管理層發言
Hello, everyone. Thank you for joining us, and welcome to the YPF Second Quarter 2026 Earnings Conference Call. 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's IR Manager. Thank you for joining us today in our second quarter 2026 earnings call. 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. Today's presentation will be conducted by our Chairman and CEO, Mr. Horacio Marin; 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 Q2 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.
Thank you, Margarita, and good morning. Q2 was a landmark quarter in YPF's history with 10 major milestones achieved across all our operations. These results reflect the magnitude of the transformation that YPF has achieved since the launch of the 4x4 plan, supported by strong market dynamics. The main drivers of this transformation are shale growth, the replacement of conventional assets, cost control, capital discipline and operational efficiency. As a result, we are reshaping the company into a very profitable integrated shale player. We are building a more profitable, more resilient and more export-oriented integrated shale company. Adjusted EBITDA reached $2.8 billion, positioning the quarter as the best in the company's history, a 70% increase versus the prior high record in Q3 2014 and higher than last quarter. To put this in perspective, in the first half of 2026, we generated nearly $4.4 billion of adjusted EBITDA, already above the full year EBITDA reported in 2023. This exceptional performance drove adjusted EBITDA margin to 43%, its highest level in the last two decades, supported by higher prices, seasonal demand, solid operational execution and operational efficiency. As a result, the outstanding performance was reflected in the income statement. Operating result reached $1.8 billion, a new record high in company history, while net result was $1.2 billion, representing the second best quarterly performance ever achieved by YPF. The first net result was Q3 last year. In terms of cash generation, free cash flow reached $824 million, top three in our history, while liquidity closed at the highest level ever achieved of $2.5 billion. As a result, net leverage decreased to 1.1x, its lowest level in more than a decade, underscoring the continued improvement in YPF's financial position. From an operational standpoint, the quarter reinforced the continued transformation of YPF's production mix. Shale oil production reached 213,000 barrels per day with shale oil now representing 80% of total oil production. This confirms the increased relevance of unconventional assets within the company portfolio and the continued progress in scaling up Vaca Muerta as YPF's key growth driver. In parallel, we continue increasing the number of rigs operated by YPF in Vaca Muerta oil window. As of today, we are operating 16 rigs, significantly higher than the 12 rigs in December last year and expecting to reach 21 rigs by early 2027. On the other hand, let me share with you an important step to accelerate Vaca Muerta. In May, we submitted the RIGI application for Loma La Lata Oil, a project 100% owned by YPF with a production plateau of roughly 240,000 barrels per day. It represents the largest oil export program in Argentina's history and the largest project submitted under RIGI so far. The project requires cumulative investment of $25 billion over 15 years and is expected to generate more than $100 billion in oil export revenue over its lifetime. Loma La Lata Oil positions YPF and Argentina to build a world-class energy export platform. Given the scale of the project, the approval process may be structured across separate SPVs. We will provide more details later when we have news. Finally, our downstream operation continued to deliver exceptional performance. Refinery processing reached 351,000 barrels per day, reflecting the highest level of refinery utilization ever achieved. It enabled us to generate surplus production of gasoline and middle distillates, reaching 43,000 cubic meters per day and setting a new record high. Overall, these results reflect a quarter of exceptional execution with record profitability, strong cash generation, a reinforced balance sheet and continued operational improvement across the company's main business segments. Before moving to the next slide, let me take a moment to highlight several recent developments that are highly important to the