Pampa Energia Q1 2025 Earnings Report

Pampa Energia EPS Results

• Actual EPS: $2.81
• Consensus EPS: $1.92
• Beat/Miss: Beat by +$0.89
• One Year Ago EPS: N/A

Pampa Energia Revenue Results

• Actual Revenue: $414.00 million
• Expected Revenue: $487.63 million
• Beat/Miss: Missed by -$73.63 million
• YoY Revenue Growth: N/A

Pampa Energia Announcement Details

• Quarter: Q1 2025
• Date: 5/12/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 13, 2025
• Conference Call Time: 10:00AM ET

Pampa Energía S.A. is an integrated energy company headquartered in Buenos Aires, Argentina. Through its subsidiaries and investments, the company operates across electricity generation, oil and gas exploration and production, and petrochemicals. Its activities primarily support Argentina’s domestic energy market.

Pampa generates electricity from a diversified portfolio of thermal, hydroelectric, and renewable power facilities located in several regions of the country. The company also explores for and produces oil and natural gas, including from Argentina’s Vaca Muerta shale formation, and participates in the production of nitrogen-based fertilizers through its investment in Profertil.

Founded in 2005, Pampa expanded its position in Argentina’s energy industry through acquisitions and the development of new generation and hydrocarbon projects. The company’s American depositary shares trade on the New York Stock Exchange under the symbol PAM, while its ordinary shares are listed in Argentina.

Pampa Energia Q1 2025 Earnings Call Transcript

Key Takeaways

• Adjusted EBITDA rose 17% year-on-year to $220 million in Q1, driven by stronger spot power prices, higher gas deliveries for thermal generation, full commissioning of PT6 and PEPE6, and favorable tariff hikes.
• Post-quarter FID on the FLNG project (20% Pampa stake) paves the way for two vessels exporting 6 million tpy of LNG from late 2027, requiring 6 million m³/day of gas supply—nearly a 50% boost over current production.
• E&P adjusted EBITDA fell 39% to $41 million due to ramp-up costs at Rincon de Aranda, pipeline disruptions affecting TGS gas sales, softer exports to Chile, and a 20% rise in lifting costs to $6.9/BOE.
• Power generation EBITDA climbed 51% year-on-year to $130 million, fueled by higher spot energy prices, strong plant availability (96% thermal capacity), and contributions from a new wind farm, offset slightly by increased operating expenses.
• Total CapEx for 2025 is guided at approximately $1.1 billion (up 35% YoY), with $950 million allocated to E&P (mainly Rincon de Aranda development) and $120 million for power (including last-mile wind farm payments and maintenance).

Presentation

[Lida Wang, Head of Investor Relations at Pampa Energía]

Hello everyone, and thank you for joining our conference call. I will make a quick summary of the Q1 very quick so you can find more details in the earnings release and the financial statements. For today's Q&A, we have our CEO, Mr. Gustavo Mariani, our Head of Oil and Gas and EVP, Mr. Horacio Turri, and our CFO, Mr. Fito Zuberbühler. Let's go to the first quarter of 2025. We saw a solid performance in power generation and utility businesses, along with the higher gas deliveries for thermal generation. Also, a key highlight after the quarter end was the FID on the FLNG project, where Pampa holds a 20% stake. This milestone officially kicks off the project. The two charter vessels will export 6 million tons of LNG per year, requiring 27 million cubic meters of gas per day.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Pampa will supply to 6 million cubic meters per day through HESA. This is almost a 50% increase from our current average production of 13 million cubic meters per day. The first vessel is expected online by the end of 2027, early 2028, and the second, the MK2, will be a year later. This is a strategic move to monetize our Vaca Muerta reserves, position Argentina in the global LNG market, and bring in much-needed foreign currency inflows, create jobs, and boost local suppliers. In addition, last week, TGS and Transener reached a major milestone by completing their comprehensive tariff reviews. Their conditions now are set for the next five years until 2030, marking a real progress toward regulatory normalization in the Argentine utility universe. Now, turning to the numbers, the adjusted EBITDA for the quarter amounted to $220 million.

[Lida Wang, Head of Investor Relations at Pampa Energía]

