YPF Sociedad Anónima (YPF) Q3 2026 Earnings Report, Transcript and Summary

Hello, everyone. Thank you for joining us, and welcome to the YPF third quarter 2026 earnings conference call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Margarita Chun, IR Manager. Margarita, please go ahead.

Good morning, ladies and gentlemen. This is Margarita Chun, YPF IR Manager. Thank you for joining us today in our third quarter 2026 earnings call. Before we begin, please consider our cautionary statement on slide two. Our remarks today and answer to your questions may include forward-looking statements, which are subject to risk 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. Today's presentation will be conducted by our Chairman and CEO, Mr. Horacio Marín, our Finance Vice President, Mr. Pedro Kearney, and our Strategy, New Businesses and Controlling Vice President, Mr. Maximiliano Westen. During the presentation, we will go through the main aspects and events that shaped Q3 results, and finally, we will open the floor for a Q&A session together with our management team. I will now turn the call over to Horacio. Please go ahead. Horacio Marín: Thank you, Margarita, and good morning. Let me start by saying that this quarter, YPF continued delivering strong financial and operational results. Margin remained high, cash generation was very strong, and both upstream and downstream performed very well. After a record Q2, revenue remained strong in Q3 and reached $6.6 billion, up 41% from last year. Adjusted EBITDA reached $2.5 billion, the second highest level in YPF history, and 84% above last year. The main drivers were the change from conventional fields to shale, record level of activity at our refineries, cost efficiency, and favorable prices. As a result, our adjusted EBITDA margin remained high at 38%. Shale oil production continued to grow and reached 224,000 bpd in Q3, up 5% from Q2, and 32% from last year. If we exclude the conventional assets in process of divestment, about 95% of our oil output would have come from shale. This shows the scale of YPF's change and our progress to become a leading shale oil company. We remain on track to reach 250,000 bpd by December. To support the continued ramp-up in shale oil production, last month, we inaugurated the first train for crude oil treatment plant at Luján de Cuyo block. The facility has an initial processing capacity of 31,000 bpd, which is expected to double with the addition of a second train by Q4 this year. We continue working on new RIGI projects in the north half of Vaca Muerta. We will expect to submit to the applicable authorities in the near term. I will share more details later in the presentation. Also, it is worth mentioning that in the downstream business, our La Plata refinery was named Refinery of the Year for the second consecutive year, one of the highest recognition in Latin America's refining industry. At the same time, YPF, we also award Digital Technology of the Year for Ekons Matrix AI. This is a digital solution that predicts fuel blending specification, improving efficiency and product quality. Moreover, we continue to reinforce the competitive differentiation of our premium fuels portfolio. In this sense, in September, Infinia Turboclean, YPF premium gasoline brand, became the first fuel in the region to achieve the new TOP TIER+ certification. This recognition reinforced our leadership in fuel quality and innovation. It also reflects our commitment to bringing Argentine consumer world-class product developed to the highest international standards. In addition, Santa Fe Bio, our joint venture with Essential Energy, signed a long-term offtake agreement with TotalEnergies for the future production of sustainable aviation fuel, SAF, another renewable fuels from San Lorenzo biorefinery. The project is expected to require more than $400 million in CapEx to be developed under the project finance structure. The production capacity is estimated to be around 170,000 tons per year of renewable fuels. SAF for aviation and HVO for diesel, mostly for export markets. This agreement is a key milestone for the project, providing long-term commercial visibility and supporting its financing. Now let me turn to investment. We invested $1.3 billion in Q3, with 70% going to our shale operation. CapEx was 26% higher than last year, mainly due to new wells, new facilities at La Angostura Sur, and maintain work at our refineries. We expect upstream investment to increase in Q4, supporting higher output and the start of VMOS. VMOS first oil export expected early next year. For that reason, we remain on track to meet our full-year CapEx target of $5.8 billion-$6.2 billion. VMOS is also moving ahead, with about 85% construction completed by September. Early this month, the two monobuoys arrived at the port in the Río Negro province. This marks a key step to making VMOS