Continuing, please read the disclaimer on the second page of our presentation. Let me mention that forward looking statements are based on Pampa Energía's management beliefs and assumptions and information currently available to the company. They involve risks, uncertainties and assumptions because they are related to future events that may or may not occur. Investors should understand that general economic and industry conditions and other operating factors could also affect the future results of Pampa Energía and could cause results to differ materially from those expressed in such forward looking statements. Now I will turn the video conference to Lida.
Thank you Raquel hello everyone and thank you for joining our conference call. I will make a quick summary of Q3 so we can spend more time on Q and A with the management. Today we have our CEO Gustavo Mariani, our Head of Oil and Gas Mr.
Horacio Turri and our CFO Mr. Adolfo Zuberbuhler. The quarter's standout performance came from Rincón de Aranda where the production ramp up is translating into strong EBITDA supported by 6 active pads. Today oil is emerging as a meaningful contributor now accounting for 34% of our EBITDA in the E&P and therefore 18% of total E&P in the quarter. In power generation after six years and amid the ongoing deregulation in winter we self procured gas for our Loma de la Lata power plant boosting both power and E&P margins. Winter demand pushed us to a new all time high in production, almost 18 MMcm/d of gas. The deliveries smoothly without any disturbance and disruptions and following the September market volatility, management demonstrated confidence in the company's fundamentals by repurchasing 1.5% of the company's share capital at close to $59 per ADR.
Today the stock is trading nearly $90. Let's move into the quarter's financial results. The adjusted EBITDA amounted to $322 million. This is a 16% year-on-year increase. This is mainly driven by Rincón de Aranda's steady shale oil growth, higher B2B sales, and the contribution of PEPE 6 wind farm. Quarter-on-quarter, EBITDA also improved due to Rincón de Aranda and gas seasonality. Capex surged 183% year-on-year, reaching $332 million, of which $174 million were invested in the development of Rincón de Aranda. Moving on to slide 4, the oil and gas adjusted EBITDA was $171 million in Q3. This is a 40% year-on-year increase, largely due to Rincón de Aranda, again increased exports and strong industrial demand, as well as self- procurement margin in Loma de la Lata well for Loma de la Lata power plant.
These variations were partially offset by soft retail demand in September due to milder weather and the end of the peak winter peak contracts under the Plan Gas GSA. Higher gas treatment costs, and the lease of temporary facilities at Rincón de Aranda offset by the higher production highly increase the lifting costs to $6.4 per BOE quarter- on- quarter. Lifting cost per BOE actually sharply decreased due to the higher output and stable total cost. Gas lifting costs remained flat year- on- year at $0.90 per million BTU but dropped quarter- on- quarter 17% while oil saw significant cuts thanks to Rincón de Aranda. We will address that later. Total production averaged nearly 100,000 BOE per day. This is a 14% increase year- on- year led by Rincón de Aranda and Sierra Chata but partially offset by decreases in El Mangrullo and non-operated blocks.
Quarter- on- quarter production rose 18% again explained by Rincón de Aranda and gas seasonality. The production mix continues to evolve with oil rising to 17% of the total output driven entirely by Rincón de Aranda ramp up. Crude oil prices average $61 per barrel in Q3. This is a 15% decrease than last year due to the Brent underperformance. However, our hedge in Rincón de Aranda's production helped mitigate the price drop. Without the hedge, our realized price will have been $60 per barrel. Excluding this, this number is excluding quality or logistic discounts and any export duties. This is a sort of a FOB price. Focusing now on the slide five in Rincón de Aranda. As you can see on the chart above, the ramp up remains on track. During Q3 average production reached 14.4 thousand bpd .