This is 17% up from last year, driven by stronger spot prices in power, higher deliveries of plant gas, the full commission of PT6, PEPE 6, and higher tariff hikes at TGS and Transener. It is also worth noting that last year's Q1 included a $20 million haircut from CAMMESA, which did not repeat this year. These gains were partially offset by higher operating costs and softer B2B gas sales. Compared to the last quarter, it improved a lot due to the seasonality and stronger peso link margins in spot energy and utilities. The CapEx rose 35% year on year, mainly due to the progress that we are doing at Rincón de Aranda, which absorbed $114 million out of the total $180 million of CapEx in the quarter.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Moving on to the EMP business in the slide four, adjusted EBITDA was $41 million in the Q1, down 39% year on year, largely due to the increased operating expenses, mostly related to Rincón de Aranda, as we were and we are preparing for production ramp-up. Also, we saw lower sales to industries because there was a partial disruption that already fully enabled the TGS transportation system in March following severe floods and soft exports to Chile, driven by the weaker Brent prices. These headwinds were partially offset by stronger deliveries under Plan Gas, supported by robust thermal power demand thanks to the hot weather and low hydropower water input. Higher costs due to the well testing and preliminary low output at Rincón de Aranda drove lifting costs per BOE 20% year on year up to $6.9 per BOE.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Gas lifting costs also increased, though moderately, up 17% year on year to $1 per BOE, mainly explained by higher treatment costs and partially offset by solid gas output. If you compare it, however, quarter on quarter, the lifting cost per BOE was down 20%, explained by increased seasonal output and lower lifting cost expenses. Total production averaged nearly 73,000 barrels of oil equivalent per day. This is flat year on year, but higher quarter on quarter because of seasonality. Where we're assuming the mix, the oil just accounted for 40% of total output and 15% of the revenues of the segment, explained by the divestment of Guadalosa Shale and the decline in conventional oil blocks that we do not operate. Total gas production remained flat year on year, just 12 million cubic meters per day. However, it grew 21% versus the last Q4. This is explained by seasonality.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Mangrullo continued to lead the output, but its production share fell to 55% of Q1 gas volume. Meanwhile, with Sierra Chata, it increased to 30% of total gas production, with an increase of 51% year on year. Both blocks, however, did not tie in any new wells during the quarter. As of today, we drilled three out of the 15 planned wells at Sierra Chata this year, which is all our operating gas drilling campaign for 2025. This is reflecting the robust productivity, shale productivity at Sierra Chata. 56% of the quarter's production was shale. Gas prices averaged around $3 per million BTU. This is 6% down compared year on year because of B2B oversupply, which pushed the prices down and weaker Brent prices affecting exports. These effects were partially offset by improved retail prices, as you know, there has been a lot of tariff increases.

[Lida Wang, Head of Investor Relations at Pampa Energía]

As you can see right below, most of our gas deliveries went to the thermal power generation to CAMMESA. Exports were steady year on year, but as Horacio flagged in the last Q4 poll, since May, we've been increasing our flows through GasAndes, and more recently, we are doing it through Pacífico pipeline, now delivering 500,000 cubic meters per day to southern Chile. In total, we are exporting 1.5 million cubic meters per day of gas to our neighboring country. In late April, we also made our first export, our first shipment to Chile, to Brazil, sorry, uncovering a new frontier to Pampa. With this outlook, our 2025 export campaign is on track to double last year's export volume. Now, let's zoom in on Rincón de Aranda.

[Lida Wang, Head of Investor Relations at Pampa Energía]

In March, we completed the fracking and tidying the path number two of four wells, now beginning to ramp up the production and fill up the pipelines and the temporary production facility called TPF, which has a capacity of 20,000 barrels per day to treat it. Also, that said, we are still cleaning out water. We see we just need more days to assess the final performance. Currently, the block is averaging over 6,000, close to 6.5 thousand barrels per day, all transported through pipelines, so no more trucking. Therefore, lower transportation costs, lower costs in the area going forward. In terms of takeaway capacity, Pampa holds 8,000 barrels per day in its own right in Duplicar, plus another additional 12,000 barrels temporarily borrowed from third parties, giving us flexibility as production is ramping up.

[Lida Wang, Head of Investor Relations at Pampa Energía]

So far this year, we drilled five pads, fracked three of them, and tidying one, the one I told you, with we have two more in the QA tidying plan in the next couple of weeks. Everything can be asked to Mr. George. We are also making progress in infrastructure. The temporary production facility, or TPF, is online, as I said. The local pipelines and other facilities across the area are being built. Currently, we have two high-spec rigs working, and we have one frack fleet active in the field. For 2025, we are targeting a total CapEx for this block of $800 million. By Q4, we aim to hit the 20,000 barrels per day of production with eight pads online. Moving on to the power generation business on slide seven, we posted an adjusted EBITDA of $130 million in Q1.

[Lida Wang, Head of Investor Relations at Pampa Energía]

This is a 51% increase year on year, mainly explained by higher spot prices, as those units have been getting more price updates than inflation evolution. On top of that, we had strong contributions from newly commissioned PP6, PEPE 6, the wind farm, and outstanding operating performance this quarter, especially from our PPA back units, partially offset by higher operating expenses. Generation volumes remain stable year on year, despite the decline in the total national grid, mainly thanks to PEPE 6, higher gas supply thanks to the Perito Moreno pipeline, stronger wind, and reduced downtime in Loma La Lata. The outage that we experienced in ENARSA, in Nihuiles Hydro, due to heavy flooding and Barragán's program overhaul, partially offset these variations. Capacity payments, especially pay-per-pay from the PPAs, are the key part of the segment EBITDA performance. Once again, our thermal capacity delivered outstanding availability of 96%.

