YPF Sociedad Anónima (YPFD) Earnings Call Transcript & Summary

Good morning, everyone. Thank you for joining us today for YPF Investor Day in the New York Stock Exchange, and thank you for those who are connected virtually as well. My name is Margarita Chun, I am the Investor Relations Manager of YPF and will be the moderator of today's event. Keep in mind that we have our QR code available on the presentation so that you can scan the QR code and download the presentation, it's also available at our website. Well, due to the formality, I need to announce this. Our cautionary statement is located on Slide 2. And during the presentation, we will -- we may talk about our 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 forward-looking statements. Our financial figures are stated in accordance with IFRS, but during the presentation, we may discuss some non-IFRS such as EBITDA -- adjusted EBITDA. So now today's presentation will be conducted by our Chairman and CEO, Mr. Horacio Marin and then followed by the QA session with our management team. Horacio, you can start.

Okay. Good morning. Thank you very much for everybody here. I tried to do my best in English. It's my second language. What is difficult in second language is to transfer feelings, love and passion. But I will lose that trying to speak in English, okay? Because there are some people that don't speak Spanish. And that's why I love to speak in Spanish because in Spanish, I can put my strong passion in YPF. And it's difficult to transfer in English that passion. First, I would like to talk about today. Today, we are in uncertainty mode, okay, because it's a very big, big -- very big -- I don't say transaction, it's negotiation. It's a big, big negotiation around all the world. When that happened, there is uncertainty. What does it mean uncertainty? It means I don't know what will happen. Nobody here know what will happen tomorrow. Nobody here knows what will happen on Monday. Me too. When you are more than 60 years old, you live in uncertainty several times in your life. I live in -- I have lived when the price was minus $36 when the price was $8, when the price was $14, and that is no long term. The long term is energy. The world needs energy. I tell you one figure. If you think that the $40, $45, that is why the number that YPF is resilient. If you think in that number, LNG is not feasible. And the LNG in the war in 2030, it will be 800 million tons. If you put in normal figure that you realize that you need for that gas, you need people is 700 million people that they need that energy. With the numbers that people think today that everything will be low, there is no energy for the world. That is not sustainable because humanity is always evolution. Evolution means that tomorrow is better than today. So for me and for us, the long term is not panic. Long term will be normal. What is normal? It will be $70 a barrel, and that is in the presentation that I will show to you today. But because I know that all of you are worried about what will happen with YPF oil prices, we have sensitivities. And now I will tell you in advance that because all our work that we did in the last year with all the employees of YPF, we put this lovely company in a situation that we can develop all Vaca Muerta oil in a long-term price of $45 per barrel. So I'm not worried about future. What I think is that we are going to develop Vaca Muerta and we will put Argentina exporting more than 30 billion in 2031. I can bet here everybody that YPF will be a company that it will be top 10 in the 2030s in unconventional around the world. Now I will start the presentation. All the figures that I will see here is with $70 per barrel of long-term price of oil, okay? Margarita tell about that, so I pass it on. What is the agenda? A company overview for people that don't know YPF is a long presentation, but when there are more figures and you can't read out in your house or after that, I will be very quickly because it will be extremely boring that presentation, reading the presentation. Argentina macro is very important for you to see. Vaca Muerta, I would like to show you the competitiveness of Vaca Muerta compared with Permian and United States. The YPF 4x4 is the way to reach the big company in 2030. And it's very important to follow that because it's a trademark for us, a trademark for all the employees to every day when we go to YPF to work, we know what we have to do. And this is a way of controlling us every day. '25 guidance, a 5-year outlook, I think that's what you want to see. And that is the different -- the big difference that we see today and final remarks. And after there will be Q&A. Because it's a long presentation, I apologize that it take more than an hour [indiscernible]. So I need to the clock so I can't follow me, okay? Because if not, I cannot see if it's one, okay? Okay. Company overview. First, I would like to share with you that during this year, we -- I say transforming. I hate [Foreign Language]. I don't know how you say in English, [Foreign Language]. I hate fear because fear is what you are not doing, okay? Fear, you don't know where to go, but it's transforming. Why? Because we transform a lot, and we are going to transform in the next year also. What is the -- I will tell you what is the important things that we make during the first year of management. First, we have result-driven management. We don't care more than profitability. Our goal is to make value for the shareholders, not to make politics in that company. We are focused on profitability and value creation. That is only the objective that we have in YPF, all the employees there. This is something that you cannot imagine the transforming that we made. The company goes to one direction, and we put the company in the totally different direction. And that I'm proud of what we get in 1 year. Why I'm proud, because in the year party of the company, I'm not accustomed to people to take photo because I'm a bad guy, not good looking. So even not my mother take photo for me, okay? And I have 1 hour and 20 minutes of selfies. That means that we are transforming the company. The second thing is Pure Shale company. That is very important. And our goal is to be Pure Shale company. In Pure Shale company, you will see the numbers. We are a lifting cost of $5. So we are making value in any price of oil. And that is our goal. It is not to work and think that we are losing money for shareholders. We are very focused on efficiency program. In 1 hour, I cannot tell you, but we are working a lot in efficiency. You will see some numbers. Also, people -- when I start, they said they were very difficult to normalize price. Argentine normalization price is done. We are in free market today in Argentina. Also, we are -- we say monetization oil and gas because Argentina in the past produced more than today. This year, we will pass the maximum production of history of Argentina. But what is the difference? Because in the past, Argentina was producing for 5 different Neuquina basins. And today, we are going to produce only for one. That makes big bottlenecks infrastructure. And we were -- now we were working today. We are making the biggest oil pipe in history in Argentina with all the industry. I don't know how to say in English, [Foreign Language] is over. The d*** state is over. The people that make money have to invest where you make money, and we don't need more of the state. We have to be serious and invest where you make money. And all the industry is working on that. And also, we have focused on new energy for 2030 plus. I will be working in YPF up to the COD of the last LNG plant that is the Argentina 3. That day is my last day working in my life. After that day, I will resign, I'm going to Disney World with my kids, not kids, grandkids, okay? I promise you that I defend your money. I will not take holidays up to that day. I'm working now 15 months. I don't have any day of holidays. I'm not going to take holidays because this is a work for 24 hours a day, 7 days a week and not to have thinking all of that. When I take a shower, I think in YPF, okay? I'm very proud to be 61. That's why I can think of all that, okay? Because it's very important to be focused in the same on export. In export, people that make great result is because they have focus on that. We have focus on YPF. And so we are changing the way of working and transform the industry and Argentina. YPF, at the glance, you can read it at home. But the only thing I will tell you for people that don't know YPF that we are an integrated company, the biggest company in Argentina. We are -- we have more than the 50% of the refinery capacity of Argentina and our revenues are 11 -- sorry, $19 billion per year. And we have different companies, and we are great. We are the best company that you can imagine, and we say always we are, and it's not possible to say in English, we are [Foreign Language]. It's the best company in Argentina. People like YPF. It doesn't matter where you come from, every person that works in YPF is proud to work with us. Macro of Argentina. Why that? Look at that. In the left, you see the share price of the company. I don't care what happened before. I don't care to see history. I'm working for the future. But it was 20 years in a row that our share price was down. Why? Because it was not focused only in profitability. They were focusing subsidies that I don't care, but they care to work in profitability. From the day of journalist in Argentina on TV, say that President Milei decided me to be in YPF up to December, our share price goes from $10 to $47. That is more than 4x the value of the share price in 14 months. Now you know that we are in a nightmare and I now want to discuss what happened there. I have no idea. If somebody is [indiscernible] you can help me. But nobody knows what happened there. But why we improve a lot? Because Argentina is -- there is a big change in the economy, in the way of working, in the government, in where, how they see the life in the future. And that is -- you have to say that, that is success of the President Milei. And you can see the inflation was impossible. When I was 27 years old, it was hyperinflation in Argentina and in 1 month, I make $25, okay? And we were in that path to have that. And after an excellent program, look at that, how they reduce the inflation. The same with control risk. Why I put that? Because in life, you have to be honest. The share price is not only the passion that we put in YPF, also it's the country. But why I put that? Because half of the price in the peer, if you put the incremental of YPF, our peers increased half. So I would say that half of the incremental of the price is because President Milei. And the other half of the price is because of us. So it's a big difference in management, okay? And also if the country has no future, it doesn't matter