Core Insights - Burford Capital Limited has provided updates on two significant developments regarding litigation finance and enforcement actions against Argentina [1] Group 1: US Budget Reconciliation Bill - The Senate Parliamentarian ruled that proposed tax provisions related to litigation finance are not eligible for inclusion in the US Senate's draft of the budget reconciliation bill [2] Group 2: YPF Turnover Decision - The U.S. District Court for the Southern District of New York ordered Argentina to transfer its Class D shares of YPF, which represent approximately 51% of YPF's outstanding shares, to a global custody account at Bank of New York Mellon within 14 days [3] - The Court also instructed that these shares be transferred to Petersen and Eton Park within one business day [3] - This development is viewed positively in the context of the enforcement campaign against Argentina, although further judicial proceedings may occur [4] Group 3: Company Overview - Burford Capital is a leading global finance and asset management firm focused on law, involved in litigation finance, risk management, asset recovery, and various legal finance and advisory activities [5]

Investment Rating - The report provides a "Neutral" rating for BP and Eni, while it assigns a "Buy" rating to Chevron, ExxonMobil, Shell, TotalEnergies, GALP, OMV, and Cenovus Energy, indicating a positive outlook for these companies [10]. Core Insights - The report highlights that the global oil and gas sector is expected to experience a compound annual growth rate (CAGR) of 6.5% from 2024 to 2027, driven by increasing demand and recovering prices [10]. - The Brent front month price is projected to stabilize around $65.99 per barrel in 2025, while WTI is expected to be at $62.13 per barrel, reflecting a recovery from previous lows [7]. - Refining margins are anticipated to fluctuate, with European composite margins expected to average around $5.00 per barrel in 2025, indicating a challenging environment for refiners [7]. Summary by Sections Company Ratings and Projections - BP: Current price at 393.0, target price 400, with a 2% upside and a Neutral rating [10] - Chevron: Current price at 148.19, target price 177, with a 19% upside and a Buy rating [10] - ExxonMobil: Current price at 113.19, target price 130, with a 15% upside and a Buy rating [10] - Shell: Current price at 2,698, target price 2,900, with a 7% upside and a Buy rating [10] - TotalEnergies: Current price at 54.90, target price 60.0, with a 9% upside and a Buy rating [10] - Eni: Current price at 14.26, target price 13.0, with a -9% downside and a Neutral rating [10] - Cenovus Energy: Current price at 14.64, target price 25, with a 71% upside and a Buy rating [10] Market Assumptions - The report outlines macro assumptions for commodity prices, with Brent and WTI prices expected to stabilize in 2025 [7]. - The report also discusses refining margins, indicating a challenging environment for refiners with European margins projected at $5.00 per barrel [7]. Performance Metrics - The report includes performance metrics such as EV/DACF, FCF yield, and P/E ratios for major oil companies, providing a comprehensive view of their financial health and market positioning [10].

Investment Rating - The report provides a "Buy" rating for Chevron, ExxonMobil, Shell, TotalEnergies, GALP, OMV, and Cenovus Energy, while BP and Eni are rated as "Neutral" [10]. Core Insights - The report highlights a positive outlook for major oil companies, driven by expected increases in free cash flow and production growth rates. The average expected production growth for 2025-2027 is projected at 7% for the global sector [10]. - The report emphasizes the importance of refining margins, with European composite margins expected to stabilize around 5.00 in 2025, while US composite margins are projected to be around 15.67 [7][10]. - The macroeconomic assumptions indicate a gradual recovery in commodity prices, with Brent crude oil expected to average $65.99 per barrel in 2025, reflecting a slight increase from previous years [7]. Summary by Relevant Sections Company Ratings - BP: Current price at 380.7, target price 400, with a 5% upside, rated as Neutral (CBE) [10]. - Chevron: Current price at 144.97, target price 177, with a 22% upside, rated as Buy (CBE) [10]. - ExxonMobil: Current price at 109.73, target price 130, with an 18% upside, rated as Buy (CBE) [10]. - Shell: Current price at 2,615, target price 2,900, with an 11% upside, rated as Buy (CBE) [10]. - TotalEnergies: Current price at 54.74, target price 60, with a 10% upside, rated as Buy (CBE) [10]. - Eni: Current price at 13.86, target price 13.0, with a -6% downside, rated as Neutral (CBE) [10]. - Cenovus Energy: Current price at 14.42, target price 25, with a 73% upside, rated as Buy [10]. Financial Metrics - The report provides various financial metrics for the companies, including EV/DACF, FCF Yield, and P/E ratios, indicating strong financial health and potential for growth in the coming years [10]. - The average expected free cash flow yield for the sector is projected at 7.4% for 2025, reflecting robust cash generation capabilities [10]. Market Trends - The report notes a trend towards increased investment in renewable energy sources among major oil companies, which may impact their long-term strategies and market positioning [10]. - The refining sector is expected to see improvements in margins, particularly in the US and Europe, as demand recovers post-pandemic [7][10].

