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| Statement |
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| In both those cases, we are making good progress |
| Finally, on the financial front, the beginning of the year resulted in another quarter delivering sound operating cash flow, which increased 12% sequentially to about $1.5 billion on the back of the higher adjusted EBITDA, coupled with positive working capital contributions |
| Adjusted EBITDA remains strong in the quarter, surpassing once again the $1 billion mark, expanding 12% from the previous quarter and 5% on a year-over-year basis |
| On a sequential basis, our shale oil production increased by 9%, and our shale gas production expanded by 4%, averaging over 92,000 barrels of oil per day, and about 17 million cubic meters per day of gas |
| The solid operating results permit our bottom line to come in positive territory once again, with net income reaching $341 million in Q1 |
| Finally, when looking into our debt profile, I would like to highlight that our healthy liquidity position comfortably covers our debt amortizations for the next 12 months, and a very manageable debt profile for the rest of the year |
| So in terms of actual working capital during the first quarter, we had a positive effect because we've been collecting on high seasonal invoices and while the delays took place on lower seasonality invoicing |
| It is worth highlighting that this funding took place at very attractive financing costs, benefiting from the average rush in the local market, as demonstrated by the negative funding cost of minus 5% achieved on our recent two-year dollar-linked local note |
| In summary, we are pleased with the result achieved during first Q23, and although we know it is a year full of challenges |
| We are glad to report a solid beginning of the year across our operational and financial metrics, where our total hydrocarbon production continued with a positive trend, bringing to market over 511,000 barrels of oil equivalent per day, representing an increase of 2% on a sequential basis and 1% when compared with the same period of 2022 |
| During the quarter, our total hydrocarbon production delivered 511,000 barrels of oil equivalent per day, highlighting a strong interannual expansion in our crude production, reaching the highest quarterly mark since 2016 at 238,000 barrels per day |
| In terms of refinery utilization, the revamping of a topping unit at the La Plata refinery that eliminated bottlenecks in the processing of light crude oil, accompanied by the revamping of the pump station Puesto Hernandez in the Neuquina Basin allowed us to increase processing levels to 307,000 barrels per day, 5% higher than the previous quarter and 9% above a year ago, achieving the highest quarterly mark in the last 13 years |
| The positive evolution in oil and gas production on a sequential basis came once again, and as expected, on the back of the solid increase of 6% in our total shale production |
| And clearly, we've been mostly successful during the first quarter |
| And in the other three pilots being deployed at Chachahuen, in Mendoza, El Trebol in Chubut, and Los Perales in Santa Cruz, we have continued harvesting promising results |
| Finally, we have also achieved solid progress on the engineering design process for the Vaca Muerta Sur pipeline and export terminal, having achieved about 70% completion |
| In addition, OTE has achieved solid progress in the critical path of its expansion project, having initiated the preliminary works for the construction of two new storage facilities of 50,000 cubic meters each and the offshore terminal at Puerto Rosales |
| So we are making good progress there |
| So in that case, we are also making good progress |
| Sequential improvements come as a result of higher hydrocarbon production and higher processing levels at our refineries, accompanied also by lower OpEx, partially offset by lower realization prices of our refinery products when compared to the previous quarter |
| So we believe that that's going to be a structural improvement and a structural export potential, both for YPF and for other players in the Neuquina Basin |
| We are making good progress on the construction of the Vaca Muerta North pipeline, which we are still seeing or expecting COV in early fourth quarter or late September, early October |
| Moreover, I would like to highlight the evolution of our crude oil production, we just commented during our strategic outlook presented a few weeks ago, is the focus of our short-term growth strategy recording a 3% sequential increase and a robust 7% inter-annual expansion |
| As we mentioned, both companies tap the local market, and they are making good progress in terms of the financing as well |
| And then finally, on the Vaca Muerta South or Vaca Muerta Sur project, we are making good progress on the engineering |
| In addition, we have continued making good progress in the construction of the Vaca Muerta North pipeline that will allow us and other producers of the basin to direct the crude oil produced in the core operations of Vaca Muerta to the Transandino pipeline and further north into our Luján de Cuyo refinery |