who is the President. It doesn't matter who works in YPF, it doesn't matter. You have no future. That's why I put that. That is very important for YPF that we have a President and a government that looks for future for free market and to be a normal country. The -- if you see the contribution of our industry, you can -- first, you can see that we are going to be in Argentina. We are going to be more than 3 million barrels of equivalent in the program, 4x4 plus all the industry. And that is in the left-hand side. If you go to the right-hand side, you will see there what is our forecast of the export of the energy because of the program of YPF plus the others. The program of YPF is a key for the development of the industry in Argentina. Why? Because we have 50% in I would say, range of the asset of Vaca Muerta. So we have the scale, and we are working with the industry, not in contrast of the industry. And that is very important and people realize. At the beginning, they were doubting. Why? Because in Argentina, the last 20 years with no incremental in the economy, and I was working, I have 36 years of experience, there was a zero sum. You have to take out the money of the other to put in your side. So in the industry, we were not accustomed to work with. We were accustomed to work in contrast of the other. So at the beginning, they were doubting because when you are 20 years working in that way, it's very difficult to see a crazy guy coming to YPF and say we had to work with, okay? And that is important. Our forecast is that Argentina, and I will continue to declare all of my life that the goal of YPF is that one of the goal in long-term YPF is that Argentina exports $30 billion. But the figure that we have is $40 billion. Why $40 billion? Because this year, the contribution of the industry to the export, it will be $10 billion. And all the program that we have that is above that is $30 billion. That's why it's $40 billion to explain in a very easy way. And of that, YPF will have $10 billion of export. We will be the #1 in Argentina. And after all this explanation, you will realize why it's $10 billion. Vaca Muerta. The pop is from Argentina. I don't know why. And Vaca Muerta is in Argentina also. Why I say that? Because Vaca Muerta is better than any shell of United. What I show here is nothing done by YPF, was done by Rystad. Rystad is a well-known strategic company for energy and make that number. I put that number from them, okay? If you see the estimate ultimate recovery for people that are not from the industry means all the production that you get from Eagle is an average. And look at their Permian Delaware, I repeat, I didn't make that number. Vaca Muerta is almost twice better in oil than any United States. Why is that important? Because even we are focused in the efficiency and focus in that it's very difficult to be better than United States for the scale. But we have the rock. And so the pop talk with [indiscernible] and say, make Vaca Muerta better. That's why we have a pop from Argentina. And now look at there. We have -- they are better. For LNG, also, I always say in my career, the only place because I study a lot that the Haynesville and there is a very small part of Haynesville that is better because I want to be fair with you. There is only a small part of Haynesville that better than Vaca Muerta. But as an average, Vaca Muerta is better than Haynesville and it's better than anyone else. Also, if you put Marcellus, it's better. So we are competitive with that. And I will take after in the LNG. The last -- in this -- I would say, in the left bottom side of the chart, you see one that is bubbles, okay? That was done by Rystad. What is there? In the Y, you have the production by foot of the shell and in the X is the breakeven price. If you see there, what they are saying, Rystad, that Vaca Muerta breakeven price is $24. What is that $24 means? It's a marginal calculation. That means development costs plus lifting costs only. They have no facilities, they not have other numbers. That's why I will say that we are resilient to $45. The difference between $24 and $45 is altogether, okay? But look at there means that Vaca Muerta is better than anyone else in the United States. The same -- and they are in the other -- I think we need space. That's why we put that. It was more necessary. But we need a space that to be, I would say, lean, say pretty, nice, pretty. And so it's the same that in the above at the left, okay? There, you see the production. That's why it's better Vaca Muerta than Delaware because they have a little more production initially, but after there is more production in any time, okay? That is -- at the end, that is why Vaca Muerta is better. Here is first number that we never say in the past. In the map, you will see in blue where we are. YPF is everywhere, they have the best, I would say, portfolio anyone that is in Vaca Muerta. And you see blue there, you see the percentage that we are, our scale in Vaca Muerta. And in the other, you can see our learning curve. Development cost in 2015 was 20. Last year, it was 11, okay? The same with lifting cost. So the learning curve in Vaca Muerta is wonderful. Not because Argentina more is smarter than the United States because we learn from the United States. I came several times here to learn because when you have more scale, you are better. You make in 1 year more than us in 1 year. So I came several times to the United States to learn from you. And so we learn from you and because shale are the same in the different places, we make a very quick and fast learning curve. Thanks from United States, not because we were smart only, okay, not for that. And if you see in the bottom, you will see the gross well inventory of YPF. That's why our hashtag is Energia Argentina, Argentine Energy. Why? Because we have 15,000 wells. That was -- I tell you, it's not because we want to be serious with you. That was audited by the [indiscernible]. That number was auditing before coming here, okay? You will see there that 15,000 wells is a huge investment, multiplied by 15-plus is huge investment. So many billions that are there, more than 100 billion -- I don't know, 150 billion. I don't have the cellular to make the calculation. But it's so high that's why we are concentrating only in Argentina. We don't need more space. We are enough more -- so we are concentrated there. And our own -- if you say for our net shares, we have almost 9,000 wells that are from YPF. That make YPF what you will see after, strong company in the oil and gas, much stronger than no one else could think. That is the end of Vaca Muerta. Now I'm going to YPF 4x4 very quickly. Now going to explain 4x4 only to say the way to reach the development of Vaca Muerta, there are -- for YPF, we have 4 pillars. focusing the most -- our most profitable business, oil Vaca Muerta, active portfolio management, selling mature fields, selling other companies that don't make value, but that doesn't mean that active portfolio management means selling, means selling and buying, okay? There also, we can -- we have to sell Metrogas. We have to sell by law. But also we can buy in the future better portfolio from Vaca Muerta or other company that we think -- that we can prove that it is better for the shareholders and selling others, okay? That means active portfolio management because if not, the name will be selling portfolio management. The Pillar 3 is maximize upstream and downstream efficiency. That is the more I love to do that. It's a very, very demanding and is difficult to explain when you reach better and better and better results. That is why human beings evolve to a better society. It's because always you work in efficiency. That is -- I will show the different things. And the last pillar is Argentina LNG project that is a change for everybody there in Argentina. What we did so far? We are #1 in shale oil producer. And last year, we were not the #1 exporting in Argentina when YPF was not normal a company that export. Also, we signed VMOS. what is VMOS means Vaca Muerta Oil Pipeline South that is a connection between Vaca Muerta with the Atlantic in Rio Negro. This is the most -- I would say, the more the [Foreign Language] the biggest investment in infrastructure in Argentina so far and was done by YPF, [ Vista ], Pan American, Pampa Energia, [ Plupetrol ], Shell and Chevron. We are together. The leading is YPF. We are -- now we are working in building that. We are now in the site. We have the President of VMOS that is the guy that comes with me, that is an expert in infrastructure. And after finishing because we -- as I said at the beginning, we are in YPF, not for power. We are in YPF for making things happen. When we finish that YPF is retiring, yes, from the position because we don't care the power. What we care is that the things happens and done, okay? The second, we are exiting mature field. I'll show after. And also, we are out now from Brazil that we have a -- lubricant company that we are wasting time. We are making little money. But it was good for people to travel for that, it was important. But it was not important for value. And so we exit there, we exit in Chile, and we're exiting any company that we make very little money or no money at all. Number three is maximize the efficiency. We have real-time intelligence center in upstream, I show after and in downstream also. And also Toyota well, what is -- we are working with Toyota, and we have very good results so far. What is Toyota well means, is making it well as a Corolla car, okay? So we take all the efficiency of the car industry and we make that efficiency the way of working in the construction of a well. That is disruptive. I think that nobody in the world is doing that. And after I explained a little bit. Also in 1 year, we made 400 million savings and efficiency in the downstream so far. That is an amazing number. In the LNG, in '23, they were more -- it was more -- you see in TV that Argentina is important -- Vaca Muerta, but it was signed, It was nothing. It was talking, but nobody could make nothing. Now we have 3 projects. One is a Tolling System, another is with Shell. And in a very few, I would say, days or weeks, I would say, you will see another strategic partner, but International Majors in LNG 3. That is a big progress. And I'm very proud of pushing that. I'm very proud -- we are very proud with all the team that we are working that we are making reality something that 1 year ago was [Foreign Language] talking. Now I go one by one very quickly. In the first, this is only to you to know the evacuation, so you were like, I would say, [indiscernible] quiet that we can make go. I'm going to show at the end. And here, I will concentrate in YPF. This is the evacuation system that will be in Neuquen for Vaca Muerta. And in YPF, what we know that after finishing VMOS, the capacity of evacuation