execution of our 4x4 plan strategy. First, regarding the second pillar of our 4x4 plan, active portfolio management, last week we signed an agreement for the sale of two clusters of the Andes projects in the province of Mendoza: the operated Chachahuen field and the non-operating El Corcobo and CNQ-7A blocks. These transactions were agreed at a sale price of $405 million and remain subject to final approvals before closing. Importantly, once these conventional fields are excluded from our production profile, approximately 95% of our oil production would come from shale operations. It marks another concrete step toward our objective of becoming a pure shale player. More recently, we have just obtained the approval of our Board and signed the sale of the 70% equity stake in MetroGAS, subject to closing. Moving to midstream oil, VMOS remains on track to reach commercial operations by the end of Q4 this year with progress of around 80% as of July, expecting first oil by early 2027. Turning to Argentina LNG. We have signed an agreement with the province of Neuquén to establish the project's regulatory and fiscal framework. In addition, we successfully brought Eni and XRG into the upstream development with each partner acquiring a 32% interest in the five blocks that will be fully dedicated to Argentina LNG, while YPF retained the remaining 36% stake. This is a highly relevant milestone on the path towards the final investment decision as it improves the project's upstream foundation and reinforces the development of the integrated LNG value chain. We will provide further details later in the presentation. In terms of our local fuel pricing strategy, in mid-May, we extended the buffer mechanism for another 45 days alongside a 1% adjustment. The buffer mechanism successfully preserved local fuel market dynamics during a very volatile international context while allowing our midstream and downstream to reach a very healthy EBITDA margin of around $30 per barrel. Finally, regarding YPF's stock split, last week we successfully completed a 10-for-1 split in the local market, BYMA, with the goal of improving accessibility and affordability for local retail investors in comparison with our peers. In parallel, we adjusted the ratio of ADR to shares from 1:1 to 1:10 with no economic impact on ADR holders. Importantly, this split doesn't affect shareholders' economic interest, ownership percentage or voting rights. In addition, users of the YPF application with cash accounts will be able to buy and sell YPF shares directly through the app starting this Friday, August 14. This represents another meaningful step in expanding access to YPF's equity story to a wider investor base. Now let me share more details on our Loma La Lata Oil project, a key driver to accelerate the development of the South Hub in the Vaca Muerta oil window. In late May, YPF applied to RIGI, the large investment incentive regime, for the SPV Loma La Lata Oil. This is a large RIGI project in Argentina's major upstream oil export initiative. The SPV is fully owned by YPF, developing five blocks with a well inventory of over 1,150 wells and an unconventional concession until 2059. These blocks are La Angostura Sur I & II, already delivering exceptional productivity with solid economics, currently with seven rigs in operation, besides expansion to Barreal Grande, La Angostura Suroeste and La Angostura Norte. In terms of investment, we estimate total CapEx of around $25 billion over the next 15 years. It will be mainly allocated to drilling and completion activities, leveraging shared infrastructure to maximize efficiency. At plateau beyond 2032, production is expected to reach around 240,000 barrels per day 100% dedicated to export markets through VMOS, while also contributing around 10 million cubic meters per day of gas to the local market. This will translate into estimated annual revenue of approximately $7 billion, considering both oil and gas with an average Brent price of $70 per barrel. It's worth mentioning that given its scale, long-term horizon and export focus supported by RIGI, this project is a transformational initiative for Argentina's long-term oil development and important value creation for our shareholders. In this sense, based on the scale of the project, the approval process may be structured across different SPVs. Now I turn the call to Pedro to analyze in detail our financial results.