operational, representing a world-class logistics solution for large-scale development. Cash generation was once again very strong, with free cash flow reaching $901 million, the second highest level in our history. This was mainly driven by adjusted EBITDA mentioned before, and the initial proceed from the sale of non-core assets. As a result, our net leverage ratio reached the lower level in more than a decade to 0.81x. Our balance sheet is now stronger and provides us with more financial flexibility. Before we review the financial results, I would like to cover three recent updates: our RIGI project for upstream North Hub, the acquisition of 25% stake of YPF Luz, and the progress on the sale of non-core assets. Let me start with an update on our RIGI pipeline. We are currently working on three RIGI projects in the north half of Vaca Muerta oil window, covering five blocks: Bajo del Toro, Bajo del Toro Norte, La Escalonada, Rincón La Ceniza, and Narambuena. YPF is the operator in all of these blocks and works with leading partners in the energy sector. We expect to submit these projects in the near term and will provide further detail as they progress. This project consists about $44 billion of total gross CapEx, with investment taking place over 16-26 years, depending on each project. If we add LLL Oil, YPF will have filled close to $70 billion of oil investment under RIGI, making this the largest upstream plan filled in Argentina so far. This project includes close to 2,200 drilling locations, which at plateau, could produce about 270,000 bbl of oil per day and 28 million cubic meter of natural gas per day. These are gross figures, and they show the large scale and long-term value of the North Hub. At full scale, the projects could generate about $8.2 billion of gross revenue per year based on Brent price of $70 per barrel and a gas price of $3.50 per million BTU. YPF keeps an average stake at about 40% in these projects. This large project shows the strength of our partner model in Vaca Muerta and YPF's ability to lead major export projects under RIGI. They will support our next stage of growth and create long-term value for our shareholders. Regarding our portfolio optimization strategy, this month, we acquired the remaining 25% stake in YPF Luz, obtaining full control of the company for an attractive valuation of $430 million. This transaction was structured through an acquisition finance. As a result, YPF now owns 100% of YPF Luz and will be fully consolidated in our financial statements. YPF Luz is a leading power generation company with a strong renewable energy business, represents a key asset in our long-term plan, as power is one of the main areas of growth in the energy sector. YPF Luz is the country's third largest power generator and second largest renewable energy company, with 100% dollar-linked revenues. It operates 3.8 GW of installed capacity across thermal and renewable power plants. Moreover, the company has grown nearly by five times in its initial capacity in the last decade. In addition, YPF Luz consistently deliver best-in-class thermal availability of 90%, well above the national average of 72%. Its renewable asset also perform at world-class level, with load factors of 50% for wind and 31% for solar, significantly higher than the global average. These results have supported high growth, with adjusted EBITDA rising from about $56 million in 2017 to about $500 million in 2026. At the same time, net leverage is expected to fall from 3.8x to around 1.5x. This acquisition represents another step for YPF to become a world-class energy company. It will allow YPF Luz to accelerate its growth while remaining focused on the power sector and reinforces YPF's integrated energy offering. Now, let me share with you an update on recent asset sales. Since last December, we have sold several non-core assets with total proceeds reaching about $2.2 billion. The two more recent deals represent more than half of this amount. First, we executed the agreement to sell the Mendoza non-operating and Chachahuén conventional areas for $405 million. In Q3, these areas produced about 16,000 bbl of oil per day, and the deal is now waiting for approval from the province. After closing, as it was mentioned, shale oil should account for about 95% of YPF's total oil output. Second, we executed the agreement to sell our 70% stake in Metrogas for $780 million. Based on Q3 results, Metrogas generated about $195 million of annual EBITDA and recorded a net cash position of about $65 million. The 20-year concession extension was already approved last month, and the deal now only needs final approval from the regulator ENRE and to reach closing. Finally, in Q3, we received the first 10% payment of both deals for a total of close to $120 million. I will now hand the call over to Pedro, who will review our financial results in more detail.

