Ypf Sociedad Anonima Q2 FY2025 Earnings Call

Good morning, ladies and gentlemen. This is Margarita Chun, YPF IR Manager. Thank you for joining us today in our second quarter 2025 earnings call. Today's presentation will be conducted by our Chairman and CEO, Mr. Horacio Marin; our CFO, Mr. Federico Barroetave; and our Strategy, New Businesses and Controlling VP, Mr. Maximiliano Westen. During the presentation, we will go through the main aspects and events that explain the quarter results, and then we will open the floor for Q&A session together with our management. Before we begin, please consider our cautionary statement on Slide 2. Our remarks today and answers to your questions may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by these remarks. Our financial figures are stated in accordance with IFRS, but during the presentation, we might discuss some non-IFRS measures such as adjusted EBITDA. I will now turn the call over to Horacio. Please go ahead.

Thank you, Margarita, and good morning, everyone. Despite international price volatility, we delivered solid results in Q2 and significant progress in our 4x4 plan by achieving key remarkable milestones. This quarter's volatility actually demonstrated the right direction and implicit value of our 4x4 plan outlined since December '23. During this quarter, the international oil market experienced significant volatility with low prices. As a result, our realization price of oil decreased by 12% sequentially. Our shale oil production remained largely unchanged even after selling our 49% stake in Aguada del Chañar, which decreased its contribution by 6,000 barrels a day. Moreover, during July, we achieved record high production of roughly 165,000 barrels a day. On Tuesday, the daily production was 163,800 barrels a day. Despite the challenging context, our continued delivery on our 4x4 plan substantially mitigated this negative price environment. During this quarter, we reached a key milestone in the divesting program of mature fields, particularly in Santa Cruz. As a material result of this pressure, we can show a 24% interannual reduction in our lifting costs. Another key milestone was achieved with financial closing at VMOS. After 18 months of hard work and dedication, today, I would like to share with you the remarkable progress we achieved in our 4x4 plan, delivering important results across all our four strategic pillars, especially since our last call in May. As we have always said, our first pillar is to focus on our most profitable business, oil Vaca Muerta. We have continued to expand our shale oil operations and made significant progress in advancing midstream infrastructure projects to support future growth. YPF, as the largest shale oil producer in Argentina, continues to deliver solid performance. Back in November '23, YPF oil production was 110,000 barrels per day; by last month, production has increased to roughly 165,000 barrels per day, even after divesting 6,000 barrels per day. We project further growth, aiming to close the year at around 190,000 barrels per day. This will represent an outstanding organic production ramp-up of over 70% in just 25 months. Moreover, in the last 18 months since 2024, our oil export revenue reached $1.5 billion. In terms of volume, this quarter, we exported nearly 44,000 barrels per day. Moving to midstream expansion, since day one, we were convinced that VMOS represented the key and the best infrastructure vehicle to ramp up YPF production from '23 and beyond and also for the entire industry. This new pipeline completely unlocks YPF's growth plan to achieve roughly 250,000 barrels per day by the end of 2026 and allowing us to reach 0.5 million barrels per day by 2030. To this end, YPF has led in record the development of this project in collaboration with the rest of the shale industry. First, we aligned commitments that allowed us to start construction in January '25. Then, supported by a solid contractor structure, the project recently secured a syndicated loan for $2 billion to finance the construction of VMOS. Besides the economic benefits for YPF and the entire shale industry, this transaction reopened the international project finance market for Argentina. It stands as the largest commercial loan for an infrastructure project in the country and is one of the top 5 largest financings in Latin America's oil and gas sector so far. The overall construction progress stands at 23% as of July, with welding works completed for around 120 kilometers. Additionally, assemblies of floor plates for the tanks have begun at both Allen and Punta Colorada Export terminal. Let me now talk about Pillar #2 that focuses on active portfolio management. From the very beginning, we committed to creating value for YPF through a dynamic portfolio management approach. Over the past 15 months, after receiving initial approval from our Board, we have completed the transfer of 28 out of 30 mature blocks identified in the initial plan called Andes. Moreover, we have successfully reverted 11 mature blocks to the provinces, one in Chubut and the other in Santa Cruz, the most challenging blocks in terms of complexity, achieving another key milestone in our 4x4 plan. During the past 18 months since 2024, the mature blocks that we already left produced roughly 61,000 barrels of oil per day and 3.2 million cubic meters of gas per day. However, it's worth noting that they were very mature and carried high lifting costs, around $42 per barrel. As a result, during these 18 months, the overall negative impact on our free cash flow was around $840 million. This amount includes operational cash flow and exit cash flow. Additionally, we have successfully divested our subsidiaries in Brazil and Chile besides closing unprofitable chemical plants. All this structuring was critical to our 4x4 plan as it simplifies our portfolio and enables us to concentrate our effort and the majority of our capital on our most profitable asset, Vaca Muerta. Regarding this exit program from mature fields, I want to highlight the constructive agenda that we have developed in collaboration with governors and unions. This represents an unprecedented level of cooperation among key stakeholders. I'm confident that with the same spirit, we will reach an agreement in ongoing negotiations with Tierra del Fuego during Q3. As a result of all these efforts, we can report today a remarkable reduction in listed costs of 24% interannually. With the decision to make YPF a very profitable company, we have recently decided to expand the scope of assets to be divested to become next year a pure unconventional ethane company. We have identified 16 other performing conventional blocks. We will open these assets for divestment with a superior objective to continue upgrading our portfolio and making YPF much more profitable and more resilient to low crude prices. Completely aligned with the same portfolio rationale, this week, we executed a bidding agreement to acquire Prime Tier 1 Shell acreage from Total for $500 million, subject to certain conditions. This acquisition follows the same value dynamics of our active portfolio management, divesting noncore, less profitable assets while securing long-term productive value for the company. In this case, La Escalonada and Rincón La Ceniza blocks are located in the most promising area in the oil and wet gas window of North Vaca Muerta, close to Bajo del Choique, Lea Invernada blocks that Pluspetrol has recently acquired from Exxon. La Calera is a first-class crude oil producing block that will generate synergies with the development of Vaca Muerta North Hub. Rincón La Ceniza has strategic potential for the development of wet gas and the Argentina LNG project. We expect to assume