This is almost 3x Q2 levels driven by the three new pads that we tied in during the quarter. Post quarter, a seventh new pad was connected, elevating output to 16,000 bopd . Currently, we have one frac fleet in the block ready to tighten three DUCs, and we have two high-spec rigs drilling another three pads for next year's campaign. We expect to exit 2025 producing 20,000 BOE per day. To support further growth and leverage idle capacity, trunk capacity in the pipeline, we plan to install an additional temporary facility next year, increasing production to an average of 28,000 bpd by the second half of 2026. Our target is 45,000 bpd by 2027 once Vaca Muerta Oil Sur pipeline and our Central Processing Facility, also known as CPF, are both online.
Another important highlight this quarter is the drop in lifting costs per barrel. As anticipated when we announced Rincón de Aranda's development, our goal is to stabilize at $5 per barrel in line with our peers, with the CPF playing a key role in achieving this milestone. Okay, slide six, moving to gas sales, held steady year-o n- year at 14 MMcm/d . This is 8% higher than Q2 as explained earlier by seasonality. El Mangrullo continued to lead the output though its share shrank to 50% while Sierra Chata grew to 38% of total output with a year- on- year production increase of 33%. In July we hit a new all-time high in gas production of 17.6 MMcm/d driven by Sierra Chata peak of 6.3 MMcm/d .
The most recent tied-in pad of three wells delivered 2.7 MMcm/d , so imagine per well how much it is, highlighting its solid productivity. A new four-well pad is now undergoing fracking. Shale accounted for 64% of the Q3 output. Gas prices average at $4.4 per million BTU. This is flat year- on- year. Fuel self- procurement for Loma de la Lata power plant during the winter and industry sales supported this price, offset by lower export prices affected by the Brent underperformance. 72% of our gas was sold under Plan Gas GSA (CAMMESA and retail). This is down from 86% last year. This is due to the self- procurement, which accounted for 6% of the total gas sales, and improved deliveries of B2B sales and exports.
Export remaining steady at 1.2 MMcm/d amid the heavy winter that we experienced, up 146% year- on- year due to the low hydro, Chile switching to power generation. On slide seven, we posted an EBITDA of $120 million in Q3. This is an 8% increase year- on- year, mainly explained by PEPE 6 wind farm, fuels self- procurement margin in Loma de la Lata, plus higher seasonal capacity payments for open cycles, partially offset by a 9% drop in generation due to the weaker demand. Availability declined to 94% due to scheduled maintenances at Loma de la Lata in September and the ongoing outages at HINISA since January. New energy, particularly under take-or- pay PPAs, continue to support 66% of the segment's EBITDA. We will discuss expectations of this new framework during the Q& A.
Turning to cash flow on slide eight, we show the Restrictive Group figures because this is aligned with our bond perimeter amid high CapEx and at Rincón de Aranda we generated $6 million free cash flow in Q3 driven by the strong EBITDA generation and improved working capital. Q3 marked our peak in EBITDA and sales, and during the second half of the year working capital typically moves as we collect winter sales, so as a result the cash and cash equivalents stood at $881 million at the quarter end in line with Q2. Finally, in the balance sheet, gross debt was nearly $1.8 billion. This is 16% down since December 2024. Following the redemption of the 2027 and 2029 notes that were funded with proceeds from the 2034 notes, net debt rose to $874 million, 1.3x net leverage ratio reflecting the CapEx outflows and collaterals on oil hedge.
However, post quarter we repaid $47 million in export pre- financing loans and recovered $84 million from OCP Ecuador's guarantees funds that should have been released back in March. Therefore, we maintain a 1.1x net leverage and a strong cash position approximately $920 million. However, our liability management efforts extended the average life to 5.6 years, strengthening our financial profile and reducing near term maturities amid Rincón de Aranda's development. This concludes the presentation. Now I turn the floor, it's open for questions. If you have any questions, please send through Zoom chat. We will read it and answer them in the order received. Make sure your name and your company display correctly so we can introduce yourself to the audience. Should any participant have any problem again, please send us a chat message or ping us or send us an email.