[Lida Wang, Head of Investor Relations at Pampa Energía]

The overall capacity availability dipped due to New Willis floods, but PPE 6 commissioning helped to offset that. In terms of maintenance, in March, we launched a major overhaul of Loma La Lata CCGT gas turbine, including life extension boards. Next month, we will begin the upgrading project in Barragán gas turbines to boost efficiency and increase by 11 megawatts the capacity. Okay, moving on to slide eight, looking at the cash flow, we show just the restrictive loop just because that requests the bond perimeter. In Q1, we posted a free cash flow of $118 million, mainly driven by higher CapEx resistant to the development of Rincón de Aranda, which accounted for 71% of the total CapEx in the restricted group, plus a seasonal increase in the working capital. As a result, cash and cash equivalents ended in the quarter at $1.1 billion.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Finally, on the balance sheet, gross debt stood at $1.6 billion. This is a 19% decrease compared to December 2024 due to the redemption of the 2027 notes. Net debt increased to $577 million. This is 0.8 times net leverage ratio, reflecting the decline in cash explained before. The issuance of the 2031 and the 2034 notes allow us to further extend our debt average life to five years and significantly improve our maturity profile. This concludes our presentation. Now the floor is open for questions. If you have a question, please send it through Zoom chat. We will read it and answer first seen, first helped. Also, please make sure you put your name, your company, so we can introduce you to the audience. Should you, any participant, have a problem or need assistance, just send us a chat or email us. Please hold while we pull for questions.

[Lida Wang, Head of Investor Relations at Pampa Energía]

We have the first question coming from Ignacio Cienichowski, inverted in bolsa. I hope I pronounced well your last name. How is the situation today in Ecuador?

[Lida Wang, Head of Investor Relations at Pampa Energía]

Hi, good morning, everybody. Thank you, Ignacio, for the question. The situation in Ecuador, as you know, the concession ended at the end of last year. We gave it back in November of last year to the Ecuadorian government. Since then, we have been trying to recover the guarantees that were given for these concessions. There are two guarantees of $50 million each. One is an environmental guarantee, and the other one is an operational guarantee. There is no reason at all that these guarantees should not be released because the pipeline is operating in perfect conditions and there has not been any environmental issue during our time as,

[Lida Wang, Head of Investor Relations at Pampa Energía]

Operators.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yes, as operators of the pipe. So far, we have not been able to obtain the release of the guarantees. A few weeks ago, we decided to initiate an arbitrage to recollect these guarantees, which we are very optimistic of the results. We do not know how long it is going to take, but that is basically the situation. Very optimistic about the outcome of the arbitrage, but it will take some time.

[Lida Wang, Head of Investor Relations at Pampa Energía]

All right. Alejandro Demichelis from Jefferies is asking, please, can you update on the development of Rincón de Aranda and what production exit rates you expect for this year?

[Alejandro Demichelis, Managing Director at Jefferies]

Okay, good morning, everybody. Thanks for the question. Rincón de Aranda, so far, we drilled five pads. We fracked three. We have one tied in, which is pad number two. The performance is pretty good. We are pumping approximately 6.5 thousand barrels a day overall.

[Alejandro Demichelis, Managing Director at Jefferies]

As I mentioned, the well performance is what we expected and is very good. What we are going to do in the coming days is tying in the next two paths, which are paths number three and number four. We will keep on with the fracking until we end up with six out of the seven paths being fracked by the end of 2025. Awesome. And tied in. I do not know if he asked about the production rates.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yeah.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Okay. The production rate, as I mentioned today, is more than 6,000 barrels a day. We are supposed and we hope that we will get to 20,000 barrels per day by the end of 2025. So far, so good.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Awesome. Thank you, Horacio. The next question he asks, with investments in offstream and LNG, where do you see the CapEx requirement that is in the next couple of years?

[Lida Wang, Head of Investor Relations at Pampa Energía]

In the CapEx, I will give it to you.

[Alejandro Demichelis, Managing Director at Jefferies]

Okay. CapEx for the LNG?

[Lida Wang, Head of Investor Relations at Pampa Energía]

LNG and upstream size.

[Alejandro Demichelis, Managing Director at Jefferies]

Okay. LNG, we are hiring the two vessels, but for the hili, we have a commitment of $7 billion in the 20 years. Regarding CapEx, specifically for all of the facilities and ancillary services that we need for the boats, we are talking about $700 million until 2028, out of which $150 million are going to be paid by dollar. We have a remaining of $550 million, and out of which we have a participation of 20%. It is a little bit more than $100 million for Pampa. And for upstream? In the upstream, we are going to be developing Sierra Chata.

[Alejandro Demichelis, Managing Director at Jefferies]

Our estimation, in order to supply the almost 6 million cubic meters per day, that is our share of the two vessels, we envision around $400 million from 2026 to 2028.

[Alejandro Demichelis, Managing Director at Jefferies]

Just to add that, in addition to the $700 million that you mentioned, we need to build a dedicated pipeline. We are quite optimistic that a midstreamer will build it, and the consortium will pay it as a transportation tariff as an OpEx.

[Lida Wang, Head of Investor Relations at Pampa Energía]

I guess he's asking also what about the upstream investments in Rincón de Aranda or oil, right? Because you mentioned.

[Alejandro Demichelis, Managing Director at Jefferies]

Okay, no problem. Rincón de Aranda for 2026, we envision around $500 million, $460 million, to be more accurate, out of which $360 million comes from drilling and completion and $100 million out of facility.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Awesome. Next question from Guido.

[Alejandro Demichelis, Managing Director at Jefferies]

No.

