Galp Energia, SGPS, S.A. (GALP) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to Galp's Fourth Quarter and Full Year 2024 Results Presentation. I will now pass the floor to João Gonçalves Pereira, Head of Investor Relations.

Good morning, everyone, and welcome to Galp's Fourth Quarter and Full year 2024 Q&A session. In the room with me, I have both our CEOs, Maria João and João Diogo, and the executive team. But before passing the mic for some quick opening remarks, our usual disclaimer. During today's session, forward-looking statements are based on our current estimates. Actual results could differ due to factors outlined in our cautionary statement within the materials we released this morning. João Diogo, the mic is yours.

Thank you, João, and good morning, everyone on the line. I'm very pleased to be here today aside with Maria João, side-by-side during the last months or so. This has been a true pleasure. We have a fantastic journey ahead of us, and I'm confident that the co-leadership model will take the best of us, fostering collaboration and our complementary skills and experience. Allow me also to welcome Nuno Bastos to the Executive Committee. Nuno was previously leading strategy and M&A, and he will now oversee our Upstream division. Galp's strategic path remains unchanged. Our Board has an active role in the assessment and decision-making of key strategic options. We will continue delivering Galp's strong investment case, derisking and growing our remarkable Upstream portfolio while transforming an integrated mid-downstream position. Maria João?

Thank you, João Diogo. So good morning, everyone. Let me start by stating that 2024 was indeed a remarkable year for Galp with strong performance across all of our businesses. In Namibia, we drilled 4 wells in 1 year in the northwest region of Mopane. This was a remarkable pace and, more importantly, safely executed. So let me take a second here to acknowledge and congratulate the teams on the work well done. Now necessarily after this fast pace, we're still collecting and digesting all information, and we're working really hard on the feasibility of one development concept in that hub. We are still drilling well #5. This is in a separate region but still within Mopane, with the potential to unlock further exploration and appraisal opportunities. No results yet, so we will not comment on ongoing drilling operations, but we expect some results really soon. Still during 2025, we will have several important deliverables. We are assuming a weaker macro there, and we will have one-off maintenance limiting our operating performance. So for 2026, the asset base is planned to operate under normalized conditions, and the start of our key projects will drive our operating cash back up 20% when compared to 2024, even under a lower macro. So the Board's confidence in our growth plan and our disciplined CapEx is underlined on the proposal to increase our cash dividend base with DPS up by 15%. So echoing what João Diogo said earlier, growth and CapEx discipline are still the hallmark of Galp's unique investment basis. We are now happy to take your questions. Operator?

[Operator Instructions] And the first question comes from the line of Giacomo Romeo from Jefferies.

Two for me. First one, if I may, on Namibia, I appreciate you don't have incremental data with regards to wells. We have seen some of other the companies providing updated numbers around their discoveries and views around discoveries. One in particular, it was highlighted permeability as being an issue potentially with regards to plateau production levels as well as the ability to reinject gas. Just wanting to see whether you're actually seeing similar concerns there or if you confirm that the permeability you've seen so far across all the wells you drilled shouldn't be an obstacle. The second question, I'd like to talk about the Renewables business, if I may. You're talking about 400-megawatt increase between '25 and '26. It's just -- it feels like obviously the results from the business haven't been great. And do you -- why continuing to push for an accelerated growth here considering the returns you're generating, which feel to be below your target levels? I'm just trying to understand where we stand on that.

Thank you, Joshua -- Giacomo, I'm sorry. Let me start with Namibia, and then I'll dip into Renewables and ask Georgios to chip in on that. So on Namibia, what we're seeing fundamentally now is after a year of great pace in our exploration and appraisal activities, we now need to take stock of all the information we've been gathering. Actually, we're still gathering. There's still information pending from the labs, from the early stages of the campaign. We're still performing 3D seismic. So there's still a lot going on there. So I understand you're seeing updates from other players in the area. Please bear in mind that some of the players have been -- have had at least a year to look at that data and process it through. We just finished our first campaign a month ago. So at this stage, we are not fundamentally revising the numbers. We're very focused on analyzing and integrated all the data that we're acquiring, including hopefully soon, the seismic that's still ongoing. As for Renewables, we have continued to be very disciplined in our plans and our investment plans. When we talk about this discipline, of course, it fundamentally entails making sure that every project that we embark on still meets our hurdles and our expected returns. So overall, the growth that we are still seeing in our figures for '25 and '26 reflects this disciplined approach. We still have projects in the portfolio delivering good returns. We've been delivering good returns so far. And we have additional opportunities ahead both in terms of hybridization and of storage that we believe will still meet our hurdles. Georgios, maybe you'd care to comment a bit more?