Thank you, Horacio, and good morning, everyone. As Horacio mentioned, it was a record-breaking quarter for YPF. We delivered record earnings, margins and cash generation, reduced leverage to its lowest level in more than a decade and achieved strong operational performance across all our businesses. Revenues reached approximately $6.6 billion in the second quarter, up 33% sequentially and 42% year-over-year. The increase was supported by stronger international prices as well as higher refinery processing levels, generating surplus for fuel exports and seasonal demand for diesel and natural gas. Adjusted EBITDA totaled $2.8 billion, increasing 76% sequentially and 2.5x year-over-year. This performance reflects the shift to shale, high refinery utilization, disciplined cost management, efficiency gains across the company and a better pricing scenario. On the production side, our shale oil output continued expanding, reaching 213,000 barrels per day, increasing 4% sequentially and 47% interannually. As Horacio mentioned, excluding the conventional assets under the divestment process, around 95% of our oil production would have come from shale formation. In terms of investment, during the second quarter we deployed over $1.3 billion, allocating 77% to our unconventional operations. CapEx increased by 37% sequentially and 16% internally, primarily due to the signing bonus for the unconventional concessions of the five blocks dedicated for the Argentina LNG project. Also, it was driven by the higher investment in facilities at La Angostura Sur and Norte fields. For the rest of the year, we expect further acceleration in line with the production ramp-up. On the financial front, despite acceleration in capital expenditures, we generated a very strong free cash flow of $824 million, which I will discuss in greater detail later. As a result, our net leverage ratio declined to 1.1x, marking the third consecutive quarterly reduction since Q3 of last year and reaching its low level in 11 years. Now let me walk through the evolution of our free cash flow during the second quarter. The positive free cash flow represents the third highest free cash flow in YPF's history and was primarily driven by the all-time high EBITDA of $2.8 billion. This outstanding result comfortably funded our accelerated CapEx program of over $1.3 billion, aligned with expansion of our shale operations and key infrastructure projects. It also covered the $188 million payment related to the acquisition of Equinor assets in Vaca Muerta as well as the $115 million interest payments. In addition, the negative working capital variation was mainly explained by higher seasonal natural gas sales. It is important to note that the higher planned gas price is fully reflected in the EBITDA during the quarter. However, given the related collection terms, most of these incremental sales are collected during the following quarter. This temporary working capital effect was partially offset by $85 million in dividends collected from affiliates. It is worth highlighting that excluding M&A activity, the company would have delivered an even stronger performance, generating free cash flow of approximately $1 billion. As a result, our cash liquidity position increased to nearly $2.5 billion at the end of June compared to approximately $1.7 billion at the end of March. This further strengthens the company's liquidity position and marks the highest cash balance in our history. This improvement provides us with significant flexibility to execute our ambitious investment plan for the second half of the year while comfortably covering our debt maturities. Turning to our financial position, we have continued improving our net leverage ratio since the third quarter of last year. This quarter it declined to 1.1x, nearly half the peak level reported in the third quarter of last year, primarily driven by a better international prices environment, reaching the lowest net leverage level in more than a decade. In addition, the strong liquidity position achieved during the quarter allowed us to pursue proactive liability management activities focused on reducing our overall cost of debt by prepaying higher cost facilities with shorter tenors. In this context, in April we issued a new local bond for $122 million with a four-year tenor and at a 5.5% yield, taking advantage of a market opportunity to secure low-cost long-tenor financing. The proceeds were used to prepay a higher-cost loan maturing in 2028, generating interest savings while further optimizing our debt maturity profile. Additionally, we amended our $450 million syndicated export pre-funding facility executed in the fourth quarter of last year, extending the drawdown period by two months and pushing the final maturity by one year. As a result, most principal maturities are now concentrated in 2029. During the second quarter, we also prepaid approximately $220 million of local bonds and trade facilities maturing primarily in 2027 and 2028. Separately, in June we signed a mandate letter with IDB Invest to establish the framework conditions to structure a potential A/B loan facility of up to $500 million. Despite not representing a financial commitment, it provides additional flexibility and optionality to address potential funding needs for next year. More recently, in August we successfully reopened a local bond originally issued in April, raising an additional $170 million with a 3.5-year tenor and a 5.5% yield. The proceeds will be used to repurchase our $140 million bond maturing in February 2027, further improving our debt maturity profile while reinforcing our commitment to proactive liability management and funding optimization. Looking at our debt profile, remaining maturities for the second half of this year amount to approximately $700 million. Nearly 40% corresponds to local bonds, 28% corresponds to amortizing international bonds, while the remainder is composed of other local and international financial loans. Finally, following the recent sovereign rating upgrade, in May Fitch upgraded our rating to B- with a stable outlook. S&P upgraded YPF's rating to B in June and Moody's also upgraded the company from B2 to B1 in July. This last new rating is the highest YPF has achieved in recent years, broadly in line with the level the company held between 2017 and 2018. Overall, these upgrades, together with our broad access to capital markets and financing opportunities, reinforce both the momentum and sustainability of our credit story, reflecting the strength of YPF's financial position and the market's confidence in our strategy and credit profile. I will now turn it to Max to walk through the operational performance.
