• Year Average Output Growth: 21% increase in 2024, 80% increase since 2017.
• Oil Equivalent Production: Reached 100,000 barrels per day.
• EBITDA Growth: 19% year-on-year increase, 29% increase compared to 2017.
• Net Debt: Reduced to $410 million, the lowest since 2016.
• Q4 Gas Production Increase: 11% year-on-year rise.
• Adjusted EBITDA for Q4: $182 million, up 60% from last year.
• CapEx in Q4: 20% lower year-on-year.
• Average Gas Price for Q4: $2.9 per million BTU, down 10%.
• Total Proven Reserves: Increased 16% to 1,231 million barrels of oil equivalent.
• Shale Reserves Growth: 60% year-on-year increase to 132 million barrels.
• Adjusted EBITDA for Power Generation: $86 million in Q4, up 7% year-on-year.
• Free Cash Flow in Q4: $82 million.
• Gross Debt: $2 billion, up 44% year-on-year.
• Net Leverage Ratio: 0.6 times, the lowest since 2016.

• Warning! GuruFocus has detected 3 Warning Signs with PAM.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Pampa Energia SA (NYSE:PAM) achieved a 21% growth in average output for 2024, with an 80% increase since 2017, driven by top-performing wells in Vaca Muerta.
• The company commissioned the PEPE six wind farm, adding 140 megawatts of green energy, and achieved a 95% availability rate in 2024.
• EBITDA grew 19% year-on-year, with significant contributions from power and gas segments, and net debt fell to $410 million, the lowest since 2016.
• Gas production rose 11% year-on-year in Q4, with shale gas increasing its share to nearly 50% in 2024.
• Pampa Energia SA (NYSE:PAM) successfully extended debt maturities and improved its financial position, with a net leverage ratio of 0.6 times, the lowest since 2016.

Negative Points

• Higher operating costs and lower exports partially offset gains in Q4, with a decrease in EBITDA due to seasonality.
• Adjusted EBITDA for the EMP segment was down 26% year-on-year in Q4, largely due to lower sales to industries in Chile and higher operating costs.
• Lifting costs per BOE rose to $8.7, with gas lifting costs increasing by 10% due to lower seasonal output.
• The company anticipates a year with negative free cash flow in 2025 due to significant CapEx deployment in Rincon de Aranda.
• The damage to two dams in Nihuiles was catastrophic, affecting 130 megawatts of capacity, though it represents less than 1% of EBITDA.

Q & A Highlights

Q: How do you expect regulatory changes introduced by the Secretary of Energy to impact the ability for generators to self-procure fuel? What impact do you anticipate for both EMP and power generation segments? A: It is too early to tell as the regulatory authority has issued guidelines for participants to comment on. Definitive changes are expected by November 2025. We do not expect significant impact in the next quarter, but we anticipate increased sales of natural gas as we use our gas in our thermal plants.

Q: With growth plans including investments in Rincon de Aranda and other projects, how do you expect leverage to evolve? A: We are moving forward with Bacamortaur and studying LNG and UEA projects. We expect a year of negative free cash flow due to significant CapEx in Rincon de Aranda, increasing net debt to about 1.2 times. By 2027, we anticipate returning to significant free cash flow generation.

Q: What is the plan if Brent prices fall to $60-$65 per barrel? A: We focus on the future curve rather than spot prices and have hedged approximately 65% of 2025 production at $72 per barrel. We do not foresee major changes in our investment plan for 2025.

Q: Could you comment on management expectations regarding further resolutions allowing generators to sign new PPAs and potential investments in greenfield power generation assets? A: We are not currently analyzing new investments in power generation. We are studying an invitation to install a battery package in Buenos Aires but have not made a decision. We have sold all capacity from our wind farms and do not need to sell new capacity.

Q: What is the outlook for gas exports to Chile and Brazil in 2025 regarding capacity and pricing? A: We expect Chilean demand to ramp up, exporting around 1 million cubic meters per day by May 2025. Prices are expected to remain stable. For Brazil, exports will depend on transportation costs and competitiveness compared to LNG imports. We are considering both pipeline and LNG exports.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.