Pampa Energia Q2 Earnings Call Highlights

Pampa Energia approved a $2.7 billion urea plant in Bahía Blanca, with planned annual capacity of 2.1 million tons and completion targeted for 2029. The project will use Vaca Muerta gas and power, primarily serving Brazil and other Southern Cone markets. Second-quarter adjusted EBITDA reached $415 million, driven by record production of 107,500 barrels of oil equivalent per day, stronger power-market margins and improved petrochemical pricing. Oil and gas EBITDA more than doubled year over year to $182 million. Rincón de Aranda oil output is targeted to reach a 28,000-barrel-per-day exit rate this year and a 45,000-barrel-per-day plateau next year, although hedges reduced realized crude prices to about $59 per barrel. Pampa expects leverage to rise to 1.5–2 times as it funds its investment program. Pampa Energia reported second-quarter adjusted EBITDA of $415 million, supported by record oil and gas output, stronger power-market margins and improved petrochemical pricing. The planned fertilizer facility, to be built in Bahía Blanca, would have capacity to produce 2.1 million tons of granular urea annually. The $2.7 billion turnkey project is scheduled for completion by the end of 2029 and marks Pampa’s entry into the fertilizer business. Investor Relations and Sustainability Officer Lida Wang said the project is intended to monetize Pampa’s Vaca Muerta shale gas resources through a higher-value industrial business. Natural gas and electricity represent about 70% of urea production costs, and Pampa expects to supply both inputs to the facility. The plant is planned for a company-owned site near the Port of Bahía Blanca, with connections to existing Vaca Muerta pipelines and proximity to Pampa’s thermal and renewable generation assets. It is expected to consume an average of 3.3 million cubic meters of gas per day and 75 megawatts of power. Wang said Brazil, which imports an estimated 7 million to 8 million tons of urea annually, along with other Southern Cone markets, will be the primary markets for the project. She said the investment could support import substitution and exports, with an estimated annual foreign-currency contribution of about $1 billion. The company is awaiting formal publication of approval under Argentina’s national RIGI investment-incentive regime after the evaluation committee cleared FertilPampa’s application. It has also applied for Buenos Aires province’s investment regime. CFO Adolfo Zuberbühler said the two regimes are complementary and that the provincial program could provide a gross-sales-tax benefit. Zuberbühler said Pampa expects to finance the plant with a limited-recourse project-finance loan, targeting an approximately 60% debt and 40% equity structure. The company expects financing to close during the fourth quarter, although terms remain under negotiation. He said equity contributions would begin this year, with the largest capital deployment expected in 2028. Pampa reported quarterly record production of 107,500 barrels of oil equivalent per day, driven by the ramp-up at its Rincón de Aranda development and gas supply to its own power plants. Oil and gas adjusted EBITDA rose to $182 million, more than doubling from a year earlier and increasing 74% sequentially. Crude production rose threefold year over year, entirely due to Rincón de Aranda. The asset averaged 22,000 barrels per day during the quarter, up 22% from the first quarter, despite no new wells being tied ...