which ended at $1.7 billion as of the end of March 2026, representing an improvement of $500 million during the quarter. Turning to our financial situation, let me highlight that YPF’s balance sheet is on a strong and improving trajectory with a solid liquidity position and very manageable debt maturities. In terms of financing, we reconfirm our strong access to the capital markets by raising in the first quarter, nearly $1 billion across international and local markets, as well as bank credit facilities at attractive financing costs.

In the international capital market, during the first quarter, we successfully re-tapped our 2034 bond, adding $550 million at a yield of 8.1%, representing the lowest rate secured by YPF in the international market in the last nine years. Moreover, we have been very active in the local capital market during the first four months of 2026. We successfully issued around $285 million in 2 local U.S. dollars MEP bonds, $161 million at a 3-year tenure with a yield of 6.5%, and $122 million at a 4-year tenure with an outstanding yield of 5.5%.

Regarding financial and trade-related loans, in February, we were able to partially refinance a local syndicated loan for $176 million, extending additional 36 months its average life. Moreover, this financing strategy, combined with a significant positive free cash flow generated in the first quarter, enabled the company to proactively refinance existing facilities. During the first four months of the year, we prepaid approximately $750 million in debt obligations scheduled to mature between the remainder of 2026 and 2028, optimizing our capital structure and lowering our average cost of debt.

Looking at our debt maturity profile, the remaining maturities for 2026 total approximately $1 billion, primarily composed of around $600 million in local bonds, of which we have already proactively repurchased $100 million as a hedge strategy of our liquidity position, around $300 million of international bonds, and the rest corresponding to other local debt. We are well-prepared to meet our debt obligations for this year, supported by the substantial liquidity generated during the first quarter at $1.7 billion. Finally, it’s worth noting the evolution of the company’s net leverage ratio. As of the end of the first quarter, our net leverage ratio stood at 1.57 times, down 25% from its peak of 2.1 times, reached in the third quarter of 2025.

The trend is clearly positive. We expect continued improvement throughout the year as cash generation remains strong. I am now turning to Max to go through our operational performance.

Maximiliano Westen, Vice President, Strategy, New Businesses and Controlling, YPF: Thank you, Pedro, and good morning, everyone. Let me start by taking a closer look at our upstream performance. Shale oil continued achieving new record high levels in the 1st quarter, reaching 205,000 barrels per day, a 5% sequential increase and a 39% year-over-year improvement. As Horacio mentioned before, this achievement was primarily driven by the outstanding performance of Lanotura Sur Block, which has shown exponential production growth in the recent months. These production levels are fully aligned with our plan, keeping us on track to meet our production targets of the year. The strong shale oil production growth fully offsets the continuous divestment from conventional oil fields, which declined more than 45% interannually, recording 66,000 barrels per day in the 1st quarter.

On a pro forma basis, excluding the recently divested assets, Manantiales Verdes, Malargüe, and Tierra del Fuego blocks, our conventional production would have averaged only about 35,000 barrels per day by March. As a result, we continue delivering meaningful savings across our cost matrix, demonstrating a remarkable 42% year-over-year reduction in our upstream lifting costs, which dropped to $8.8 per BOE in the first quarter. Excluding divested assets, pro forma lifting cost would have averaged around $8 per BOE. Zooming into our shale oil hub blocks, lifting costs reach best-in-class levels of $4 per BOE, primarily driven by significant cost efficiencies in pulling activities, especially in the Loma Campana Block, as well as the growing share of Lanotura Sur blocks in our production portfolio, which notably has a lifting cost of around $3 per BOE, the lowest among all YPF fields.

On the other hand, the natural gas production averaged 32.8 million cubic meters per day, down 12% year-over-year, mainly reflecting our continued exit from mature conventional fields, partially offset by shale gas expansion. Finally, let me highlight that on April 23rd, 2026, the shareholders’ meeting of VMOS approved the allocation to YPF of 44,000 barrels per day of additional available capacity of the pipeline. With this decision, YPF’s stake in VMOS increases from around 25% to 30%, which is key to supporting the company’s production growth in the coming years. In addition, Oldelval is expected to expand its transportation capacity by roughly 150,000 barrels per day by year-end through upgrades to pumping stations and using polymers.