Thank you, Horacio. Now, let me walk through the evolution of our free cash flow during the third quarter. YPF once again delivered a strong free cash flow performance during the quarter, reaching the highest cash balance in its history. Adjusted EBITDA reached approximately $2.5 billion, marking YPF's second-best quarterly record and comfortably funding the CapEx of nearly $1.3 billion. During the quarter, we also recorded approximately $175 million of net proceeds from M&A transactions, mainly related to the initial 10% collections from the sale of our interest in Metrogas and the divestment of the Mendoza blocks. Cash generation was partially offset by approximately $278 million in regular interest payments and $225 million in income tax payments. On the other hand, working capital and other items contributed positively by approximately $15 million. Overall, YPF generated positive free cash flow of roughly $900 million during the third quarter. This performance reflects the strength of our underlying operations and our ability to simultaneously fund growth and continue reinforcing our financial position. In addition, net debt issuance and other financing activities contributed by almost $280 million during the quarter. This reflected the successful issuance of the new $1.2 billion international bond maturing in 2035 together with the completion in September of tender offers of approximately $530 million of the 2027s and 2029s international bonds. As a result, our liquidity position increased from approximately $2.5 billion at the end of the second quarter to $3.7 billion at the end of September, the maximum level ever recorded by the company. This strong liquidity position covers more than 2.5 years of our debt maturity profile and provides YPF with significant flexibility to continue executing its investment program, proactively managing upcoming debt maturities, and preserving a robust financial profile. Moving to our financial position, net leverage ratio declined to 0.8x at the end of the third quarter compared with 1.1x in June and 2.1x a year ago. This represents a reduction of more than 60% year-over-year and the lowest net leverage level achieved by YPF in more than a decade. In addition, the strong liquidity position achieved during the quarter allowed us to proactively execute liability management initiatives focused on reducing our overall cost of debt by repaying higher cost facilities with shorter tenors. In August, we retapped our dollar-MEP bond in the local market for approximately $170 million at a very competitive yield of 5.5% with maturity in April 2030. The proceeds were used to prepay local bonds maturing next year, optimizing our debt maturity profile and extending debt maturities. In parallel, we continue to repay our regular maturities with internally generated cash, reflecting our strong liquidity position and disciplined balance sheet management. Let me highlight an important milestone achieved by YPF in terms of our financial strategy. In September, we successfully returned to the international capital market with a new bond of $1.2 billion, representing the largest corporate bond of Argentina in the last 11 years. The transaction attracted demand for approximately $2.2 billion, allowing us to issue $1.2 billion through a new nine-year bond maturing in 2035 at a 7.85% yield. The transaction was priced at a spread of 300 basis points over the U.S. Treasuries, the lowest spread ever achieved by YPF. This demonstrates our strong access to the international capital market and the continued improvement in our credit profile. It also allowed us to further extend our debt maturity profile while prefund a portion of our 2027 financial needs. Following the issuance, we repurchased approximately $530 million of international bonds maturing between 2027 and 2029, reducing our near-term maturities and further improving the distribution of our debt profile. The remaining proceeds are expected to support our 2027 investment program and provide additional liquidity and financial flexibility. I will now turn it to Max to walk us through our operational performance.