Yes. As Maria João -- Giacomo, as Maria João said, we have a very disciplined, a very targeted growth plan. We're developing solar, but we're also developing storage, and we're developing hybridization for wind, where we have solar capacity. So our capacity growth is very, very selective. We're picking up the best projects that we can out of our portfolio, and we want to grow so that we also have the opportunity to grow our business organically in other technologies around our interconnection. So that is storage, and wind, in particular, organically, and that is on a greenfield basis.

And your next question comes from the line of Matt Smith from Bank of America.

I had a couple as well, please. The first one on Namibia, sort of noting that the current well, well #5, is looking to potentially unlock another development hub. I just wanted to sort of go back, what should we read what that means in terms of -- I appreciate you're still gathering data, but your confidence on the first development hub at this stage. And I guess I understand AVO-1 really underpins that development hub. You've drilled it. Should we read the fact that you're sort of drilling a separate location now is a marker to your confidence in the reservoir that you have at AVO-1? Or perhaps might you need to return to AVO-1 for further drilling? So that would be the first question, please. And then perhaps actually sticking to Namibia on question 2 as well. So since the last update, there's been 2 sort of question really about the farm-down timing. There's been management changes, but you've also accelerated the drilling program since the last conference call. So I wondered if you could reflect on your latest idea of timing around the farm-down, please.

Thank you, Matt. So let me go back to the first hub and what we mean by now being very, very focused on the development concept for this hub. So we've been sharing -- as we conducted the campaign throughout 2024, we've been sharing some information on what we saw with the high pressures, good to high permeabilities, so a number of important factors there that have led us to conclude the campaign for now in this first half. So we're not expecting, in the short term, certainly, to go back to this hub for further drilling. It is indeed anchored on AVO-1 plus satellites. So what we're now doing is, again, as the appraisal wells campaign has been completed, we're very focused. We're still pending seismic and lab tests. So we expect some of these to finalize by late March, and we will be incorporating all of that, analyzing and integrated into our models and updating and making sure that all data is articulated. As for the farm-down timing, I think we continue to look for the solution that will make sure that we drive value from the assets. Given its size and given its potential, we believe that farm-down is obviously a natural solution here. I think it is clear to us that we're not in a rush, right? We've built a very solid balance sheet, a very solid position. So even though the farm-down is a natural way forward, we think it will benefit as we exchange new data, and we will continue. There's no firm time line to find that at this stage. So we will make sure we get a partnership that aligns incentives with a future partner, and that is very much our focus right now, to analyze and integrate data. We believe that will be beneficial. We don't see the rush in firming a time line, but we still do believe that farm-down is, for players such as Galp and for an asset such as what we have there, a very natural solution, and we aim to continue to pursue it.

Your next question comes from the line of Josh Stone from UBS.

Two questions, please. I wanted to focus on Midstream gas. It looks like the team has done a great job there in 2024. You've got earnings coming down in '25 in the guidance. So how conservative do you think you're being there? What are the key determinants that will drive the bridge between '25 and '24 earnings? And maybe if you can comment where you think steady-state earnings in that business might be now given some of the expansions you've been making. And second question, there's a -- in one of your slides, there's a comment about low-carbon CapEx acceleration towards industrial projects. I wanted you to just comment on that because it seems to be going against what others in the sector are doing. Most in the sector seem to be slowing down a lot of the low-carbon spending. So why do you think now is the right time to increase industrial low-carbon spending and particularly given the more difficult regulatory backdrop we see for some of the biofuel markets?