Core Insights - Eni S.p.A. has signed a memorandum of understanding with YPF for a $50 billion LNG project in Argentina, highlighting its potential involvement in one of South America's most ambitious energy initiatives [1][10] - The project aims to leverage Argentina's Vaca Muerta shale formation, which contains an estimated 308 trillion cubic feet of recoverable gas reserves, positioning Argentina as a key player in the global LNG market [6] Group 1: Project Overview - The MoU focuses on the initial development stage of the Argentina LNG project, which includes upstream, transportation, and gas liquefaction infrastructure, specifically covering two floating LNG units with a combined capacity of 12 million tons per annum [2][10] - Argentina LNG is structured in three phases, with the first phase involving the two FLNG units, the second phase including a 10 million tpa onshore liquefaction plant, and the third phase expanding that facility to increase output by another 10 million tpa, aiming for a total capacity of 30 million tpa by the end of the decade [5] Group 2: Strategic Importance - YPF's CEO expressed that the partnership with Eni is intended to accelerate the project's timeline, reflecting growing global interest in gas from the Vaca Muerta region [4] - Eni's CEO emphasized the company's unique expertise in FLNG, citing successful projects in Congo and Mozambique as reasons for YPF's selection of Eni [3] Group 3: Future Developments - YPF and Shell, the current developers of the Argentina LNG project, are expected to issue the front-end engineering and design tender for the first onshore liquefaction unit by August, with the FEED process anticipated to last for 10 months, leading to a final investment decision by mid-2026 [7]

Core Viewpoint - Eni has signed a partnership agreement with YPF regarding the ARGLNG project, which aims to enhance LNG export capacity to 3 million tons per year by 2030 [1] Group 1 - Eni is an Italian energy giant involved in the LNG sector [1] - YPF is an Argentine oil company collaborating with Eni on the LNG project [1] - The ARGLNG project is expected to gradually increase LNG export capabilities [1]

Core Viewpoint - YPF Sociedad Anónima's stock surged by 18.2% following the announcement of its first-quarter 2025 earnings, despite a weak bottom line, primarily driven by a temporary pause in the U.S.-China trade conflict [1] YPF's Q1 Results - YPF reported first-quarter earnings of $0.62 per share, missing the Zacks Consensus Estimate of $0.73 per share and declining from $1.66 per share in the same quarter last year [2] - Total quarterly revenues were $4.61 billion, falling short of the Zacks Consensus Estimate of $4.92 billion but increasing from $4.31 billion year-over-year [2] - YPF currently holds a Zacks Rank 5 (Strong Sell) [2] YPF's Q1 Operations Upstream - Total production volumes increased by 4.9% year-over-year to 552.1 thousand barrels of oil equivalent per day (MBoe/d) [7] - Crude oil production rose by 5.6% year-over-year to 269.9 thousand barrels per day (MBbl/D), while natural gas production increased by 2.7% [7] - Average price realization for crude oil decreased by 0.6% year-over-year to $67.9 per barrel, and natural gas price realizations fell by 0.3% to $3 per million British thermal unit (MMBTU) [8] - EBITDA from upstream activities declined by 8% year-over-year to $766 million due to falling commodity price realizations [8] Midstream & Downstream - Refineries' utilization rate improved to 94% from 89% in the prior-year quarter [9] - Adjusted EBITDA from the Midstream & Downstream segment was $504 million, down 12% year-over-year, primarily due to higher crude oil purchases [9] Cash Flow of YPF - Net cash flow from operating activities totaled $850 million, while free cash outflow was reported at $957 million [10] Balance Sheet - As of March 31, 2025, YPF had cash and short-term investments of $1.2 billion and total debt of $9.6 billion [11]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of $1.24 billion for Q1 2025, reflecting a significant sequential growth of 48% [7][14] - Revenue for Q1 was $4.61 billion, showing a 3% sequential decline but a 7% year-over-year increase [13][14] - The net result was a loss of $10 million, an improvement from a loss of $284 million