the operating role of these two blocks holding a 45% working interest, partnering with Shell and Gas y Petroleo. Together, these blocks encompass nearly 115,000 acres of Vaca Muerta with an outstanding well inventory of over 500 wells. Wells drilled in the volatile oil window during the early stages of development demonstrate promising productivity levels that underscore their long-term potential. Our expectation is to accelerate the development plan to fast track the monetization of this production. This new asset increases our future oil production curve, extends the duration of our plateau, and reinforces our leading position in Vaca Muerta reserves. Furthermore, when we complete the divestment of our conventional assets, YPF will become a pure integrated shale player with superior size synergies and economies of scale, as I mentioned before. Now Pillar #3 focuses on maximizing our upstream and downstream efficiencies. Since our last call in May, we have inaugurated three real-time intelligence centers, two of them in La Plata and Luján de Cuyo refinery, respectively, and the third one based in our headquarters to support our downstream commercialization business. The latter has been key for the implementation of micro pricing and Shell fuel projects. This real-time system is unique in Latin America. We can follow the demand by each gas station during 24 hours beside our old product at convenience stores. We are changing the way of delivering fuel and products in the country. It's a disruptive marketing change. We have an impressive positive image from the people in the polls. This 100% technology-driven in-house management project was launched last month to seek a win-win strategy. Micro pricing allows our gas station clients to access a different price at fuel from midnight to 6:00 a.m. Shell fuel provides these clients with greater savings if the payment is made through the YPF application at certain gas stations. YPF has pioneered this metal pricing in Argentina with the objective of reducing our fixed costs, growing our nighttime sales, and generating more profit for YPF. The results so far are impressive. In the first month since launching this project, our sales volume at the gas station line grew roughly 30% compared to Q2 this year. On the industrial efficiency side, we have significantly reduced the duration of program maintenance, especially in La Plata refinery, completing the maintenance between 40% to 60% faster than historical records. Regarding the Toyota well project, we have reduced the construction cycle for the pad of four wells to roughly 230 days, a reduction of around 80 days compared to 2023 levels. The same methodology and focus are being adapted for the real-time intelligence center for drilling and completion that will start to deliver results as you will see in the next slides. We are the largest operator in Vaca Muerta, working upstream real-time intelligence center 24/7 remotely from YPF headquarters. As a record, one of the biggest service companies last week delivered work from remote locations all around the world for the first time. In the third week of August, we are opening the RTIC Real-time Intelligence Center for operation and maintenance, pooling, and logistics in Nine to improve our efficiency and coordination in all the operations of Vaca Muerta. This achievement reflects our integrated approach, working closely with our strategic suppliers at every stage of the well production process. Additionally, we enhanced our operational dashboard to enable real-time anomaly detection and implement corrective action plans rapidly. All these initiatives represent a critical cultural change for YPF's entire management and production processes. Finally, Pillar #4 is the Argentina LNG project. Since our last call in May, we signed the health agreement with ENI for the consolidation of the first 3 for 12 million tons per annum, expecting the approval of the final investment decision in Q1 '26. In the same direction, we are working with Shell for Phase 2 to expedite the FID and obtain synergy between both projects in the structure. Moreover, this week, our SPV SESA obtained the FID approval for the 20-year bareboat charter agreement for its second floating LNG named MK II. This vessel has a capacity of 3.5 million tons per year and is expected to be operational in 2028. We are also working on the RIGI project as well as environmental and export permits for MK II. Regarding the first vessel Hilli, the total capacity amounts to roughly 6 million tons per year. Let me mention that this second vessel allows the construction of a 100% dedicated gas pipeline from Vaca Muerta to the San Matías Gulf in the province of Río Negro, available during the whole year instead of the original plan of using existing pipeline idle capacity during the off-peak season operating only Hilli. Now moving on to Q2 results. Revenue remained stable sequentially, reaching over $4.6 billion with record high seasonal sales on natural gas and fuels, and increased export volume of crude oil and agro products. However, the volatility in international prices negatively impacted our refined product prices, especially local fuels. Additionally, Q2 was affected by lower seasonal gasoline demand. Interannually, despite a roughly 20% drop in Brent, revenues only declined by 6%. The drop in Brent prices was mitigated by operational efficiency, the increased shell export, and a recovery in local fuel demand. Adjusted EBITDA was $1.12 billion in Q2, decreasing 10% sequentially. It was mainly explained by the contraction impact in refined product prices, the exit from mature fields, and the value of inventories. On the positive side, this negative effect was softened by lower lifting costs due to less exposure to mature fields. Interannually, adjusted EBITDA declined by 7%, also reflecting Brent volatility, but it was partially mitigated by the significant ramp-up in shale oil production and even better conventional lifting costs. Also, bear in mind that Q2 last year was affected by the extreme weather conditions experienced in Patagonia. At this point, I would like to note that excluding the negative contribution from mature fields, our proxy adjusted EBITDA would have been $1.25 billion. Looking at the bottom line, Q2 net profit was $58 million compared to a loss of $10 million in the previous quarter. This turnaround was mainly driven by one-off items related to mature fields in Q1. Interannually, net profit declined sharply, explained by higher depreciation from shale activity expansion and lower gains from financial securities in 2024. Also, this quarter included an income tax charge due to higher future tax payable, while Q2 '24 was the opposite. Mature fields also impacted the net results. Excluding them, our profit net result would have been a profit of $264 million. In terms of investment, in Q2, we deployed $1.16 billion, remaining similar sequentially and interannually. It's important to remark that 71% of the total was now directly allocated to unconventional assets. In Q2, we recorded a negative free cash flow of $355 million. It was mainly affected by $315 million of negative impact from mature fields. Moreover, we had negative working capital due to peak winter sales on natural gas and our subsidies paid income tax. However, the negative impact was softened by dividend collection from affiliates. As a result, our net debt rose to $8.8 billion, reaching a net leverage ratio of 1.9x as expected while divesting mature fields. Please take into account our acquisition of this year and also in the rest of this year, we are selling performing conventional assets at Metrogas after the extension of the concession. Now I will turn the call over to Max.

