INVESTOR PRESENTATION
JANUARY 2020
IMPORTANT NOTICE
Safe harbor statement under the US Private Securities Litigation Reform Act of 1995.
This document contains statements that YPF believes constitute forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995.
These forward-looking statements may include statements regarding the intent, belief, plans, current expectations or objectives of YPF and its management, including statements with respect to YPF's future financial condition, financial, operating, reserve replacement and other ratios, results of operations, business strategy, geographic concentration, business concentration, production and marketed volumes and reserves, as well as YPF's plans, expectations or objectives with respect to future capital expenditures, investments, expansion and other projects, exploration activities, ownership interests, divestments, cost savings and dividend payout policies. These forward-looking statements may also include assumptions regarding future economic and other conditions, such as future crude oil and other prices, refining and marketing margins and exchange rates. These statements are not guarantees of future performance, prices, margins, exchange rates or other events and are subject to material risks, uncertainties, changes and other factors which may be beyond YPF's control or may be difficult to predict.
YPF's actual future financial condition, financial, operating, reserve replacement and other ratios, results of operations, business strategy, geographic concentration, business concentration, production and marketed volumes, reserves, capital expenditures, investments, expansion and other projects, exploration activities, ownership interests, divestments, cost savings and dividend payout policies, as well as actual future economic and other conditions, such as future crude oil and other prices, refining margins and exchange rates, could differ materially from those expressed or implied in any such forward-looking statements. Important factors that could cause such differences include, but are not limited to, oil, gas and other price fluctuations, supply and demand levels, currency fluctuations, exploration, drilling and production results, changes in reserves estimates, success in partnering with third parties, loss of market share, industry competition, environmental risks, physical risks, the risks of doing business in developing countries, legislative, tax, legal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, wars and acts of terrorism, natural disasters, project delays or advancements and lack of approvals, as well as those factors described in the filings made by YPF and its affiliates with the Securities and Exchange Commission, in particular, those described in "Item 3. Key Information-Risk Factors" and "Item 5. Operating and Financial Review and Prospects" in YPF's Annual Report on Form 20- F for the fiscal year ended December 31, 2018 filed with the US Securities and Exchange Commission. In light of the foregoing, the forward-looking statements included in this document may not occur.
Except as required by law, YPF does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that the projected performance, conditions or events expressed or implied therein will not be realized.
These materials do not constitute an offer to sell or the solicitation of any offer to buy any securities of YPF S.A. in any jurisdiction. Securities may not be offered or sold in the United States absent registration with the U.S. Securities and Exchange Commission or an exemption from such registration.
Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to separately disclose proved, probable and possible reserves that a company has determined in accordance with the SEC rules. We may use certain terms in this presentation, such as resources, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No. 1-12102 available on the SEC website www.sec.gov.
Our estimates of EURs, included in our Development Costs, are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized, particularly in areas or zones where there has been limited history. Actual locations drilled and quantities that may be ultimately recovered from our concessions will differ substantially. Ultimate recoveries will be dependent upon numerous factors including actual encountered geological conditions and the impact of future oil and gas pricing.
Unless otherwise indicated the calculation of the main financial figures in U.S. dollars before 2019 is derived from the calculation of the consolidated financial results expressed in Argentine pesos using the average exchange rate for each period. For 2019, the calculation of the main financial figures in U.S. dollars is derived from the sum of: (1) YPF S.A. individual financial results expressed in Argentine pesos divided by the average exchange rate of the period and (2) the financial results of YPF S.A.'s subsidiaries expressed in Argentine pesos divided by the exchange rate at the end of period.
2
YPF TODAY
- 97-year-oldcompany
Publicly traded
corporation since 1993 on the NY and BA Exchanges
The largest O&G producer
in Argentina
511 Kboe/d
(9M 2019)
36% Market
Share(1):
- 43% Oil
- 33% Gas
- Source IAPG - October 2019.