Please hold while we poll for questions. Thank you. Okay, let's go first. The first one is Guido Bizzozero from Allaria from Italy. He's asking, considering that during Q3 2025 inventories of crude oil were sold by approximately 2,800 bpd and that since October the 1,6 00 bpd contribution from El Tordillo will not be any more, how do you expect total oil production to evolve in Q4 in the upcoming quarters?
Our best expectation for the fourth quarter of 2025 is between 18,000 bdp and 19,000 bpd .
So ramping up from Q3?
That's right, that's right. Because of the coming online of pad number 11.
Great. Awesome. Basically, going forward, it is going to be Rincón de Aranda plus associated oil from gas fields.
Very little, very little. I mean the main driver is Rincón de Aranda.
Good. Second question from Guido. We notice a sequential improvement in lifting cost from $7.6 per barrel or BOE to $6.8. $6.8 or $6.4? No, $6.4. $6.4. How do you expect to evolve during 2026 until the CPF is ready? This is per BOE. All right.
Yes, I understand the question. The main change in 2026 is going to be the ramping up of Rincón de Aranda from the ending year end of around 19,000 bbl- 20,000 bbl up to 28,000 bbl on the second half. Therefore, we will see a reduction in our lifting cost for oil from $10 to around $9.19-$9.2 per barrel. That will drive down our overall lifting cost to around $6.2 per barrel equivalent.
Do you see any potential to reduce lifting cost in gas?
I wouldn't say so. I would say that probably that's going to be. Once we keep stable, we are pretty much keeping more or less the same expectation of production so far. If there's going to be an additional production to come online, probably those lifting costs will be reduced.
Yeah.
Great. How do you expect to evolve the gas market during the summer season considering the lack of local demand, export market to Chile, and more associated gas from oil fields?
Okay. There is always seasonality, obviously in the Argentine market. Good news is that we do have a take-or-pay clause in our contracts of 75% and more or less that matches with the real demand during the summer. We will be delivering what we already have contracted as a take-or-pay. Regarding the associated gas, I would say that that will have much more influence in the spot market, in the gas spot market. We are not in that market.
That's right.
It's not going to have any influence on our overall price.
Yeah.
What do you think about Chile? Do you think it's going to maintain this levels?
Chile? We are consistently increasing our exports to Chile. If we compare with last year, we come from around 500,000 m³/d to around 1.2 MMcm/d -1.3 MMcm/d this year. That has to do with two main drivers. One is the launching of the export to the Gas Pacifico region pipeline with around 400,000-500,000 m³/d , and also has to do with higher demand on the GasAndes region from the Chilean side.
Matches to Santiago, right?
Yes, not only Santiago, but all the central region of Chile. Yeah.
You expect that it could, it could continue around 1 million.
It's going to be around. Yeah, a little bit more than that. Probably 1.2-1.3 million m³/d .
Great.
Basically, maintaining what we do have today
Basically maintaining what we do have today and eventually increasing a little bit in the Gasoducto del Pacífico.
Awesome. Fourth, could you g ive us any color on how you expect to improve during 2026 revenues and EBITDA in the generation segment considering the new framework established by the Resolution 400. This question is also addressed by Alejandro Demichelis from Jefferies, I want to say, and others. Yeah, another, another people, sorry.
We basically expect that the EBITDA of the segment will improve by at least 15% next year due to these resolutions. There is still a, this is based on several assumptions. Now the market has become much, much more complicated to predict now that we are moving into kind of a marginal price system. It will also depend on how successful we are on the B2B market and how much of our energy we are able to sell with higher margins than CAMMESA to the B2B market. That is going to be very competitive. The other relevant thing is that the Secretary still needs to publish the details on how producers of gas can take out their contracts from CAMMESA. In order for us to self-fulfill our power generation unit, we need to cancel or extinguish our obligation with CAMMESA.
The Secretary of Energy is working on that resolution. The details of that resolution will impact on this matter. Still too early to be precise on what to expect, but I would say that you should be expecting at least 10%-15% improvement in the segment.