Thank you, Josh. So starting with Midstream on 2025 guidance. We're acknowledging what we see in the macro. So relatively conservative, fundamentally reflecting the fact that we see TTF at EUR 30 versus a bit over EUR 50 today. This is a diverse portfolio. We've been working a lot on making sure that we enhance that diversification. So indeed, contributions across a number of commodities, particularly in gas trading, where we've been working hard at making sure that we increase our flexibility. Still, there's some complexity in our sales basket. So different tenures, different indexation. So we try to keep our expectations and our guidance relatively conservative. In terms of run rate, we are very mindful of the levels of risk that we have in the balance sheet. So we don't expect fundamental changes in our run rate for the coming years. Just maybe one additional note here. It should also be taken into consideration that 2025 guidance at this stage does not includes any volumes from Venture Global. So that is indeed a potential upside should those volumes actually come through, but not included at this stage. As for the acceleration of our low-carbon projects, maybe bear in mind that this is acceleration of the execution of projects that were FID-ed already. So this is not additional project coming into the portfolio. These were -- have been undergoing their development stages. They are part of our plan to integrate and manage our assets, particularly given the fact that we hold the sole refinery in Portugal. So this is very much a set of projects that has to do with our industrial transformation. We find them to actually be critical to support that transformation. So yes, we acknowledge that currently the market is pressured, but we have, so to say, a natural demand supporting these investments, and right now, and as it was at FID, our expectation is that these projects will be delivering IRRs of above 12%. So very much in line with our hurdles and our requirements.

Your next question comes from the line of Alejandro Vigil from Santander.

The first question is again about Namibia. If you can give us some color about the derisking process after well 5, which are your expectations of additional investments in the area. And the second question will be about the operating cash flow, the guidance for '26. Just to highlight that in terms of EBITDA guidance, it's very similar to '24 numbers, EUR 3.3 billion of EBITDA, but you're expecting a significant increase in operating cash flow to EUR 2.6 billion. If you can give us some color about the reasons of this significant increase in operating cash flow. Is lower taxes, working capital release? If you can elaborate on that, please?

[Foreign Language], Alejandro. So on well 5, maybe my colleague, Nuno Bastos, will comment a little bit on what we're expecting in terms of further derisking, and then I'll jump back into -- talk a bit more about the guidance for '26.

Alejandro, it's fair to say that -- and to reemphasize a bit what Maria João has said before, which is we have anticipated and we have accelerated all these appraisal campaign to 2024, and we are drilling the well #5 as we speak. It's fair to say that we have a lot of data in our hands that we need to analyze and integrate in our models so that we can define properly the next steps from an exploration and appraisal plan point of view. On the northwest part, we are focused on assessing the feasibility of a development concept. That's what we are focused upon today. Thank you.

So going back to your question on guidance for 2026. Overall -- let me just take a step back and give you some of the highlights. Overall, we are expecting EBITDA for 2026 to go back to normalized levels after some of the one-offs you see in 2025. And that will indeed be bringing up -- our OCF will be boosted back up to EUR 2.6 billion in 2026. You see some elements there that have to do with the fact that there's greater fiscal efficiency in Bacalhau. So you'll see some of that bleeding into the difference between our projections for OCF versus EBITDA. But I'd say fundamentally, what we're getting to in 2026 is what is ongoing value delivery once we go back to normal levels after the one-off in maintenance in 2025 and once Bacalhau is already starting to significantly deliver on its ramp-up. So the combination of both, also a little bit less maintenance in the refinery, our projects for low carbon, the ones we just mentioned going online, so 2026 will be back up delivering significant value. Actually, I think OCF is going to be up about 20% versus 2024. And I think this is at the ground level for the confidence that our Board is also sharing with us and our delivery for '26, and that's allowing us to bring up our DPS growth to 14% from our current reference of 4%. So it's confidence in delivery and all the underlyings being there, the assets are there, the performance guidance is there.

Your next question comes from the line of Sasikanth Chilukuru from Morgan Stanley.

I had 2, please. The first was on Namibia. You've kind of made the distinction between the northwest region, the southeast region and the development in the first half. I was just wondering if your farm-down discussions are also going along these lines. I just wanted to check whether you're planning to sell the entire -- the stake in the entire license. Or is it a possibility that farm-downs occur in terms of these hubs as well? How are these discussions kind of progressing? And how much are you willing to go for a full development plan before a farm-down as well? The second was related to the CapEx guidance, guidance of less than EUR 800 million per annum on average and disposal proceeds of EUR 800 million as well. I was just wondering if you could comment on how much of the gross CapEx was committed and how much of that is catered to the SAF and the hydrogen projects as well. Should we expect the CapEx to be unevenly distributed now given the majority of the proceeds are likely to come this year in 2025? And finally, just related to that, is there any spend in the Upstream -- is there any spend related to the Bacalhau Phase 2 project or the Tupi redevelopment project incorporated in this guidance?

