Argentina’s state-owned oil and gas company YPF ended the first quarter of 2025 with a US$10 million loss, a US$667 million drop compared to the same period last year.
Early on May, the company’s CEO, Horacio Marín, and its CFO, Federico Barroetaveña, presented the results to investors.
There, representatives spoke about strategy moving forward, which consisted of focusing almost exclusively on Vaca Muerta, a large host rock for major deposits of shale oil and shale gas in the southern provinces of Neuquén and Río Negro.
Shale oil and mature fields
“In terms of shale oil, we produced 31% more than Q1 last year, now representing 55% of our total oil production,” said Marín. “This upstanding growth was boosted by record drilling performance achieved, especially in March.” Shale oil production averaged 147 thousand barrels per day, a growth of 31% compared to the same period of the previous year and 7% compared to the last quarter of 2024.
YPF is also withdrawing from conventional oil fields, divesting from its mature oil fields — those in the later stages of their production life. According to Barroetaveña, the company’s mature fields partially explain this quarter’s losses. The presentation said that, if they were excluded, the company would have earned US$428 million instead of losing US$10 million.
Their aim is to be fully out of mature fields by Q3 of 2025 and the plan to steer away from those fields is called the Andes project. So far, out of the company’s 50 production blocks in mature fields, 11 have been fully transferred, 23 are in their final stage, and 16 are in progress. The company signed an agreement with the Santa Cruz province in April to give it back the 10 blocks the company operated there. Talks with to exit from fields in the Neuquén and Chubut provinces are also underway.
The public company is also advancing a project to build six floating liquefied natural gas (LNG) facilities — specialized vessels that convert natural gas into LNG at sea. YPF says the first vessel is expected to be operational in 2027, and the second in 2028.
International prices and strategy
Marín also spoke about the international drop in oil prices, as the Brent barrel price fell to around US$60 this week. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC+) announced its eight member countries would hike production, which could mean a bigger drop in prices. “At US$60 [a barrel], in Vaca Muerta, we make money and we make good money.” Marin claimed. The company, however, made its projections for the year with a barrel at US$72.50.
Marín warned that YPF could switch its capital expenditure strategy if the prices continue to fall. “If we have to change our program, we will change it, okay? And never, never will I make a decision in a panic, okay?” he added, before questioning the “volatility” in the prices. “The market is not stabilized,” he said.
Numbers: revenue, investments and debt
The company reported earnings before interest, taxes, depreciation, and amortization (EBITDA) for $4.61 billion in Q1, a 3% decline. Marin said the drop is mainly explained by “lower seasonal local demand for fertilizers” and “reduced oil volume as we increase the vertical integration with our La Plata refinery.”
“This effect [was] partially offset by higher local fuel prices and big seasonal demand of natural gas from power plants. Interannually, revenues grew by 7%, mainly boosted by shale activity, including increased oil exports,” he added.
He said that the cash flow of the quarter “was impacted by $211 million of net disbursement made for the acquisition of Sierra Chata at 54.45% of stake — that is a shale gas block in Vaca Muerta.” “As a result, our net debt rose to $8.3 billion,” he said.
Oil exports increased 34% in the quarter compared to the first quarter of the previous year, mainly driven by the growth in shale oil production. Exports averaged 36 thousand barrels per day. In this period, YPF invested US$1.2 billion. Seventy-five percent of these investments were destined for the expansion of non-conventional production (mostly shale) and the modernization works at YPF’s Refineries, especially in La Plata and Luján de Cuyo.
SOURCE: buenosairesherald.com