[Alejandro Demichelis, Managing Director at Jefferies]

I think he asked about the debt. Debt requirements. No need.

[Alejandro Demichelis, Managing Director at Jefferies]

This year, we're planning to fund all our CapEx with the cash flow generated by power and gas businesses, plus our strong cash position. We're not envisioning issuing more debt, no more debt for CapEx. If there are very good market opportunities, we will always pursue an active liability management. Other than that, we're not seeking to increase our debt significantly.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Thank you, Fito. Next question is coming from Guido Vitocero from Alaria. Regarding the Argentina FLNG project, how much of the $7 billion CapEx announced by Golar LNG will be financed through project finance, and how much by the 20% stake of Pampa in CESA?

[Lida Wang, Head of Investor Relations at Pampa Energía]

The $7 billion of CapEx is not being financed at all by us. It's just a higher fee. There's no finance there.

[Lida Wang, Head of Investor Relations at Pampa Energía]

As I mentioned before, what we need to face in the future is 20% of those $550 million, which is a little bit more than $100 million, plus the upstream. Again, as Gustavo mentioned, we are assuming that the new pipeline is going to be a transportation capacity charge.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Awesome. In order to achieve the 6 million, I think you already mentioned it is how much CapEx right now, or any more mentioned about. Do you have an estimation of the EBITDA contribution for this new project by 2028, 2029?

[Lida Wang, Head of Investor Relations at Pampa Energía]

Okay. When the two vessels are online and we are already delivering the almost 6 million cubic meters per day, we estimate approximately $150 million of EBITDA for an FOB price of $7.2 per million refill. That is what our best estimation of EBITDA is.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Conservative.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yeah. I would say it is base case. Yeah. Based on that price of.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Based on price of 7.8. Right.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Considering the FLNG is now a full-year gas project for 2028, are you planning any other project for the idle gas production in capacity during the summer period or the off-peak period?

[Lida Wang, Head of Investor Relations at Pampa Energía]

I don't think I understand very well the question. I mean, the demand for the vessels is flat.

[Lida Wang, Head of Investor Relations at Pampa Energía]

No, I think he means another project beyond FLNG, like Via, for example, or.

[Lida Wang, Head of Investor Relations at Pampa Energía]

The only project that we have today facing us is the potential expansion of TGS through the IP that we already presented to the government. That accounts for 40 million additional cubic meters per day, out of which eventually we might get, I don't know, maybe 20% of that. It's going to be around 3 more million cubic meters for 120 days a year. That's the only project that we have in the short term.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Great.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Guido is also asking, could you give us a little color about the expected evolution for lifting costs and production? Production we already talked, but lifting costs.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yes, sure.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Rincón de Aranda.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Rincón de Aranda. No problem. For Rincón de Aranda, we have three different stages. One that we've already been through, which was the tracking. I would say the tracking stage, which was obviously the most expensive. We were talking about $23-$24 per barrel of lifting costs, which obviously is very expensive. Now we already tied in our first stage of our pipeline connecting Rincón de Aranda with La Maria Chica Norte, which reduced dramatically our lifting costs. We are now in the range of $8 per barrel.

[Lida Wang, Head of Investor Relations at Pampa Energía]

The third stage, sorry, is going to be the connection or the tying in of the pipeline, the oil pipeline to Cabo Knock, which is the interconnection with the Vaca Muerta system. We see that after that, our lifting costs probably will go down to $5 per barrel.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Awesome. In the last conference call, you mentioned that Pampa hedged, well, not you, or.

[Lida Wang, Head of Investor Relations at Pampa Energía]

I did not mention that.

[Lida Wang, Head of Investor Relations at Pampa Energía]

You did not mention that. But someone did. Hedged from May to December, most of the screw oil production at $72 per barrel. Are you planning to continue with this policy in the future?

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yes. Yes, we will continue with the policy of hedging oil prices when conditions are good.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Great. All right.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Regarding power generation, Guido asks, although we do not know what will happen with the legacy carriers in the future, what will be the impact on EBITDA for 2026, 2027 when some of your PPA contracts will come to an end? Right now, in 2026, we only have a small contract of 75 megawatts of TG4 in Loma de Lata. Then we have three contracts under Resolution 21, Loma de Lata, TG5, Parque Pilar, and by Ingeniero White. The four of them account for around $100 million of EBITDA, a little bit. Yeah, $100 million of EBITDA yearly. I'm estimating that there's status quo. There's no changes, and there will be because there are peakers. They should be charging around, I do not know, $5,000 per megawatt month. I am assuming a drop in EBITDA of around $70 million, more or less.

[Lida Wang, Head of Investor Relations at Pampa Energía]

You see the CN, 100 to 20 something. I did the math. You do.

[Lida Wang, Head of Investor Relations at Pampa Energía]

It's a little bit aggressive, but

[Lida Wang, Head of Investor Relations at Pampa Energía]

yeah, you do 380 times 5,000 times 12, which is the capacity. This is a rough number, right? It gives you around $25 million of EBITDA. And for 125, I guess the difference is 75. I know it's too early to tell, but that's the drop in the EBITDA. Again, very important, the PPAs on CAMMESA, they are meant to be to be repaid investment in the tenure of the PPA. That's why they need way to the spot market. That's unlike the other B2B or PPAs that we develop in the B2B world, like MATER, for example, that doesn't have any maturity at all. They just keep rolling, right? The other question, which confirmed the PPA selling, I already said that.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Next question, Anmil from Bank of America. Does Pampa plan to bid the tender for the hydroelectric concessions in Nihuiles and Diamante?