Thank you, Pedro. Let me now walk you through our upstream performance during the third quarter. Our upstream strategy continued to deliver solid results during the quarter, driven by continued growth in shale oil production and further progress in the transformation of our production base. Shale oil production averaged 224,000 bpd during the third quarter, increasing 32% year-over-year and 5% sequentially. Moreover, according to our preliminary figures of October, production reached above 245,000 bpd these days, bringing us closer to our year-end target of roughly 250,000 bpd. This growth was driven by the continued development of our shale oil hubs, mainly supported by the contribution from La Angostura Sur, Loma Campana, La Amarga Chica, and Bandurria Sur blocks. In September, we completed the start-up of new oil and gas integrated treatment facilities in La Angostura Sur, representing approximately $400 million of investment. These facilities add processing capacity of approximately 60,000 bbl of oil per day and 4 million cubic meters of gas per day, supporting the continued development of the block towards its long-term production targets. In addition, this new infrastructure further strengthens our readiness for the next phase of production growth and supports the future evacuation of volumes through the VMOS system. At the same time, conventional oil production declined to approximately 37,000 bpd, down 47% year-over-year, mainly reflecting the continued execution of our conventional asset divestment program. Excluding the recently divested Mendoza blocks, conventional oil production would have been approximately 17,000 bpd. Moving on to costs. The total lifting cost declined to $7.8 per BOE, mainly driven by the continued shift towards higher share of shale and lower conventional volumes. Excluding the blocks under divestment, lifting costs would have totaled below $7 per BOE, underscoring the structural improvement in YPF's cost base as shale continued to account for a larger share of production. Within our oil hub, lifting costs remain at best-in-class levels of approximately $4.2 per BOE, broadly stable compared with the previous quarter. Turning to natural gas, total production averaged 36.5 million cubic meters per day, a 5% decline year-over-year. However, this trend was mostly driven by the continued reduction of conventional and tight gas production. Interannually, shale gas production increased 3%, reaching 27.1 million cubic meters per day, representing 74% of total gas production, further improving the quality and competitiveness of our gas portfolio. Overall, results during the quarter fully reflect the successful transformation of YPF's upstream portfolio. Shale oil continues to drive growth, more than offsetting the impact of conventional divestments, while the evolving production mix and ongoing operational efficiencies support a structurally stronger and more competitive cost base. Moving on to our midstream and downstream segments, processing levels remained robust during the third quarter at an average of 344,000 bpd, reflecting the strong reliability and efficiency of our refining system. Sequentially, it declined by 2%, primarily due to the scheduled maintenance shutdown at our La Plata refinery in September. On a year-over-year basis, processing volumes rose 5%, mainly driven by stronger utilization rates at La Plata and Luján de Cuyo refineries. Once again, this outstanding operational performance, together with strong gasoline and middle distillates production, allowed us to fully meet domestic demand without fuel imports, supply local refiners, and further expand fuel export volumes while also driving record premium gasoline production during the quarter. Looking ahead, we expect refinery throughput to gradually normalize by year-end as further maintenance activity is scheduled for the fourth quarter. Turning to domestic fuel sales, gasoline and diesel volumes declined by 4% on a quarterly basis, mainly driven by lower diesel demand from the industrial and agribusiness segments in the third quarter of 2026. These effects were partially offset by stronger gasoline demand. On a year-over-year basis, fuel sales increased by 2%, supported by stronger demand for both diesel and gasoline. As a result, YPF maintained its leadership position, reaching a 58% market share during the quarter and 61% when including gasoline and diesel volumes produced by YPF and sold through third-party gas stations. Beyond the domestic market, we also continued growing fuel exports during the third quarter, shipping 166,000 cubic meters of gasoline and diesel, around 4% of our total fuel sales. In terms of pricing, local fuel prices remained under the buffer scheme, allowing us to preserve fuel demand during a period of elevated volatility, maintaining a competitive position in the local market and expecting to recover the gap between the local prices and the import parities once the market has normalized. During certain periods in the third quarter, the decline in international prices partially allowed us to recover the gap as domestic prices remained stable. However, as the international conflict intensified again, YPF resumed temporarily absorbing part of the impact to support domestic demand while continuing to deliver strong downstream adjusted EBITDA margins. In late September, we implemented a modest 1% increase at the pump. Looking ahead, we will continue to closely monitor international price trends, domestic demand, competitors' pricing, market condition, and fiscal costs. We will use targeted micro pricing adjustment to maintain our competitive position in the local market while protecting margins. Lastly, our midstream and downstream adjusted EBITDA margins expanded to about $32/bbl in the third quarter, reflecting strong processing levels as favorable production mix, no fuel imports, and effective execution of our commercial and pricing strategy. Now, let me briefly highlight the continued progress we are making on the efficiency front. During the first nine months of the year, our shale operations continued to achieve significant productivity gains across both drilling and completion activities. Drilling speed in our shale oil hub reached roughly 354 meters per day, growing by 29% compared to 2023. At the same time, the unconventional fracking activity also continued improving, completing 11.1 stages per day and pumping 18.8 hours per day, representing improvements of 46% and 30%, respectively, compared to 2023 levels. This sustained growth is the result of our continued support from our Real Time Intelligence Center, focused on operational excellence and learning curve gains across our shale developments. It is also reflected in a new operational milestone achieved during the quarter with a new drilling record of 4,770 meters lateral length in a single run. Regarding our downstream business, as Horacio Marín explained at the beginning of the presentation, we continued to strengthen our operational excellence, technology, and product differentiation. La Plata Refinery was named Refinery of the Year for the second consecutive year, while YPF received the Digital Technology of the Year award for Ekons Matrix AI, our fuel blending solution. In addition, Infinia Turboclean became the first fuel in the region to achieve TOP TIER+ certification, reinforcing our leadership in premium fuels and innovation. I will now turn to Horacio Marín for an update on our LNG projects. Horacio Marín: Thank you, Max. Finally, let me share the progress on Argentina LNG project. As mentioned in previous call, this phase includes the development of the fully integrated LNG and liquids project based on five wet gas blocks in Vaca Muerta with about 1,400 well inventory. The project targets 12 million tons per year of liquefaction capacity, supported by two own floating LNG vessels of 6 million tons per year each. Additionally, it targets roughly 3.5 million tons per year of liquids, 70,000 bpd of condensate, as well as dedicated gas at NGL pipelines and required onshore infrastructure. The founding partners are YPF with 36% stake and Eni and XRG with 32% stake each. Once operational, cash flow will be supported by long-term off-take agreements with investment-grade counterparties, including the project sponsors. By 2031, investment is expected to reach around $29 billion. It includes $24 billion associated with the integrated LNG infrastructure, of which 60%-70% is expected to be debt, and around $5 billion for upstream development. Regarding progress today, last month, we received a long-term financial proposal up to $6 billion from US EXIM, one of the largest potential financing proposal ever associated with Argentina energy projects. This support marked a new transformational milestone for the project and underscore the project relevance and international confidence in execution. We expected FID to be reached by November 26th of this year. This will allow us to keep advances toward becoming a key platform for monetizing Vaca Muerta and positioning Argentina as a global energy exporter. Overall, YPF continues making significant progress on Argentina LNG project. Beyond unlocking the full potential of Vaca Muerta, it will position Argentina as a competitive LNG exporter and a relevant player in global energy markets over the next decade. With this, we conclude our presentation and open to the floor for questions.