Thank you, Pedro, and good morning to everyone. Let me dive into the evolution of our upstream performance in the quarter. Our upstream strategy continues to deliver outstanding results with shale oil driving growth, improving efficiencies and consolidating YPF's position as a best-in-class Vaca Muerta player. Importantly, shale oil output continues to more than offset the conventional divestments, supporting a more resilient and higher-margin production base. In that sense, shale oil production continues the growth path, hitting a new record high, reaching 213,000 barrels per day in the second quarter, representing a sequential increase of 4% and a 47% year-over-year. This performance was primarily driven by the strong contribution from La Angostura Sur, followed by higher production recorded in the north hub of Vaca Muerta. In addition, since May, we have incorporated the production associated with our 4.9% stake in Bandurria Sur block and our 15% stake in Bajo del Toro block, both recently acquired from Equinor. Looking ahead, we expect shale oil production growth to accelerate during the second half of the year as key infrastructure projects and other facilities like the oil treatment plant in La Angostura Sur continue to move closer to startup including VMOS, which reached around 77% completion as of June 2026. Shale oil expansion fully compensated the continuous divestment from conventional assets, which dropped 49% year-over-year. Excluding the conventional assets that are under the divestment process, conventional production would have been roughly 18,000 barrels per day in the second quarter. Total lifting costs, excluding specific well service costs, continued the downward trend, decreasing 31% year-over-year to $8.4 per BOE in the second quarter, reflecting the structural improvement in our cost base. Excluding the divestment assets mentioned before, lifting cost would have been below $7 per BOE focusing on our shale oil hub, where we continue to operate at best-in-class levels at around $4 per BOE, essentially flat on a sequential basis. Turning to natural gas, production averaged 37.3 million cubic meters per day, down 6% year-over-year, primarily reflecting the exit from conventional fields, partially offset by the expansion of shale gas production, mainly led by La Calera block. Additionally, let me point out that during the second quarter a well located in Rincón del Mangrullo block reached production of 1.3 million cubic meters per day, becoming the highest producing well within the basin's dry gas window. Our capital allocation is currently focused on the oil window of Vaca Muerta, reflecting the greater flexibility of oil demand supported by higher evacuation capacity, while natural gas still remains largely constrained by domestic consumption. Looking ahead, the development of integrated LNG projects is expected to unlock significant incremental demand, leveraging YPF's substantial acreage position and world-class resource base in Vaca Muerta's gas window. Overall, these results highlight the consistency of our upstream strategy, where shale development not only drives production growth, but also enhances efficiency, lowers cost and supports structurally stronger and more profitable results. Moving to our midstream and downstream segment. Our processing levels set a new record in the second quarter, averaging 351,000 barrels per day, reconfirming the reliability and flexibility of our refining system. It grew by 2% sequentially and 16% interannually, where during the second quarter last year La Plata refinery was under maintenance. This exceptional operational performance, together with a new record production of gasoline and middle distillates, enabled us not only to fully meet domestic demand without imports, but also to supply local refiners and expand exports. Looking ahead, we expect processing to gradually normalize towards ordinary levels as scheduled maintenance activities will take place during the second half of the year, thereby ensuring sustained operational reliability and long-term efficiency. Regarding domestic sales of gasoline and diesel, dispatch volumes increased by 7% quarter-over-quarter, driven by an expansion in seasonal diesel demand. On a year-over-year basis, gasoline and diesel volumes grew by 10%, supported