Of this incremental capacity, YPF will hold around 40,000 barrels per day and will support higher volumes of YPF’s shale oil to our La Plata refinery. Overall, these results reconfirm our upstream strategy robustness, shale oil driving higher efficiency by reducing lifting costs and sustaining a more resilient production output. Now, let me share the progress achieved in terms of productivity and operational efficiencies in our upstream segment, where the continuous improvement in drilling and completion efficiency has positioned YPF as the best-in-class operator in Vaca Muerta. Our drilling speed in our shale oil hub reached 364 meters per day in the first quarter, reaching a 12% improvement compared to 2025.

Moreover, our unconventional fracturing speed amounted to 11.2 stages per set per day, growing 15% compared to 2025, supported by a 10% increase in pumping hours to an average of 18.5 hours per day in the first quarter. This performance reflects lower non-productive time and greater operational consistency. In this sense, let me highlight that in January, we drilled a new horizontal well in just 10 days in La Amarga Chica Block, reaching a drilling speed of 520 meters per day. Faster drilling and fracturing means more wells completed in less time, which directly translates into faster production ramp-up and lower costs per well. One of the most important efficiency levers we have been developing is the transition to longer horizontal well design.

We have moved from a standard horizontal length of around 3,000 meters in the previous years to nearly 3,450 meters in the first quarter of 2026. We would like to highlight the continued strengthening of our relationships with key suppliers. In this context, in April, we signed a 5-year contract with Halliburton for electric fracturing services, combining electrification and automation to boost efficiency, maintaining greater operational consistency, and helping to reduce emissions intensity. Moving to our midstream and downstream segment, our processing levels averaged 344,000 barrels per day in the first quarter, growing by 3% sequentially and 8% interannually, and setting another record high processing level. This exceptional performance was coupled with record production of premium gasoline and middle distillates, allowing us to avoid imports, supply local peers, and export to neighboring countries.

Regarding domestic sales of gasoline and diesel, dispatch volumes declined by 3% quarter-over-quarter due to seasonality. On a year-over-year basis, gasoline and diesel volumes grew by 8%, supported by stronger demand across all commercial segments, particularly in the agribusiness. As a result, we maintained a solid 57% market share fully in line with our historical levels, which increases up to 60% when including gasoline and diesel produced by YPF and dispatched through third-party gas stations. Turning to our pricing strategy, local fuel prices increased by 12% sequentially, primarily reflecting the rally in international reference prices that began in March, which were largely passed through the prices at the pump.

Importantly, as Horacio explained earlier, fuel demand during late March fell by 10% approximately compared to early March, which supported our decision to temporarily delay further pass-through of international price increases to the local market for 45 days. In addition, following the price adjustments recorded in March, during April, fuel prices remained competitive. Lastly, our midstream and downstream adjusted EBITDA margin remained strong at $19.1 per barrel in the first quarter. This margin further strengthened to about $24 per barrel in April, driven by elevated processing volumes and the effective pricing strategy outlined earlier. I am now turning to Horacio for updates regarding Argentina LNG and final remarks.

Horacio Marín, Chairman and Chief Executive Officer, YPF: Thank you, Max. Finally, let me share updates on the LNG projects, the most transformational initiative in YPF’s history that is making solid progress on all fronts. Regarding the CESA tolling phase, in which YPF holds a 25% equity stake, during the first quarter, CESA signed an SPA for an LNG supply partnership with SEFE, an international energy company based in Germany. This strategic agreement covers a period of 8 years for 2 million ton per year starting in late 2027, representing around 30% of CESA total capacity, which correspond to the total capacity of the first vessel, Gimi. In parallel, CESA award the engineering and construction contract for the 480 kilometers gas pipeline, and has been advancing on the project finance of the project.

Turning to Argentina LNG project, as flagged on our previous earnings call, this project contemplates the development, design, construction, and operation of a fully integrated LNG condensate and NGL facilities. The founding partners are YPF, Eni, and XRG, an international energy investment arm of ADNOC. The project contemplates a total investment, excluding the upstream segment, of approximately $24 billion, which includes the financial cost associated with the funding structure. These figures constitute an upward adjustment versus the most recent CapEx disclosed during the Q4 2025 result presentation. This adjustment reflects a strategic reallocation of investment between the upstream and midstream businesses, further optimizing the aggregate CapEx of the integrated project. Since the beginning of this year, we have been actively advancing the project financing process. In this context, we conducted a comprehensive market sounding exercise to assess investors’ appetite. The response was very strong.

