Pampa Energía S.A. Q4 FY2025 earnings call

Pampa marked 20th anniversary in 2025. Upstream profile changed with Rincón de Aranda ramping up production. In Power segment, consolidated 15% share of Argentina's net electricity output. 2025 EBITDA grew 8% year-on-year. Q4 adjusted EBITDA was $230 million, 26% year-on-year increase. Capital structure strengthened with issuance of 12-year international bond. Total proven reserves rose 28% to 296 million boe in 2025.

Oil and Gas segment: Q4 adjusted EBITDA was $77 million, more than doubling last year, driven by Rincón de Aranda, increased gas exports and industrial demand. Lifting costs averaged $8 per barrel of oil equivalent. Total production averaged over 81,000 barrels of oil equivalent per day, up 32% year-on-year. Power segment: Q4 EBITDA was $111 million, up 28% year-on-year, mainly driven by stronger spot prices under new guidelines, partially offset by power dispatch at Genelba's new CCGT due to maintenance.

2026 CapEx expected to be around $1.1 billion, with $770 million for Rincón de Aranda, $400 million for maintenance across operations and $600 million for TGS' private initiative project. Expect 10% increase in natural gas produced by E&P segment. No plans to distribute dividends in the near future as there is negative free cash flow this year and expecting slightly positive in 2027.

Q: How do you see the evolution of production?

A: For oil, target to reach 25,000 bbl/day by end of March, April, then 27-28k bbl/day by half year. For gas, closed Feb at ~14 million cubic meters per day, expected average of ~13.5 million cubic meters per day in 2026.

Q: How are the royalties settled?

A: Royalties do not have connection to hedging, set at market price.

Q: How much impact have you seen so far from Resolution 425-25?

A: Between 10% and 15% vis-a-vis 2025 EBITDA generation.

Q: Have you signed any PPAs with private counterparties?

A: Yes, commercial team active, sold over 100-something contracts for around 70 megawatts.

Q: What percentage of oil production remains unhedged?

A: Fully hedged 1 year going forward.

Q: How long do you expect RIGI approval to take for Rincón de Aranda treatment plant?

A: Filed third/fourth quarter of last year, haven't been approved yet, recently new decree added upstream of oil to RIGI, starting to file for overall RIGI.

Q: Do you plan to fund CapEx by new debt issuance?

A: Base case is no, will use cash position, but if new projects, will reevaluate.

Q: Guidance about CapEx for 2026?

A: Total CapEx around $1.1 billion, ~$1 billion for E&P, less than $100 million for power generation maintenance.

Q: What crude realized price assumed?

A: Hedge price around $66.

Q: Quarterly production ramp-up through 2026?

A: Ramp-up curve from 28,000 to 45,000 in 5-6 months.

Q: Would consider monetizing gas acreage portfolio?

A: Could consider but not actively seeking.

Q: Update on Southern Energy FLNG project?

A: First boat by second half of 2027, second by second half of 2028, demand 6 million tons/year, $1.3-1.5 billion CapEx for pipeline.

Q: New opportunities in generation segment?

A: Possible batteries, but not sure on participation in new auctions.

Q: Higher returns in power generation relative to shale oil?

A: Power generation margins improved, but shale oil provides higher expected returns.

Q: RIGI impact on Rincón de Aranda?

A: RIGI will help develop northern part of Rincón de Aranda, impact ramp-up curve and oil recovery.

Q: Do you plan distribute dividends?

A: No, not planning in near future.

Q: CapEx estimates for Rincón de Aranda?

A: ~$500 million in wells, difference in facilities.

Q: B2B PPA conditions?

A: Around 70 megawatts, prices mid-50s, 1-year contracts.

Q: When will power market liberalization for distributors be fully implemented?

A: No clarity yet.

Q: Short to midterm M&A opportunity?

A: Nothing in short term, not actively engaged.

Q: Rincón de Aranda type curve details?

A: Estimated EUR around 1.1 million barrels, D&C cost per well ~$15 million.

Q: Involvement in certain project?

A: Not involved.

Q: Power plant maintenance program?

A: Usually in autumn/fall, most likely Genelba and Loma de la Lata.

Q: Change in 2026 CapEx considering oil prices?

A: No change.

Q: Urea project information?

A: Still working, delays expected.

Q: Oil prices hedge in new environment?

A: Last year $7 profit per barrel, this year losing $4-5 per barrel.

Q: Open for new investments outside oil and gas?

A: Open within energy scope, not studying other investments.

Q: Why retire production from Plan Gas Round 1 and 3?

A: Reallocated to power generation for vertical integration.

Q: News on fertilizer plant sale?

A: Sale of Profertil to Adecoagro does not affect decision.

Q: CISA agreement price maturity?

A: 8-year contract until 2036, pricing 50-50 Henry Hub and Brent with certain discounts.