of the Vaca Muerta in Argentina will be 1.5 million barrels a day. So bottleneck is south. The only thing that now is bottleneck is capital. You need capital for you. And the only thing is results of Vaca Muerta. There is no more saying that I can know though because in Argentina, there is no evacuation. This is over the evacuation. So now it's reality. How we see and how we prepare YPF for the future with all those. We have 3 refineries in Argentina. Luján de Cuyo, what is -- I don't have lesser point, so I have to tell. But it's in the north. You will see the YPF oil pipeline, Luján de Cuyo. There, we are 15,000 barrels a day of capacity. So where we take there, we take from all the producers that are in the north or in Mendoza plus some production of us, okay? So there, we have -- that we have 115,000 barrels that [indiscernible] there. Transandean that is in black with Chile is an oil pipe that existing pipe. And that's why this year, we were the first exporter of Argentina. We are going to export there 41 is exactly the number, 41,000 per day forever, okay? So we have there that capacity. Plaza Huincul is a barrel full refinery that is 25,000 barrels, and we can take from production of us or buying there. And the important is the others. Oldelval that this finished [indiscernible] today, we will use that from now for internal consumption and for La Plata. Why? Because our position, if you see there Oldelval, not to say YPF oil pipeline, we can go buy oil pipe from Vaca Muerta to La Plata refinery, where I was born. I am from La Plata. I am from Hinacia. There are a lot of people. So that's why I'm YPF to have something good because in Hinacia was never championing the life, okay? This pipeline take almost our capacity is 190. And you say what's happening with the other capacity? We have to take the Panamax, Aframax, Puerto Rosales, [indiscernible]. We have to buy heavy crude oil from the South or import, okay? So that is a part. And what is VMOS for us? VMOS is our dedicated export pipeline. And from there, why is there? Because look at the other say VLCC or the 2 million barrel capacity of peso and you save $2 to $3 or more no sale, we are making $2 to $3 more of profitability to go there than to [indiscernible] okay? So that is the way that we are going to evacuate, okay? And you know that everybody is familiar with them. Here, I'm not going to go out and say, what happened today? Okay. You know that we have 30% of equity and 70% of project finance. We are going to sign in the next week or next week or so, the project finance, and we are working even in that situation and the banks, the big banks say that there is no problem. Why? This is a long term and make some values. I would like to you to make some values to realize that it is not logical not to have project finance. It's 70% of 3 billion, okay? So we are in 2.1 billion. How much can export diesel pipe, 20 billion per year. So it's nothing, okay? It seems that it's a lot of investment, but in the context, it's nothing. I repeat, nothing. That's why the risk is 0 because there are a lot of production that come from there. What is our plan in Vaca Muerta? There, they will start the new figures that you never saw, okay? So now you always look at, we say Core-Hub, Core-Hub are the areas that we are developing right now like Loma Campana, the traditional ones, La Amarga Chica, Bandurria Sur and so forth. There are 2 more hubs. One is the North hub and the other the South hub. The South hub, we just signed with the province of [indiscernible] 4 new and we have thousand of wells there. And so what is our program? First is to have the agreement with partners in the different areas. And the south is our, I would say, swing to have the incremental that I show you. So we have agreement with partners and after the extra investment that we can dedicate to Vaca Muerta goes there. So we have a good portfolio and was doing in purpose to have a logical and possible and sure program. That is why we have those there. What is our goal? You have there and you have the production. We make this well by well. It's not doing like this, okay? This program was doing by a lot of engineering geologist, all of that and working one by one, develop, see the efficiency that we can make altogether. And we are going to reach in the order -- the number is as an average in 2030, 470. I would say 0.5 million to make around, okay? But the real number is that one. In my talk because I'm an old man, I remember very easy figures. And so from now on, I will say 0.5 million, okay, but it is that number. Look at the number of wells that we have to invest is 6,400 as a gross and on as a net is almost 400 -- 4,000 sorry, 4,000 wells, okay, that we have to drill to reach that number. There you have when I go in the below section of the chart, you can see there the numbers -- the wells that we are going to drill. Look at that number. That's why we are so proud of what we are doing. You are going to drill almost 2,000 wells up to the 2030 to reach that number and to make the incremental. In that part -- because after you will see all are the same. The way to show is the gross and there you have the percentage of the net. So you can make the figures if you have to make figures, okay? The next one is the rigs that we are going to operate. And when they say percentage, in general, rig that you have to say I have half is very difficult because if not, it's not working. But we can make that to have an idea of you and make good figures of the productivity because in general, when we present to investors, we are presenting net. And if you make net, gross is a miss, is a nightmare. So you can make your numbers. But in oil, we are going to have as an operationship 18, okay? As a total 20. This is a very important number. And there, you have the flag sheet, okay? Portfolio too, we are going -- that is what is important for you. It's important for us that make the difference in YPF, YPF was losing money here, okay? And also was wasting money. Why? Because our listing goal was so high that was not logical for our company to do. So we work a lot to selling and to form a new ecosystem in Argentina for small companies to make money in those fields that YPF cannot focus and not make efficiencies. I can tell you that now we are out, I will say, for me, what we call, [indiscernible], that is a real way. I explained the colors. In green means that we are totally out and is operating the other company. In blue, final stage that we are days of signing with a new company and going out. And in progress means that we have agreements, but we need a little more time, and I will go there. Mendoza, we are out of -- the province is out of everything. He approved all that. The only thing that we are in the last days of what we call closing with the company. We have everything done. But after all of that, you have to make the new pricing because they change the day and all that stuff. But we are almost out. In [indiscernible], it was signed in North and South was approved during the last week for the government. And we are in the closing is almost, I would say, weeks -- in weeks, we are out of there. And when you say block [indiscernible] we start talking with the provinces that is one was not in the [indiscernible] and because the liabilities are bigger than the assets. We have to do -- I explained here and after it's very important for Santa Cruz and [indiscernible] we are doing what the law says. We are going to abandon the wells that are in the situation abandon because it's the responsibility of YPF by law. And we have to do the things right, not the things wrong, okay? So that will be a change in Argentina, and we are going to put the way of doing as is all around the world. And there, we start negotiating -- start -- not negotiation but start talking and people and here our Vice President of M&A, is it responsible to go quickly out of there, okay? In Rio Negro, there is only one block, but we are in the finishing also, but it was more because it was a delay more because the company that won the bidding after he was not going. I don't know what happened there, and we have to make a second bidding process, and now we are finishing. But the other block, we are out. In Chubut, I would say that we are out. The only thing that we have is that we are finishing -- there the other Vice President is finishing is with the province we are reverting one area that is not producing. We don't have people working. We have nothing there. So there is no losing during the days, and we are in almost finishing. And also, we say Chubut, nonoperated are 3 blocks that was selling by the former company was 4 that is Tecpetrol that is [indiscernible] and we are selling and we have the proposal in that selling at the same company, and we are in the finishing process. In Santa Cruz, last week, April 2, we signed an MOU, and we are in very good shape to revert all the blocks to the province of Santa Cruz. And we are making the same idea of the other. We are going to do what we have to do is to abandon wells and some -- abandon wells and put the areas possible to be continued for other companies. So we think in 1 month or so, we are going to sign the final agreement, revert to the province. We continue operating during 6 months up to the province decide or who will be the operator by bidding or why -- I don't know because I have there like 45 minutes. And I will pass 1 hour, I tell you what I think is important because I see that you are not boring. Nobody is looking, I tell you. Nobody is saying or trying to go to [indiscernible]. So don't have you say [indiscernible] because I know how to work. The second, now the exit program, look at the important thing that happens. The mature fields, our lifting cost before in '24 with a lot of work was an average of $16 and the mature field with $28. Our goal is to go out for mature fields and be a company of $5, okay? And the CapEx in the bottom side, look at there how we increase in the Vaca Muerta, how we increase the investment in Vaca Muerta. In 1 year, that is a huge -- big change, okay? Because that figure doesn't show what is doing life, okay? That change was huge. We increased a lot of production with less investment and putting where in Vaca Muerta instead in the others, okay? And in 2030, it's all Vaca Muerta because 88% is upstream Vaca Muerta Shell and the other is more refinery, downstream, different part. So we are going to be a poor shell company with refinery. What does it mean that I gave to you, to the investor more than, I would say, 13 -- in the order of 13 that was last year to take the figure that was last year. I now promise that it will be exactly the same the next year. But I will say a company that make the value for a future company plus $13 in the refinery for 300,000 barrels a day. And the other 200, it will be export, okay? Number 3. [Presentation]