When interested from approximately 50 institutional investors and cumulative initial appetite exceeding the project financial requirement, reaffirming the project financial viability. In addition, during the quarter, we have been diligently developing both our commercial and procurement strategies. On the commercial front, we launched a competitive bidding process, and the market response was very positive, far exceeding our initial expectation and demonstrating robust demand. On the procurement side, we are actively advancing the engineering phase for the various procurement packages required for the project. Our goal is to ensure that all necessary preparation are in place to enable a final investment decision by year-end. Moreover, last month, the province of Neuquén approved the assignment of Pluspetrol 50% interest to YPF in the three wet gas block identified to develop the Argentina LNG project.

Finally, I would like to emphasize that YPF continue to lead the key infrastructure debottlenecking initiatives required to fully monetize the vast shale oil and gas resources of Vaca Muerta, one of the world’s most competitive basins in terms of breakeven prices. In this context, YPF was awarded the Argentine Country Brand Certification, recognizing the company’s role as a key contributor to the country’s productive development and its international positioning. This distinction underscore YPF’s contribution to reinforce Argentina’s global image and supporting the attraction of long-term investment. With this, we conclude our presentation and open the floor for questions.

Bruno Montanari, Analyst, Morgan Stanley1: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Furrow with Pickering Energy Partners. Your line is now open. Please go ahead.

Bruno Montanari, Analyst, Morgan Stanley0: Hello, and good morning. Thanks for having us on the call and for taking our questions. Horacio, I was hoping to get your perspective on the local service market in Vaca Muerta. The play is attracting more international attention. I think YPF is in a good position to offer some insight after signing the recent deal with Halliburton. We’ve noticed several U.S. oilfield service companies mention South America and Argentina specifically, as emerging markets for their businesses on recent conference calls. My question is, are you actively seeing new entrants, and do you think that this is resulting in a more competitive service pricing environment? If not, what do you think needs to change before more service providers feel comfortable with Vaca Muerta and Argentina in general?

Horacio Marín, Chairman and Chief Executive Officer, YPF: Great. Thank you very much. First, I would like to say that today is Pedro’s birthday and also my birthday. You have to be very polite with us, okay. Because it is our birthday, okay. Okay.

Bruno Montanari, Analyst, Morgan Stanley0: Happy birthday to both of you.

Horacio Marín, Chairman and Chief Executive Officer, YPF: Thank you for your question. Thank you very much. Thank you very much. 63. I was born in 63, okay? It’s a special day today, yeah? You have to use 9, okay? Okay. Yes. In the service contract and the unique cost, I think next quarter you will see a reduction in our cost because we make a very, I would say, strong, I don’t know if that is exactly the question, a strong meeting with all the international service companies. We get very good reduction because it’s illogical, because Argentina is a new country. It’s business friendly. There was a big reduction. This week I was also in United States trying to convince service company to come Argentina. We need more competition.

You know, learning U.S., to reduce the price, there is two ways. One, by competition, big competition. The second one is to take one out. If they are three, two. If two, one. If they are four, three. They are four, two. We did that process, and we were very success for the shareholders’ value. For this year, we are going to improve. In December, you will see 19 rigs. We secure all the rigs. Also, we secure all the fracs fleet. Now we are working for next year also. We are importing the last technology equipment from U.S. Halliburton is trying, it will be in Argentina, the first electrical frac fleet. Our real-time intelligent center is working very well and improving a lot.

We really need good equipment with technology because is the one that we are investing, the one that we see that we are improving a lot every quarter. We have also a procedure to improve our standard times in all drilling and completion by the rig flooring automatically. Every quarter when it’s finished, the people in YPF will know that we have a new standard and are always more challenging than it was before. That is the way that we work. I hear your question, that we try to come a more service company. We are working that service company is more service company United States have to be in joint venture with Argentine companies to improve the quality and the, how you say it? The efficiency.

We know that every tomorrow must be better than today. Tomorrow we have to be more efficient than yesterday. That is the way that we work in YPF.