Thank you, Horacio, and hello to everyone. Focusing on the Upstream segment, the second quarter total hydrocarbon production was 546,000 barrels of oil equivalent per day. It remained stable both sequentially and interannually. Shale production keeps driving the growth, now representing an impressive 62% of the total output. It nearly offset the divestment of mature fields and, to a minor extent, the lower working interest in Aguada del Chañar. In the case of mature fields, hydrocarbon production decreased by 26% versus the previous quarter as we continued divesting them. It recorded 72,000 barrels of oil equivalent per day, representing only 13% of the second quarter total production. Crude oil production amounted to 248,000 barrels per day in the second quarter, decreasing 8% sequentially. It was primarily driven by lower mature fields and, to a lesser extent, Aguada del Chañar, as explained before. Interannually, while total crude oil production remained stable, the remarkable 28% expansion in shale output fully offset the decrease in exposure to mature fields. Let me mention that last month's shale oil production was approximately 165,000 barrels per day. We expect continuing significant growth in the second half of the year to achieve our 2025 annual target of over 165,000 barrels per day. Oil exports in the second quarter totaled 44,000 barrels per day, increasing by 20% sequentially. The main growth came from redirecting Escalante heavy oil to the foreign market as La Plata refinery was under program maintenance. Interannually, it grew by 43%, also boosted by Shell expansions. Natural gas production increased by 6% in the second quarter sequentially to 40 million cubic meters per day, primarily supported by higher seasonal demand. NGL production was 48,000 barrels per day, a modest growth of 2% sequentially, driven by higher associated gas output in certain shale oil blocks. Total lifting cost was $12.3 per barrel of oil equivalent. This is a remarkable sequential reduction of 19%, reflecting further divestment of mature fields. Excluding mature fields, our proxy lifting cost for the second quarter would have been roughly $7.5 per barrel of oil equivalent. Zooming into our core hub blocks, lifting cost at 100% of working interest was $4.9 per barrel of oil equivalent. It grew by 7% sequentially due to higher pooling and maintenance costs. Regarding prices in the Upstream segment, crude oil price was $59.5 per barrel, 12% lower sequentially, in line with Brent volatility. Natural gas price was $4.1 per million BTU, growing by 38% sequentially, primarily influenced by the peak season planned gas price. Now let me walk you through the performance of our shale activities. In the second quarter, we drilled 54 horizontal oil wells on a gross basis, mostly in operated blocks while maintaining our net working interest of 55%. In this sense, in the first half of the year, we drilled 105 horizontal oil wells on a gross basis. This is in line with our estimate of 205 wells for the year. In terms of completion and tie-in of wells, we accelerated our activity. In the second quarter, we completed 70 horizontal wells and tied in 76 on a gross basis. They represented an increase of 35% and 69%, respectively, when compared to the second quarter last year. Shale oil production in the second quarter remained stable sequentially at 145,000 barrels per day. This is because the lower stake in Aguada del Chañar block was fully compensated by the growing contribution from La Angostura Sur I block. This block is 100% YPF, located in the South hub with a shale oil production of 20,000 barrels per day in the second quarter. Considering the acceleration in our activities mentioned before and July's production level of 165,000 barrels per day, we are in good shape to reach the 2025 target of 165,000 barrels per day. In our unconventional core hub blocks, we achieved an average drilling speed of 331 meters per day. We remain optimistic about reaching our annual target of 360 meters per day. On the fracking side, we completed 259 stages per set per month in our unconventional operations, now very close to achieving our annual target of 260 stages per set per month. In our Downstream segment, local fuel prices remained closely aligned with international parities, reflecting Brent volatility. As a result, local fuel prices measured in dollars were down 8% sequentially and 10% interannually. Also, second quarter local fuel prices were just 1% below import parities. Fuel sales volume was 3.5 million cubic meters in the second quarter, growing by 4% sequentially, primarily explained by seasonality. Interannually, it increased by 3%, mostly driven by demand recovery. We also maintained our leading market share of 55%. In the second quarter, we processed 301,000 barrels per day, recording a 5% sequential contraction due to the maintenance stoppage at La Plata refinery. This resulted in a refining utilization rate of almost 90% as anticipated in our previous call. However, let me highlight that La Plata refinery achieved a record high monthly processing level in the past 15 years, reaching nearly 201,000 barrels per day in April. Our refining and marketing margins declined by 17% sequentially. It was mostly due to lower prices combined with higher costs related to maintenance. However, it was mitigated by the lower cost of oil on top of the OpEx efficiency measures stated before. Now I will turn the call over to Federico.

