Pampa Energia(US:PAM)2023-11-09 19:50Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2023 amounted to $244 million, similar year-on-year, but grew 10% quarter-on-quarter due to higher gas production [2][3] - CapEx in Q3 was 40% higher year-on-year, driven by ramp-up activities in Exploration & Production (E&P) and the construction of the PEPE VI wind farm [3] - Gross debt remained at $1.6 billion, while net debt decreased significantly to $677 million, resulting in a leverage ratio of 1x [22] Business Line Data and Key Metrics Changes - E&P business posted adjusted EBITDA of $132 million in Q3, a 12% increase year-on-year, driven by higher gas deliveries under the new Plan Gas [13] - Power generation adjusted EBITDA was $91 million, 2% higher year-on-year, mainly due to new PPAs at wind farms and lower maintenance costs [10] - Petrochemical business recorded $60 million in EBITDA, a 16% decrease year-on-year due to lower international prices, but a 60% increase quarter-on-quarter [19] Market Data and Key Metrics Changes - Total production averaged above 80,000 barrels of oil equivalent per day, a 17% increase year-on-year and 19% quarter-on-quarter [14] - Gas sales grew by 20% year-on-year, averaging almost 13 million cubic meters per day, primarily due to higher volumes sold in the local market [16] - The average gas price for the quarter stood at $4.7 per MMBtu, consistent year-on-year and quarter-on-quarter [17] Company Strategy and Development Direction - The company aims to enhance its balance sheet by increasing liquidity and expanding its E&P footprint, focusing on shale gas drilling and renewable energy projects [2][60] - The strategy includes adding more PPAs and enhancing the thermal portfolio with better technology and efficiency [32][60] - Future contributions are expected to come primarily from E&P and new PPAs, with less reliance on legacy units [34][60] Management Comments on Operating Environment and Future Outlook - Management noted that the warmer spring and high hydro levels are impacting domestic gas sales and exports to Chile, with expectations for gas demand to normalize by December [18] - The company is optimistic about the natural gas market in five years, anticipating opportunities for increased exports to Chile and Brazil [51] - Management expressed confidence in the ability to manage financial risks associated with potential dual exchange rate scenarios [49][50] Other Important Information - The PEPE VI expansion project is 94% complete, with the first phase expected to be operational by Q3 2024 [5] - The company raised $68 million net from the local market, contributing to a cash position of $964 million by the end of the period [21] Q&A Session Summary Question: How do you see the evolution of production of Mangrullo going forward? - Management expects Mangrullo to deliver around 7 to 7.5 million cubic meters per day, with increased production from Sierra Chata compensating for any decreases [24] Question: What is your outlook for the power sector? - Management is working to secure peso increases to cope with cost variations but does not expect significant changes beyond that [26] Question: Could you comment about the tender prices and PPAs for Genelba and plants? - The tender has concluded, and the company believes it meets the technical and economic requirements, but awaits resolution from the Secretary of Energy [27][28] Question: What scenarios are being considered in terms of regulatory changes? - Management indicated uncertainty regarding regulatory changes but noted that legacy units may not contribute significantly in the future [30][31] Question: Can you provide an update on the progress of crude oil projects? - The Rincón de Aranda field is expected to complete a well by January 2024, with further drilling planned for 2025 [35][36] Question: What is the outlook for signing new gas contracts with Chile? - Contracts with Chile are renegotiated seasonally, with recent contracts finalized for the upcoming spring and summer [39] Question: Is there a risk of impairment and downward revision of gas reserves? - Management does not foresee issues in the next five years due to existing commitments for natural gas sales [51] Question: Any plans related to offshore investments? - Currently, there are no plans for offshore investments [52] Question: Any updates on renewable expansion and transmission bottlenecks? - The government has outlined a comprehensive plan for transmission expansion, with significant investments needed [54][55]