Okay. This is our new real intelligence center for Vaca Muerta. That's a big change, and we are proud of what we did. It's the only one company in Argentina make that. And I will say very few companies in the world, they are working on that. I know that it's only super major one, I now tell the name just in case. And all the super major, the others are working the same way. What is the big change on that? It's not that you're seeing computer numbers. When you see computer numbers and you look back, they was working for what happened yesterday. That is monitor center. And that's what the industry was working always. The big change on that is not the computer are good or not. The big change is that we are measured 3 million, 5 million data per day per well. And we are looking physics as we make every day in our life. We are using artificial intelligence, 2 kind of artificial intelligence. One for making mathematics and the other as a partner that we are working now to read the database. Read the database means that there is artificial intelligence as a person that tell you in that well you have a problem and be careful because in the wells that are surrounded there you have the same problem in the same depth and you make that. Don't do that the other because when you make that, you lose money. This is the change that we are making real-time decision. That is the big change. No other place with the monitor that are good and are very nice. It is the way of working. Now I explain you also in real time intelligence center, well also Toyota well, and we are making the best 40% of the time. Nobody understands that in general, if you are not involved on that, play very quickly in -- with the Formula 1. Let's say that in Sector 1, the [indiscernible] in sector 2 is Hamilton and Sector 3 is [indiscernible] because I love [indiscernible] from Argentina. And so what we made there, let's say that are the best. We are making in the 40% that we make a rank of the 40 best results and is [indiscernible] Hamilton and is [indiscernible]. That makes that it's not real. because there is no driver and choose the driver in the best situation, Sector 1, sector 2 and sector 3. We are making a person that doesn't exist. That is the best of all. That's what we are doing there with math. We are pushing to improve the productivity as much as we can. And that is what we are making in the real-time intelligence center. Toyota well is to reduce the lead time and to have a contract with the provider -- suppliers and making those contract with YPF and long term, the same as Toyota is making in the car industry. And look at the results. In 1 year, we reduced the cycle of the wells from we start and what we put in production for 312 to 215, 100 days. That is more money for you and for us, okay? And that is productivity. And our commitment -- or commitment Margarita tell me that I have not to say to investors because commitment is very difficult. So I raise commitment and I say, my forecast is that we can go to 170 in the 5-year period. Drilling speed, look at the change when you all have focus. We increased a lot for 272. Here, I explain the numbers because it's amazing for you, its numbers. But that is working every day, a lot of people from 272 to 360 for this year, and we think that we are going to go to 440 at the end of the period. Frac speed the same. So the efficiency that we are facing in the Toyota well plus real time is we had to make $1 billion of efficiency and more money for the company in that period of 5 years. So we -- our goal is to make $200 million of saving and making more money, reducing costs, reducing CapEx per year. And that is what we are working and we are saying every time that we work to the real time to the people that are working there. For downstream, we made this year, we made $400 million, as I say, but $400 million, there are some savings that are not recurring and $260 million that are recurring, okay? And our goal is to make $800 million in the period. The reduction -- the incremental margin that we are in our program is $6 per barrel. That is huge. If you -- the people that know downstream they know that this is an amazing way. And it's not an amazing way that is telling. Why? Because when we measure productivity and with Solomon, we make our benchmark, I think it's in another play, but it doesn't matter. I say it today, I would now that we are in the fourth quartile. That means that refinery of La Plata is -- and I was there. Imagine we are in the lower quartile of the world of efficiency. Our goal is to be in the first quartile of the world, and we are making that. I'm sure that we are going to do that. Last week, I went to the refinery and the people have the power, the passion, the goal to reach. And when you realize that people like this, you are going to reach the objective. We are going -- we have 5 -- in this year, we will have 5 new real-time intelligence center. Last week, we make inauguration -- a farewell inauguration. Inauguration of the first one. And in June, we are going to do something that we are proud of that is amazing. [indiscernible] '22 because it's the birth of my daughter. So the guys, they are sound like the bottleneck [Foreign Language] and they put that because my daughter was born in '22, okay? And the idea is to have there a real-time intelligence center that we are measured minute by minute all the [Foreign Language] pump station. Every pump that you have in the station, we are going to see the demand minute by minute, and we can make micro pricing and also efficiencies that nobody realized now what we can do. So we can see from all around the country from [indiscernible] in the north to [indiscernible] in the South, the real demand minute by minute. We can make improvement in night and improvement during the day, reducing cost and make the consumer also -- there is one idea that is easy to see. Let's say that, that is ideas that we are going to say. Let's say in night there is one pump -- gas station that lose money. And so we can reduce the people because you are losing money and you can reduce the gas price, the gasoline price and make more money for the consumer and also for YPF. So we are proud of what we are doing there. Argentina LNG, we have very good progress. We have 3. One, Argentina is a tolling system. In the newspaper, you got -- the people that are familiar, they know what I'm talking about. And we are in the finishing time of signature during this month. This will be -- if that happen, will be the first one and we will start exporting in '27. There will be 2 ships and 6 million tons. The second one is Argentina LNG 2 that our strategic partner is Shell. There are 3 super majors as they say a potential offtaker. There are -- I would say, there are 3 super majors offtakers and the project -- those are project finance driven. There is no other way to do, okay, also around the world. It's not possible. There is no company that can do energy without project finance. And we think that, that is a very good consortium, very good offtaker, and we are going to do that. That idea is we are in the process of FID, F-I-D, I would say that could be end of next year. And so the vessel could arrive in the '30s, I would say in the '30, at the beginning of '30s. And Argentina LNG 3, I cannot tell a lot, but you can have, I would say, good news in the near future. But there is the other -- sorry, we shall [indiscernible] 10 million tons, the other 12 million tons. There are also 3 super major potential offtakers and they will be in a very short term, you will see in the news that there is a super major Shell that it will be in that project. So I'm very -- is happy and we are very proud, all the people that are working in YPF, Santiago, German, Federico that we are working and we are making reality a big change for Argentina and for YPF. And if you see because of the investment, we were very focused that the first one is Argentina and the other 2 because of our big investment are more international company with YPF. And they will be small stakes for Argentine companies because if not, there is no way to finance and to develop the gas in Argentina. The -- here, you will see the development of these 3. Assuming that these 3 is developed, you will see that the production of YPF, it will be 65 million cubic meters. And we need -- look at our share there, it will be between 25 and 30 more than that. We think that is the way that YPF can face. They cannot face to have 100 real. So we prefer to develop all the projects of Argentina LNG. I repeat project finance driven. But with international companies with the stake that is logical in the order of 25, 30, you can make that development and make also more money for YPF. Here is the same. I will not repeat because if not, I will pass a lot of time, you will see it's the same as the oil, okay, the number of rigs, the number of frac seat. You will see here that -- I explained only that because I was working and maybe you know -- when you see something like this, it's difficult to understand. Look at it goes up, it goes down, the number of rigs. That's why because there are 3 projects that are in different stages in years. So you have to -- at the beginning, you have to invest a lot to have the -- to reach the peak. And after to maintain the peak, you need always lower number of rigs. So that's why you see ups and downs. And after you are maintaining, okay? Now I'm going to the 2025 guidance. For CapEx for this year, we think that we are going to be between $5 billion to -- in the order of $5 billion, and it will be 66% of shale because we have also investment in other part of the company. We need -- we are going to be in 165,000 as an average of the year. We think that in December -- our production in December will be 190,000, is an amazing increment in 2 years. When I get -- I was in YPF the first phase the production of Vaca Muerta was in the order of [indiscernible] or less than 90,000 barrels a day per day, and we are delivering in 2 years 190,000. So we are very proud of the result that we are getting. And here, you have the EBITDA with the different, you will see different prices, okay? $60, $80, okay? For you to make your numbers and look at there is $60 as an average is impossible unless looks very down. But look there that instead of 5,000, you will be in 4,000 less -- in the order of 500 million less and also in the other side. There, you have a number for you to have your figures. In the net leverage ratio, our guidance is that we are going to be 1.5x, 1.6x here. I would like to be very clear all of you that in the first semester in the first 2 quarters because of the out of mature fields, we have to pay one shot cost and those kind of things that we are going to face, we can -- I think we are going to reach 2x, okay, or 2.1x. And after we take out all that, the EBITDA, it will be incremental. There is no more reason to have that cost, and there will be no way to do that. And so we are going to reduce that net leverage a lot as you see there. But when you will see in the next quarter's results, remember that we tell you that there will be like a stress in our -- in the company of that results because of what I'll tell you. This is -- this slide has a lot of data, a lot of data. So we are going -- we want to be clear with you, so you can see that you out. But I would like to point out that our policy of the guy that works in finance, it was extremely good. And at the beginning of the year, we have a big maturity upside of the debt. So during the beginning of the year, we take EUR 1.1 billion of debt. And what we did, if we change the profile and we reduce the necessity of this year, as you see there. And if you see the profile of our debt that is in gray, you will see Argentina debt. So for Argentina debt, you will see that for the next 2 years, we don't have -- this year and next one that we don't have maturity debt outside of Argentina. Argentina is a country that now is normalizing by the new government, but we know how to deal with crisis and the thing that happened there. And we know that there is no problem for YPF for that debt because we can roll over very quickly. And remember that Argentina is -- YPF is the company of Argentina. There are also -- I say several times that the LNG is a financially driven project, okay? And so you have to know that. We are going to invest there if there is project finance. I repeat, we are going to make Argentina LNG happen if there is project finance. The first stage of the LNG is tolling free. We don't need investment outside actually. So there it's easy to make as the first one. That's why we are doing that, okay? 5-year outlook. Here, that is very important. Look at what YPF will be in the '30s. What we have to do there is oil growth, gas growth is like operation. YPF in 2030 with this program will be a company of 2 million barrels a day of a equivalent. So we will be a very, very big company as YPF deserve for the assets that they have. So we will be an excellent company with a lot of activity, and we are working to be there. Why? That's why Toyota well, that's why we work in real-time intelligence center because we are going to be the more efficient company that you can imagine. If you go to net there, YPF will be a company of 1 million barrels a day of equivalent. So we are going to have [ 475 ]. So there is the [indiscernible] -- I don't know who was the mistake, but I don't want to be honest with you. The 475 and the other, there is 470. The other [indiscernible], sorry, it was my mistake, was my mistake. There is very little conventionals, okay? Very little conventionals. The gas production, we are going to be a company of 70 million cubic meter per day. And so we are going to be 1 million. That is an amazing company. We are going to reach that. It's the first time in Argentina. Remember, the maximum production of Argentina was 850, okay? We are going to be a company of 1 million. I'm very proud to present that and all people of YPF are proud to be a company of 1 million barrels a day. And so we are going to -- I don't know how to say in English. The only thing I would say in Spanish [Foreign Language]. I don't know how to say in English. We are going to work very hard to obtain that number, okay? People don't like bad words when the bad words are good words, okay? Bad words could be bad words or good words. [Foreign Language] is a good word, but don't like -- people in English doesn't like. I don't know why. Okay. The other CapEx, you will see there, you have the CapEx that we will reach with LNG in a peak in '29 of almost $7 billion, okay? That is also are big numbers, and we are helping to have a lot of activities, scale reduction cost. Look at the lifting costs. Our lifting costs, we are going to be a company of $5 per barrel. That is an excellent company. I don't know where you can have that. It's an amazing company. And at the low is the downstream, if you want to know that we are going to have in the order of 19 barrels a day -- sorry, $19 per barrel of operating cost. As an operation, look at the drilling, we are going to have more than 30 rigs of production and our intelligence center that now has half a floor. In 2 years, there will be a floor, not half a floor. We are going to increment because we have 3 person every 4 rigs working there. And we think that is the logical number because we have 1 geologist, 1 operation guy and 1 engineer guy for 4 weeks. That is a very efficient way of working, and we are going to do that one. The other is the number of frac sets that in general is relative to the drilling rigs. That's why people talk about drilling rigs in general. The YPF EBITDA and CapEx. There you can see in blue, EBITDA; in green, you can see the CapEx. We are -- all YPF employees have the push to put this company to make $11 billion of EBITDA in 2029. And this is only oil. Why oil? Because after that, you will see a sensitivity, okay? And from the [ 37 ] as an average, more years will be a company of $11 billion. If you see there, we will have free cash flow, I would say, secure free cash flow from '27 because in the range of investment to have $500 million, I would say, I prefer because I'm a guy that comes from the operation that is neutral, even though the numbers are very positive. But from there, it's '27. If you wait, you will see when we are going to make dividends, okay? Because there, you are looking at, okay, you say, okay, '27, but I will change a little bit. This is for you to have the sensitivity. I know that this is a mess, but it's difficult in 5 minutes to look at all the sensitivities and look at the numbers. If you are in 50s, our EBITDA is more than reasonable, okay? Why? Because I explained all during the morning because we make a company of $5 a barrel of lifting cost. And we are resilient of all that number. So there, for you to analyze at home, the analyst to see there, and you will see our resilient when I say that we are resilient to $45 a barrel, that is what we are resilient to develop all Vaca Muerta, including infrastructure, plants, everything, okay, everything. So we make a good company, a very resilient company, a very competitive company all around the world. If YPF suffer, the world suffer, okay? It's not because we were not efficient. We put the company where you have to put. The LNG is for you to have LNG. This is a little -- not tricky because remember, the way of working -- because LNG, we have there, look at there. There are 5 fundamentals in LNG. One is the law [indiscernible] for large investment. What is an excellent, that's why I say always. Without [indiscernible], there is no LNG. Always I say that, all right? Now we have [indiscernible]. We have [indiscernible] that is very important for stability, for the investment, for everything, okay? Because there is also incentives for income taxes. There is stability for the law. There is no -- if someone says you are worried about [indiscernible] that I have no idea how to say in English. FX control. Okay. The [indiscernible] itself, okay? We have also the super major partner, what is very important, and we have first class of takers. We have more than -- you cannot imagine that I think we made an excellent job in YPF. [indiscernible] going to different parts of the world, Europe and Asia, open markets. We have much more possibilities that we can sell much more. We work as a finance guys. When you add the bonds, you have a book and the book made 4x, okay? We make than 4x, okay? So we are in a very good position to sell and to sell in good way. Also, you saw during all the presentation, the Vaca Muerta acreage quality, competitiveness and [Foreign Language] that is very important. And the only thing, and I explained several times that what is important is that is project finance driver. 70% of there assume that this project finance, okay? With that all in mind and also we put a number that is very low, what is $7.5 per million BTU as FOB price. That is a very low price. It's not that we are optimistic. For this kind of project, you had to be more in the side of pessimistic. Why? Because if not, you are making no good decisions. With all that in mind, this is the numbers that we have. Because of the state that we have, we are going to have a free cash flow of $1 billion and also EBITDA of $1 billion. Why we put that? Because EBITDA, we cannot put the company that is for LNG because our SPV, okay? And so there, you have to make the numbers what is for that. And I explained that because that is everything of the company. So from there, I can explain that if the prices are in the long term, as I said, if we develop the LNG that I'm sure that we are going to do, if we have all the results that I explained, this company will start to pay dividends from '28 forward, okay? Because it's not logical to pay dividend and [indiscernible] debt, okay? That is not good for your investors, okay? So from '29, if that happens, that is our idea. And I don't have now the program that how will be the dividend. That will be the next year after seeing the results. But that is the result that we have for all the programs that we make. And final remarks, and I finish, I passed 4 minutes, so it's not so much, okay? It's not so much. YPF, it will be top 10 shell player worldwide. We are going to be integrated unconventional company with volumes, efficiency, with everything as a play. We are going to be world-class in downstream. We are -- I will say that I cannot say why we say that. I commit everybody has the commitment to make this company in downstream as a world class. It was not right now, but we are working so hard, and we're so focused that, that result will be done. When I go to the refineries, the people that were there are totally committed that this result will be done. They are extremely happy that people now work for profitability, for technology, and they are totally motivated. I'm totally sure that we are going to reach that result. We are going to be the #1 exporter of Argentina. And also, we'll be a free cash flow generator that is amazing because we are developed one, I would say, from the rock perspective, the best shell in the world. So that is our project. And also, we are thinking in new energy for the 2030 when I'm not going to be in YPF because my cycle is hydrocarbon guy. And I have to work a lot, and we have a lot of ideas for YPF 2030, and I think you will have excellent news also in the coming months. But I'm going -- my cycle in life is up to 2031. After 2031. I'm not going to work anymore. I'm not going to talk about energy anymore. I would say my cycle, you have to go out when you know that you are old, okay? And at that moment is the finish of my work life, okay? Now I will pass to Spanish to make some signs, okay? Because [indiscernible] is impossible to say in English. [Foreign Language].