Thank you, Max. Switching to the financials. Let's start with the cash flow evolution. In Q2, we posted a negative free cash flow of $365 million, mainly explained by the performance and closing agreements of mature fields. They recorded an adjusted EBITDA loss of $126 million and a one-off cash flow loss of almost $190 million. Moreover, our subsidiaries, Metrogas and AESA, paid income tax, while the regular debt service remained stable. On the other hand, the dividend collection from our affiliates, net of contributions and prepayments, mostly offset the negative working capital. The latter was mainly explained by higher seasonal gas sales and payroll. In the same line, exports of agricultural products grew, boosted by reduced export duties. As a summary, for the first half of the year, we recorded a negative free cash flow of $1.3 billion, mainly explained by the impact of mature fields. These assets recorded an adjusted EBITDA loss of over $230 million and a negative one-off cash flow for around $420 million totaling an aggregate of $650 million. In addition, year-to-date, we disbursed a net amount of roughly $210 million in M&A activity, mainly the acquisition of Sierra Chata. Therefore, during this six-month period, the proxy free cash flow, excluding mature fields and M&A activity was $460 million negative, which is mostly explained by the regular interest payment for roughly $320 million and income tax payments from our subsidiaries for around $100 million. Now in terms of Q2 financing, we ended with $8.8 billion of net debt, representing a net leverage ratio of 1.9x as anticipated during our Investor Day in April. During this quarter, we issued a $204 million linked bond and a $140 million hard dollar bond. The first one was with a 15-month tenure at 3.95%, and the second one with a 2-year tenure at 7%. We also secured around $190 million in another local financing. After the quarter, we also issued two local bonds, a $250 million MEP bond and a $167 million Cable bond. The first one was a 2-year tenure, and the second one, a 5-year tenure. Considering the recent acquisition of shale assets, we will complement the last issuance of the dollar Cable bond with cross-border acquisition financing. We anticipate this M&A will take our net leverage ratio to near 2x during Q3. However, for the second half of the year, we expect that the increase in EBITDA driven by the ramp-up in production and the sale of our mature fields, combined with the divestment of additional non-mature fields that is anticipated will lead to a normalized net leverage ratio of 1.8x by year-end. In terms of refinancing activities, during the rest of the year, we will target debt maturities of nearly $800 million, with 78% local and only 22% international. In this process, it is important to highlight that last month, Moody's upgraded YPF's credit rating from Caa1 to B2 with a stable outlook following the recent sovereign rating improvement. So with this, we conclude our presentation and open the floor for questions.