Bruno Montanari, Analyst, Morgan Stanley0: Thank you for the context. As a follow-up, I’d like to ask about the concession sales that Neuquén province is offering in August. Particularly interested in your opinions on the prospectivity of the northern acreage given YPF’s adjacent position and knowledge of the area. Without giving away too much information, are there certain blocks that YPF is interested in, or is the company comfortable with the current asset portfolio?

Horacio Marín, Chairman and Chief Executive Officer, YPF: In the north we have Sorry, yes. You know that we have what we call north hub core and south core. South core, we have all that, we are going to present Vaca Muerta I think next week. This is the big Vaca Muerta. For the north, we are working, we have more partners. In the south, we are 100%. We are working with our partners to have the Vaca Muerta and to start. After that, we have always to make our projection and to have the best value for shareholders is a mixture between the capital that we raise from partners and 100%.

In that way, we always try to put the maximum or the optimum way of making value for you, for shareholders.

Bruno Montanari, Analyst, Morgan Stanley0: All right. Thanks for your time. Hope you and Pedro have a nice birthday.

Horacio Marín, Chairman and Chief Executive Officer, YPF: Okay.

Bruno Montanari, Analyst, Morgan Stanley1: Your next question comes from the line of Daniel Guardiola with BTG Pactual. Your line is now open. Please go ahead.

Daniel Guardiola, Analyst, BTG Pactual: Good morning, Horacio, Pedro, Masha, and Naghi, and thank you for your presentation. I have a couple of questions from my end. One is on prices. I see that the quarter somehow benefited from a sharp increase in oil prices in March, but I get the feeling that much of the pricing benefit in both upstream and downstream appears to be delayed. I wanted to ask you, in the case Brent remains high as it is today, above $90, how quickly can you guys now pass through price changes domestically under the current market framework? It would be awesome if you could please provide some sensitivities in terms of your EBITDA generation for 2026 if oil prices range in 2026 around $80-$90. That would be my first question.

My second one is on the lifting costs. We have seen a very sharp decline in lifting costs, declining 42% year-over-year. Of course, we are seeing a more efficient structure in the core hub, in the shallow core hub. I want to ask you how much further room you think there is for structural reduction, especially considering that the company is transitioning from conventional assets towards unconventional assets, but at the same time, higher oil prices are perhaps creating inflation pressures in Vaca Muerta. Those will be my two questions. Thank you, guys.

Horacio Marín, Chairman and Chief Executive Officer, YPF: Great. Thank you for your questions. The first one, I don’t know if I agree with you that this at the core is only because of the sharp increase in prices during March because looking in detail, you will see that there’s a big difference because our strategy to be more unconventional. That is in your introduction. I will answer the question. I’m not worried what in the prices that you are saying, that if it remains in $90 or if it’s going to $80 or $90, we are very okay, and we can quickly pass through the prices. No, I don’t see that problem. I will not say what is our price today because it’s a, you know, that it’s a buffer.

I prefer not to say because of the competition, even that everybody, we are doing the same. I don’t see at all that it will be a problem for us if we are the price of Brent remains in the order of 90, so it remains in the 80-90 range. For the second question, We are really working very, very hard, people in YPF, always trying to optimizing. That’s why you can see the big difference in both upstream and downstream during those years. And I don’t take on account what you are saying, why you say inflation pressure. I don’t know what you are talking about because a country with is okay, and that means that we are improving in the country. We’re not arguing on that.

My job is to work and be always more efficient. Really you see that we are reducing the lifting costs. Also if you see how we are developing the way of developing. You see, how Vaca Muerta and Isena was increasing, and you compare the way that we are developing now, is totally different. We are growing very fast, we can reach a better efficiency. We have also in our operation, I would say, very sophisticated real-time intelligence center for the operation. We can see everything. We have drones, we have everything on that.

We are improving a lot every time that every day that we are there, every month that we are following the prices is already the management control. We see that all the KPIs go in a good direction. I’m positive the way that YPF quarter over quarter are doing their job. We are very proud of why we are reducing, and we are going to reduce more. We have very low now, very few asset in conventional, and our idea is to try to sell out during 2026 and be an special company. We’ll be selling conventional integrate company.