So with this, we conclude the presentation. Thank you, Horacio, and we begin with the Q&A session. Thank you for waiting. [Operator Instructions] So here, we have from your left to your right, first, our CFO, Mr. Federico Barroetave; then we have our VP of Strategy, New Businesses and Controlling, Mr. Max Westen; then our VP of Midstream and Downstream, Mr. Mauricio Martin; then we have our VP of LNG and Integrated Gas, Mr. Santiago Tanoira; and then our General Counsel, Mr. [indiscernible]; and our VP of Upstream, he is the most challenging guy because he's going to receive a lot of questions about Upstream, but also we have Horacio; [indiscernible] Matthias Farina, our VP of Upstream; and then we have our public affair VP, Lisandro Delionarvis. Now Horacio, we can start with the Q&A. Please, those who have questions, please raise your hand.

Horacio, first and foremost, I want to praise you for the display of passionate English today. I think it came across as very natural, and we understood everything you said. And you can say or you can tell by your words in your presentation what the great outlook of this company. The question for you is, obviously, you have a great, promising outlook for the company with a huge amount of growth in which you will attain the opportunity that Vaca Muerta brings to Argentina, but also combining that with applying best practices from management, innovation, efficiency and technology. The question for you is, what are the challenges that you are facing on this very promising future? What are the, I would say, bottlenecks, growing pains that you're going to be facing in the next 5 years that you are already thinking and probably you're losing your sleep thinking about them?