Your first question comes from Tasso Vasconcellos with UBS.

I would like Horacio to get a broader update on the development plans that you guys have planned ahead. The company just announced the acquisition of this block that you mentioned during the presentation. How does that impact the current production plan for the upcoming years? And how do you view the risks of an increased development plan amid an already accelerated plan that you guys have released before? And in parallel, Horacio, you recently said in an interview that you view the acceleration in the CapEx in Vaca Muerta. Can you also give some additional feedback on your view? Those are my two questions here.

Why we bought that is because this field is one of the best fields in the north of Vaca Muerta, where the type of well is more, I would say, if you see from different consultants, the average production of UR of wells for all Vaca Muerta is on the order of 1 million. But if you see this area, it could be 1.5 million or more. So that means that it's more profitable than anyone else. They are in the very, I would say, sweet spot. What is the effect? Nothing, because it's good. We are going to make more money for you. And so we are going to prioritize with Shell for sure to go very quickly because it will be one of the best fields regarding profitability in Argentina. I don't know if I answered the question or you need more detail.

It's clear. From you on this interview that you recently gave on this potential deceleration on Vaca Muerta activities as a whole?

Okay. Why I say that in an interview? Because they asked me in an interview, but it's not YPF. It's not the problem for us to do that. So we are delivering what we say. And in everything that we say in 4x4, we have delivered. I answered at that moment because there are people in the market of Argentina who said there will be a reduction in some number of rigs, but it's not YPF. So I think it's not, I would say, logical and fair that I would say which company is reducing the rigs, okay?