We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Furrow with Pickering Energy Partners. Please go ahead. Your line is now open.

Good morning, Horacio, and the rest of the YPF team. Congrats on another strong quarter. Look, I understand it may be a little early to talk about 2027 activity plans, but at the current level of commodity prices and just the advancements on RIGI projects, an acceleration of activity looks highly compelling to us. We understand there's ultimately infrastructure constraints, but with VMOS coming online shortly, what would really prevent YPF from accelerating upstream activity next year? Horacio Marín: Good morning, and thank you very much for your question. First of all, I would like to tell you that when they hear me, I am a big monkey. I don't like how we rate because there are very long statements. We are going to improve, and we are working with artificial intelligence. Next quarter, I will think that we can hear me, but with artificial intelligence, it will be more clear for you. Okay? Second, yesterday, Vaca Muerta daily production was 252,330 bbl. What is it? Record high in our. Okay, record high will be every day. It is a record high, it is more than we say that it was at the end of this year. I think it is a very good production. It is congratulation all the upstream guys that are working very hard every day. Regarding your question, this year, we were expecting a very low price of oil. We accelerate all our M&A, and we were expecting very low price and not to stop our development in Vaca Muerta. The year was totally different, so that is why you see that our cash generation and our cash is high. For next year, we are in a very good financial position to speed up. I have a number. I will not say that. Why? Because I have to go to the board of director and to be approved next year budget. I will explain to you in April. What I have to tell you that you will be very surprised the production of Vaca Muerta for YPF December 2027. I repeat, you will be very surprised of the production of Vaca Muerta in December of 2027. What else you ask me?

No, that is great. You answered my question, and for what it is worth, I can hear you just fine, and I think we got the message loud and clear. For a follow-up, there has been a lot of topic of conversation in the U.S. on inflation. A lot of that is our global issues, but ultimately, Argentina is a bit of a different market for some items such as steel and diesel. Horacio Marín: Yes. When you talk about the inflation, the inflation in Argentina is very low compared what was in the history. Really, we don't care in the inflation, and you see that our cost is in a very good fashion because our business is to be efficient tomorrow, more efficient than today, and that is our work. Our price of our product is free market. Inflation is another. I don't think that this is the problem in Argentina, that in the market, I was before in all my life. It is not something that I preoccupy at all.

That is great. Good to hear that. Thanks again for your time, and congrats on another good quarter. Horacio Marín: Okay. Thank you very much.

Your next question comes from the line of Jacob Roberts with TPH Research. Your line is open. Please go ahead.

Good morning. I wanted to start on operations. You guys are hitting 15,600 ft per lateral, in a few of the wells you've done, 4,700 meters or so. In the U.S., I think we're seeing 15,000 ft becoming pretty routine. I'm just curious where you see the best opportunity set to keep extending those laterals. When we think about 2027, how much of the program do you think you can start seeing those longer laterals on? Horacio Marín: I will tell you our operation is half a million. In general, when we talk with you, we talk about our net production. Our operation production is much more. In what you say about the wells, today our routine is more I will tell you in meters, you have to multiply to be precise, is 3,500 meters is our standard. If you are not in a limit of a area, you will see that in general, our wells are 3,500 lateral. That when we arise was, I think was 2,800 meters. Why that? Because we want improve, and also, sometimes very important when you see, for example, the record that is 4,800 meters, why we drill those well is because we are near limits. There, sometimes we think there is, I will say there is. We go further in our knowledge, going more there. Why that? Because we make more money, because if no, we cannot drill another well, and also, the guy from drilling and completion, they are going up in their knowledge, and after until 3,500 meters, maybe next year we go 200 meters more and so on. The records, for me, the record are not important for the newspaper. I don't care. The record, what is important is you make more knowledge and you pass what you think is your limit. When you have a record, means that you can pressure the guys and going and to make more efficient and more money for the shareholders.