Thank you, Sasi. Let's see if I can keep track of the very rich questions you just posed. So starting with Namibia. So we are indeed on the fifth well going further to the southeast region of Mopane alone. So if you'd care, I think this is the fifth well is approximately 20 kilometers from what was the first 12 we drilled. It is a well with 2 stacked prospects. So we're talking about a well that is drilling AVOs 10 and 13. So the first hub that we're now looking into and making sure that we focus on the development concept for that hub, we -- information takes time. We're now making sure that we process. We have both teams working in parallel. So both the Upstream E&A campaign teams supporting doing a great job. Again, extraordinary pace throughout 2024. Now we need our M&A teams to work in parallel and to deliver as the teams operationally look into the information and to the results. So we're looking at the process as an overall process. We're not discussing partial or asset-specific farm-downs. We're looking at the overall. So that's how we're going to be focusing. Still, we see a first development out there already, and we'll see when the time comes and when results come from our fifth well, but looking forward to sharing the news with you as soon as we reach to them. Now on CapEx, net CapEx guidance is fundamentally reflecting our discipline, so we're bringing it down from the approximately EUR 1 billion per year we had guided for the previous period. We're now guiding at under EUR 800 million for net CapEx. The big part of this CapEx is committed, as you can imagine, as long as it pertains to investments that we are already -- that we already have underway. Still, it also brings into consideration the fact that we have approximately EUR 800 million announced divestments. If you look at that, that brings us to an implicit gross CapEx of EUR 2.4 billion. It is indeed slightly heavier in 2025. Fundamentally, given the nature of the investments that are going on in Upstream and Industrial and also the fact that in 2025, we're still going to be wrapping up Bacalhau and we are ramping up our HVO/SAF and our hydrogen project. So there, you'll see a slightly heavier profile towards 2025. Other than that, Tupi, only investments comprising infill wells. So this is investments that we are planning to make sure that we continue to retain our approximately 5% -- actually improving the 5% depreciation or decay rate for the wells. This is already best practice and reference numbers for such deepwater wells, but the joint venture found an opportunity there to invest and actually maintain the wells, and we will be pursuing that investment. Other than that, no significant values to highlight.

Your next question comes from the line of Kate O'Sullivan from Citi.

So another one on CapEx and Namibia plans. You've indicated future E&A CapEx in Namibia to be on top of the revised CapEx guidance. So could you remind me what's included for Namibia in the 2025 guide? Anything beyond the completion of this fifth well, the sixth well and seismic, are there any further DSTs included in the guidance or plans, be it in the southeast or back in the northwest of the block? And just a follow-up, any color you can give on where a sixth well could potentially be?

Thank you, Kate. So to be very clear that at this stage, for Namibia, we're not including any further CapEx other than the completion of the well that's still currently underway, so nothing there. And also no specific guidance at this stage as to the location of a possible sixth well.

Anything on any DSTs included as part of the drilling campaign?

At this stage, we're not planning on that. Again, as I said, a lot of information yet to come our way and still coming our way. So we've looked at that. Our decision tree, every branch we looked at would benefit from us actually now taking stock of all the information we've been onboarding. We've clearly been having a much faster pace in E&A than we've had in analysis. So that now needs to catch up. I'm going back to the topic that we've just finished our first campaign on the northwest region a month ago. So very early days. We now clearly need to take some time, look at our peers and spend certainly quite a few months looking at the data we gathered, incorporating it back into our models. So no specific additional expected investments or guidance or location at this stage.

Your next question comes from the line of Alessandro Pozzi from Mediobanca.

The first one on Namibia. I appreciate you -- there's limited information that you can share with us today. I was wondering if the farm-out process gets, let's say, delayed or may not happen, let's say, in 2025, would you be willing to consider FID on the first half and take FID at 100% CapEx and with a view potentially of farming down after project sanction? And the second question on Bacalhau, the development. First oil has been delayed, I believe, towards year-end. Are you still confident in that time line? And should we assume any volume from Bacalhau in 2025? Or it's mostly from '26?