World-class
shale producer
The biggest outside the US
VM Gross Acreage
(MM ACRES)
- 1.8 Oil (~53%)
- 1.2 Gas (~44%)
102 Kboe/d
92 new wells in 9M 2019
The leading downstream player in Argentina(2)
3 refineries: 50% of Argentina´s capacity. ~ 320 kbbl/day
~1,600 gas stations. 36% Market Share
57% Market Share of diesel and gasoline sales (as of 9M19)
#1 petrochemical manufacturer: output of ~2.5 mm tons/year
103 branches covering the Agribusiness
(2) 20-F 2018.
YPF Luz fifth- largest power generator in Argentina:
1.8 GW
50% stake in Ensenada de Barragán Thermal power plant (560 MW)
3
SAFETY AND SUSTAINABILITY ARE EMBEDDED IN THE DAILY ACTIVITY AND CORPORATE STRATEGY
TOTAL IFR
- of people injured for each million hours worked 2009 - 9M 2019
1.89
1.27
1.05 | 1.05 |
0.82 | 0.91 |
0.72 | 0.74 |
0.60 |
0.51 0.45
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 9M |
2019 |
DOW JONES
SUSTAINABILITY INDEX(1)
Oil & Gas Upstream & Integrated Industry
YPF score by RobecoSAM
DJSI OGX Industry Average
100 | ||||
90 | ||||
80 | ||||
70 | 66 | |||
60 | ||||
50 | 46 | 44 | ||
40 | ||||
42 | 42 | |||
30 | ||||
20 | ||||
10 | 9 | |||
0 | ||||
201720182019
(1) YPF is not part of the Dow Jones Sustainability Index. YPF was assessed by RobecoSAM for the first time in 2018 using the DJSI criteria.
4
MAIN FINANCIAL FIGURES: STABLE EBITDA MARGIN AND NET LEVERAGE ~2x
REVENUES
(In Billions of USD)
14.3 | 15.3 | 15.5 | 14.2 |
2016 | 2017 | 2018 | LTM Q3 2019 |
ADJUSTED EBITDA(2) & MARGIN
(In Billions of USD and %)
CAPEX(1) | Upstream | Downstream | ||
(In Billions of USD) | Gas & Power | Other | ||
4.3
3.53.33.4
2016 | 2017 | 2018 | LTM Q3 2019 |
NET LEVERAGE(3)
NET DEBT / ADJ. EBITDA (x)
28% | 27% |
4.0 | 4.1 |
28% | 27% |
4.4 | 3.9 |
2.0x | 2.0x | 2.0x |
1.7x |
2016 | 2017 | 2018 | LTM Q3 2019 | 2016 | 2017 | 2018 | LTM Q3 2019 | ||
(1) | Q2 2019 capex includes around USD 200 MN from Ensenada Barragán and Aguada del Chañar acquisitions. | ||||||||
(2) | Adjusted EBITDA = Operating Income + Depreciation of Property, Plant and Equipment + Depreciation of Right of Use Assets + Amortization of Intangible Assets + Unproductive Exploratory Drillings + (Recovery) / | ||||||||
Deterioration of Property, Plant and Equipment. It also excludes IFRS 16 and IAS 29 effects and the profit from the revaluation of YPF S.A.'s investment in YPF Energía Eléctrica (YPF EE) for Ps 12.0 billion in Q1 2018. | 5 | ||||||||
(3) | See description of Net debt in footnote (4) on page 16. | ||||||||
ORGANIC INCREASE IN RESERVES
Reserve Replacement Ratio 178%