The -- what I think is the major bottleneck is work with the industry because all the bottleneck is structure and something that I not tell here as, for example, the Institute of Vaca Muerta with this education for workers, I don't want to work in an industry that you can have accident because people don't know the risk that they are taking. That is the more difficult thing because Argentina was not accustomed to work together as the industry. And sometimes the delays, a lot in my point of view, the decisions, a lot of decision on that. Apart for that, the drilling wells, complete wells, we know a lot. We have the best technician that you can imagine. We have the -- I would say, they're willing to do. People are totally focused. So from the point of view of the operation and the YPF, really, I don't have any doubt. From the point of view of Argentina, also, I don't have any doubt. So the question is that you can -- the finance, I have no idea if you're going to give us money or not. I don't have -- I cannot tell you give me, you have to give me. And so there, it could be one thing. But I'm sure that we are going to deliver the results. We are going to deliver to you technology, results, technology, excellent way of working, profitability. You will see a company that you cannot imagine. I would like that here in United States, they will say, and that is my personal [indiscernible] that they say YPF is as good as ExxonMobil. They don't have the asset of that, but it's as good as them. So I see that, okay? It could be not finance because of the country, finance because you have -- always you have the people that invest and it's logical. You have to decide between different companies. And that's why I think we have to be so, so, so efficient that you can never, never doubt giving money to us to the others. That is a competition that we have to face.

Thank you very much, Horacio, for the presentation. It's very clear transformation you're making. In the recent weeks, you have been talking a lot about the cost that Vaca Muerta has. In this presentation, you haven't touched on that. Probably the question for you is, how are you working to try to lower the cost of Vaca Muerta for the industry? And what is the upside for YPF if that were to happen?

Okay. Sorry, also I have 1 hour. I can be one day, but you're going to sleep, okay? Because it's difficult. Imagine that we are every day to work. Okay. First, I will say that for the cost, I will say capital cost, there. And if you see, I have -- I declare in media in Argentina. And also, first, I discussed with the companies and after I declare because if not, I think you don't have values, okay? When I analyze the cost of the CapEx of Vaca Muerta and I took the [indiscernible] I put in a plane, come to Texas. I go back, I put there, and I put the unit cost. Argentina has 35% more cost than United States. But it's not because of logistics. It's because of the unit cost that very few companies and very few tools that this today is not reflecting Argentina. Maybe it reflects Argentina 4 years ago, but not the Argentina of [indiscernible]. And so I'm discussing with that CEOs and we are making process to reduce. And I'm going to go like this, going down after that because we deserve -- and I think we have to -- not only deserve because it's logical, because of the scale, because of the country, because what we are doing is totally fair that our unit cost must be close to Midland and it's not. That is the first part that we are facing. And after we want to face all the things because it's not that we have a big cost because we have -- I have no idea. I'm not talking about -- I don't want to be specific on that, you have 2 more workers or not. That is not the difference. The difference today is the unit cost that we pay. And after, for sure, I will work, as I work in all my life with the unions to do things efficient that is a win situation for both parts, okay?

Bruno Amorim from Goldman Sachs. I'd like to follow up on the slide where you showed some sensitivity on the balance sheet for different oil price scenarios. If I'm not mistaken, you showed leverage at 2x at $60 oil. The first question is, is 2x still a comfortable level? And second, at what point would you consider changing your CapEx plans? You have projects which are pretty much resilient at much lower oil prices, of course. But I was just curious to hear your thoughts on the balance sheet in a lower oil price environment?

