PAM — Pampa Energía S.A.

Pampa Energia Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Adjusted EBITDA: $322 million, a 16% increase year-on-year, driven by strong performance from Rincón de Aranda and higher B2B sales.
• Oil and Gas Adjusted EBITDA: $171 million, up 40% year-on-year, supported by increased production and exports.
• CapEx: $332 million, a 183% increase year-on-year, with $174 million allocated to Rincón de Aranda development.
• Total Production: Averaged nearly 100,000 barrels of oil equivalent per day, a 14% year-on-year increase.
• Lifting Costs: Increased to $6.4 per BOE, but decreased from $7.6 per BOE in the previous quarter.
• Net Debt: Rose to $874 million, with a net leverage ratio of 1.3x, although post-quarter repayments improved the ratio to 1.1x.
• Cash Position: Cash and cash equivalents stood at $881 million at quarter-end.

2. Strategic Updates and Business Highlights

• Rincón de Aranda: Production ramp-up continues, reaching an average of 14,400 barrels per day in Q3, with expectations to exit 2025 at 20,000 barrels per day. Plans to increase production capacity to 28,000 barrels per day by mid-2026.
• Gas Production: Steady at 14 million cubic meters per day, with a new all-time high of 17.6 million cubic meters per day in July driven by Sierra Chata.
• Power Generation: EBITDA of $120 million, an 8% increase year-on-year, supported by higher seasonal capacity payments and improved margins from the PP6 wind farm.
• Share Buyback: Management repurchased 1.5% of the company's share capital, reflecting confidence in the company's fundamentals.

3. Forward Guidance and Outlook

• Oil Production Guidance: Expected to ramp up to between 18,000 and 19,000 barrels per day in Q4 2025, primarily from Rincón de Aranda.
• Lifting Costs: Anticipated to decrease to around $6.2 per BOE by 2026 as production ramps up.
• CapEx for 2026: Projected to remain stable at $1 billion to $1.1 billion.
• Power Generation EBITDA: Expected to improve by 10% to 15% in 2026 due to new regulatory frameworks and increased B2B sales.

4. Bad News, Challenges, or Points of Concern

• Crude Oil Prices: Average prices fell 15% year-on-year to $61 per barrel, although hedging mitigated some impacts.
• Retail Demand: Softened in September due to milder weather, affecting gas sales.
• Production Declines: Notable decreases in output from El Mangrullo and non-operated blocks.
• Regulatory Uncertainty: Ongoing changes in the power market and the need for clarity on new regulations could impact future operations.

5. Notable Q&A Insights

• Production Expectations: Management confirmed a focus on Rincón de Aranda as the main driver for future production increases.
• Lifting Costs: Expected to stabilize and decrease as production ramps up, with gas lifting costs remaining stable.
• Gas Market Dynamics: Management expressed confidence in maintaining export levels to Chile and managing seasonal demand fluctuations.
• Regulatory Framework: The transition to a marginal pricing system in the power market presents both opportunities and uncertainties, with expectations for increased B2B sales.
• Debt Management: The company is focused on maintaining a strong cash position and prudent debt levels, with no immediate need for new bond issuances unless advantageous opportunities arise.

This summary encapsulates the key points from Pampa Energia's Q3 2025 earnings call, providing a balanced view of the company's financial performance, strategic direction, and outlook amidst challenges.