Bruno Montanari, Analyst, Morgan Stanley1: Your next question comes from the line of Bruno Montanari with Morgan Stanley. Your line is now open. Please go ahead.

Bruno Montanari, Analyst, Morgan Stanley: Good morning. Thanks for taking my question, and happy birthday. The first question is about the LNG project. You do mention you have the two foundation partners, Eni and XRG. I’m wondering if on the back of all the energy security and the conflict in the Middle East, YPF is seeing now interest of potential additional partners coming into Argentina LNG, and potentially making it viable, discussions about the potential expansion of 6 million tons per year. That is my first question. My second question is about the drilling pace, drilling completion pace in the first quarter now. There seems to have been a temporary slowdown in the beginning of the year.

I do understand you are reiterating all the production guidance. I just wanted to have more color, on what happened specifically in the first quarter that led to a slower, activity level. Thank you very much.

Horacio Marín, Chairman and Chief Executive Officer, YPF: Okay. Thank you very much. With the LNG, we are working the three founders. In fact, today we are in Milan, the three teams working very hard to finish all the contracts because our idea to be in the BDR as soon as possible for a project finance. Really, we don’t need another partner, could be potentially another one. We are working the three, and we are very proud of what we are doing. What we think, from my point of view, I think from the conflict of Middle East, there are two things that is happening. They are speeding up. There is more appetite for finance our project.

This is a very, a big and robust project. It’s, it’s one of the various profitable projects in the world today. The other thing that I see is that is going. That is my point of view, that it’s going to speed up a lot what we call the expansion. I think the expansion, it will be quickly than we thought before. Maybe we can make like one. I don’t say one, but it will be speed up a lot. There is also before the conflict, we have a lot of appetite from off-takers, and we see good, I would say, good, not contract, good negotiation with the possible off-takers.

We are in very good moment and very good path for to have a FID at the end of the year. I’m very happy on that. In the second part, the slowdown in the drilling and completion, I would pass to Max Westen, but I will tell you that it’s a question of a bottleneck that is in our infrastructure. Next year, we will not see that anymore. You will see an improvement, incremental production month by month. To there, you have to take into account there was a big change in the system. I pass to Max.

Maximiliano Westen, Vice President, Strategy, New Businesses and Controlling, YPF: Thank you, Horacio. Hello, Bruno. How are you? No, there wasn’t a slowdown. What happened is that what we’ve did in the first quarter compared to the fourth quarter last year is that we drilled longer lateral wells about as an average 6% higher and longer laterals compared to the fourth quarter. We’ve drilled pretty much the same amount of wells. On top of that, there was an effect that at the end of last year, during the fourth quarter, we’ve there was a window where in which we’ve accelerated our plan of reducing our DUCs that we had, the drilled and completed wells. We had some extraordinary CapEx at the fourth quarter to reduce DUCs.

Over the first quarter, we’ve drilled longer lateral wells. What I can tell you is that we are maintaining our production targets for this year, and you will see a ramp-up in the level of activity starting next month, with Horacio Marín commented this, going up to 19 rigs at the end of the year. We’ve did that at the pace, at the correct pacing because there’s not much more that we can evacuate until VMOS is COD. That’s our, that’s our plan.

Bruno Montanari, Analyst, Morgan Stanley: Perfect. Thank you very much.

Bruno Montanari, Analyst, Morgan Stanley1: Your next question comes from the line of Vicente Falanga with Bradesco BBI. Your line is now open. Please go ahead.

Bruno Montanari, Analyst, Morgan Stanley4: Hi, Horacio, Pedro. [Foreign language]. Thank you for taking my question. I had one. YPF has, now been very successful in accelerating the de-risking of the southern cluster. I was wondering, what is the timeline for the northern cluster, in terms of development? What are the key milestones, we can expect for the next couple of years maybe? Thank you very much.

Horacio Marín, Chairman and Chief Executive Officer, YPF: Hello, Vicente. As I tell before, the north part is not where we are in 100%. We are now negotiating with our partners. I’m very positive that we will reach very soon a development phase on how to develop. After we present, we will present the rig. For sure next year we will start the risking that part. We need that because at the end of that, we have to develop very well all that not to have challenges, and also to go to the places where we make more value for us to the shareholder.