Shale P1 reserves representing 19% of total reserves
TOTAL HYDROCARBON PROVED RESERVES
(MBOE) | 1,212 | 1,226 | Crude + NGL | Gas | |||||||
1,132 | |||||||||||
1,083 | 1,113 | 1,080 | |||||||||
1,014 | 1,005 | ||||||||||
982 | 979 | ||||||||||
929 | |||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 |
6
LOWER NATURAL GAS DEMAND IMPACTING TOTAL PRODUCTION; FOCUS ON SHALE
TOTAL NET PRODUCTION
(KBOE/D)
577.4 | 555.0 | ||
530.2 | 510.9 | ||
2016 | 2017 | 2018 | 9M 2019 | |||||
Crude | Gas | NGL | ||||||
NET SHALE PRODUCTION | |||||||||||||||||
(KBOE/D) | |||||||||||||||||
17% | |||||||||||||||||
90.0 | 15% | ||||||||||||||||
80.0 | 11% | 85.4 | |||||||||||||||
70.0 | 10% | ||||||||||||||||
60.0 | 7% | 57.7 | |||||||||||||||
5% | |||||||||||||||||
50.0 | 5% | ||||||||||||||||
40.0 | 29.9 | 36.8 | |||||||||||||||
30.0 | 0% | ||||||||||||||||
20.0 | |||||||||||||||||
10.0 | -5% | ||||||||||||||||
2016 | 2017 | 2018 | 9M 2019 | ||||||||||||||
Crude oil | Natural Gas | ||||||||||||||||
NGL | % of total production | ||||||||||||||||
7 |
ChSN PH
N
BDT
LaMa
LAChAdCh
BS
LC
LLL Sur
LLL
O
LLL-SB
CBNAND
UNLOCKING VALUE OF
SHALE OIL ACREAGE
NET SHALE OIL PRODUCTION
(KBBL/D)
33.1
22.5
16.6
14.5
2016 | 2017 | 2018 | 9M 2019 |
STRATEGIC PARTNERS
8
PRODUCTIVITY IMPROVEMENT TIMELINE
LOMA CAMPANA | LA AMARGA CHICA |
(KBbl - standardized at 2,000 meters) | (KBbl - standardized at 2,000 meters) |
BANDURRIA SUR - SE ZONE
(KBbl - standardized at 2,000 meters)
375
300
225
150
56 wells
30 wells
37 wells
20 wells
6 wells
375
9 wells
300
11 wells
225 8 wells
150
2 wells
375
2 wells
300
225
150
75
Avg. Campaign 2016
Avg. Campaign 2017
Avg. Campaign 2018
Avg. Campaign 2019
75
Avg. Campaign 2016
Avg. Campaign 2017
Avg. Campaign 2018
Avg. Campaign 2019
75
Avg. Campaign 2017 Avg. Campaign 2018
0
0
6 | 12 | 18 | 24 | 30 | 36 |
0
0 | 6 | 12 | 18 | 24 | 30 | 36 | 42 |
0
0 | 6 | 12 | 18 | 24 | 30 | 36 |
EUR 905 kboe
2018 campaign
Months
EUR 800 kboe
2018 campaign
Months
Months
EUR 980 kboe
2018 campaign
9
LOMA CAMPANA: CONTINUOUS COSTS IMPROVEMENT; SWITCHING TO HDC
DEVELOPMENT & OPEX COST
(USD/BOE)
18 | 15 | Development | Opex | ||||||||||||
12 | 9 | 11 | ~10 | ||||||||||||
6 | ~5 | ||||||||||||||
2016 | 2017 | 2018 | 9M 2019 | ||||||||||||
SHALE OIL STAGES & WELLS HORIZONTAL LENGTH | |||||||||||||||
55 | Avg. frac stages | Avg. lateral length (m) | 3,000 | ||||||||||||
~2,300 | ~2,400 | ~2,500 | ~2,500 | ||||||||||||
50 | 2,500 | ||||||||||||||
~1,800 | |||||||||||||||
45 | |||||||||||||||
38 | |||||||||||||||
40 | 35 | 2,000 | |||||||||||||