Thanks. I appreciate that color. I did want to follow on to some of the comments that Archer just made on production. It sounds like you guys are already at the 250,000 bpd coming off of shale. I'm curious maybe where you see the December exit rate truly being at this point, and then if I could, how many wells do you plan to tie in during the fourth quarter? Horacio Marín: Here is the Vice President of our team. All the guy, "You have the right number, I chicken out." No, he is chicken out now. He tell me that we will be in 250, 55, 58. I tell you, 250, it could be not the average. It could be one daily production date. It could be that one or more. The average within that it could be 255,000 bpd. Remember, we are more than we thought at the beginning of the year. Now, I tell you what, I pressure the guy. When I tell that, they have to do. I know that Farina is going to be very good, and he will reach that number. Why I talk only about Vaca Muerta, because he goes, "I care." Vaca Muerta makes money for you. Today, with all the sales that we have, we are 95% unconventional. Our goal was reached, that I told you two years ago that this year have to be the year that we are an unconventional and integrated company. I think we reach the goal because the other is minor.

I appreciate the time, guys, and congrats on the quarter.

Your next question comes from the line of Bruno Montanari with Morgan Stanley. Please go ahead. Your line is now open.

Good morning. Thanks for taking my questions. I have two on my end here. First, can you comment on how the Northern hub has compared with the current core shale hub in terms of productivity and well economics? What the experience has been there? Then as a follow-up from the presentation, when we look at the LNG financing structure, what needs to happen for the US EXIM Bank proposal to become binding at this point? Thank you very much. Horacio Marín: The Northern hub is, I tell you, how will be the development of YPF. You have the LNG hub, what is in the southwest. You have the hub core, but the hub core now includes south. A south hub, what is 100% of YPF. The LNG, you know that we have 36%. North hub is not 100% of YPF, it's with partners. Chevron, Vista, with Shell, Pluspetrol, and GyP, what is the province company of Neuquén. The northern, remember the RIGI was one of the best, I think, policy of Argentina because allow some places where our internal rate of return could be more difficult to be very economically. In the north hub, there is a place where we don't have, so far, as on rigs as in the south. It's very good, the wells are very good. Within our profit will be very, very good, but a little less EUR than in the south. It's not big difference. I would say 10% less, no more than that. The second question was about the EXIM Bank. The EXIM Bank, we've got a letter of intent. I think we are going to have that finished by, let's say, middle of next year. There will be the final closing, but there is no doubt that we will have up to the $6 billion. That was very important for our LNG project, and we have the same for other ECA, and the FID of the LNG will be next month, November 26th, Thursday, in Argentina.

Perfect. Thank you very much, Horacio.

Your next question comes from the line of George Gasztowtt with Latin Securities. Please go ahead.

Good morning, and thank you for taking my question. Moving to the downstream segment now this quarter, obviously another impressive operational quarter as we've seen throughout this year. I was wondering on the pricing side, it looks like we saw in your presentation that the gap to import parity widening to around 20% this quarter. I was wondering under your consumer buffer framework, how much you estimate remains to be recovered now and what the outlook is for the next few quarters, perhaps there. Thank you. Horacio Marín: The price? We are in a buffer. We have, I think, I don't know how many companies can say that we have a real-time prices of all the pumps around all the country. You have to see the demand. The demand was elastic. That's why when we see there was in general, and you know that the demand for the gasoline and diesel are totally inelastic. In Argentina, after some incremental at the beginning of the conflict, the demand start to be very elastic. Only was not elastic in the city of Buenos Aires, that continues to be in the same manner, but in all around Argentina are elastic. We cannot increase more than that, and we have a honest and a clear program with all consumers, and we are explaining in all TV shows, in the medias, in all the medias, because you have to be very clear with consumers. It's very important in the life to be clear and honest. There is, when I explain the buffer and I go to the supermarket, the person that use the, how you say greengrocer? The grocery. The woman in the grocery, they say, "I saw you on TV last night. Tell me what you understand." She told me, "You help me now, I help you after." That is our way to work. When the price of and also Argentina, it was never was in the free market. Never was in the free market. In a way that you can go directly there. What you have to read, the people are now here, and also you see in Europe, it is very difficult to all increase 20%, reduce 10%, increase 30%, reduce 15%. It is not possible. It is impossible. The people cannot afford that because they make very high uncertainty. What we did is to maintain the buffer, we increase from we start, some percentage is more percentage, and we pass through when there is incremental in taxes or incremental in biofuels, that will pass directly to the price. The way that it works, and people understand, and they maintain, is as follows. When the prices, they are up, we have two Vice Presidents that they calculate every day how much we finance the people. When they go down, we are collecting what we finance. That is the way that is going to continue. Nobody knows when it is going down. It is impossible that we will continue with that conflict. When the price goes down, we are going to maintain the price of gasoline, and there we are going to collect. That is when we see the demand, there is no room to increase in Argentina because the demand cannot afford more incremental. When I see the war in Europe and different places, it is impossible. Why is impossible? Because this is unique case in the war. Why? Because it is not only a big crisis, but it is a big crisis in spread. It is a double. It is exponential. That is why we think, and we are proud in YPF to maintain that policy, and you see excellent results. Because the price in the gasoline are high, not high as it has to be if you make the spot, but people cannot afford. We are going to maintain that because YPF, we call Argentina [Non-English content]. Tell somebody to translate that. Because people loves our company. Our company is the company of Argentina. We cannot put there because it will be a very difficult situation with the demand. If the demand was low, we are in the trouble, we need more investment to put all our gasoline in condition to be export. That is our policy.