Bruno Montanari, Analyst, Morgan Stanley4: Thank you very much.

Horacio Marín, Chairman and Chief Executive Officer, YPF: You need more details?

Bruno Montanari, Analyst, Morgan Stanley1: Your next question comes from the line of Andres Cardona with Citi. Your line is now open. Please go ahead.

Andres Cardona, Analyst, Citi: Hi, good morning, Horacio Marín. Happy birthday. What unexpected synergy here. One quick question about the productivity of Lanotura Sur. How does it compare with your key Vaca Muerta fields and versus your initial expectations? Do you think there is upside on the numbers on the south hub? How many acres and drilling locations do you have in this new developing area? Thank you.

Horacio Marín, Chairman and Chief Executive Officer, YPF: Okay. In general, the productivity that we have in last, like a hardcore, is very good. Also you can have better results comparing with the history, because now we have more lateral is longer. We have more efficient on that, okay? The all that we call, what we call the south hub, because it is 100% of YPF, it will be very productive, very profitable. It’s extremely good. We have a lot of work to do. You will see next week the rig. There will be the order of 1,200 plus location to drill.

They will be very important for the incremental production that we have in the long term for our peak production in the beginning of next decade. You say also about the possibility of the timing of the 6 million. That is something that we have to discuss with the partners. I have the idea. I will start discussing, I prefer that we are very good partners that the three of them same moment say that. In my point of view, because they are of us, of course, is the Argentina LNG, that they will be sped up. Sorry not to answer.

I don’t like also to not answer questions, but I think I have to be a very good partner with them.

Andres Cardona, Analyst, Citi: Thank you.

Bruno Montanari, Analyst, Morgan Stanley1: Your next question comes from the line of Leonardo Marcondes with Bank of America. Your line is now open. Please go ahead.

Leonardo Marcondes, Analyst, Bank of America: Hi, everyone. Good morning. Thank you for picking my questions. Happy birthday to you guys as well. I have two questions from my end. The first one is related to the inclusion of the upstream projects into the RIGI framework, right? My question is, what blocks do you expect to register for RIGI? How should they change your drilling plans in the middle term, right? My second question is regarding the LNG project. It seems that you guys have implemented some changes since the last quarter, right? Because as we compare both presentations, we see that CapEx for phase one have increased to $24 billion from $20 billion. Now you’re contemplating what seems to be two pipelines, right? I mean, one for wet gas and one for C5+.

If you could walk us through these main changes here, it would be great. Thank you.

Horacio Marín, Chairman and Chief Executive Officer, YPF: Okay. Thank you for the question. The first one, we are going to include all the possible blocks that can be applied to RIGI. Okay? The RIGI, because it’s the same for everybody, all the blocks, they will not change the relative reference for one to the other. They are not going to change our drilling plan. Also our idea was always to develop quickly. Maybe we can because of the RIGI is very, makes simple. They could speed up our peak. That we are going to show big detail in the next investor day that we are going to travel to New York in April, and you will see the big difference.

You have expected next year because of the difference of prices in this year and the rate and all that. I’m very positive that you can see there a speed up of our program. For the second part, maybe, we were not clear with that maybe to make a key decision for us because there was no changes because it could be confuse you because we put 24 to 20, but this is same. I explain why. With all the partners in the engineering part, we follow and see in big details all the projects, and we realized that it will be more profitable.

It would make more all the plant is still to be in the separation plant in Neuquén, is there will be the first phase, and after there will be RIGI take the road directly to the port, and there we make a big plan. It was a shift of investment from what we call upstream to, let’s say midstream or midstream plus downstream. That is the difference. The other difference that we see from the beginning that you have now, the gas, the gas pipeline will take a lot of that, but the rest of it is a wide rate. That they go all condensate, plus all the different liquids. After in Río Negro, they’re going to separate the NGLs more.

There will be three products out, what is the gas for LNG, NGLs for export, and also the liquids of the oil for export. That is the difference. Really there is not a more cost. I would say that it’s less cost than we thought because we were not clear when we talk about there was in the upstream, because the upstream is not in project finance in general. You will not see all the hitting on that. That is not the big. I would say that it’s better than before, but you see in the project finance $4 million more, okay? Maybe it was our fault. Apologize. Okay.