35 | 30 | ||||||||||||||
27 | 1,500 | ||||||||||||||
30 | 21 | ||||||||||||||
25 | 1,000 | ||||||||||||||
20 | 500 | ||||||||||||||
15 | |||||||||||||||
10 | - | ||||||||||||||
2017 | 2018 | Q1 2019 | Q2 2019 | Q3 2019 | |||||||||||
DRILLING COST
(USD/lateral foot)
628
606
583
545
524
2017 | 2018 | Q1 2019 | Q2 2019 | Q3 2019 |
COMPLETION COST
(KUSD/stage)
254
188 | 170 | 154 | |
144 | |||
2017 | 2018 | Q1 2019 | Q2 2019 | Q3 2019 |
10
ENSURING THE NECESSARY INFRASTRUCTURE TO EVACUATE SHALE OIL PRODUCTION
LUJÁN DE CUYO | Poliducts LC-VM-MC-SL | MC-SL | ||
REFINERY | VM-JN-LM | VM-MC | Montecristo | |
100% YPF | ||||
105.5 kbbl/d / 100% YPF | LC-VM | |||
Villa | ||||
Mercedes | VM-JN-LM | |||
PH - CILC Pipeline | ||||
100% YPF |
OTC
35% YPF Trasandino Pipeline | |||||
107 kbbl/d | OTA | NODO | |||
428 km | 35% YPF | PH | |||
LC-LP Pipeline | Medanito | ||||
85% YPF | OLDELVAL | TRAFIGURA | |||
PLAZA HUINCUL | 37% YPF | ||||
Allen - PR 163 kbbl/d | |||||
REFINERY | |||||
Allen | 513 km | Puerto | |||
25 kbbl/d / 100% YPF | Rosales | ||||
San Lorenzo
AXION
JunínRAIZEN
LA PLATA REFINERY
189 kbbl/d / 100% YPF
PR - CILP Pipeline
100% YPF
OTE
30% YPF
No bottleneck expected in the short-term
Performing meticulous
study of the oil midstream sector, including:
- Reverting some existing pipelines
- Increasing OLDELVAL pumping capacity
- Upgrading the existing export terminal in the Atlantic
- Reactivating export route to the Pacific
11
GAS MARKET: TAKING SEVERAL MEASURES TO MITIGATE OVERSUPPLY
VACA MUERTA
ESCOBAR
BSAS RING
BAHÍA
BLANCA
TGN
TGS
TO Chile
FSRU
LNG BARGE
MEGA SEPARATION
MEGA FRACTIONATION
NATURAL GAS PRODUCTION
(Mm3/d)
43.7 | 44.0 | 43.7 | 43.6 |
40.1
36.8 34.7
6.1 7.7
1.2 | 1.3 | 1.3 | 2.6 | 0.8 | ||
Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | Q1 2019 | Q2 2019 | Q3 2019 |
NG Production | NG Production Curtailments |
Short-term levers | Medium | ||
• | Exports to Chile | to long-term levers | |
• | LNG floating barge | • | Sizeable LNG terminal |
• | Ensenada Barragán | ||
• | Profertil expansion | ||
• | Underground gas storage | ||
12
DOWNSTREAM: SOLID MARKET LEADERSHIP
GASOLINE MARKET SHARE BREAKDOWN (%)(1)(2)
DIESEL MARKET SHARE BREAKDOWN (%)(1)(2)
Others
5%4%
15%
56%
20%
Others
6% 5%
15%57%
GASOLINE SALES (YoY variation)(2)
YPF Market
8%
4%
0%
-4%
-8%
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
DIESEL SALES (YoY variation)(2)
YPF Market
8%
4%
17%
- Market share as of 9M 2019.
- YPF volumes exclude bunker sales to the foreign market and sales to other companies.