by stronger demand, particularly in diesel across all commercial segments. As a result, we increased our market share to 59% from 57% in the first quarter and up to 61% when we consider gasoline and diesel produced by YPF and dispatched through third-party gas stations. It is worth mentioning that beyond local demand, in the second quarter YPF exported nearly 100,000 cubic meters of gasoline and diesel. In terms of pricing strategy, as Horacio explained before, in April we decided to temporarily postpone further price adjustments alongside a 1% increase. This temporary measure, which concluded in late June, acted as an effective buffer, allowing us to preserve fuel demand during a period of elevated volatility while progressively reducing the gap with import parity as market conditions evolve, maintaining a competitive position in the local market. Lastly, let me highlight that our midstream and downstream adjusted EBITDA margin expanded to nearly $30 per barrel in the second quarter, benefiting from strong processing volumes and the successful execution of our commercial and pricing strategy. Now let me briefly walk you through the progress of our upstream efficiencies during the quarter. We continue to deliver consistent improvements in productivity across our shale operations, driven by execution and ongoing efficiency gains. Starting with drilling activity, we continued setting new efficiency gains in our core shale hubs. During the first half of 2026, we reached 354 meters per day, 9% above 2025's average and recording roughly a 30% increase compared to 274 meters per day recorded in 2023. In our unconventional fracking activities, we also delivered strong efficiency gains across our key operating metrics. During the first half of the year, we recorded 11.4 stages per day, 18% higher versus 2025 levels and representing a remarkable expansion of 50% compared to 2023, while pumping hours per day rose to 19.2 hours, 14% and 32% above the average of 2025 and 2023, respectively. It is worth highlighting that in June we achieved record levels of fracking, completing nearly 1,400 stages and representing around half of the country's activity. Moreover, during July we achieved another major hydraulic fracturing milestone by pumping continuously for 203 hours and completing 86 stages at Bandurria Sur block. It represents over eight days and 11 hours of uninterrupted operations. This achievement was monitored through our real-time intelligence center and reflected a fully remote and autonomous fracturing operation completed with zero incidents. All these record performances in Vaca Muerta bring us even closer to Permian-level operating standards. In the downstream business, in the second quarter we continued to strengthen YPF's position as a key player in Argentina's energy transformation. As part of our innovation program, we visited Tesla's Gigafactory in Texas, one of the most advanced industrial facilities in the world, and signed a letter of intent to explore collaboration opportunities in fast charging networks and energy storage, combining Tesla's technology leadership with YPF's nationwide infrastructure platform. This initiative reflects our commitment to modernizing our energy system, advancing innovation and supporting the adoption of next-generation energy and mobility solutions that will enhance the country's competitiveness and long-term sustainability. Moreover, as I mentioned before, our outstanding processing levels resulted in a surplus of gasoline and mid-distillates production, enabling YPF to avoid imports, supply local peers and expand our exports. Additionally, during the quarter we completed the works related to the new fuel specification project at our Luján de Cuyo refinery, marked by the successful start-up of the new diesel hydrotreating unit in July. In parallel, we made progress on engineering works for new hydrotreating units at the La Plata and Plaza Huincul refineries to ensure full compliance with diesel specifications. Importantly, all these improvements are the result of continuous optimization efforts across all of our operations, supported by better well planning, disciplined execution and a more efficient integration with our service providers. I am now turning to Horacio to continue with updates regarding LNG projects.