Bruno Montanari, Analyst, Morgan Stanley1: Your next question comes from the line of George Gasztowtt with Latin Securities. Your line is now open. Please go ahead.

George Gasztowtt, Analyst, Latin Securities: Hi, good morning, and happy birthday to you both. I was wondering if you could please unpack the 102% refinery utilization in 1Q, and how sustainable that is. Relatedly, how are fuel inventories running so far in 2Q, and do you think you’ll be able to sell some to other refineries again? Thank you.

Horacio Marín, Chairman and Chief Executive Officer, YPF: Okay. Thank you. Yes, it’s sustainable because we made in YPF, the people of downstream made excellent efficiency without big investments. That is sustainable. The only day when there is quarter that you have to make a stoppage, for sure it will be lower. If not, I would say there could be that number including more, okay? We are, all the transformation that people from upstream made in YPF in the last two years, you see that YPF used to import, and now it’s not importing anymore. Also we sell to the domestic market when the other make the stoppage. Also we export for the neighborhood countries, also we can sell diesel for electric generation.

There is big change in YPF, is good news for the shareholders.

George Gasztowtt, Analyst, Latin Securities: Thank you.

Bruno Montanari, Analyst, Morgan Stanley1: Your next question comes from the line of Claudia Rivera with Santander. Your line is now open. Please go ahead.

Claudia Rivera, Analyst, Santander: Hi, good morning, YPF team, and happy birthday to both. My question is, given Brent prices have remained above $100, how should we think about downstream margin dynamics in the second quarter? Do you expect to pass through higher crude costs into domestic pump prices? What will be the timing and pass-through dynamics look like?

Horacio Marín, Chairman and Chief Executive Officer, YPF: If the Brent has remained above $100, you are saying some sensitivity we are talking? The margin of dynamic or the margin of boundary will be more than $3 per barrel. This excellent margin. I answered your question. There I don’t, I don’t know whether it will be 100, 90, 80. I have no idea when the conflict or the it’s going to stretch. It price on its own, it will be open. We have a real policy of import price of international prices, we are going to pass on. The question why we didn’t pass through, because we saw the demand going. It was a question of demand and supply.

It was reducing the demand so fast in the last two weeks there for that to improve was worse for YPF and for the shareholder than to make like a buffer. After the buffer, we see also instead of the demand going down, instead going up. Why? Because people were without uncertainties because when you have one week that it was 90, the other 100, 110, 112, it was like it make uncertainty for the consumers. At the end, we are going to pass through the dynamics, and also we have I would say an account that we see how much we have to take out the dynamics of the conflict is on. Okay? It’s our policy and it will not be a problem.

I don’t see a problem to pass through.

Claudia Rivera, Analyst, Santander: Perfect. Thank you very much.

Bruno Montanari, Analyst, Morgan Stanley1: Your next question comes from the line of Matías Cattaruzzi with AdCap Securities. Your line is now open. Please go ahead.

Matías Cattaruzzi, Analyst, AdCap Securities: Hi, Horacio, Pedro, and Max. Happy birthday to you both. I have a few questions. First, and a simple one, what’s gonna happen after the fuel freeze after May 15th? Then, in your 2026 guidance, of CapEx, you guided to a neutral to slightly negative free cash flow, at a Brent of $63-$65, and now we are well over that range. Is your CapEx gonna change? You got the infrastructure constraints. We are seeing a really low CapEx in the first quarter. Can you guide us through what’s gonna be 2026, and then what’s gonna be 2027? Then I got an additional question about the acquired capacity at VMOS.

Can you tell us if it’s going to affect the production curve in 2026, if you’re going to expect a higher ramp in the beginning and middle of the year?

Horacio Marín, Chairman and Chief Executive Officer, YPF: Okay. First question. Beginning of next week, we are going to have a big meeting in YPF between us. We will decide what will happen after May 15th. We are going to communicate what the decision that we are going to make. Okay? I think I answered you what happen after May 15th in the previous question that they asked me. About the 2026 guidance of the CapEx or For sure, if the price is higher, you have to pay, as we say in New York, let’s see, I think it was last year that the, I would say simple sensitivity is 80 million per dollar that it will increase in EBITDA. You have to have rough numbers if you want.

