Pampa Energia(PAM)2024-05-09 08:39Financial Data and Key Metrics - Adjusted EBITDA for the quarter was $189 million, an 8% decrease YoY due to CAMMESA's payment haircut, lower gas exports, and a drop in petrochemical and energy spot prices [1] - CapEx in Q1 decreased by 36% YoY, primarily due to reduced shale gas activity and the divestment of PEPE 6, partially offset by the shale oil pilot plan in Rincon de Aranda [2] - Free cash outflow in Q1 was $187 million, driven by increased working capital due to CAMMESA payment delays, which rose from 73 to 89 days [52] - Net cash increased by $11 million in the quarter, achieving an $845 million cash position by the end of March [19] Business Line Data and Key Metrics - Gas production increased by 31% YoY and 32% QoQ, averaging almost 12 million cubic meters per day, driven by local demand [49] - E&P business posted an adjusted EBITDA of $70 million in Q1, a 14% increase YoY, driven by higher domestic gas demand and hot weather [15] - Power generation segment posted an adjusted EBITDA of $85 million in Q1, a 22% decrease YoY, impacted by CAMMESA's January invoice impairment and peso devaluation [45] - Petrochemicals business posted $11 million of EBITDA in Q1, a 58% growth YoY, driven by higher sales in the reformer and lower costs due to FX [51] Market Data and Key Metrics - Average gas price for the quarter stood at $3.2 per million BTU, an 18% decrease due to lower exports in volume and price to Chile [16] - Domestic gas sales were above take or pay levels, although exports to Chile struggled but improved compared to Q4 [47] - The winter season began in May, and the company is hitting peak production soon [47] Company Strategy and Industry Competition - The company is focusing on shale gas production, which represented 40% of total output this quarter, a significant increase compared to last year's 14% [43] - The company is awaiting final resolution on CAMMESA payments and analyzing the course of action [6] - The company is optimistic about the development of Rincon de Aranda, with initial production of over 1,300 barrels per day and plans to drill and complete two pads by the end of 2024 [24][85] Management Commentary on Operating Environment and Future Outlook - Management highlighted the impact of CAMMESA's payment delays on working capital and the need for current and on-time payments going forward [39] - The company is optimistic about reaching an agreement with the government on CAMMESA payments, with minor improvements expected [82] - Management expects to see lower CapEx in the future, particularly in natural gas, due to the excellent productivity of recent wells [100] Other Important Information - The company collected $45 million in dividends from OCP, a co-controlled oil pipeline company in Ecuador [19] - The company issued new debt to cover increased working capital, taking advantage of local market conditions [53] - The company has a solid financial position with no significant debt maturities until 2027 [109] Q&A Session Summary Question: Update on CAMMESA payments and potential bond - The company is awaiting final resolution on CAMMESA payments and analyzing the course of action, with a potential 40-50% haircut on receivables [6][39][82] Question: Update on Rincon de Aranda block performance - The Rincon de Aranda 2001 well was extremely successful, with initial production of almost 1,400 barrels per day and plans to drill and complete two pads by the end of 2024 [24][85] Question: Impact of CAMMESA issues on capital allocation - The company does not see any relationship between CAMMESA issues and investments in oil, with plans to drill and complete two pads in Rincon de Aranda [85] Question: Update on Nestor Kirchner pipeline status - The Nestor Kirchner pipeline increased evacuation capacity from the Neuquen Basin, with further capacity increases expected once compression plants are completed [86] Question: Outlook for petrochemical business sales - The petrochemical business has two parts: the reformer, driven by international prices, and the credit cost, dependent on domestic economic activity [94] Question: Potential for lower lifting costs in shale oil - The company sees the possibility of significantly lowering shale oil lifting costs once final facilities are in place [112] Question: Potential for dividend distribution - The company has not taken a decision on dividend distribution, focusing on maintaining a strong financial position and pursuing M&A opportunities [111]