Okay. I love to be in YPF at 60 years old. Why? Because in my life, I have no other agenda and you -- after -- when you are 60 years old or more, you pass different crisis. In a crisis, you don't have to be panic. When you make panic, you make mistakes and that is something that you never have to do. There is always a crisis, you have opportunities, but not to be out of your questions is, I think it's no moment to see -- to change nothing. We know that we are resilient to [ 45 ]. What I can tell you and I can promise you that we are guys that understand everything on that. We are guys that we're very committed with YPF, and we are not going to do any crazy decision that will be against the company. If we have to change the capital expenditure we are going to do. If we don't need to do, I'm not going to do, even you're right, okay? But if I think that they have -- we have to do, we are going to do, but it's not the moment today.

Bruno Montanari, Morgan Stanley. Two questions on my end. One more detailed on shale and one on LNG. So on shale, you just started working more on the South Hub. So what gives you comfort that the results with the full development of the South Hub is going to be as prolific as in the core hub today. By 2030, it seems that the production levels are similar across both hubs so curious to hear your thoughts on that. And on LNG, what is the hurdle rate in terms of returns of IRRs that you require to FID the project. So I assume that, of course, on top of having the project finance, the company does require at least a minimum acceptable level of returns.

Okay. First in the South, we call South everybody of you know, Loma Campana what is the best price in Vaca Muerta is the price. The south of Loma Campana what we call hub south. And we have results and are very good. So we -- Vaca Muerta, remember, is a sea -- is a rock -- is a salt rock. The salt rock was sea, okay, 165 years ago. And so the change of composition in the sea, when you see that they go now to the sea and you see that it's huge. That was Vaca Muerta one day. So the change of property, it doesn't take so fast as it changed in conventional. That in math calls correlation length, but I'm not going to be boring with you in math. And that is very important, that's why Vaca Muerta is so good and the same as all the shells here in Permian. There can be changes in regionals but embedded far -- in very far distance. All of that are inside the good places. I'm not really very worried. And one thing that all investors have to do that it doesn't matter where you are. It's doesn't matter where you are. The productivity, what is the -- I would say productivity is the faster same ball was running. It depends of low normal. What does it mean that low normal, that is normal to have 1 or 100 or 1,000. If you make in any industry, in our industry, in any place, the best one with the worst space, they have a ratio of 4 or 5, in the order of 4 or 5. But I'm not worried at all on that in that part, okay? That's for the first part. The second, you asked me up for internal rate of return LNG. I'd like to be open in everything, but what I learned from the IRI guys that I cannot tell you that. And they don't want me to tell you that. But I can -- you will understand me, okay? The internal rate of return of our projects, the tolling process, you imagine that is the worst internal rate of return because there is another company that have to make value because there is no stupid people in the life, and the others are more economics, but you have to put more money. So one is risk comparing with profitability. The -- I tell you one thing. The internal rate of return of the tolling is a very good internal rate of return of the one world, okay, of United States. I would say, it will be better than general project in the United States. The others are a little more important. One thing that you have to take into account, that why you make LNG? No for the LNG. You are making LNG for the upstream, if you are an oil and gas company. So the force or the weight of the upstream is extremely high compared with the other. So even if you have the difference, that is huge in the part of LNG, it doesn't change the white, okay? So why we are doing LNG because we want to make money in the upstream, okay? It's like a plant, if you want. But for sure, I am not a guy that would like to lie, the internal rate of return of the LNG is less than the marginal of oil, what is logical because in the oil, you are selling in a spot way, you can do different things, okay? But I think that what we are doing is very good for all shareholders. That's why we are pushing.

This is Regis Cardoso with XP Investments. Two questions from my side. I'll continue from where you left off...

Ask me one question. So the guys that actually sitting here can...

Yes, please jump in. So the why invest in LNG, I think that's a very common topic of discussion with investors. And I just wanted to make sure I understood the message. I guess the -- the thing is YPF has such a big asset base that presumably you could invest more in oil and do more of those high returns as opposed to committing that capital to LNG. And from your earlier comment, I understood that well, but LNG is not a spot market, so it's more resilient. I wanted to get your perspective on that.

Okay. Why? If I -- there -- I wanted to show all the long term of YPF, but the IRI guys doesn't allow me, okay? Because there, you will understand more. When you -- if you don't have any idea of oil, when you develop oil, it is a plateau of in the order of 7 years. If you pass that, you are loosing money for shareholders, okay? If you make less, you are loosing money for shareholders because you invest more in infrastructure that you need, okay? So you are passing the maximum, the optimum and going down in profitability. I will answer that, that the oil is not forever. So what happened there? If I do that, I maintain in the name -- in the number that I put there. But you have as they said the AII, I think I said okay, that Vaca Muerta has 308 TCF. I always say 150. If you make 150 have some plenty of reserves that I'm making value. Why there? Because I don't have more oil and we have plenty of that to invest more than that up to 2029 or '30 after you maintain the plateau and after years, you start declining. So you have to think in the asset that you have, in the investment that you have. So the LNG is more pushing for the 2030 forward. No 2030 here, okay? So the 4x 4 program is exactly what we are doing. First is develop Vaca Muerta oil and after gas. Why? Because you don't have more assets and also YPF cannot be the only company that have the asset. We have plenty of assets, and we are developed for YPF and for investors, all the areas, okay? That's why it come after. It's not that I compete in. I don't like what people or the world do with energy in the last 5, 10 years that they say the energy transition, the oil is over. The oil is not over, the gas is not over. And also the solar and the wind is not over. It's with no without. And that is the same. It's with no without. It's first oil after gas. I don't know if I explain you a little bit about what I think. Okay.

It does, yes. Very much. So the second question and maybe an opportunity for the others to join as well. Can we get an update on the Vaca Muerta Sur oil pipeline? At what stage is it? When do we expect it to become operational, and what's the ramp up like?

Okay. [indiscernible], Mauricio Martin is going to answer.

Yes. About the Vaca Muerta Sur, we are working with the infrastructure people, which is another vice presidency, leading by Gustavo Gallino. And right now, we are deploying the first equipment. We are deploying the first teams in order to starting up the entire project, which is going to be available the second quarter -- the last quarter of 2026, and we hope that we are running at complete capacity during the first quarter of 2027. So in that sense, we have sooner starting up during 2026. For sure, it's going to debottleneck the entire system at that time.

We have virtual questions as well. Can we ask with that? We have Andres Cardona from Citibank. He's asking about the pillar number to regarding what else for sale beside Metrogas planned for YPF Luz? Do you consider any activity there and plan for Profertil?

YPF Luz, is a company that can grow lot with project finance itself, not asking to the YPF Group. And this is a company for next decade also because the energy electricity is going to increase a lot. So we are not going to sell YPF Luz at all. We would like also to have inside. We don't want to make an IPO if someone ask because I think in 2030 will be a very important company for YPF because at that moment after 2030, it's logical that maybe hydrocarbon is going down in our company. So that is the first part. Profertil is a company we make a lot of money, and it's not like it's the focus of YPF, but it's not also that we need to sell. If we need to sell because we need, we will do. We are not -- like I say, love somebody YPF is not my wife or my daughter. I can change one company or buy the other. But today, it's not in our program to sell Profertil. It's not in our thought. It's not necessary to do that.

Thank you, Horacio. We have one more virtual questions also related to pillar #2, but this one regarding expansion. Are you considering in your investment plan inorganic growth? Are you actively looking at the opportunities of Equinor and Total? That is the first one.

For Total, we didn't make any proposal. So you can have that. For when we say Equinor, the area they are selling we have our rights. We will see. We think we made money for the shareholder, we will take it. And also, if we realize that, that asset is better than someone that we have and is the quality better, we will take it and we sell the other. That is what we call active portfolio management. Active portfolio management means buying and selling. Not only selling or only buying, okay.

Perfect. Actually, that was the second question regarding all the acreage and drilling locations that YPF has, if we are considering partial M&A opportunities to speed up the development of assets.