| And when compared to the same period of 2022, shale oil production expanded by 31%, aligned with our strategy of accelerating the monetization of our shale oil operations |
| As far as we managed to maintain production stable within crude -- conventional crude and mitigate to some extent, the decline in conventional natural gas, we should also see or be able to contain the increase in lifting costs there to a large extent |
| In terms of bottlenecks or pipeline expansion, again, as commented, we are seeing very good progress, and we are very comfortable with the progress that we are achieving directly and indirectly, right? Because some of these projects are being executed directly by YPF and some of them by third-parties like our participating companies Oldelval and OTE |
| And we are seeing good progress there, both in terms of the actual construction or the actual works that are being performed as well as the financing |
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| Now, regarding our domestic sales of gasoline and diesel, total dispatch volumes decreased by 3% when compared to the previous quarter, driven by a contraction of 6% in diesel sales, mainly due to the lower seasonal demand in the agribusiness that was particularly affected by the severe drought that the country experienced in recent months, and partially upset by a 2% increase in gasoline demand, which set a new quarterly record |
| Clearly, access to -- or the flow of imports is somewhat more troublesome these days, of course |
| Clearly, we have seen some deterioration in collections, particularly in -- related to the planned gas, where we have seen some further delays in collection |
| In terms of efficiencies within our shale operations, during the quarter, we lost some ground in terms of the development costs at our core hub operations, averaging $9.9 per barrel of oil equivalent, primarily on the back of continuous cost pressures, although operating metrics remain healthy |
| That is one thing, and the other thing is, what do you see in the next six months regarding pump prices given that we are in an inventory year, inflation is running high, and probably the company is receiving some pressure |
| Then as you have said, even though we might continue to see some cost pressures, we would expect the average lifting to trend downwards over time |
| However, we continue to see cost pressures affecting our overall performance |
| What I can comment on that is that although the steep devaluation of the currency will definitely erode our revenues as it impacts a large portion of our revenues, which are related to pump prices, roughly speaking, in the order of 55% to 60% of our total revenues come from the sale of local -- of fuels in the local market, which are priced in pesos |
| But clearly, as we continue to expect our oil production to increase in coming months and in coming years, as was also presented in our strategic outlook a few weeks ago in New York, we would expect total purchase volumes to decline over time, while at the same time, we increase our exports |
| So we saw an increase of imports despite an increased refinery utilization rate |
| So far we have managed to achieve that, and as mentioned, during the first quarter, the average of our net dollar prices was just 3% below the average for the fourth quarter, even though international prices came down further than that |
| This is a question, of course, for the government to try to keep pump prices stable |
| This strong cash generation was almost enough to fully fund our investment plan, payments of interest, and other expenses, resulting in a slight negative free cash flow of just $17 million |
| So all-in-all, we would say that the net -- there is a net impact, negative impact that the valuation will have on the differential between revenues and costs |
| And the gap between local fuels prices versus import parity declined to an average of about 20% in the first quarter, while further declining to about 15% in April, and more recently, during the first days of May, to a smaller discount of about 10% on the back of the continuous general downward trend in international prices |
| All-in-all, even within both sides, well, clearly on conventional, we've been -- we have seen our costs in previous quarters increasing, and that was mostly related to the decline that we were experiencing in production |
| But for the following quarters, particularly the third quarter, we might also see import levels relatively high compared to historical averages mostly because of program maintenance on our refineries |
| dollars decreased 3% sequentially, but stood 16% above Q1 2022 |
| On top of that, there is also a possibility -- a high probability of enlarging -- refinancing and enlarging the CAF-led A/B loan that was secured last year |
| But of course, that doesn't mean that we don't need to continue to making good progress and keeping a close eye to that project in the current -- right now, not just in the future |
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