Thank you, Alessandro. So we have no time line for the stake dilution at this stage. So it's hard to consider it being late or delayed as one of the elements that we feel that we've allowed ourselves to gain by building a solid financial position, such as the one we have right now, is -- we're not really in a rush. So again, we're very keen on continuing to seek a partnership that will be based on a sound alignment of incentives. So we're very keen on making sure that there's a fair valuation for both parties to the assets. That means that we do conduct all the derisking that we can and that we do have the transparency to make sure that fair valuation is reached. We're also looking to an experienced operator with whom we can have good alignment on the progress for Mopane. So that is definitely very much what we are seeking right now, aligning incentives much more than establishing a firm time line or sticking to that time line at the expense of value. On Bacalhau, the operator has already been very clear on it being expected for later this year. So we're aligning with that. Our expectation right now is that coming in later and still being in ramp-up, we don't see significant volumes coming into 2025. We now have in our estimates approximately 4,000 barrels per day for the year '25.

Okay. Just going back to Namibia. The question was, what if at the moment, you don't achieve a -- what you deem to be a fair value for the asset. So would you go ahead with the development? Or would you do more derisking to achieve that fair value?

Alessandro, at this stage, we see all options as being open. We -- it's early days. We want to look at what the data is telling us. We want to look at what partners are also telling us. There's interest in the assets. We have potential for the assets. So we still don't know what is the development concept that will be most adequate. But obviously, all of this will come into the definition of what are the opportunities still open and ahead of us. So for now, there's -- that's clearly the guideline and the way ahead.

[Operator Instructions] And your next question comes from the line of Irene Himona from Bernstein.

My first question is on refining, please. I note your guidance for an increase in the 2025 cash cost due to maintenance. I wanted to ask about your views on the average refining margin. And what are you seeing so far in the first quarter in terms of margins? And secondly, on Commercial, where your previous guidance was that nonfuel is contributing about 35% of EBITDA. What is the plan for that in 2025 and any indication of the margins you're realizing in that business compared with conventional fuels?

Thank you, Irene. Yes, on market outlook, if you look at the market outlook and refining margins, I think you need to look on the fundamentals on supply and demand. On the supply side, we see some additional refinery capacities coming online in South America and also in Africa at this moment in time. And demand, I think we can all see where the world is going in China, in Europe and in the U.S. So overall, market fundamentals are not that positive from a refining perspective. I mean at the same moment in time, there's quite a lot of uncertainty that's hanging over the market, Trump, Gaza, Russia and the Ukraine, which clearly gives an additional amount of trade flows and uncertainty that's being priced in. Our current expectations for 2025 are $6 per barrel. Coming back to the question you had around our OpEx. If you look at that 2024 performance, it was actually below the $3 per barrel. We also expect that again to happen in 2026. However, 2025 is a year of a turnaround. And hence, that's where also our guidance is coming for the OpEx expenditure in 2025. Thank you.

And Irene, coming back to your convenience -- Commercial nonfuel plans for 2025. So if you follow, as you know that Commercial has been quite resilient on the way. It has been delivering around EUR 300 million EBITDA per year. Looking back and when we started this journey in nonfuel back in 2021, we are almost doubling the contribution of this business. So we are expecting to continue within a double-digit growth looking forward. Taking also in consideration that C-store today, it's a very important growth lever considering the overall transformation that we are managing in Commercial, improving our EV offer, transforming our consumer journey. So nonfuel and convenience in particular, it's a quite important lever for us to sustain our Commercial EBITDA within, what I could say, a conservative vision on the fuel side. So that's it. Thank you.

Your next question comes from the line of Pedro Alves from CaixaBank.

The first one on the outlook for 2025. It's just if you can quantify the impact of the 50 extra days in Upstream for maintenance and also the stoppage in refining. And why the so large maintenance of the extra 50 days in Upstream across the fleet? And the second question is on impairments. The EUR 67 million impairment on the appraisal and development assets in Brazil, if you can elaborate a bit more on this, would be helpful.

[Foreign Language], Pedro. I'll ask my colleague, Nuno, to comment a bit further on those topics.

Pedro, on the impact, they would -- they are around 2,000 to 3,000 barrels per day in production guidance. The maintenance, this is -- we think that this is always a very well invested time and money in order to make sure that we secure the integrity and longevity of our facilities. These 50 additional stoppage days will occur in replicants as one-off incremental scope to replace flare lines to address integrity topics, mainly correlated to corroded equipment that will be replaced by stainless steel. This production impact for all was already accounted in our plans, as I said before. Thank you.