Thank you, Max. Let me share the progress we achieved on the LNG projects. Regarding the tolling phase, I would like to highlight the recent approval of the San Matías pipeline SPV under the RIGI framework. The project contemplates the construction of a 470-kilometer gas pipeline connecting Tratayén in Vaca Muerta to the San Matías Gulf and is expected to have transportation capacity of approximately 27 million cubic meters per day by mid-2028. The project will require a total investment of around $1.3 billion and is expected to be funded by a project finance scheme with 70% debt and 30% equity. Importantly, the project finance is progressing very well and is already at an advanced stage with financial closing expected during Q3 this year. Turning to the Argentina LNG project. The most relevant milestone of the quarter was the agreement signed in June between YPF and the government of Neuquén. This set the long-term regulatory and fiscal framework applicable to Argentina LNG. All of these steps provide a more predictable and competitive foundation to continue advancing the project. We also made significant progress in the upstream segment of the project through the agreement to incorporate Eni and XRG into the UPCO Argentina LNG 1, the upstream SPV that currently held 100% of the five wet gas blocks dedicated to the project. Under this structure, Eni and XRG will each hold a 32% interest while YPF remains the operator with a 36% stake. This reinforces alignment across the entire value chain, enhances execution capabilities and represents another important step toward reaching the final investment decision. On the execution front, we have recently selected the frontrunners for the EPC of the gas NGL pipeline as well as the integrated gas treatment plant. In addition, on the financial side, we have completed all the documentation required to open the virtual data room with the ECAs, which was successfully launched in July. This marks another important milestone in the project finance process and further demonstrates the continued progress of Argentina LNG. Overall, Argentina LNG continues to gain momentum. This project will not only accelerate the development of Vaca Muerta, but also has the potential to reshape Argentina's export profile over the coming decade. Finally, I would like to share our revision to our 2026 guidance. This reflects a strong international price environment and its direct impact on profitability, cash generation and balance sheet strength. We are assuming a Brent price of $75 per barrel for the second half of the year. This assumption remains subject to the high volatility seen in international markets over recent weeks. Under this scenario, the average Brent price for the year 2026 would be around $82 per barrel, 30% above our previous assumption of $63 per barrel. As a result, we now expect adjusted EBITDA in the area of $8 billion, representing a significant increase from our previous guidance of around $6 billion. This improvement is supported by a higher Brent environment, operational efficiency and strong refined product crack spreads. And let me highlight that this new guidance compares very favorably with YPF's 2023 EBITDA. In fact, under exactly the same comparable Brent condition in just three years, YPF is doubling the adjusted EBITDA from $4 billion to $8 billion. This clearly reflects the strength and discipline of the 4x4 plan and our ability to create tangible and sustainable value for our shareholders. On the operating side, we remain fully on track with our shale oil production targets. We continue to expect average shale oil production of around 215,000 barrels per day during 2026 and to reach an exit rate of approximately 250,000 barrels per day by year-end. With respect to investment, we expect to accelerate deployment during the second half of the year. This is mainly driven by progress in facility construction, maintenance activity rescheduled for the second half and the faster development of the southern half of Vaca Muerta through Loma La Lata Oil. As a result, we're increasing our full year CapEx guidance by approximately 5%; the new range is $5.8 billion to $6.2 billion, remaining around 70% allocated to shale operations. Despite the minor increase in our CapEx plan, we expect to end the year with a positive free cash flow position of around $2 billion. This figure includes M&A proceeds already collected and assumes the proceeds expected from transactions currently under execution. This strong cash flow outlook is also reflected in our balance sheet expectation. We now anticipate net leverage to decline significantly to nearly 1x. This compares with our previous guidance range of 1.6x to 1.7x. In summary, this revised guidance reinforces the strength and resilience of YPF's business model: a more favorable pricing environment is translated into higher profitability, strong cash generation and lower debt. At the same time, our strategic priorities remain unchanged. Most importantly, this provides further evidence that the 4x4 plan is delivering concrete results, positioning YPF for a stronger, more profitable and more financially robust future. With this, we conclude our presentation and open the floor for questions.
分析師問答
Your first question comes from the line of Michael Furrow with Pickering Energy Partners.
I'd just like to start with CapEx. It came in notably below expectations this quarter, particularly on the upstream side at just under $1.1 billion. So given the strong start to the year and the acceleration of spending and activity in the second half of this year, could you help us get a better understanding of the shape of CapEx or activity levels for the remainder of 2026?
Thank you very much for the question. As you saw in the guidance, we are going to accelerate because of our results, and we have secured the rigs and the fracture sets. At the end of the year, we're going to have 19 rigs; now we have 16. The level that we think we are going to finish at the end of the year for CapEx will be $6 billion. The production at the end of December target is 250,000 barrels per day. For sure, we are going to accelerate next year. We have also secured the rigs for next year. In February, we are going to have 21 rigs.
Great. I appreciate that, Horacio. Maybe just following up on that point: the shale productivity continues to look strong across the asset base. To us, at least, it seems like the company is more than on track to hit its 2026 guidance and the 250,000 barrels per day shale exit rate. So Horacio, are you seeing the same thing? And what would need to happen in the back half of the year to put that target out of reach?