0%
-4%
-8%
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
13
RECOVERY IN DOWNSTREAM MARGIN; FREEZE IN PRICES WIDENED GAP WITH IMPORT PARITY
DOWNSTREAM ADJUSTED EBITDA(1)(2) | FUELS BLENDED PRICE VS IMPORT PARITY(3) |
Excluding inventory revaluation | (% VARIATION) |
(USD per refined barrel) | |
12.1 | 11.2 |
10.4 | |
2017 | 2018 | 9M 2019 |
- Amounts in Argentine Pesos converted to USD using the applicable FX rate on the date in which revenues and expenses were recognized. Please note that these figures may differ from the EBITDA expressed in USD that is disclosed in table 5.5 of YPF's Quarterly Consolidated Results report.
- Net of commissions, deductions, freights, turnover tax and other taxes.
Fuels Blended Price
Import Parity
- Import parity includes international reference price for heating oil, RBOB and biofuels, each of them weighted by sales volumes of our regular and premium diesel and gasoline. Fuels blended prices and Import Parity prices based on monthly average prices. January 2018 = base 0. (*)
December 2019 and January 2020: preliminary data. Jan-20 includes average prices through | 14 |
January 7 2020. | |
CURRENT PRICES AT THE PUMP AT LOW HISTORICAL LEVELS
FUELS BLENDED PRICE AT THE PUMP(1)
(USD/liter) |
1.4 |
1.3 |
1.2 |
1.1 |
1.0 |
0.9 |
0.8 |
(1) Weighted by sales volumes of our regular and premium diesel and gasoline. * Q4 2019 and Jan-20 prices are preliminary. Jan-20 includes average prices through January 7 2020.
15
FINANCIAL DISCIPLINE: FUNDING CAPEX WITH INTERNAL CASH FLOW GENERATION
CONSOLIDATED STATEMENT OF ADJUSTED CASH FLOW(1)
(In Millions of USD)
1,196
1,587 | -804 | |||||
-418 | 1,042 | |||||
-243 | -276 | |||||
Cash & | Cash flow | Capex | Net borrowing | Interest | Others | Cash & |
equivalents at | from | payments | equivalents at |
the begining of | operations | the end of Q3 | |
Q3 2019 | 2019 |
- Cash and equivalents at the beginning of Q3 2019 were converted to USD using the June 30, 2019 exchange rate of Ps 42.36 to U.S $1.00. Cash and equivalents at the end of Q3 2019 were converted to USD using the September 30, 2019 exchange rate of Ps 57.49 to U.S $1.00.
CUMULATIVE FREE CASH FLOW(2)
(In Millions of USD)
526 | ||
310 | ||
135 | ||
3M 2019 | 6M 2019 | 9M 2019 |
(2) Free Cash Flow = Cash Flow from Operations minus CAPEX - M&A.
16
FINANCIAL DISCIPLINE: SUCCESFULLY MANAGING OUR SHORT TERM MATURITIES
PRINCIPAL DEBT AMORTIZATION SCHEDULE(1)(2)
(In Millions of USD)
Bonds | 2,263 | ||||||||||
Trade financing | |||||||||||
Bank loans | 1,436 | 1,495 | |||||||||
1,180 | |||||||||||
1,042 | |||||||||||
714 | 624 | ||||||||||
356 | 484 | ||||||||||
Cash & (3) 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026+ | ||||
Equivalents |
- As of September 30, 2019. Excludes IFRS 16 effects.
- Converted to USD using the September 30, 2019 exchange rate of Ps 57.49 to U.S $1.00.
- Includes cash & equivalents, including Argentine sovereign bonds BONAR 2020 and BONAR 2021.
- Net debt is calculated as total debt less cash & equivalents. Net debt to LTM Adj. EBITDA calculated in USD. Net debt at period end exchange rate of Ps 57.49 to U.S $1.00 and LTM Adj. EBITDA calculated as sum of quarters.
DETAILS OF Q3 2019
~90% of our cash & debt denominated in USD
Average interest rates of 7.6% in USD
and 55.8% in Pesos
Average life of 6.23 years
Net Debt /LTM Adj.
EBITDA 1.98x(3)(4)
17
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YPF SA published this content on 10 January 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 January 2020 14:27:03 UTC