in Q4 2024 [16][17] - CapEx for Q1 was $1.21 billion, with 75% allocated to unconventional assets, aligning with the annual guidance of $5 billion to $5.2 billion [17][18] Business Line Data and Key Metrics Changes - Shale oil production increased by 31% year-over-year, now representing 55% of total oil production [9][19] - The downstream segment achieved a record refining utilization rate of 94%, processing 318,000 barrels per day [10][27] - The company signed an MOU with Globant to accelerate digital transformation, focusing on AI implementation [11] Market Data and Key Metrics Changes - Oil export to Chile grew by 34% year-over-year, reaching 36,000 barrels per day [20] - Natural gas production increased by 9% sequentially, delivering over 37 million cubic meters per day [20] - Local fuel prices increased by 2% sequentially and 1% year-over-year, while the market share remained at 56% [26][27] Company Strategy and Development Direction - The company is focusing on reducing exposure to mature fields and enhancing shale production as part of its four-pillar plan [7][19] - A new business structure was implemented in 2025, splitting the Gas and Power segment into LNG and Integrated Gas and New Energies [6] - The company aims to achieve an annual average Brent price of $72.5 per barrel for 2025 [16][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience amid price volatility, indicating a breakeven level of $60 per barrel for EBITDA [39] - The company anticipates a reduction in leverage as it divests from mature fields, expecting to reach a net leverage ratio of 1.5 to 1.6 times by year-end [34][72] - Future CapEx adjustments will depend on market conditions, with management indicating flexibility in response to price changes [45][73] Other Important Information - The company reported a negative free cash flow of $957 million in Q1, primarily due to the performance of mature fields [18][31] - The company is actively refinancing its debt, with a focus on local market opportunities [92] - The LNG projects are progressing, with FID expected for the Southern Energy JV by July 2025 [51][82] Q&A Session Summary Question: Current Brent breakeven level in terms of EBITDA and cash flow - Management indicated that every $10 reduction in Brent results in a $900 million impact on EBITDA, with a breakeven level around $60 [39] Question: Required CapEx to maintain current production - The required CapEx to maintain production is estimated at $2 billion [40] Question: Flexibility on CapEx and activity levels amid current oil price scenario - Management stated they would adjust their plans if necessary but are currently not considering changes [44] Question: Impact of divestment of mature assets on cash flow - The impact was around $230 million, with expectations of minimal further impact as divestments progress [49][50] Question: Steps for final investment decision on LNG projects - FID for the Southern Energy JV is expected by July, with ongoing negotiations for other projects [51][52] Question: Fuel pricing strategy and market share expectations - The pricing strategy is aligned with international market conditions, and the company expects to maintain its market share [56] Question: Update on Vaca Muerta Sur and gas pipeline negotiations - The company is on track for initial production by the end of 2026, with ongoing discussions for pipeline investments [60][63] Question: Divestment of Nitro Fuels and production contribution - The production contribution from divested blocks is minimal, with a focus on improving production from Vaca Muerta [66][68] Question: CapEx guidance and affiliate contributions - The $5 billion CapEx guidance does not include contributions to affiliates, which are part of ongoing infrastructure projects [77][80]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of $1,240 million, reflecting a sequential growth of 48% due to divestment in mature fields and improved refining and marketing margins [7][13][14] - Revenue for Q1 was $4,610 million, showing a 3% sequential decline but a 7% year-over-year increase, primarily driven by shale activity and higher local fuel prices [12][13] - The net result was a loss of $10 million, significantly improved from a loss of $284 million in Q4 last year, attributed to higher