Great. Thank you for taking the time to explain that, and it looks to have been a successful policy so far. Congratulations again on the quarter.

Your next question comes from the line of Leonardo Marcondes with Bank of America. Please go ahead. Your line is open.

[Non-English content], Horacio, Pedro, Maximiliano, and Margarita. Thank you for taking my questions here. I have one from my side, and then one follow-up. My question is on the asset sale program for the upstream assets. When do you expect it to be completed? Which assets are still for sale, and how far along are those processes? The follow-up question is regarding the new wells with longer lateral lengths. I was wondering if you guys could share in which blocks were these wells drilled, and if they are more productive than your standard wells, and if so, by how much, and what is the EUR you guys expect from them? Thank you very much. Horacio Marín: Okay. First, thank you for the question. The first question I will answer, I think. I say that in April, you will be surprised for our production, that you will be surprised the production of us in December 2027. That means that we are accelerating comparing what we said in the last investor day. I think it was one or two years ago. I don't remember 1.5 or two. In April, because of all the change in the market prices, we are going to go again to New York to update because of who you are asking. Really, we are going very fast, and we cannot be faster than you will see there, not because of financing, because of bottlenecks in evacuation. Not in the oil pipe, but in facilities. Because we are development new areas, but we are going the fastest that we can. Regarding the lateral length, when we go there, yes, the well has more EUR. In general, our EUR, you can extrapolate when you are more than 3,500, you make, I would say, the additional investment and the profitability increase. When you go farther, and farther, the question is not the reservoir and the quality of the reservoir. The question is the mechanical bottleneck of the drilling rig and also the pressure that you lost during the fracture. When you go to 4,800, the last fracture is at lower EUR than the first one. You can see in all the books and all the magazine in United how they go down. In general, the EUR is not linear, but it is much more. Okay?

Thank you very much.

Your next question comes from the line of Milene Carvalho with JPMorgan. Please go ahead.

Good morning, everyone, and thank you very much for taking my questions. I would like to understand a little bit better the M&A potential here. 2026 has been a very strong year. We have production expansion associated with very high levels of oil prices, and this translated into very solid free cash flow generation. When we look at the leverage of the company right now, we do see a lot of room for more to come. I wanted to understand a little bit on your side, what can we expect? Are there still M&A opportunities in Vaca Muerta? Would there be more diversification, or the focus right now would be on the LNG project? Thank you very much. Horacio Marín: We bought, as you remember, I would say one, two, three full block from Vaca Muerta. We bought YPF Luz. Why we bought YPF Luz? Because that is a future company, but it is very important to have no more YPF Luz and YPF. Why? Because we are working very hard to be delivering data centers. The energy for the data center, to be precise. Not that we are going to make data centers, okay? But with all the knowledge that we have and all the strength that we have from the upstream, plus the knowledge of YPF Luz, we are doing that. Always, you have when there are opportunities and M&A in Argentina and Vaca Muerta that are in the core and within the core that will make more profits for the shareholders, we will see. Always we will see also our financial situation. If we can enter and make stronger, we will do. If at that moment we will see that it's not good for our financial situation because we are going to develop, not only the oil but also LNG, we have to be very serious in the growth of YPF.

