YPF - ADR

Strong Q1 financial performance; exceptional cash generation - Revenues: $4.95bn, up 9% QoQ (international price rise since March + domestic fuel pricing aligned to international parities) and +7% YoY (strong local fuel demand + record refinery processing). - Adjusted EBITDA: ~$1.6bn, highest first quarter in YPF’s history, +24% QoQ and +28% YoY; margin 32%. - Free Cash Flow: $871m, up ~$1.8bn YoY; supported by operating performance + ~$500m strategic M&A proceeds. - Net leverage: 1.57x at end of Q1, down from 1.9x in Q4’25 (and below the ~2.1x peak in Q3’25). - Liquidity: $1.7bn, up $500m during the quarter. - (Good / surprising): Cash generation materially outpaced revenue growth; deleveraging accelerated.

Upstream: shale oil growth is delivering targets and lowering costs structurally - Shale oil: 205k bpd, +5% QoQ and +39% YoY; now 76% of total oil. - Guidance alignment: On track for ~215k bpd average 2026 with December exit rate ~250k bpd. - Efficiency/cost transformation: Upstream lifting costs down 42% YoY to $8.8/BOE (and ~$8/BOE pro forma excluding divested conventional assets). Best-in-class shale lifting costs around $4/BOE; La Angostura Sur ~$3/BOE. - Operational excellence (metrics investors care about): - New fracturing record: ~110 continuous pumping hours, 52 stages in <5 days at Loma Campana. - Drilling productivity: 364 m/day (+12% vs 2025); fracturing 11.2 stages/set/day (+15% vs 2025); pumping hours 18.5/day (+10%). - Longer laterals: ~3,450m (vs ~3,000m previously). - (Good): Demonstrates both volume and cost improvement—key for free cash flow durability.

Capex/investment and guidance reaffirmed (with acceleration expected) - Capex in Q1: ~$1bn; 78% allocated to conventional operations. - Capex trend: -10% QoQ (more downstream maintenance in Q4’25 + slower pace upstream facilities); lower YoY due to reduced exposure to conventional assets and a prior one-off item to secure unconventional concessions. - Full-year guidance reaffirmed: $5.5bn–$5.8bn, with capital deployment to accelerate in later quarters to match production growth needs. - Investment opportunity highlight (La Angostura Sur “proof of concept”): - Production ramp: 2k bpd → ~55k bpd in ~18 months (~25x). - Economies: breakeven < $40/bbl, cost ~$3/bbl, development level ~19%; plateau target ~100k bpd. - YPF holds 100% equity, implying full capture of upside through 2059.