We cannot accelerate this year because we have bottlenecks, and we will reach, I think we are going to reach a bottleneck of the evacuation between October and November. That’s why we cannot accelerate, because if we accelerated, we improve the capital in the ground, but not taking out. Next year, and I think I say before that we are going to accelerate, so we can have, in 2027, I think we are going to have a better production than we thought.

That I cannot, I prefer to show you in New York in April, and you will see that because if we have less necessity of CapEx, and we have the evacuation out, and you have more money in, more cash of YPF, we are going to put that for improve the production and make more value for the shareholders and to reach the plateau before.

Matías Cattaruzzi, Analyst, AdCap Securities: Okay. Thank you so much. Happy birthday.

Bruno Montanari, Analyst, Morgan Stanley1: Your next question comes from the line of Tasso Vasconcellos with UBS. Your line is now open. Please go ahead.

Bruno Montanari, Analyst, Morgan Stanley3: Hi, Horacio, Pedro, Max. Horacio, I wanted to move back here on your how you’re thinking in terms of capital allocation for YPF. Get some additional color from your side. You had a lot of success in the 4x4 Plan that you released when you first assumed the company. You had a lot of success in focusing the core assets and the operations of the core assets, divesting from some other assets. Maybe if you can make a summary on everything that you accomplished since you assumed the company. Of course, looking forward, what do you still view as adjustments required for YPF? Where would you want to invest more, especially in the scenario of a higher Brent and like perhaps making more money? Of course, if anticipating dividends at some point could also be a possibility.

I think just to get some additional color on how you’re thinking about capital allocation as a whole for YPF. That’s the question. Thank you.

Horacio Marín, Chairman and Chief Executive Officer, YPF: Thank you for your question. The capital allocation is always what we call, we have I tell you something that is more our cooking. We have a week, we call CapEx week, and there we discuss all the projects in detail, all the economics, and we allocate what is more economical to the less economical, okay. That the way that we always allocate. If you allocate that in the upstream, unconventional is first. At the beginning when I arrive YPF, say, "I am unconventional." Yeah, I know because I love unconventional and not the conventional, because when it’s all are, they are very young, it’s better the conventional than unconventional. In Argentina, the conventional is old.

We allocate all in unconventional, and it’s our, my goal, personal goal, and the company goal to be a unconventional integrate company. Really, we are very close to over there. We are negotiating going out from the last one. The allocation in upstream is going to be clear that it will be unconventional, and always is a portfolio in our portfolio that you have to decide the economics and between the one that we are with partners and the 100. What is a good news for us is the big stake that we have in 100% are wonderful. They are very profitable, and we are locating more than we are there. Is a new way of YPF.

It’s not that we need if the partners don’t want, we can increase the production very fast, and this is our idea, okay? If the price that is same now, that it will be this year, next year, in a better level, in higher level, for sure our people are making more revenues, and we will have a better results. That result, it will be allocated for increasing the production. It will be better for the LNG. We are very, I would say, positive of the result of the 4x4 Plan. I expect that you are the same that us, even if by violence, you have to say yes, okay? You are the same as us in the success of the 4x4 Plan.

Really, I tell you, I see now every month when I see all the results of the company in detail that this, I would say, this engine that is YPF is working very hard on making value in all the business that we have.

Bruno Montanari, Analyst, Morgan Stanley1: We have reached the end.

Bruno Montanari, Analyst, Morgan Stanley3: Very clear. Thank you, Horacio.

Bruno Montanari, Analyst, Morgan Stanley1: We have reached the end of the Q&A session. I will now turn the call back to Horacio Marín for closing remarks.

Horacio Marín, Chairman and Chief Executive Officer, YPF: Thank you very much for all the questions. Thank you, Manuel, to be in the call. I say for all the guys that we work here, that I’m very proud to work with YPF. We are working hard but with passion. That is the reason. Company with passion has extraordinary results. That what YPF is doing now. I, well, I try always to say at the end that in the memory of my grandmother, I breathe YPF, I sweat YPF, I think YPF, I love YPF. Thank you very much.

Bruno Montanari, Analyst, Morgan Stanley1: This concludes today’s call. Thank you for attending. You may now disconnect.