adjusted EBITDA and lower one-off costs [14][15] Business Line Data and Key Metrics Changes - Shale oil production increased by 31% year-over-year, now representing 55% of total oil production, with total hydrocarbon production rising by approximately 5% [8][18] - The downstream segment achieved a record high refining utilization of 94%, processing 318,000 barrels per day, and refining margins increased by 28% sequentially to $14.3 per barrel [9][26] Market Data and Key Metrics Changes - Oil exports to Chile grew by 34% year-over-year, reaching 36,000 barrels per day, while natural gas production increased by 9% sequentially [19][20] - Local fuel prices increased by 2% sequentially and 1% year-over-year, with the company maintaining a market share of 56% [25][26] Company Strategy and Development Direction - The company has restructured its business segments, splitting the Gas and Power segment into LNG and Integrated Gas and New Energies, and reallocating midstream gas business [6] - The focus remains on increasing shale production and operational efficiency, with plans to replicate real-time intelligence centers across other refineries [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current uncertain price environment, indicating a breakeven level of $60 per barrel for EBITDA [37][39] - The company anticipates continued growth in shale production and aims to achieve an annual target of over 165,000 barrels per day [18][23] Other Important Information - The company signed multiple MOUs and agreements to advance LNG projects, with expectations for operational vessels by 2027 and 2028 [10][11][12] - CapEx for Q1 was $1,210 million, with 75% allocated to unconventional assets, aligning with the annual guidance of $5 billion to $5.2 billion [16][17] Q&A Session Summary Question: Current resilience amid price uncertainty and breakeven levels - Management indicated that every $10 reduction in oil prices impacts EBITDA by approximately $900 million, with a required CapEx of $2 billion to maintain current production levels [37][39] Question: Flexibility on CapEx and potential buyer financing issues - Management stated that they would adjust their plans if necessary but are currently not in a position to make drastic changes due to market volatility [42][43] Question: Impact of mature asset divestments on cash flow - The company reported a $230 million cash flow impact from mature assets, with expectations of minimal further impact as divestments progress [48][50] Question: Steps for final investment decisions on LNG projects - Management outlined that FID for the Southern Energy JV is expected by July, with ongoing processes for other LNG projects [51][52] Question: Fuel pricing strategy and market share expectations - The pricing strategy is aligned with international market conditions, and the company expects to maintain its market share despite price adjustments [56][57] Question: Update on Vaca Muerta Sur and pipeline negotiations - Management confirmed timelines for production increases and ongoing negotiations for gas pipeline investments, emphasizing the importance of favorable tariffs [60][62]

Financial Performance - Revenues for Q1 2025 totaled $4,608 million, a decrease of 3% quarter-over-quarter (q/q) but an increase of 7% year-over-year (y/y) compared to Q1 2024[15]. - Net result for Q1 2025 was a loss of $10 million, a 96% improvement from a loss of $284 million in Q4 2024, but a decline from a profit of $657 million in Q1 2024[7]. - Revenues totaled US$3.9 billion, down 3% q/q, primarily due to lower seasonal diesel demand and a decline in oil exports[35]. - Gross profit for Q1 2025 was $1,279 million, reflecting a significant increase of 28.5% Q/Q, although it showed a slight decrease of 0.9% Y/Y[5.2]. - Operating income for Q1 2025 was $192 million, a substantial recovery from a loss of $530 million in Q4 2024, but a decrease of 71.2% Y/Y from $666 million in Q1 2024[5.2]. - The company reported a net loss of US$10 million in 1Q25, a significant improvement from a loss of US$284 million in 4Q24[21]. - The company recorded a financial net loss of US$256 million in 1Q25, compared to a loss of US$112 million in 4Q24, mainly due to lower domestic interest income rates[20]. - Earnings per share attributable to shareholders