What YPF Sociedad Anónima (YPF) Said on Its Q3 Earnings Call

Key Points

• Strong third-quarter results: Revenue rose 41% year over year to $6.6 billion, while adjusted EBITDA increased 84% to $2.5 billion and free cash flow reached $901 million. Net leverage fell to 0.81x, its lowest level in more than a decade.
• Shale growth is reshaping YPF: Shale production climbed 32% year over year to 224,000 barrels per day, with post-quarter Vaca Muerta output reaching a record 252,330 barrels per day. After planned conventional-asset divestments, shale is expected to represent about 95% of oil production.
• Major expansion and portfolio initiatives continue: YPF reaffirmed 2026 capital spending of $5.8 billion–$6.2 billion, acquired full ownership of YPF Luz, and advanced large Vaca Muerta, Argentina LNG and VMOS pipeline projects. The company also strengthened liquidity through a $1.2 billion bond issuance while selling non-core assets.

YPF Sociedad Anónima NYSE: YPF reported third-quarter 2026 revenue of $6.6 billion, up 41% from a year earlier, while adjusted EBITDA reached $2.5 billion, the company’s second-highest quarterly level, according to management’s earnings call. Adjusted EBITDA rose 84% year over year, with the margin holding at 38%.

Chairman and CEO Horacio Marín attributed the performance to the company’s shift toward shale production, high refinery activity, operating-cost efficiencies and favorable prices. The company generated $901 million in free cash flow during the quarter, its second-highest level historically, and reduced net leverage to 0.81x, the lowest level in more than a decade.

Shale output advances as conventional divestments continue

Shale oil production averaged 224,000 barrels per day in the third quarter, up 5% sequentially and 32% from a year earlier. Maximiliano Westen, vice president of strategy, new businesses and controlling, said preliminary October production had exceeded 245,000 barrels per day, bringing YPF closer to its roughly 250,000-barrel-per-day year-end target.

Marín said the company recorded daily Vaca Muerta output of 252,330 barrels during the period following the quarter, calling it a record. He indicated that YPF could exit the year above its stated target but did not provide a formal updated forecast. Management said it expects to provide more detail on its 2027 plans in April after the board approves the company’s budget.

Production growth was supported by La Angostura Sur, Loma Campana, La Amarga Chica and Bandurria Sur. YPF completed the startup of oil and gas treatment facilities at La Angostura Sur in September, representing about $400 million of investment. The facilities add capacity for approximately 60,000 barrels per day of oil and 4 million cubic meters per day of gas.

Meanwhile, conventional oil output fell 47% year over year to about 37,000 barrels per day, mainly due to asset divestments. Excluding recently divested Mendoza blocks, conventional output would have been about 17,000 barrels per day, management said. Following completion of pending sales, shale is expected to account for approximately 95% of YPF’s oil production.

Total lifting costs declined to $7.80 per barrel of oil equivalent. Excluding assets being divested, lifting costs would have been below $7 per BOE, while costs in the company’s oil hub were about $4.20 per BOE.

Refining margins and capital spending remain strong

YPF invested $1.3 billion during the third quarter, with 70% directed toward shale operations. Capital expenditures were 26% higher than a year earlier, reflecting drilling, new facilities at La Angostura Sur and refinery maintenance. The company reaffirmed its full-year capital spending target of $5.8 billion to $6.2 billion.

Refinery throughput averaged 344,000 barrels per day, down 2% from the preceding quarter because of scheduled maintenance at the La Plata refinery, but up 5% year over year. The company said its refining system met domestic fuel demand without imports, supplied local refiners and expanded fuel exports.

Domestic gasoline and diesel volumes fell 4% sequentially, primarily because of weaker diesel demand from industrial and agribusiness customers, though sales rose 2% from a year earlier. YPF reported a 58% domestic market share, or 61% when including volumes produced by YPF and sold at third-party stations.

Midstream and downstream adjusted EBITDA margins expanded to about $32 per barrel. Management said it continued to use a fuel-price “buffer” approach intended to preserve demand amid international-price volatility, temporarily absorbing some cost pressures while seeking to recover gaps to import parity when market conditions permit. YPF implemented a 1% pump-price increase in late September.

Balance sheet strengthened through cash flow and debt management

Pedro Kearney, YPF’s vice president of finance, said third-quarter free cash flow was supported by $2.5 billion of adjusted EBITDA and about $175 million of net proceeds from M&A transactions, including initial payments tied to the sales of Metrogas and Mendoza-area assets.

Cash generation was partly offset by approximately $278 million of interest payments and $225 million of income-tax payments. Liquidity rose to $3.7 billion at the end of September from about $2.5 billion at the end of the second quarter, which Kearney said covered more than 2.5 years of debt maturities.

During the quarter, YPF issued a $1.2 billion international bond due in 2035 at a 7.85% yield. The company said the offering represented Argentina’s largest corporate bond issuance in 11 years and attracted approximately $2.2 billion of demand. YPF also repurchased about $530 million of international bonds due between 2027 and 2029.

Portfolio moves and large-scale development plans

YPF acquired the remaining 25% stake in power generator YPF Luz for $430 million, gaining full ownership of the business. Marín said YPF Luz has 3.8 gigawatts of installed capacity across thermal and renewable assets and generates dollar-linked revenue. Kearney said there was no contractual put-option obligation associated with the transaction, which was negotiated with GE Vernova.

The company also continued selling non-core assets, with total announced proceeds since December reaching about $2.2 billion. YPF agreed to sell Mendoza non-operating and Chachahuén conventional areas for $405 million, subject to provincial approval, and agreed to sell its 70% stake in Metrogas for $780 million. The Metrogas transaction requires final approval from regulator ENRE; Kearney said the remaining roughly $700 million would be received at closing.

Marín said YPF is preparing three RIGI projects in the northern half of the Vaca Muerta oil window, covering five blocks. The projects represent approximately $44 billion of gross capital spending over 16 to 26 years and could reach plateau production of about 270,000 barrels per day of oil and 28 million cubic meters per day of natural gas. YPF holds an average stake of about 40% in the projects.

On the Argentina LNG project, YPF said it expects a final investment decision by Nov. 26. The project targets 12 million tons per year of liquefaction capacity and is expected to require approximately $29 billion of investment by 2031. Marín said U.S. EXIM had provided a long-term financing proposal of up to $6 billion, with final closing expected around the middle of next year.

Separately, the VMOS oil-export pipeline was about 85% complete by September. Management expects the line to begin filling in January, with exports starting around March.

About YPF Sociedad Anónima (NYSE:YPF)

YPF Sociedad Anónima is an integrated energy company based in Argentina and one of the country's principal oil and gas producers. The company explores for, develops and produces crude oil and natural gas, with operations that include both conventional and unconventional resources. YPF is also a major participant in the development of the Vaca Muerta shale formation in the Neuquén Basin.

Through its downstream operations, YPF refines crude oil and markets fuels, lubricants and other petroleum products.

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