Yes, we are seeing the same thing. We have the rigs, and we have finished drilling many wells. We need to fracture all the wells. The only thing we need from the facility point of view is the oil treatment plant in La Angostura Sur. We think that in September it will reach COD. With that, we can reach the number without problems.
Your next question comes from the line of George Gasztowtt with Latin Securities.
Congratulations on the good quarter. I have two related questions this morning on Vaca Muerta's evacuation capacity. First, we've seen a few reports of delays to the Vaca Muerta Sur monobuoy delivery out of the Middle East, and I was wondering if you had any comments on that. As a follow-up, Oldelval is looking to temporarily increase capacity in Duplicar using polymers and upgrades to pumping stations. As its largest shareholder, I was wondering what your expectations for that initiative were and whether the additional capacity could allow YPF to sustain its production ramp if Vaca Muerta were delayed?
Regarding VMOS and the monobuoy, we are keeping our fingers crossed. The vessel is on board and is now passing the Strait of Hormuz, so maybe next week we will have very good news. Regarding a plan B for VMOS, we purchased another vessel that will not need to refuel in Dubai because of the Strait, so we believe we have everything on track and that it will be a success. That is the update we have today. In any case, we are going to use all our capacity. Remember that we need capacity for the three refineries and also for export. Our plan is to export by VMOS. Because of the production that we are going to have next year, I think in April next year in New York we will use the majority of the capacity that we have.
Your next question comes from the line of Andres Cardona with Citi.
Congratulations on this very strong record quarter and also on the execution on the capital allocation front. Two quick questions. Given the projects being approved under the regime, does the industry see a need to accelerate the development of the Vaca Muerta Sur phases that were originally planned for 2028 and beyond? And on the capital allocation front, you have completed many of the processes previously announced; which ones are still pending? Are you also reviewing the portfolio to assess potential additional divestments?
To answer the first one: we know what our north is for YPF. Our view is that the industry needs to improve VMOS. If other players move as quickly as we are, the timing could be 2028; if not, it could be 2029 and beyond. We have the plans to do that. Regarding capital allocation and the portfolio, with MetroGAS we have finished the sale of non-core assets. For conventional assets, after last week's signature for the Mendoza fields, YPF is moving to having about 95% of production from Vaca Muerta. That means we can say we are almost an exclusively unconventional integrated company. There are still some non-core fields to sell, and we are in the process of selling those fields as well. So maybe by the end of the year it could be 98%–100% shale. We finished a very difficult process that some doubted at the start because it was difficult to execute in Argentina, and I think we were very successful.
Your next question comes from the line of Milene Carvalho with JPMorgan.
Congrats on the very solid results. I would like to explore a little more on the downstream side. You had very strong results and very strong margin despite prices being a little bit below international parity. Could you comment on what your plans are for the rest of the year in terms of fuel prices? If oil declines, should fuels follow? Or should we see YPF sustaining prices to compensate for this period below parity? Additionally, on the utilization rate, you have been running above 100%. Should we expect maintenance in the second half?
Thank you for the two questions. On utilization: we expect to have some scheduled maintenance in the second half, and for Q4 we think average refinery utilization across YPF will be around 100%. On prices: as everyone knows, we implemented a buffer because demand was weak; it was decreasing and could have been negative, so we used the buffer as temporary support. Now we are in a different phase. Our pricing policy is aligned to international prices and to supply and demand dynamics. We have a real-time intelligence center where we can see pump-level demand in real time, which provides us with rich information to make decisions. We have different micro-pricing policies that will continue. Oil prices are volatile—15 days ago Brent was near $70 and today around $85–$86—so what will happen in the second half depends on that. We will adapt pricing as market conditions evolve.
Your next question comes from the line of Daniel Guardiola with BTG.
Congrats on the results. Following the incorporation of Eni and XRG into the upstream JV, what are the next key milestones toward FID? And perhaps what remaining commercial or regulatory risks still need to be addressed before the project becomes fully sanctioned?