Just to comment on our impairments in Brazil. So those are EUR 67 million approximately. So this has to do with a number of well development, particularly on Tupi. So just some regular management of the fleet. It's approximately 150 wells. So it's not -- obviously, not all perfect. So -- but overall, fundamentally around Tupi. Maybe just to also complement on the 50 days impact expected for the additional maintenance, we believe this will amount for approximately 2,000 to 3,000 barrel oil equivalent, so a relatively small impact, even though it's 50 days overall. Thank you, Pedro.

Your next question comes from the line of Matt Lofting from JPMorgan.

Two follow-ups, if I could. First, just to come back on the last topic on the additional 50 days in maintenance in the Upstream. I think that the points that -- or note the points that you made around corrosion, I think it's been a topic that's been discussed at times in presalt obviously in the past. So I wondered if you could just expand on that in terms of the sort of the confidence that the consortium has that the additional maintenance requirement this year will be one-off as opposed to a precursor for higher maintenance requirements in the future. And then secondly, I wondered if you could just expand on the calibration and the sort of the rationale behind the 15% increase in the dividend above and beyond the sort of the point that you made earlier, Maria, on the 2026 financials. I just wonder if there's a breakeven point or a reference point that you're using in terms of the sort of the case to increase the dividend baseline and effectively lean more into dividends versus buybacks within the unchanged 1/3 OCF.

Thank you, Matt. On the maintenance in Brazil, we're rather confident that this is indeed a one-off. This is maintenance that will be conducted in 5 of our replicant FPSOs. It follows an analysis as to the performance and the conditions on those vessels. And it is an investment in making sure that the fleet is maintained in good health and good conditions. But on a very specifically identified topic, this will be focusing on the flare lines. So it's contained very clearly on replicant FPSOs. So we do believe that it's clearly a one-off and the fleet will be back at prime condition back in 2026. Now on the distributions, dividend versus buyback, I think we're maintaining our 1/3 OCF guidance. We find that to still meet competitive -- a competitive stance versus our peers. So what we are fundamentally is acknowledging that with increased visibility on our upcoming projects, and the profile that we see for 2026, particularly if you're talking about a 20% OCF growth in 2026, with us maintaining low capital intensity and discipline in our CapEx, there were definitely the conditions there to give a nod to an increase in dividends per share. So go a bit further in terms of cash dividends, hence, the growth of 15%. But if you're asking for an anchor, fundamentally, I'd say the anchor here is maintaining a competitive overall distribution and that we feel that is still anchored on the 1/3 of overall OCF.

Your next question comes from the line of Paul Redman from BNP Paribas.

Yes, 2 questions, please. The first, going back to Namibia, just a focus on size or split of the 10 billion barrels. You're talking, at the moment, about a northwest hub. It's AVO-1 plus satellite. Do you have any way for us to break down in the northwest hub or AVO-1, how much of the 10 billion barrels is located in either of those? And then the second one is just on -- I see that Maria and João are still interim, how the CEO recruitment process or appraisal process is currently going.

Thank you, Paul. Let me just be very clear, we're not guiding on the split between any of the hubs. With that, I think I'll hand over to João maybe to comment on our interim Co-CEO role.

Well, it's, in fact, a word that it doesn't fit with us. We feel completely on job with a strong support from the Board. Of course, there is a competitive recruitment process ongoing, which will assess internal and external candidates. We know that this process will take at least 6 months from now. So let's keep very focused on the execution that we have. And I might just pass -- no, it doesn't matter. Thank you.

And the next question comes from the line of Ignacio Doménech from JB Capital.

The first one is on Namibia. It seems that you are progressing now with the first development hub. So I was wondering if you have already started to look on the technical side now of our first development. Do you already have an idea on the capacity, for instance, of the -- of our first unit, if you could give us any color on that? And the second question is a follow-up on the maintenance in Brazil. I was wondering if this 50 days is a pure commitment. Or do you see any efficiency to the number of days in maintenance? And the last one, if I may, is on the development plan in Brazil. If you could provide us an update, maybe what's the latest recovery factor that you can guide us on -- at Tupi?

Thank you, Ignacio. Let me get Nuno to jump in on this one.