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yeah, eventually, yes, we will. We will look at them and eventually participate. Not only in the Nihuiles and Diamante, we could eventually participate in any of the hydro concessions that will be optioned in the coming months. The first ones will be El Chocón, the ones from the Comahue. Piedra del Águila area. Piedra del Águila, El Chocón, and Alicurá. Those are the first three hydroelectric concessions that will be optioned. Later, it will be Nihuiles and Diamante. Once the conditions are on the street, we will evaluate and eventually we will decide whether to participate in which of them.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Great. All right. The second question she asks, is there a rough timeframe for the Serri Complex of TGS to fully resume the NGL production?

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yes.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Serri Complex has already resumed production at full capacity, although because of the floods, equipment is still not with the reliability that they had prior to this catastrophic situation. They are still adjusting to, they are still solving problems, but it is already fully online.

[Lida Wang, Head of Investor Relations at Pampa Energía]

She says about Rincón de Aranda, we already talked about that. Does Pampa consider calling the 29 bond, given it has a high coupon and is trading above the call price?

[Lida Wang, Head of Investor Relations at Pampa Energía]

We definitely look all the time to any opportunities in liability management, as I said. It is not only the coupon. You have to factor in all the costs of issuing a new bond. The prime is over $2 that you have to, premium that you have to pay to call the bond, plus any new issue spread, plus any spread in a longer bond.

[Lida Wang, Head of Investor Relations at Pampa Energía]

When you factor all that in, you need to have a positive net present value of all that. Given the case, it might make sense to call the bond, but we are not there yet. We will keep analyzing and searching for any market opportunities. Basically, we do not have any need to do any liability management. If market conditions are good enough, we will eventually do it, but not before. If the net present value makes sense, and it is because there is a very good market and bonds are trading tighter, we look at that in due moment.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Great. Thank you, Fito. Next question comes from Gustavo Faria from Bank of America Equity. The other was fixed income.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Do you have any estimate about the upside potential of the power sector deregulation in Argentina, including, let me give you first, higher margin on the fuel procurement in its own thermal power plants, reservoir wires? That's the first. Say that again, please. If there's any margin to the ones that do the self-procurement of fuel.

[Gustavo Faria, Equity Research at Bank of America]

Not currently. Nobody is still using that opportunity. It's complicated to explain in a minute. We are still awaiting regarding that deregulation of the power sector, we're still awaiting for the regulator to issue the new rules. As you know, I think it was late last year, they published the guidelines 1.0. Basically, they gave the industry, all the participants, large users, distribution companies, power generators, everybody in the industry, to give feedback about these guidelines, which were already given.

[Gustavo Faria, Equity Research at Bank of America]

Now the regulator has been working on guidelines 2.0, which has not been released yet. We are waiting for those new guidelines to come out and to see what they look like.

[Lida Wang, Head of Investor Relations at Pampa Energía]

He asked, will there be higher prices for the legacy energy capacity?

[Gustavo Faria, Equity Research at Bank of America]

Hopefully. Hopefully, after this deregulation, there will no longer be legacy capacity, and there will no longer be the regulator defining a price, but rather letting the market decide for that. We are still awaiting the new guidelines. It is totally guessing, and I cannot give you any better answer than this.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Gustavo asked, what's the upside potential for Pampa and each of the initiatives? We are gas producers and power producers as well.

[Gustavo Faria, Equity Research at Bank of America]

As we always said, we are awaiting this deregulation because as an integrated company, it's music to our ears to be able to use our own gas in our own power plants. We are very eager for this deregulation to happen and to be able to use our own fuels. What additional margin this will bring us is very difficult to forecast at this point.

[Lida Wang, Head of Investor Relations at Pampa Energía]

I think we talked about it as the timeline. You do not know much the timeline to have this.

[Gustavo Faria, Equity Research at Bank of America]

We are waiting for the second round of guidelines to be published any time. This will not take effect. This will be, again, guidelines. The government has already announced that they expect the new rules to be implemented during the wintertime and to take effect by November, by the end of this year, basically.

[Lida Wang, Head of Investor Relations at Pampa Energía]

After the winter.

[Gustavo Faria, Equity Research at Bank of America]

After the winter, yeah, in November of this year.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Cool. Thank you. Next question is coming from Bruno Montanari from Morgan Stanley. I think we did not cover this. She says, with the recent decline in the oil price, do you expect any changes in the CapEx, in the intensity, drilling intensity, in the round path schedule in Rincón de Aranda?

[Bruno Montanari, Executive Director at Morgan Stanley]

No, no, we are not foreseeing any decline in our rates of drilling or completing the wells.

[Lida Wang, Head of Investor Relations at Pampa Energía]

It is steady path.