Because I'm still recovering, I'll ask the team and then answer. Pedro, could you summarize the outstanding items for Argentina LNG?
He was asking about the Argentina LNG project and what remains pending.
On Argentina LNG: we are working very hard. We have finished all the documents and are in the virtual data room process with ECAs and banks. We have completed all technical finishes and already selected EPC contractors for the pipelines and for the gas conditioning plant. We expect to have materials for the pipelines in two months and to progress engineering for the big conditioning plant in Río Negro within a similar timeframe. From a project standpoint, we are very ready to reach FID by the end of the year or in the fourth quarter and to start construction as soon as possible after that. From the commercial side, we have finished agreements with the provinces of Neuquén and Río Negro and have established the regulatory and fiscal framework. With our partners now integrated in upstream, we are aligned across the value chain. We are very ready to reach FID this year; it will be very important for YPF, our partners and the country.
Your next question comes from the line of Leonardo Marcondes with Bank of America.
I have two questions. First, on Argentina LNG, what LNG price are you assuming for the FID and what IRR target are you underwriting for the project? Second, regarding upstream CapEx: with the improvement in drilling and frack speed, could you share your current drilling and completion cost, and is there still room for further efficiency gains?
This project is very robust. You should know that in the wet gas window this project produces revenues that are roughly half liquids and half gas, so it has built-in natural hedging and robustness. For price assumptions, we generally use market futures in our underwriting. We view the project as very resilient under a range of price scenarios. Regarding well costs: if you take a 3,000-meter horizontal lateral length, our cost is around $11.5 million per well. In practice we are now using longer laterals—around 3,500 meters—because they have proven to be more profitable given our efficiencies through the real-time intelligence center and our operational teams. There is still room for further efficiency gains, but we are approaching best-in-class levels.
Your next question comes from the line of Matias Cattaruzzi with AdCap Grupo.
This was an amazing quarter that you presented. Congratulations. I have a few questions regarding capital allocation and the divestment process. You'll be having $1.2 billion of extra cash this year combined with an excellent EBITDA and high oil prices. Are you expecting to accelerate CapEx or deleverage this year? Or are you preparing for CapEx contributions for the Argentina LNG project? Is inorganic growth on the table? Or will you bring forward the dividend distribution expected for 2028? And then one more: what should be the second half of the year R&M margins going forward? How do you see the buffer, which ended in July? Should we expect a trajectory back to the $12–$14 per barrel R&M margins you previously guided, or should we expect margins to remain at these higher levels?
On capital allocation, remember we planned for a lower price environment; reality turned out different. We work always on optimization and efficiency irrespective of prices. Operational efficiency at YPF is extremely good today. As I said, in February we expect to have 21 rigs, up from 12 in December. We aim to be incremental; you'll see more detail at our investor day next April. Regarding Argentina LNG and VMOS and evacuation: we have a solid program and capital in place and are also working to improve our debt profile. If we need more funding, it will depend on the price environment, but we do not see big difficulties developing Argentina LNG. On downstream margins: we don't see margins reverting to the $12–$14 per barrel range; we believe margins can remain good because we have significantly improved operational efficiency across our refineries and logistics. YPF has an excellent downstream system, and with increased efficiencies we expect sustained stronger margins, although final outcomes will depend on market conditions.
Okay. And one last question on YPF Agro: is it still considered core? Do you have an ongoing sale process?
On YPF Agro: we ran a bidding process that was not successful. Given that outcome, we decided to reorganize it and move YPF Agro under the New Energies reporting structure to increase focus. We will continue to optimize and deliver better efficiency. We are not pursuing a sale at this time; YPF Agro will remain part of YPF and we will implement a renewed strategy to improve performance.
We have reached the end of our Q&A session. I will now turn the call back to Horacio for closing remarks.
Thank you very much everybody, and thank you very much for the congratulations. All the team at YPF is very proud to work in our company and to create value for all of you. We are going to continue to create value. That is our goal and our pride. Thank you very much.
This concludes today's call. Thank you for attending. You may now disconnect.