All right, cool. What levels of CapEx and leverage are you forecasting for 2026? Are you planning to finance it?
Level of CapEx for 2026 is going to be more or less similar to CapEx of this year of around $1 billion-$1.1 billion. In terms of how we are planning to finance it, Lida showed our beautiful, our beautiful slide. Lida showed our cash position. The cash that we are showing there does not take into account the cash that we have posted as collateral for the hedge, the hedges for hedging the Brent. That is something that for us is also cash that we can convert into cash in just one day, but it is not considered cash by the accounting rules. We have a very large cash position. We have a very good debt profile that we always like to improve, even better than what it is. Argentina, as you have seen, is a volatile country.
We always like to play it on the safe side with a very comfortable financial position.
I will add to that that next year we have a full year of oil production that this year we did not have. We have full year of an average of 2,422 per day. That will add additional cash flow that we did this year we had to face with our own cash position.
Great. Awesome. Moving on to Alejandro Demichelis from Jefferies. The first question is was exactly the same as Guido about the deregulation. We talk about it. Second question is with increased CapEx from the subsidiaries and the CapEx requirement, what do you see? When do you see that the net debt peaking? When and where net debt peaking?
As you can see in the last slide, our net debt had remained very, very low, around 1.1. As we've been speaking with investors, this question was repeated many times. We expected to have reached the highest peak by now at around 1.2-1.3. We were saying that because this year was, as I said before, the year with a lot of CapEx and production of oil just started. Next year the production of oil will be constant the whole year. We should not increase net leverage much or above these current levels of around 1.1, 1.2, 1.3. Next year we probably have more debt, but we will have more EBITDA. The ratio will keep around these levels. This is a level that we feel very comfortable and very prudent.
Great. Next question comes from George Gasztowtt from Latin Securities. I know that Pampa's free cash flow was positive this quarter despite the ongoing expansion at Rincón de Aranda. How is the rest of the year looking on this front? Are you expecting any reductions in the D&C costs to help over the next few quarters?
Okay. We are working permanently in the reduction of the D&C costs. Actually in 2025 we were successful in reducing our drilling time in around 15% and our completion time in around 13%. That resulted in an overall reduction on our well costs of around 6%-7%, going from $16 million to a little bit above $15 million. In 2026 we expect to keep on going this way and eventually, sorry, achieve reductions in the range of 5% in the overall costs of the wells.
Great.
I would add that the reason why the free cash flow was positive this quarter is because this is the best quarter of the year for Pampa. But this year overall as you know we have, we are investing a lot in Rincón de Aranda. So our CapEx this year are above our EBITDA generation. Definitely a year of negative free cash flow and that's why our net debt went up. Next year that because of the reasons that we explained it's going to be reduced significantly because next year where EBITDA is going up our CapEx remain flat. They will. It's going to be a more balanced year than 2025.
Awesome. The next question is coming from Francisco Cascarón from Don Capital. What was the amount of non-cash deferred income tax that it was, I guess, recorded in this quarter and do we expect an impact of this account of this size in Q4 2025? Want to answer? Or.
I mean, this happens from time to time when there is a big gap between the devaluation rate and the inflation in pesos. Whenever this happens, we might have this gas deferred income tax in one quarter. That's what happened in this quarter. It's very hard for us to project if it's going to happen in the following quarters because it will depend on these variables that are out of our control. Whenever the inflation and the devaluation move together, this won't happen. If they widen, the difference between them is increased or widened, then we will have it again. We cannot predict, only no one knows. If the macro balance remains normal, this shouldn't happen again.
Great. Great. Awesome. Luiza Belem from Morgan Stanley. What should we expect in terms of Rincón de Aranda drilling pace for Q4 2025 and how was the production during the month of October?
Production during the month of October was around more than 16,000 bbl and we will be in the next quarter we will be drilling four wells. We are drilling pad number seven and number 12 and we will be drilling in short time pad number 13 and what we call number 10 B's.