[Bruno Montanari, Executive Director at Morgan Stanley]

Yeah, we keep the course.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Okay. He is asking, a little bit more goods looks. Can you provide an update on your CapEx budget per business segment in 2025?

[Bruno Montanari, Executive Director at Morgan Stanley]

CapEx of 2025?

[Lida Wang, Head of Investor Relations at Pampa Energía]

See, per business. Like power.

[Bruno Montanari, Executive Director at Morgan Stanley]

Per business. Yeah.

[Bruno Montanari, Executive Director at Morgan Stanley]

The E&P segment will be around $950 million, out of which $800 million goes for the development of Rincón de Aranda, all the infrastructure facilities, plus the drilling of all the wells. The other $150 million is basically some drilling in Sierra Chata for a few gas wells, plus some maintenance of the key. E&P around $950 million in total. Power generation is in the $120 million. That is basically $30 million that is the remaining payments for PEPE SASE for the last wind farm that we put online last year. The other $90 million is maintenance CapEx. It is a little bit above average of maintenance CapEx in power generation this year because we have some, as Sibila mentioned earlier, some life extensions. That is why it is a higher CapEx than the average. All in all, it is about a $1.1 billion CapEx for Pampa this year.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Great. Awesome.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Regarding the Argentina LNG project, wait, it's the YPF's. Will Pampa also seek to join the future phases being planned by YPF?

[Bruno Montanari, Executive Director at Morgan Stanley]

Eventually, yes. Still, we don't have much information about those projects. Definitely, as we have proven with the first one, with CESA, with the consortium that we joined last year, this is strategic for Pampa. It's a way to monetize our very competitive gas reserves. We would definitely look at all the opportunities regarding LNG that will come out.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Great. He asked finally, regarding the first PEPE FLNG project, is Pampa interested to take part on the midstream, the dedicated pipeline project? Pampa TGS.

[Bruno Montanari, Executive Director at Morgan Stanley]

Oh, okay. Pampa itself is not interested in participating in the midstream. That's not our core. We have TGS, whose core business is midstream.

[Bruno Montanari, Executive Director at Morgan Stanley]

It has been proven to the market in recent years with a lot of investment in the midstream area, a segment of the company that is growing very importantly. Yes, TGS will definitely be interested in participating in offering the construction and the operation of the dedicated pipeline that the floating LNG project will need.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Awesome. Next question coming from Lucas Gerimedo from Quantum Finanzas. Any comments about, very broad though, any comments about Complejo Petroquímico San Martín, our petrochemical complex? I guess he's asking about PEPCAM business, I guess.

[Lucas Cerimedo, Analyst at Quantum Finanzas]

Okay. If the question goes for the PEPCAM business, as we have been mentioning in previous calls, this is a tough year for that business segment, which we expect to basically break even or have just small EBITDA margin this year.

[Lucas Cerimedo, Analyst at Quantum Finanzas]

Because of international prices, basically higher dollar cost and lower sales and more competition from imports, several factors are affecting the business. It is a tough year for the segment, and it is not going to be as good as the previous three or four years were.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Right. Awesome. Next question is coming from Jorge Mauro from Fundamenta. I think we covered most of this. Supplying own gas, we talked about that. I guess adjustments in energy advance prices, do you foresee more?

[Jorge Mauro, Analyst at Fundamenta]

Yeah. I think the trend might continue. Increases have, I think most of the increases have already been given, or most of the catch-up has already happened, but not all of it. Still, some technologies are still struggling to make money. There might be further adjustment down the road while we await deregulation and the new rules.

[Lida Wang, Head of Investor Relations at Pampa Energía]

The first of Jorge was about the hydro options that we already covered. Next question is coming from Juan Ignacio López from Puente. He has one question about the outlook in the power sector, which I think we already talked about that. The outlook in the power sector, the deregulation, I think we covered. Have you made any investment decisions, like organic investment decisions in the power sectors? We are aware of the batteries tender launched by the Secretary of Energy. We would like also to know whether you are considering new renewable assets in this context. Thank you.

[Juan Ignacio López, Analyst at Puente]

Regarding the battery, the BESS auction, so battery this auction that has been called by CAMMESA. We are studying that. We have recently requested suppliers. We have not taken a decision whether we will participate or not.

[Juan Ignacio López, Analyst at Puente]

It will very much depend on the cost of the equipment and the projected IRR of the auction. The same can be said about renewable projects. At this point, we do not have anything. We are awaiting the deregulation. We are not taking any decision on new renewable. We believe prices are quite tight. Competition is already tough in that segment. The deregulation might bring additional competition from thermal units. We are waiting to see how that market, where the equilibrium prices land, before deciding on building new renewable power.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Great. Next, Andrés Cardona from Citi. Is there any M&A opportunity that you are looking at?

[Andrés Cardona, Analyst at Citi]

Yeah. We are always analyzing M&A opportunities in several sectors, but nothing concrete that I can comment right now. Awesome.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Andrés Cardona from Citi and also Andrés Yllano from Balance are asking together, can you provide information about the status of the RIA project? How close is the FID?