Your next question comes from the line of Andrés Cardona with Citi. Please go ahead. Your line is now open. Andrés Cardona: Hi. Good morning, Horacio, Pedro. I have a question about 2027 production outlook, because when looking at your latest strategy update, there have been many changes, right? You launched LLL Oil RIGI project, the size that was acquired, Bajo del Toro. So I was wondering if you could share any color about how do you see these two projects potentially affecting this production growth outlook. Thank you, and congratulations for this very solid results. Horacio Marín: Today we have 18 rigs and one rig that is going to Mendoza. So in February, we are going to have 22 rigs. You have to wait. I know that you would like to know all the data today, and I wish to tell you, but I'm going to tell you in April. In April, you have all that answer very clear. I can explain how we do the development. All of what is LLL Oil, let's say, take out the LNG, because the LNG is like something that is focused there. For the oil, and they have their own infrastructure for LNG. LNG, it's another company. In fact, will be another company. With the oil, you have to either north or south. South YPF has 100%, and the north not. There we have partners, so it is logical that the partner can invest at a different pace or more pace than you. It depends, because it is their own decision. When we have the decision of partners, we know how much we are investment in the half north. There, we know how much money we can invest for our project to be very high and going to have the peak of our production in 2031, where I am going to leave YPF. The south, we invest a lot because the investment in the north are not decreased the same as the south. It is the swing of our development. Also, we are developing now in a new way that we avoid the maximum that we can the chokes. We are now drilling, that is why you see the incremental production. We are drilling in the way that we maximize the planning wells. The choke will use 30% of EUR. We try to do in a very good fashion, and try to copy the best company of U.S., and to reduce that a lot. That it will be a lot of money for the shareholders.

Your next question comes from Daniel Guardiola with BTG Pactual. Please go ahead.

Thank you for taking my questions. I have a question on YPF Luz, for Horacio and Max, and Pedro as well. I wanted to know if you could elaborate on the strategic and financial rationale behind the transaction. Was there any contractual put option, liquidity obligation, or other arrangement with the minority shareholder that ultimately influenced the decision? Just to get some color on this, what ultimately led you to pursue a direct acquisition of that minority stake rather than proceed with the IPO that had been under consideration? If I may squeeze just a little one very rapidly, very easily for you guys regarding Metrogas, could you clarify the expected payment schedule for the remaining $700 million? Thank you very much. Horacio Marín: I'll pass the answer to Pedro.

Hey, Daniel. Thank you very much for the question. Regarding the YPF Luz deal, there was no contractual put option obligation for the deal. Actually, as Horacio mentioned before, the strategic path of that acquisition is based on the main future that we are foreseeing for that company, on the energy sector in general, and the electricity sector in particular. That is the real reason. Actually, we found a very attractive valuation. We negotiated with GE Vernova, so that was the main rationale behind that decision. Your second question regarding Metrogas, we expect that the final approval will come from the ENRE. That is the only pending approval for the transaction. Once we get that approval, we will get the closing for the remaining $700 million.

Your next question comes from Guilherme Martins with Goldman Sachs. Please go ahead when you are ready.

Hi, everyone. Good morning. Thank you for taking my questions. I have two quick ones since most of mine were already answered. The first one is on discount for Brent. We have been noticing increased volatility in differentials between ICE and Dated Brent, as well as in global freight prices. Do you have any color you would share on what you are seeing in terms of Brent discounts going into the fourth quarter? My second question is in terms of schedule for drillings next year. You have VMOS going online by early next year. How should we think in terms of production growth quarter by quarter next year? Thank you. Horacio Marín: Discount of Brent, I have no idea. You know? Nobody knows. What happened now is that there is a discount for the freight, because the freight is 10 times that it was in the normal. I have no idea what will happen in the fourth quarter. Nobody knows. Yesterday, I was with a big trader of the world, and I asked them, "What are you seeing on the price there?" They say, "No idea. Nobody knows." It's a conflict. It's a conflict that's your politics. I cannot answer that, I have no idea. Regarding VMOS, we are going to finish in time, in schedule, in cost, in everything. Okay? And on January, we will start to fill all pipes, and we are expecting that in March, everybody will start exporting. YPF is going to export at the pace that they have in the next year budget that I cannot tell today because it's not approved our next year budget. They will be bigger than we thought two years ago.

There are no further questions at this time. We have reached the end of our Q&A session. I will now turn the call back to Horacio Marín for closing remarks. Please go ahead. Horacio Marín: Okay. Thank you very much for all your questions, and we are very, I would say, very proud and happy how we are working. The result is a consequence of working hard and well. Our goal is to make always value for all shareholders. Thank you very much for your questions.

This concludes today's call. Thank you for attending. You may now disconnect.