of the parent company was $(0.04) in Q1 2025, down 94.6% from $1.66 in Q1 2024[5.2]. Operational Highlights - Adjusted EBITDA reached $1,245 million, reflecting a significant increase of 48% q/q, primarily driven by higher fuel prices and operational savings from divested mature fields[8]. - Adjusted EBITDA reached US$766 million in 1Q25, reflecting a 28% increase quarter-over-quarter, driven by seasonal demand for natural gas and higher crude oil prices[29]. - Total revenues for the upstream segment amounted to US$2,067 million in 1Q25, a 5% increase from the previous quarter, primarily due to a 21% rise in natural gas sales[25]. - The company’s adjusted EBITDA for the midstream and downstream segment was US$504 million in 1Q25, a 36% increase quarter-over-quarter[23]. - The company’s adjusted EBITDA, excluding inventories price effect, reached US$504 million, up 36% q/q, supported by higher local fuel prices[39]. - The company produced approximately 40% of Argentina's oil and 30% of its gas, maintaining its position as the largest shale producer in Vaca Muerta[6]. - Shale oil production averaged 147.3 kbbl/d, representing a 7% increase q/q and a 31% increase y/y, constituting 55% of total oil production[11]. - Crude oil production averaged 270 kbbl/d, flat q/q, with shale oil growth at 147 kbbl/d (+7% q/q), offsetting a 6% decline in conventional output[32]. - Natural gas production increased by 9% q/q, driven by higher seasonal demand from power plants, while NGL production rose by 34% q/q[33]. Capital Expenditures and Investments - Capital expenditures (CAPEX) amounted to $1,214 million, down 8% q/q but up 4% y/y, with 75% focused on unconventional activities, particularly shale[10]. - CAPEX for the upstream segment was US$979 million in 1Q25, an 11% increase from 4Q24, with a focus on drilling and workover activities[29]. - CAPEX was US$204 million, a decrease of 42% q/q, with 53% allocated to refining projects[41]. - The company signed a Memorandum of Understanding (MoU) for the transfer of 10 conventional blocks in Santa Cruz Province as part of its Mature Fields Exit Program[12]. - Argentina LNG project received Final Investment Decision (FID) approval for a 20-year charter agreement for 2.45 MTPA FLNG, with expected completion by 2027[12]. Debt and Financial Position - The company reported a net debt of $8,336 million, an increase of 12% q/q and 16% y/y, with a net leverage ratio of 1.8x[7]. - Total debt increased to US$9,566 million, reflecting a 7.0% rise from the previous quarter[58]. - The company issued a 9-year unsecured international bond for US$1.1 billion at a yield of 8.50% during 1Q25[60]. - The net leverage ratio increased from 1.6x in 4Q24 to 1.8x in 1Q25, with expectations to return to 1.5x to 1.6x after closing the mature fields transaction[59]. - Cash and short-term investments decreased to US$1,230 million, an 18.4% decline compared to the previous quarter[58]. - Free cash flow was negative US$957 million, impacted by US$230 million from mature fields and US$211 million from M&A activities[54]. Market Position and Shareholder Information - The company’s total issued capital stock was 393,312,793 shares as of March 2025, with 51% owned by the Argentina Government[19]. - YPF operates three refineries, accounting for about 50% of Argentina's refining capacity, and holds a market share of over 55% in local diesel and gasoline sales[6]. - The company’s subsidiary, Metrogas, distributes around 25% of the country's natural gas, while YPF Luz is the third largest power generation company in Argentina[6]. - The government holds a controlling 51% stake in YPF, which is listed on the NYSE and ByMA[6]. - The company is in the process of divesting conventional mature fields to focus on its core operations[6].

I am an individual investor with over 10 years of trading. I have been developing as a stock analyst for the last five years. I am inclined to search for Value companies, mainly linked to the production of commodities. I mainly focus on companies that show sustained free cash flows over time, low levels of leverage, sustainable debt over time, that are going through some stage of distress but with high recovery potential. I prefer to analyze companies and sectors that are not widely taken into account by th ...