[Andrés Cardona, Analyst at Citi]

The FID is far away. We have a team. We have set up a team, and the team is working very hard to get information, to have suppliers providing us with firm quotations of the total cost of the project. We are several months away from obtaining that information. Hopefully, it will be before year-end. We hope to be able to make a decision by year-end, first quarter of next year, to decide whether to go forward with the project or not.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Great. Next question, Gerimbo Langasi Oil, actually, from Daniel Guardiola from BDG. He's asking, "Good morning.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Could you share us an indication of the expected trajectory of the production flowing from Rincón de Aranda in 2025, I guess? Through the year.

[Daniel Guardiola, Executive Director at BDG]

Through the year? Okay. As I mentioned before, we started with a little bit more than 6,000 barrels per day right now. We will go up to 12,000 barrels by August-September. Hopefully, by the end of the year, we will be reaching the 20,000 barrels per day.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Awesome. Then share with us the total amount of DUCs you currently have and what is the expected time it will take you to frac and put them into production, this inventory of drilled-out but uncompleted wells.

[Daniel Guardiola, Executive Director at BDG]

Okay. Currently, we only have one drilled and completed well, which is part number five. We are currently drilling two more parts, parts number 10 and part number 11.

[Daniel Guardiola, Executive Director at BDG]

We still have to frac part number five. We will proceed after that with the fracking of parts 10 and 11. This is basically because we have two other parts, which are parts number seven and number eight, that have been drilled up to the landing point in Vaca Muerta, but not the horizontal leg, just to avoid interference between drilling and completion, or parent-child, as it is usually known. To be more accurate, we have one DUC, which will be drilled in June. We will be drilling by September and November, parts number 10 and number 11. Right.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Daniel, now it is getting more into the point. He is saying, "Can you share some data of Rincón de Aranda like EUR, IP production, lifting costs, lifting costs we cover, CapEx per well?

[Lida Wang, Head of Investor Relations at Pampa Energía]

If possible, any IRR you're expecting per well basis?

[Daniel Guardiola, Executive Director at BDG]

Okay. Easy times. Regarding the IP and the EUR, we are talking about 1,600 barrels per well. The EUR will be around 1.2-1.3 million barrels. Cost per well, it's in the range of $16 million-$17 million.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yeah, I see

[Daniel Guardiola, Executive Director at BDG]

That at this point. Once we reach the factory model, which is hopefully going to happen by the end of this year, we hope that our CapEx per cost will go down to some figure around $15 million-$14.5 million.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Great. He says, "To better graph how resilient your oil operation, are you able to provide any indication of how much is the break-even of Rincón de Aranda in terms of brand and cash?" I guess cash break-even and brand. I know brand.

[Daniel Guardiola, Executive Director at BDG]

Yeah.

[Daniel Guardiola, Executive Director at BDG]

If we're looking at the factory model CapEx, the project has a break-even of less than $40 per barrel. We are talking well-head. Regarding the CapEx per well, it's very important to notice that we are also adding to the total CapEx the flow lines. Usually, oil companies tend to avoid the adding up of the flow line from the well to the treatment facility. This is why some companies are showing costs of $12.5 million-$13 million per well. You need the flow line to get that oil out.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Great. Thanks for the transparency. One more from, more. He's asking Daniel, "What is the real potential of exporting gas to Brazil?

[Lida Wang, Head of Investor Relations at Pampa Energía]

Can you provide us an update on the infrastructure you're using to ship the gas to Brazil?

[Daniel Guardiola, Executive Director at BDG]

With the current infrastructure, we are capable of exporting to Brazil around 4-5 million cubic meters per day. The infrastructure that we use is the infrastructure that is already there in place. Basically, the reversion of the northwest pipeline, plus the Bolivian infrastructure, plus the Brazilian infrastructure from the Bolivian border to São Paulo. It's a lot, and it's very expensive. So far, it's very expensive. We are barely competitive with the alternative of the Brazilian industry, which is getting LNG from their regasification terminals.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Awesome. One more from Daniel. He didn't get enough. He says, "Do you foresee any potential synergies of having YPF as a new partner in Sierra Chata?

[Lida Wang, Head of Investor Relations at Pampa Energía]

Are you considering to accelerate the development of that field?

[Daniel Guardiola, Executive Director at BDG]

Having YPF with all the LNG projects that they have in their portfolio definitely helps us to accelerate the development of Sierra Chata. I think it's good news.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Great. That was all from Daniel. Now we turn into someone I don't know, but he's asking. Christian Andrews, good morning. Roland speaking. Is the recent five-year tariff review for TGS transcendent positive for your business? We were hoping or expecting for more favorable tariff increases. I think it was created online, right?

[Lida Wang, Head of Investor Relations at Pampa Energía]

Oh, yeah. I would say that we were not surprised by the outcome of the integral tariff revision, neither of Transener nor TGS. Because as you know, the companies participate a lot in providing information and discussing with the regulators. It didn't come as any surprise.

[Lida Wang, Head of Investor Relations at Pampa Energía]

It was in line with our expectations. That was the question, or?

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yeah. It was like, "Are you okay?" I guess in a nutshell, are you happy?

[Lida Wang, Head of Investor Relations at Pampa Energía]

Happy, yes. We are happy with the outcome.