Ignacio, so on Namibia, we are -- it's early days. We just ended our appraisal campaign 1 month ago. So we are focused on assessing a feasibility development concept for this first half. That's what we are doing. While in parallel, we are still analyzing and acquiring and integrating the data that we have that we have just acquired or to be acquired mainly on the seismic that we are still shooting as per today. And it's fair to say that some of -- well, a lot of analysis that will come from the lab will take some months. So it's -- no guidance on -- at this stage on the capacity of a unit. We are early, early days on that. On the 50 days maintenance, we are assuming that they are -- there will be -- that we'll have 50 days in maintenance effectively. So no, we are not considering any efficiency even though it may occur. On the recovery factor, it's fair to say that our last guidance still remains at 34%. Thank you.

Your next question comes from the line of James Carmichael from Berenberg.

Just -- sorry, one more on Namibia. Just wondering what is the sort of -- or if you've had any further thoughts on the gas strategy. I think in the last call, it was sort of left hanging out there that you could just reinject the gas for the first few years, but that led to the sort of obvious question of then what. So I guess just what are your latest thoughts on handling the gas, if you can update there. And then second, on Midstream. I just noticed -- just thinking about the guidance for 2025, I noticed that the trading -- the guidance for trading volumes is roughly in line for 2024. So I guess what is driving that EUR 50 million increase in EBITDA guidance for next year? Maybe just some color around that would be helpful.

Thank you, James. So we're not guiding on gas content at this stage, fundamentally because on overall gas content extrapolating results from the few AVOs that we've already tapped, extrapolating that to the full Mopane complex would not be a reliable exercise. So regarding this first hub, as we've already mentioned, often, it is a lot more about recoverability than it is about one particular indication such as GOR would be. So that's what we're focusing very much on assessing overall recoverability and making sure that we can actually drive that assessment into a full development concept. That will take time. That will require analysis. I understand curiosity about gas content, but it's one of the factors we're pondering. And at this stage, we're still in the process of analyzing and incorporating. So too early to fine-tune on that guidance. As for Midstream, volumes will be relatively flat versus 2024 indeed. But we've been working a lot in making sure that we optimize and ensure adequate diversification in our portfolio. So we've been delivering steadily and healthily in 2024. And even though we're continuing to maintain some caution in terms of our gas sourcing and certainly in terms of the risk levels within our portfolio, we do have been progressing in terms of actively managing the portfolio. We have some gas sales already locked. Approximately 60% of our gas sales in Iberia are locked. So to a large extent, that is what is driving our guidance there. It has some degrees of caution, but it also reflects the progress that the teams have been making in terms of our ability to actively manage the portfolio across all commodities, certainly, but gas continues to be one of the core commodities in terms of value creation at this stage. So that's where we're focusing a lot of our attention. Thank you.

We will now take our final question for today, and your final question comes from the line of Fernando Abril-Martorell from Alantra.

Just only one question with regards, say, CapEx. So you are guiding for around EUR 2.3 billion of gross CapEx, of which around 45%, more or less, according to the pie chart will be allocated to Upstream. So that gives you around EUR 1.1 billion. And then in another slide, you are pointing to around EUR 200 million of annual maintenance CapEx. So basically, you are targeting around EUR 700 million of growth CapEx in Upstream. And I don't know if you can give more color on this because you are not assuming more CapEx in Namibia beyond the fifth well and Bacalhau is almost complete. So just -- I was wondering, what are you including in this growth CapEx in Upstream?

Thank you, Fernando. We are indeed guiding for EUR 2.3 billion, EUR 2.4 billion approximate implicit gross CapEx. So this -- maybe just to take a little bit of a step back. Again, it is -- it will come up to a net CapEx of about EUR 800 million for the period of 2025, '26. And again, highlighting that we're guiding for the 2-year period, we have announced divestments for that same period that already amounts for approximately EUR 800 million. And it is indeed going to be slightly heavier on 2025. Now on your question as to implicit growth for CapEx in Upstream, you need to take into consideration not only just the values for current maintenance and infrastructure, so just for the ongoing support to the activity. Those amounts for approximately EUR 200 million per year. So that is a significant chunk there. I've already commented on what will take place in terms of well infills in Tupi, also some growth there. And fundamentally, what we are guiding for is completion of Bacalhau, so in 2025, there will still be remaining amounts for all the works that we'll have to consider until completion. And I think those are the fundamental topics there that make up the overall. Of course, we still have the wrap-up of well #5 and that we are still closing, and that will fall into 2025. And that's probably what you are still missing there in the overall figures. Thank you.

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