Your next question comes from Leonardo Marcondes with Bank of America.

I have two from my end. The first one is regarding the new Andes project. Could you provide some color on your expectations in terms of timing for the conclusion of the whole Phase 1? And also some more details on Phase 2 on what is the total production to be divested from? What does it EBITDA representativeness? And also your expectations in terms of conclusion for the second phase as well? My second question is regarding the export tariff for oil, right? We have recently seen the government reducing the export tariff for other segments. So is there any expectation or discussion with the government to reduce the export tariff for oil as well in the short term?

Okay. Thanks for the question. Let's go by number one. In Andes 1, we are finishing. There is only one block that is in Rio Negro that is under expectation. They have to be approved by the government of Rio Negro, but we are in the final phase, and we are totally out. When there is something that I have to explain for you, that in Andes where we sell, we sold everything. But there were two provinces, one is in Santa Cruz that we are out now because we are no longer the owners of the blocks. We are operating until December at most, but we operate for the province company, okay, because they don't have the people to do that. But we are out there. In Tierra del Fuego, that is very small compared to Santa Cruz, very, very small. I think next week, we can have maybe good news because we are in the last phases to agree with the province. That is Andes 1. What is Andes 2? Andes 2 consists of all the conventional blocks that we have left because remember if you see some interviews, I said that the goal of all the people that work in YPF in the management is to be an unconventional company next year. And so now we are delivering to sell what you can call core conventional fields that have good results for conventionals. But why do we do that? Because we can make more money as you realize that we have a good portfolio to invest in Vaca Muerta. All these assets have lifting costs of more than $20 per barrel, which are not a priority for us, given the profitability. And so there are others in Chubut, Mendoza, and Salta. The production of all these assets is in the order of 50,000 barrels a day, and our production is 2 million cubic meters per day. The EBITDA of all of this is in the order of 8% at 2024, okay? And I think I answered the question or I left something.

Very, very clear, Horacio. Just a follow-up on the first question. Regarding the second phase in terms of production and EBITDA representativeness, what should be the impact on the company?

I said maybe because my English maybe is not good, I know that, okay? But it doesn't matter. The production is 50,000 barrels a day of all together and the production of gas is 2 million cubic meters per day. The EBITDA for all that in figures of 2024 should be in the order of 8%. It was more clear.

Your next question comes from Matías Cattaruzzi with Adcap.

I have a question about the CapEx guidance. You gave us this $5.0 billion to $5.2 billion guidance with a Brent price of $70 per barrel. Are you planning on changing that or adjusting it in the upcoming quarters?

Okay. No, we are not going to change. And also, if you look at our figures, we are very, very close to what is our budget, and we are going to continue.

Okay. And then could you provide an update on the equity contributions to Vaca Muerta del Sur for the upcoming two years?

The equity, I will pass to Federico. They are in charge of all the financing.

Matías, well, basically, after the financial close of VMOS based on a total investment of $3.1 billion for the project and a 70% debt-to-equity ratio. The total number for our share of the equity will be in the range of $230 million, out of which close to $75 million, $76 million have been already contributed up to June. So the remaining amount will be $155 million until COD. I would say that at least $50 million will come along in 2025 and the rest mainly concentrated in 2026. That will be our disbursement of VMOS equity.

Your next question comes from Juan Muñoz with BTG.

The first one is a follow-up of the divesting of conventional assets. So regarding the proceeds that you expect with fully divesting those assets, could you provide us with an estimation of those proceeds? That's my first question. And the second one is regarding the recent acquisition of the Shell assets from TotalEnergies more a strategic question: how are you seeing the competitive M&A landscape in Vaca Muerta in recent months? So that's my two questions.

First question, okay, thank you. I cannot answer. If I reveal our expectations, it would be headline news tomorrow. I can't disclose that information. However, we believe it's a positive figure because the assets are quite valuable, but I can't provide the specific number. Based on our sales, I genuinely think we will receive significantly more than the total acquisition cost. That’s something I can share with you. Regarding the competitive landscape, I’m not sure I fully understand what you mean. In what context are you referring to?

How are you seeing the competition regarding the current assets that are available for sale in Vaca Muerta right now?