Right, right. Basically drilling. Yeah, drilling a bit more but completing, still completing this year seven pads.
We are. Yeah, the only pad that is going to be completed in short time is pad number 10. One more pad to be complete.
Yeah, sure.
Sorry. Sorry, I was muted.
I don't know. I did.
Yeah. I do not know. Start from scratch. Sorry about that. Again, the production for October was around, more than 16,000 bbl. We will be drilling in the last quarter four pads. We are currently drilling pads number seven and number 12. We will be drilling pad number 13, and we are almost starting to drill pad number 10B, so an additional three more wells to the Orgánico Inferior in pad 10. That is regarding the drilling, what Gustavo mentioned about our activity and how many rigs we have. Currently, we have three high-spec rigs, but it is going to be for a short time until we finish with the three wells of the Orgánico Inferior in pad number 10. We will remain with two high-spec drill rigs and one E fleet. Great.
Second question is in terms of investments, should we expect a maintenance in 2025 expectations for CapEx, how should it evolve going into 2026? We talk about $1 billion. Yeah. Pretty similar, right? Yeah.
This year is basically what we projected on the budget or slightly lower than what we projected on the budget because of very small delays in the deployment on some payments that are not going to be done this year but are going to be done early next year. It is going to be around $1.1 billion and next year we expect roughly to maintain that level of CapEx.
Great. Juanina.
That is basically until we finish the ramp up of Rincón de Aranda. No, because as we said Rincón de Aranda takes 70%, 70%- 75% of that number.
Yeah.
Okay. So Juan Ignacio from Puente, given the recent launch of the Secretary of Energy new regulatory framework for the power market and the explicit focus on free contracting through bilaterals or B2B PPAs and cost reflective marginal pricing. What is Pampa's commercial strategy to navigate this transition and how do you plan to maximize the opportunities presented by this new scheme? Particularly regarding securing long term private contracts?
Okay. Fortunately we have a very well- seasoned commercial team because we have always been active on whatever B2B market was available for us and we have always been a very active player on the B2B market. Now that this market increases, we have a very good muscle and obviously we are going to try to gain a good market share in this B2B market for two reasons. Basically because we expect to improve our margin vis a vis selling our energy to CAMMESA and second to diversify our sources of clients. So being less dependent on CAMMESA and a diversified portfolio of industrial clients and power distribution companies.
Great. Carolina Carneiro from Safra, she's asking. It's a bit of a broad question but it's good to ask this. Can you comment on the new rules published for the wholesale electricity market? If there's any next step that you talk a little bit about that and impacts for the companies or. First thing first you have to read the summary I previously laid out. We previously laid out in the earnings release but basically in a nutshell it's a marginal system. Right? Cap. We cap for this period of time there's going to be a B2B market. The good news is that Pampa is around in the power sector. In power generation it's 20% of our EBITDA is B2B and 80% is CAMMESA. Now that's going to shift. It will be more than 20%.
I don't know how much will be but surely will be more than 20% B2B. This is a good diversification and, well, that's basically more. Of course, for the first time we will be able to, well, actually we started this winter, but we can continuously self-procure fuel to our own power units. It's a great chance for our CCGTs.
Yes, but again there's still rules to be published by the Secretary of Energy. We are not able to withdraw the contracts from CAMMESA yet and serve and provide the fuel to our plants yet. We hope that at any moment and the sooner the better that would be published and it will allow us to self fulfill our power generation plant.
At the same. We need to see the open season for the transport.
Exactly. This is not only gas but also transportation capacity that the Secretary of Energy has to decide. Out of the 21 MMcm of gas transportation contract that CAMMESA has, how much will remain in CAMMESA? How much will be transferred to gas distribution companies? There are a few things that need to be clarified before having a better visibility of what's going to happen in 2026.
