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- **New Fertilizer Business Launch:** $2.7 billion urea plant to reduce Argentina's urea imports, leveraging Vaca Muerta gas reserves.
- **Revenue Growth:** Q2 EBITDA up 28% YoY, driven by oil production ramp-up (22,000 bpd at Rincón de Aranda) and higher power margins.
- **Financial Management:** Despite $128M negative free cash flow, net debt at $1.3B (1.4x leverage), with plans to peak leverage at 2x during project ramp-up.
- **Strategic Projects:** Urea plant and Rincón de Aranda expansion key growth drivers, with $1.4B equity financing for urea project.
- **Risk Mitigation:** Hedge 67% of 2027 oil production at $67/Brent, with plans to reduce hedging as production stabilizes.

**【CEO Summary Section】**
- Announced the launch of a new fertilizer business with a $2.7 billion urea plant project in Bahía Blanca, aiming to reduce Argentina's reliance on imported urea and monetize Vaca Muerta's shale gas reserves.
- Q2 2026 adjusted EBITDA reached $415 million, up 28% quarter-over-quarter, driven by gas seasonality, stronger spot power margins, and increased petrochemical prices.
- Oil production at Rincón de Aranda ramped up to 22,000 barrels per day, contributing one-third of oil and gas EBITDA, with plans to reach 45,000 barrels per day by 2027.
- Power generation EBITDA increased 39% year-over-year due to higher spot margins and B2B PPAs, offsetting challenges like turbine outages.

**【CFO Financial Commentary】**
- Q2 free cash flow was negative $128 million, but improved year-over-year due to stronger EBITDA and lower CapEx at Rincón de Aranda.
- Gross debt stood at $2.6 billion, with net debt at $1.3 billion, resulting in a leverage ratio of 1.4x trailing EBITDA.
- 2026 CapEx projected at $1 billion, mainly for Rincón de Aranda, with plans to finance the urea project through a 60/40 debt-equity ratio.
- Management expects net leverage to peak at around 2x over the next 2-3 years during project ramp-up.

**【Q&A Highlights】**
- **CapEx and Leverage:** CFO Fito noted net leverage could reach 2x, but expects stabilization by 2028 as projects mature. 2026 CapEx is $1 billion, with $700 million allocated to Rincón de Aranda.
- **Urea Project Financing:** The company aims to secure $1.4 billion in equity over 41 months, with debt negotiations nearing completion. EBITDA contribution from urea is projected at 65% of revenue, depending on urea prices.
- **Power Generation Outlook:** Q3 EBITDA expected to rise due to winter demand, but Q4 may decline seasonally. 2027 EBITDA growth could be limited by PPA rollouts, though long-term benefits from new infrastructure are anticipated.
- **Gas and Oil Costs:** Gas lifting costs remain stable at $1/MMBTU, while oil lifting costs decreased 28% to $15/barrel. Hedge strategy maintains 67% of 2027 oil production hedged at $67/Brent, with plans to reduce hedging as production plateaus.
- **Strategic Growth Drivers:** Expansion of Rincón de Aranda, urea plant, and LNG projects align with Argentina's export goals, supported by RIGI framework benefits like tax incentives and duty exemptions.

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Pampa Energy (PAM) Financials Overview

PAM Q2 2026 Earnings

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