Okay. Okay. But I think there are not a lot more. The company that we have all the — now all the assets, they are all focused on the development, okay? It could be another company or there could be changes; it's normal, but we don't see that there are more developments during this year at least.

Your next question comes from Bruno Montanari with Morgan Stanley.

I have one follow-up and one question. Coming back to the Total acquisition, can you share with us maybe the timeline for when you would start to invest in the area? And if there is any CapEx expectation? Just like a quick math: if it's a 500 well inventory at around, say, $14 million or $15 million per well over the full development, it would be at least around $7.5 billion in CapEx. So I just wanted to know if that makes sense and what type of facilities you would potentially have to invest in as well? And the second question is maybe on the financial side. When we look at 2026, the company has some concentration of maturities, especially in domestic bonds. So when would you start to work on the refinancing of the '26 maturities?

Okay. I will answer the first, and Federico will answer the second, okay? With the Total acquisition, our partner is Shell and the provincial company. We are going to have a meeting with them to decide the development, okay, because we are partners. So I cannot say exactly when we are going to prioritize as much as we can if necessary facilities. We are also talking with companies that are near there, so you can get, if you know Vaca Muerta, to have synergies in the plants, in the CPF, okay? So there, everybody, we can reduce the investment per barrel. That is our idea, okay? The second question, I pass to Federico.

Bruno, looking for refinancing, first, we need to work on, let's say, what we have for the rest of the year. Our total refinancing and acquisition finance now is for $500 million to be done. In other words, we have $1.1 billion of additional debt to be acquired until the end of the year. For the acquisition finance, we already issued a bond last month in the local market for $167 million. So more than 30% of the total acquisition is already funded. The rest we have acquisition finance committed. And the rest, I think that will be mostly in the local market. Now looking at the tower of financing that we have for 2026, we have $2.3 billion, out of which more than 50% is local and refinancing, and only $350 million are international bonds depending. So we are going to be looking at the opportunities that we have in the local markets and in the international market, starting, I would say, from the last year of this year and also entering into early beginning of next year as, for example, as we did in January of 2025. But bear in mind that more than 50% of the refinancing required is coming from local bonds. And so far, we have been very successful in refinancing locally. We just together with the dollar bond that we issued last month, we issued another dollar bond for $250 million. So in total, it was $417 million. That is the highest bond ever in the local market. So there is a growing appetite for our paper in the local market.

The company appreciates the question. But since we are running out of time, we're going to accept one last question from Andres Cardona with Citigroup.

On the capital allocation team, I just wonder if you could provide any update about assets that are for divestiture excluding the Andes project. Maybe you can walk us through the rationale of the strategy of the discounts on the downstream business during nights, how it improves profitability or increases volumes, I don't know, just help us to understand the rationale from a profitability perspective.

Thank you for your question. Regarding assets for divestiture, aside from the Andes project, I have previously mentioned Metrogas, and we expect to extend it this year and enter the market. We're also trying to exit from a small refinery associated with Refinol. That refinery isn't currently refining but is close to resuming, and we're exploring exit strategies. As for the operational changes, I appreciate your comments on our initiatives. You need to visit to see the remarkable work we've done—it's truly unique in the Spanish-speaking world, with comprehensive services for vehicles. We analyze the demand at each gas pump across Argentina. It's all about demand dynamics, which is why we're focused on increasing profitability for YPF. We've noticed that after 9 PM, demand drops significantly as people are typically asleep, leading to negative profitability at gas stations during that time. To address this, we've decided to adjust our operations, resulting in a notable increase in our market share. Our demand during nighttime has risen by over 30% across Argentina, with some locations showing higher or lower elasticity. We're capitalizing on these trends, and I'm excited about our progress.

That concludes our Q&A session. I'll now turn the conference back over to Horacio Marin for closing remarks.

Okay. Thank you very much for all the questions. We are proud of what we are doing in YPF. We are working very hard. In fact, I am today with an infection, and I was coming all day long, all week with an infection because I love to be in YPF. I love what we are doing. I like what people are responding to in the profitability in all the company. Thank you very much, and we will see in three months. We will be talking in three months, okay?

This concludes today's conference call. You may now disconnect.