The good news is already out there. It's already kind of implemented. It's just, we need the details. Yeah, small details. That's right. Updates on Rincón de Aranda. We already talked about it, so let's move on. On Matías Cattaruzzi from Adcap. U pstream, Pampa hit 17,3000 bpd in Q3, 2025 in Rincón de Aranda with numbers above the guidance. What is the fourth quarter 2025 exit rate target? We already talked about that. 20,000 bpd and 2026 quarterly quarterly ramp up because we put like already.
Okay.
Two, all this, all the path to the 45,000 plateau by 2027. He wants the all details.
All of the details. Okay. We will be exiting 2025 around 20,000 bbl as we mentioned. By February next year, end of February, beginning of March, we should have the additional temporary production facility. We will be able to have there ramp up around 4,000 bbl of additional oil. It is going to 24,000 bbl by the second quarter of 2026. By the third quarter of 2026 we should be reaching a peak of around 28,000 bpd . By January, February of 2027, once the central processing facility is in place, our plan is a very quick ramp up from those 28,000 bbl to 45,000 bbl, which is the overall target.
Cool. Great. He's talking, asking for D&C which we already talked about. Lifting costs, we already talked about that. This, this. As soon as this call is done in 10 minutes, it's uploaded to the cloud so you can access the replay easy. Keep Zoom 10 minutes and then he's asking. This is a more detailed question, but the lifting cost breakdown between shale gas and shale oil. I will say shale gas is what we have. We are seeing today it's $0.80 Sierra Chata.
Yeah, yeah, yeah. Between Mangrullo and Sierra Chata but it's around $0.80.
Yeah, Sierra Chata cheaper,
Cheaper than Mangrullo.
Amazingly it was the opposite.
That's right.
Given the productivity. Right? And then shale oil. It's Rincón de Aranda.
We already talked about that.
Right now it's $9 but
it's around $10.
It's going to be going down to $9 with the installation of the second temporary production facility.
In power, he's asking something like kind of similar but with the normalization. What, how quickly can Pampa migrate legacy thermals? Basically, how quickly we can get B2B PPAs. We already talk about that, about the muscle of our commercial.
That's a, it's a question that I don't have an answer. We will have to.
We have a handicap. It doesn't mean exactly. It doesn't mean that we are guaranteed. This is a very odd question. What is your 2026-2027 spot price range under the new dispatch rules? How sensitive is power EBITDA to an increase of $5 per MWh ? I think he's asking for the marginal cost because now it's that the higher the marginal cost, the higher the EBITDA, right? What marginal cost are you seeing? Question.
Yeah, it's a difficult question. I don't have all the numbers on top of my head. It's very difficult. Very different. Summer and summer prices could be in the $30, $40 summer and winter in the lower demand of the summer and.
Off- peak
And in t he winter, probably in the 80s or 90s or 100 next year, there shouldn't be any significant change from current year. Hopefully in 2027 the system will see a decrease in the marginal spot prices because there's going to be new gas available in the market. As I think, I don't recall when we mentioned, but our subsidiary TGS has been awarded to increase the transportation capacity of the Gasoducto Perito Moreno by 14 MMcm of natural gas per day. That will have an impact during winter times because as a country we will be able to replace imports of LNG and even more important, import and consumption of diesel oil in thermal plants with local natural gas. That will have an impact reducing spot prices. On 2026 there shouldn't be any significant change.
Yeah, well, there's a lot of variables like weather, but hydrology.
Exactly.
Renewable penetration, right? Yeah. Anyways, Ricardo Vejo from Safra, is there any other projects or infra auctions, gas pipeline, batteries, renewables, PPAs that the company may be interested in?
The auction of the CAMMESA power plant that we are studying, all the opportunities, that is something that is. If there's no new delays, it's going to take place this coming Friday. I don't have any other infrastructure auction on top of my head, do you? No.
The second tranche of the Perito Moreno.
I don't see it. You don't see it at this point.
With the initial private initiative you think like it's kind of related to. The good news is that that private initiative keeps gas to the eastern side of Argentina where a lot of the most efficient power plants are located.
