YPF's 2025 Q2 Earnings Call: Unpacking Contradictions in CapEx, Debt Strategy, and Production Goals

Shale Oil Production and 4x4 Plan:
- YPF's shale oil production remained stable at 145,000 barrels per day in Q2, despite a divestment that decreased production by 6,000 barrels per day.
- Despite international price volatility, the 4x4 plan and production from new shale acreage acquisitions offset the divestment impact.
- The company aims to reach 165,000 barrels per day by the end of 2025, marking a 70% increase in oil production over 25 months.

Mature Fields Divestment and Cost Reduction:
- The divestment of mature fields resulted in a 24% interannual reduction in lifting costs, contributing to a 61,000 barrels of oil per day decrease in production from these fields.
- The divestment strategy focused on reducing exposure to high-cost mature fields to enhance profitability and allocate resources to more productive unconventional assets.

VMOS Pipeline and Infrastructure Expansion:
- The development of the VMOS pipeline aims to reach production capacity of 0.5 million barrels per day by 2030, supporting YPF's expansion in the Vaca Muerta region.
- The project secured a $2 billion syndicated loan and is around 23% completed, with significant progress in welding and tank assembly.
- It is considered a critical infrastructure for unlocking YPF's and the broader industry's growth potential.

Financial Performance and Debt Management:
- YPF reported an adjusted EBITDA of $1.12 billion in Q2, with a 10% sequential decrease primarily due to Brent price contraction and exiting from mature fields.
- Despite challenges, the company's net profit improved to $58 million in Q2, driven by one-off items related to mature fields.
- YPF's net debt rose to $8.8 billion, with plans to normalize the net leverage ratio to 1.8x by year-end through asset sales and debt refinancing.