Pampa Energia(US:PAM)2024-03-07 21:21Financial Data and Key Metrics Changes - EBITDA fell 12% year-on-year, primarily due to reduced gas sales and the impact of peso depreciation on affiliates [4][8] - Net debt reached $613 million, marking the lowest level in years, with a significant reduction in net cash of $129 million in the quarter [5][14] - Adjusted EBITDA for Q4 amounted to $129 million, a 30% decrease year-on-year, influenced by soft demand and peso devaluation [23] Business Line Data and Key Metrics Changes - The E&P business posted an adjusted EBITDA of $50 million in Q4, down 30% year-on-year due to a sharp decline in demand affecting gas prices [12] - Power generation achieved an adjusted EBITDA of $94 million in Q4, a 10% increase year-on-year, attributed to lower operating costs and new PPAs [9] - Shale gas production represented 47% of total gas production in Q4, a significant increase from nearly 3% the previous year [6] Market Data and Key Metrics Changes - Q4 gas production decreased by 7% year-on-year, averaging almost 9 million cubic meters per day, primarily due to lower demand [29] - The average price for gas in Q4 stood at $3.2 per million BTU, a 17% decline due to lower-than-expected exports [29] - Power dispatch decreased by 3% year-on-year, with take-or-pay capacity reaching 93%, down from 97% the previous year [10] Company Strategy and Development Direction - The company aims to diversify its production by incorporating shallow oil from Rincon de Aranda while focusing on gas production [3] - Significant investments are planned for E&P, with a CapEx budget of around $700 million for 2024, including $500 million for new wells and infrastructure [36] - The company is actively involved in the development of LNG projects, recognizing the importance of natural gas exports for long-term growth [40] Management's Comments on Operating Environment and Future Outlook - Management highlighted the challenges posed by mild weather and the impact of peso depreciation on financial results, emphasizing the need for strategic adjustments [22][24] - The outlook for 2024 includes a projected 30% increase in natural gas sales compared to 2023, with expectations of improved production capabilities from new wind farms [33][34] - Management expressed optimism about the company's financial position, noting a significant reduction in net debt and strong cash flow generation [74][88] Other Important Information - The company recorded a cash outflow of $95 million in Q4, primarily due to expansionary CapEx in shale gas [30] - The PEPE VI wind farm project is progressing well, with 69% completion and expected to add 140 megawatts of capacity [27] - The company is experiencing delays in CAMMESA payments, which adds uncertainty to working capital needs [41][77] Q&A Session Summary Question: How do you see upstream production and sales evolving in 2024? - The company expects a 30% increase in natural gas sales in 2024 compared to 2023, averaging around 13.5 million cubic meters per day [33] Question: How do you see power generation sales and prices evolving in 2024? - Power generation sales are expected to increase due to the new wind farm coming online, with remuneration anticipated to remain relatively flat despite inflation [34] Question: Can you walk us through Pampa's 2024 CapEx budget for each of the business segments? - The CapEx plan is around $700 million, with $500 million allocated to E&P and $200 million for power generation, including significant investments in the PEPE VI wind farm [36][55] Question: Is the company interested in participating in LNG projects being discussed in Argentina? - The company is interested in participating in LNG projects, recognizing the importance of natural gas exports for Argentina [40] Question: Could you comment on what Pampa is experiencing regarding CAMMESA payments? - The company is facing delays in CAMMESA payments, which is causing uncertainty and stress regarding working capital needs [41][77] Question: What are your expectations for gas export to Chile during winter? - The company expects to fully supply the capped export to Chile through the GasAndes pipeline during winter [45] Question: Can you explain how Plan Gas works during off-peak season? - The company can export surplus gas to Chile, but there is a cap on transportation capacity during off-peak season [70]