Good.
Daniel Guardiola from BTG is asking. The first question is about the new regulation. Answer broadly, answer I think at least what he is asking. The second question is about the hydro auction, but zooming in on the potential CapEx that it might engage or might commit if you get awarded, and how do you envision the remuneration? How do you envision the remuneration of these plans? I guess if it is going to happen or not because it is the remuneration.
Itself, it's a fixed dollar remuneration with a for a 30- year contract.
Yeah, and we just.
The upside is on an increased portion of your energy production that can be sold to the B2B market. Initially, the first two years is only 5% of your energy can be sold to the B2B market. Then it goes for another two years at 10%-15% until in year 20 it reaches that 100% of your energy can be sold to the B2B market. Meanwhile, you are selling your energy to CAMMESA at this fixed dollar price adjusted by inflation,
By U.S. inflation.
Do you, it does involve in any CapEx if awarded?
There are maintenance CapEx, but in most of the plants those CapEx, because these are fairly new, a very well maintained plant, those CapEx come at 2/3 in the last 10 years of the concession. From year 20 to year 30, most of CapEx have to be done.
Right. He's asking about, well, about lifting cost D&C. We already cover that. Yeah, but he's asking a more interesting question: do you foresee any additional M& A opportunities in Vaca Muerta? If so, what will be the priority, oil or gas?
There has been many opportunities and I'm sure there's going to be many opportunities in the future as well. Our focus, if any, would be increasing our reserves of shale oil. We have reserves of shale gas in excess of our expected production over the next, so we don't need any additional gas reserves. If there's a good opportunity, but as you know, we are price sensitive. We will be waiting for what we consider a good opportunity to increase our portfolio of reserves.
I know it's, but there's no processes ongoing.
No, no, there's not nothing.
That we're interested in. Right. Another question from Daniel. He's asking can you share with us the expected IRRs of the LNG project that you are currently developing. I guess Southern E nergy and if it's possible what will be the incremental EBITDA for Pampa link to this project?
Okay, let's go to the incremental EBITDA.
The best part.
There are two segments of this business, the SESA side regarding the liquefaction of the LNG and the sale of the LNG itself. Then there is the upstream segment, which is basically supplying those 6 MMcm/d that the vessels will be needing from Pampa, from our participation of 20%. The EBITDA related to the upstream segment of the business is around $140 million per year once we reach the 6 MMcm/d .
IRRs.
IRR of the overall project is going to depend on the FOB price of the LNG that we sell. I think we mentioned this in the previous call about if we are able to save above $7.5 is going to be a very good project. If we are selling below, it's going to be lower IRR return that we expect. We know we are going to have good years, regular years, and sad but years, but we are very optimistic in t he overall project.
On the average it's going to be fine. All right. Ezequiel Harari from Adcap. H as Pampa hedged any portion of its 2026 production? If so, what percentage was covered and at what average price those hedges were executed?
Okay, we hedged almost 100% of our production for 2026. I mean I have.
Pretty much very. A good portion of it, right? A very important portion of it. And 68? No?
October something here.
Sorry, I'm here. I would say it's around 80% of next year. The average price is including this year, so what is left of this year and the rest of next year is around $68, over $68 per barrel.
This is brand right? Then translating to Pampa we have a lot of stuff like we have to pay export duties, there are some discounts, very minor though, for logistics and quality, and then other stuff. If we sell locally, transportation fees and so on. Right. Jonathan Szwarc from Debtw ire, are you planning to cancel the 0.8 million ADRs that you bought back? Is 0.8 million all you have on your own shares or do you have more?
I don't recall if we have. Do we have shares from previous buyback?
No, we cancel it all.
We can't sell so no, we had to. There's no, as of today, most probable that we are going to cancel these shares as well. We have to do by law. Eventually, we could do a convertible or use it for something, but this we are not studying that opportunity, so most probable that they are going to be cancelled in the next shareholders assembly.