The problem that we have is speed up everything that we have when we see that there are assets that are not fully developed, for sure, we are going to sell because that is better for YPF, better for the shareholder for sure. Better for the industry and better for the country. Now we are not like I don't think that we have to do. The question is that we are developing today, and we're going to develop all assets that we have.

Yes, Alejandro Demichelis form Jefferies. On that transformation and pillar of active management and so on, you have a company called IESA within YPF?

Yes.

Most of other companies where you came from, they have a separate construction engineering company outside of what is the core. So could you please tell us how you see the value of having IESA within YPF?

Good question. I didn't imagine really. I didn't imagine that I have that kind of question today, okay? But I have the answer, and I share with you. IESA was doing everything and nothing. We don't know what they are doing. So Gustavo Gallino, Vice President of Infrastructure is a person that has a lot of experience in company like IESA. What is our view of IESA? IESA is a company we have to have. We have, like you said, we can have engineering company for construction and make more value for YPF. And the other thing that we are thinking on IESA that was doing the other was operating and maintaining for different countries. We are not going to do any more of that, and we are going to do in YPF. Why? I tell you why. Because if you integrate -- not integrate and we maintain IESA outside, but if you integrate the O&M with the YPF company, we can make better efficiencies because you don't need to put supervisor for the supervisor, supervisor and to put people that are not there. And also, you have inside a company that you are. So you can have a better decision very quickly, more efficient. So IESA will be a company looking at YPF as the other company have some companies in Argentina is looking majority of YPF and to O&M and some engineering construction, no, we are going to do gas pipe that we are not going to make a big company in that way, okay? That is what we are thinking. But Gustavo is with the guys of IESA. They are in the process today that during this year or in the couple of months or so that to define the strategy of IESA like 4x4, and we are not -- and we know exactly the path to go. And thank you for the question. I never expect that question, okay.

Michael Furrow with Pickering Energy Partners. Thank you for the presentation as well. And I'll echo previous comments. I think your passion for YPF in Argentina was very clear even in English. So I appreciate that as well. I'd like to ask a question on lead times. I'm looking at your slide here. The improvements have been very clear, moving from 300 days for a 4-well pad down to 215, 50% improvements, looking to '29 showing more like a 20% improvement in cycle times to 170 days. I was wondering if some numbers could explain what some of the limitations are there to go beyond 170 days. And maybe as a kind of part 2, if efficiency improvements were better than what are sort of forecasted in your 2030 projected time line, would you pull forward activity to spend more money and grow volumes faster? Or would you kind of try to hit your CapEx budgets slow down, maybe drop a few rigs or pick up less than anticipated to kind of stay on that trajectory?

Okay. I'll tell you one thing. The guys here, they say, I cannot put not with you because after in 4 years, you are going to say me, you tell me that and you don't achieve that. That is we think that is feasible but it's not my goal. That guy that was not sleeping yesterday because he was very -- the [indiscernible] is an excellent one. He pushes that you cannot imagine. But he was very nervous yesterday for the question. He said me, no, no I don't want to answer, okay? But this guy will go further than you put there. And also, I promised that I will do exactly the same. And I really -- my way of working in my life was always to growth, growth, growth. And to growth I don't care the number that you put there. Is the guy -- this guy reach, I don't can tell you what is the day-by-day daily with him. He's working with me 25 years directly. So it's like -- I don't know, my friend no because I am his boss. But he's a guy that when I look at him, he looks at me, okay? When we have -- I tell you how we work. If that next month, the 40% of what we said the best 40, you cannot imagine what does it mean. If we work on that, when we reach, I go to the real-time me. And always I say, I don't get -- we have to go more, and we have more. The productivity is not numbers in a presheet. Productivity is the passion and the -- I would say, the goal, the personal goal that they put people that you don't know. When you work a lot on guys and you see passion, those numbers, you can go much further. The difficulty of that and also they curse me all of that, they curse me every 2 months, I say, what you had to me, say to me and they curse me everybody to me is like something that is virtuous, sometimes side effect, okay? The problem of the effect that I put in the structure is that I never in my life, I am okay with the number. I want always to have more numbers. And so what we promise you that we are working on that, but it's not that we are following that, and we -- there is a show that I make [indiscernible] means, I don't know in English [indiscernible] eat bagels instead of obtaining results, okay? So we are here for results, not for bagels, okay? As soon as we reach something, we are more, we are more, we are more. And I'll tell you one thing. I don't remember the number that I say today. Maybe tomorrow, I forget. But what I know is we have to [indiscernible]. If you [indiscernible], you reach. You never reach something that you don't want. So we will push more than the number that they are. The result, I don't know, okay? That's why I didn't put there. But we push every day to be better, better and better.

I have a virtual question. It is Matthias [indiscernible]. With over $2 billion in debt maturing between 2025 and 2026 and a CapEx program of in the range of $5 billion per year how does YPF plan to refinance its obligation in a scenario of lower brand and EBITDA ranging between -- in the range of $5 billion.

Okay. Federico Barroetave CFO, is going to answer you.

No, I think that we are going to be continuing rolling over our debt. We are quite comfortable with the capital structure that we have reaccommodated in this first year. As Horacio was explaining, for 2025, we already refinanced the most important part of the international debt. So what we did in January was raising $1.1 billion, and we removed the huge maturity we have for July that was more than $750 million. So I'm confident that with the different pockets of liquidity that the company has been accessing since we took over with the new management team, let's say, in total, we raised $2.4 billion, plus $400 million in the local syndicated loan market. And then we also issued in Argentina. So we have 2 or 3 different pockets of money to touch, and the idea will be continuing with that approach, having -- maintaining an adequate capital structure. So as Horacio was explaining, now we're going to be going through in the next 2 quarters, increasing our leverage because we are paying, let's say, the end of the mature fields. And with that, I think that we will continue. Argentina has been also very, let's say, open to lend to YPF always. And particularly in the crisis, let's say, if you look at the last 5 years, Argentina was a solid lender for YPF. Now on top of that, we reopened the international markets, and we are now trying to reopen the project finance syndicated loan market for VMOS as well. So I think that we have good opportunities to tap those pockets of liquid, I'm confident.

Let us check if we have more in person or we have virtuals. Okay. We have one more virtual. It has to do with the upstream on shale. Could you -- it's from Milene Carvalho of JPMorgan. Could you guide on the process to achieve production guidance or target of 295,000 barrels per day by 2027, and 380,000 barrels per day for 2028.

I explained here -- first thank you for the question. But what I explained here, you have not to make linear way as human being do, okay? When we have '27 and we have the possibility there, you look that we changed from 12 to 18 rigs. So that is huge. Imagine I cannot -- I don't want to talk about other companies. But if you have one company increased a lot, they have 4 rigs, okay? There are 8. And also, we have, as I explained, after '27, we have the capacity to export and also we have the capacity to increase the production, okay? And that's why it's a question of physics, the more rigs, more production, and we have the evacuation capacity. Today, if we put a lot of more, we don't have the capacity to do, okay? But in '27, so after that, we have -- that's why there was a slide that I explained the evacuation of YPF. And I know that I explained the evacuation at the end because you take a lot of time. I didn't put maybe a slide with time. But that's why we are following the capacity that YPF bought in all the evacuation oil pipes. And so try to fill up and to continue there in the different parts, okay? That's why we make that.

Okay. We have one more -- we have one more question. This is from Tasso Vasconcellos of UBS. He is asking, could the company evaluate divesting or selling any other assets as an alternative to get additional funding if required or coming from financial market? That's one.

The base case is $70 as a plan and with $70 or $60 or so, we don't need to change, and we are financing what we need. But after 2 years, I explained that in 2 years, we have a better position from a finance point of view. We don't need that. I don't know what'll happen in the world in 2 years. It changes a lot? I don't know. Maybe yes, maybe not. But that is good is the Pillar 2 active portfolio management. That means buying and selling, and it depends on the necessity and always thinking in YPF, okay? Okay. We finish. Okay. Thank you very much. Okay.

Thank you.