[Lida Wang, Head of Investor Relations at Pampa Energía]

The outcome. Yeah. Another question from Christian. He says, "Empowered Generation have payments terms mostly normalized with CAMMESA, or you're still facing long payment delays?" He's not following for a long time.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yes. Now, CAMMESA since the events of April, yeah, March, April of 2024, since that event, CAMMESA has very quickly begun to pay, not exactly right on the date of the maturity of the invoice, but within the next three weeks, CAMMESA fully pays the invoice of the month. Within the month, we fully collect both from CAMMESA and ENARSA. There are a few days of delays in the payment, but nothing relevant.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Like five days. Five days.

[Lida Wang, Head of Investor Relations at Pampa Energía]

In average, five days, yes.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Coming from 60 or more.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yeah, exactly. Yes, basically, CAMMESA is.

[Lida Wang, Head of Investor Relations at Pampa Energía]

It's the best payer right now. It's our best payer.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Excellent payer today.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Another question coming from Matías Casaruzi from ABCAP Securities. Could you break down the expected timeline from the phase one FLNG project?

[Lida Wang, Head of Investor Relations at Pampa Energía]

Say again, please.

[Lida Wang, Head of Investor Relations at Pampa Energía]

The milestones on the FLNG project. I know this year we do some.

[Lida Wang, Head of Investor Relations at Pampa Energía]

The COD on the first vessel is expected for the last quarter of 2027.

[Lida Wang, Head of Investor Relations at Pampa Energía]

In the meantime, what kind of.

[Lida Wang, Head of Investor Relations at Pampa Energía]

In the meantime, we need to secure the gas transportation project for ENARSA. I would say that plus the interconnections with the San Martin pipeline and all the yoke and sealery services that we need for the vessel, basically.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Explain the yoke.

[Lida Wang, Head of Investor Relations at Pampa Energía]

The yoke is the. The mooring system.

[Lida Wang, Head of Investor Relations at Pampa Energía]

The mooring system allows the ship to deal with tides and with wind and with normal movement of the motion of the ocean five kilometers away from the coast.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Okay. We have to better keep it up. He is asking about volume revenues, EBITDA. We already talked about that. You can see in the rewatch. Another question coming from Valentino Caramucci. Do you see further needs on Brazil gas imports from Pampa?

[Lida Wang, Head of Investor Relations at Pampa Energía]

We see Brazil as a very big and relevant potential market. As we mentioned before, we have to deal with the transportation tariffs that are imposed all over the way. If that is reduced, definitely, it's going to be an opportunity for new exports to Brazil. Taking into account this cap of 5 million cubic meters per day, in order to do more than that, you need additional investments.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yes.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Sorry.

[Lida Wang, Head of Investor Relations at Pampa Energía]

One relevant thing to mention here that has been published here is that beginning in 1st of May, we have begun exporting gas through Gasoducto del Pacífico to Chile to the Violiva region. We are currently exporting almost 500,000 cubic meters per day to Shell. And it's the first, I mean, it's the first export that takes place through that pipeline, apart from what YPF was doing for the past years.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Very good. Yeah. Valentino Caramucci is also asking from Guterres, "Are you planning to raise in more debt in the short, medium term?"

[Lida Wang, Head of Investor Relations at Pampa Energía]

I think we saw that, but we don't have to raise new debt. We are okay with the level of debt we have.

[Lida Wang, Head of Investor Relations at Pampa Energía]

We're always looking for market opportunities, and we are very active in our liability management, but not for any of these projects or for CapEx. The last one, because we are at the top of the hour, Jorge Mauro asking if in the upcoming sale of Cytelec by ENARSA, can you participate, would you? I mean, I guess Transener sell, right? The sale of Transener's share of.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Yeah. ENARSA is working in the process of divesting Cytelec, which is controlling, they have 50% ownership of Cytelec, which is the controlling company of Transener. Regulatory-wise, if you are a distributor or a power generator, you cannot control transmission. We currently have the co-control together with the government of transmission. We cannot go beyond that. We cannot acquire ENARSA's stake in Cytelec. That is the answer.

[Lida Wang, Head of Investor Relations at Pampa Energía]

Great. Awesome. We are 12:02.

[Lida Wang, Head of Investor Relations at Pampa Energía]

This is concluding our Q&A section. Thank you for joining us and taking time to join this call. Take care. Should you have any questions, please let us know. Write us to Raquel or me to anything. Have a good day. See you next August. Bye.

[Lida Wang, Head of Investor Relations at Pampa Energía]

All right. Thank you very much for joining.

Participants

Analysts

• Analyst 6
• Gustavo Faria, Equity Research at Bank of America
• Analyst 1
• Juan Ignacio López, Analyst at Puente
• Analyst 2
• Analyst 5
• Jorge Mauro, Analyst at Fundamenta
• Andrés Cardona, Analyst at Citi
• Lida Wang, Head of Investor Relations at Pampa Energía
• Analyst 3
• Alejandro Demichelis, Managing Director at Jefferies
• Daniel Guardiola, Executive Director at BDG
• Lucas Cerimedo, Analyst at Quantum Finanzas
• Analyst 4
• Bruno Montanari, Executive Director at Morgan Stanley