What is the status of your plan to build a fertilizer urea plant?
We are awaiting from. There's been some delays on the original. Our original schedule so now we are expecting by the end of the year to have. We have already received the death yeah, but the technical part of the and we are studying from the suppliers the technical part of the project. We still haven't received the prices. We should receive that by year end. We are expecting that number.
Great. Okay. Felipe Collazo from Bull Market. What is the current state of the payment days in gas from ENARSA? What is Pampa's exposure to this?
Vito, do you have no exposure in ENARSA? Has been improving significantly over the past few months. At one point he had like almost two months of delay and now it has less than a month, right?
Yeah, yeah, it's like 20 days. That's right. And then the debt, it shrank a lot. Right now the debt, it's like less than $60 million. Around $60 million. Okay, so it's like in pesos, it's like ARS 90 billion.
Yeah.
Exposure is w e just sell
Those 19 billion pesos that you mentioned.
That's easy. No, but the export. No, where we sell ENARSA . Why is a client on ours? We sell under a Plan Gas, but a fractional Plan G as to them. The last round that we won, our offtake is in ENARSA. Next question. I better keep it up. Tadeo Zapata from Proficio. Regarding the three DUC pads plus the three that you are currently drilling, is it part of your policy to maintain the inventory of that type of wells, or is it due to the limitation related to the facility's capacity? I guess. Why do we have DUCs?
We have DUCs because we need to, as he's mentioning, we need to anticipate the ramp up once the facility is in place. If we are going to be installing a facility in March 2026 increasing around 7,000 bpd-8,000 bpd , we need to anticipate those DUCs so we can complete those quickly and hit the ramp up rate.
Some questions that have been answered. Laura Aguirre from 9f in. Nice to meet you. Any further bond placement on the cross-border markets?
As you know, I'm sorry I'm going to extend a little bit in the question, but as you know in 2024 we started a process of refinancing all our debt. We issued two bonds, we called another two as Lida explained, that showed that we were and we are very active in the international bond market. As we've been explaining, we've been funding our CapEx with our own cash position and our free cash flow. All these issuances were opportunistic.
Rather t han a need to finance any CapEx or any M& A. They were all. We tapped the market in very opportunistic manners and that will be the case going forward. We do not need to issue bonds, we do not need to finance any specific out of the ordinary cost of business. If we see an opportunity, we will take it. We will take it. If we can improve our debt profile, if we can issue a very long term bond or if we can issue a very low rate, that is something that we might do always in the spirit of calling or paying short term debt and issuing longer term debt. That is something that we might do and we are always very active and we execute our transactions very fast. This can happen overnight. I think that answers the question.
Awesome. Ignacio Sniechowski from Invertir en Bolsa . He's asking regarding the remaining stake Pampa has in Geo Park. As far as I know it is now nearly 4%. Are you planning to sell?
Currently we don't have any position in Geo Park. We sold them all, making us more profit. It's basically, I think we finished selling the staking in September. After the significant sell down in the Argentine market, we decided to switch if you.
The main goal was we saw our stock very cheap and we launched a share buyback program as you all know. We disinvested in GeoPark and at 58 we decided to buy back our shares with that capital. Was a better investment.
Yeah, even significantly more than what we spent in the.
We spent $48 million and the GeoP ark trade was 33, 34. The profit from that trade was the two dividends we collected during the holding p eriod.
And something else.
No price was more or less neutral, but in general that was our strategy.
Right. Regarding OCP, the warranty was $100 million. Are there any chances to collect the remaining?
No, we, yeah, the guarantee was $100 million, but we had cash collateral of $84 million. The rest was based on, yeah, based on the balance sheet of Pampa. So the guarantee collected. There's nothing remaining there.
Awesome. That is it. It's 12:59 we ended all the questions. Some of them have already been answered, so you can access the replay and check it out. Thank you for being here. Do you have anything to say to everybody for joining?
Hope it was useful.
See you next time. Bye bye.
Yeah.