Pampa Energia(PAM) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In 2024, the company achieved a 21% growth in average output and an 80% increase since 2017, reaching an all-time high in gas production [5] - EBITDA grew 19% year-on-year and 29% compared to 2017, with net debt falling to $410 million, the lowest since 2016 [8][28] - Adjusted EBITDA for Q4 amounted to $182 million, up 60% from last year, driven by increased gas deliveries and improved PPA performance [10][11] Business Line Data and Key Metrics Changes - Gas production rose 11% year-on-year, with shale gas's share increasing from 32% in 2023 to nearly 50% in 2024 [9] - Power segment recorded a 94% availability rate, with adjusted EBITDA of $86 million in Q4, up 7% year-on-year [22] - E&P adjusted EBITDA was $36 million in Q4, down 26% year-on-year due to lower sales to industries in Chile and higher operating costs [14] Market Data and Key Metrics Changes - The average gas price for Q4 was $2.9 per MBTU, down 10% due to lower exports to Chile and sales to industries [17] - Gas exports to Chile are expected to ramp up to 1 million cubic meters per day by May 2025, with current exports around 1.4 million cubic meters per day [88] Company Strategy and Development Direction - The company plans to diversify into shale oil with the development of Rincon de Aranda, targeting 20,000 barrels per day by December 2025 [19] - The focus remains on operational excellence and maintaining a strong balance sheet while preparing for future growth projects [8][29] - The company is not currently analyzing new investments in power generation but is studying a potential battery package investment in Buenos Aires [62] Management Comments on Operating Environment and Future Outlook - Management expressed optimism regarding regulatory changes, which are expected to enhance the company's ability to self-procure fuel and improve competitiveness [73] - The company anticipates a marginal increase in net debt due to significant CapEx in Rincon de Aranda, with expectations of returning to positive free cash flow by 2026 [39][40] Other Important Information - Total proven reserves rose 16% to 231 million barrels of oil equivalent, with shale reserves growing 60% year-on-year [20][21] - The total CapEx for 2025 is projected to be around $1.1 billion, with $750 million allocated for Rincon de Aranda [105] Q&A Session Summary Question: How do you expect regulatory changes to impact Pampa? - Management indicated it is too early to tell, but they do not expect significant impacts in the near term, with potential benefits for self-procurement of fuel [33][35] Question: How do you expect leverage to evolve with growth plans? - Management expects a marginal increase in net indebtedness due to significant CapEx in Rincon de Aranda, projecting a net debt increase to about 1.2 times by 2026 [39][40] Question: What is the plan if Brent prices go to $60-$65 per barrel? - The company has hedged approximately 65% of its production for 2025, feeling comfortable with the prices achieved through hedging [42][43] Question: What is the expected contribution of Rincon de Aranda to total EBITDA in 2025? - The estimated contribution is around $180 million for 2025 [112] Question: What is the timeline for the urea plant FID? - The company expects to make a decision by year-end, with a production plan of 2 million tons per year [119][120]