PAM — Pampa Energía S.A.

Pampa Energía Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Q4 Adjusted EBITDA: $230 million, up 26% year-on-year.
• Annual EBITDA: Surpassed $1 billion, an 8% increase year-on-year.
• Oil and Gas Segment EBITDA: $77 million in Q4, more than double from last year.
• Power Segment EBITDA: $111 million in Q4, up 28% year-on-year.
• Total Production: Averaged over 81,000 barrels of oil equivalent per day, a 32% increase year-on-year.
• CapEx: $371 million in Q4, an 81% increase year-on-year, with $249 million allocated to Rincón de Aranda.
• Net Debt: $801 million, with a net debt-to-EBITDA ratio of 1.1x.

2. Strategic Updates and Business Highlights

• Pampa achieved a record daily production of 104,000 barrels of oil equivalent during winter 2025.
• The Rincón de Aranda shale oil project ramped up production to 20,000 barrels per day by December 2025, contributing significantly to EBITDA.
• The company holds a 15% share of Argentina's net electricity output, maintaining a 94% thermal availability rate.
• Pampa has committed $1.4 billion in CapEx for 2025, with plans for $770 million in Rincón de Aranda and $400 million for maintenance in 2026.
• The company is actively pursuing vertical integration by self-procuring gas for its power generation.

3. Forward Guidance and Outlook

• Production Targets: Aim to reach 25,000 barrels per day by Q1 2026 and 28,000 barrels per day by mid-2026 from Rincón de Aranda.
• EBITDA Growth: Expected 10-15% increase in EBITDA for 2026, driven by improved operational efficiencies and increased self-procurement of gas.
• CapEx Guidance for 2026: Total estimated at around $1.1 billion, with approximately $1 billion for oil and gas and less than $100 million for power maintenance.

4. Bad News, Challenges, or Points of Concern

• Quarterly EBITDA Decline: Q4 EBITDA decreased quarter-on-quarter due to seasonal gas demand fluctuations.
• Gas Pricing and Demand: Gas prices remained flat year-on-year, with a 23% drop from Q3 due to seasonality.
• Hedging Losses: The company is currently facing losses of $4-5 per barrel from its hedging strategy amid high oil prices.
• No Dividends Planned: Pampa does not foresee dividend distributions in the near future due to negative free cash flow projections.

5. Notable Q&A Insights

• Production Evolution: Management confirmed production targets for oil and gas, with a focus on Rincón de Aranda.
• Hedging and Royalties: Royalties are set at market prices and are not tied to hedging strategies.
• Self-Procurement Benefits: The shift to self-procuring gas is expected to enhance margins and operational efficiency.
• M&A Activity: No immediate M&A opportunities are being pursued in either the upstream or power generation segments.
• RIGI Impact: The new RIGI framework is anticipated to improve project economics for Rincón de Aranda, although its full impact is still being evaluated.

Overall, Pampa Energía demonstrated strong growth in Q4 2025, with significant contributions from its oil and gas segment, particularly the Rincón de Aranda project. However, challenges such as seasonal fluctuations in gas demand and hedging losses present headwinds for the company moving forward.