ARGENTINA
A Brief Country and Company Overview
1 Disclaimer
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, 2013 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 for sale of YPF S.A. bonds, shares or ADRs in the United States or otherwise.
2 Agenda
1 Country Overview
2 Company Overview
3 Agenda
1 Country Overview
2 Company Overview
Population 41.9 Million people Capital City Buenos Aires (13 Million people) Total Area 2.8 Million km2 Official language Spanish Government type Federal Republic President Mauricio Macri (Cambiemos)
GDP (Billion USD) 536 GDP per head (Thousand USD) 12.8 Trade Balance (Billion USD) 6.7 Public ext. debt / GDP 40.1%
Source: Instituto Nacional de Estadísticas y Censos (INDEC) – year 2014 5 Argentina primary energy consumption breakdown
Oil and Gas Argentina 86 %
1% 1% 1% 11% Oil production 2014
35% 532 Kbbl/d -1,4% vs 2013 Renewable energy Hydroelectricity Gas production 2014
Nuclear energy 114 Mm3/d -0,5% vs 2013 Coal Source: 51% IAPG 2014 Natural gas
Oil
Annual consumption Argentina Energy imports 2014
Source: B. P. Statistical Review 85 Million tones oil equivalent 15 Million tones oil equivalent (17%) of World Energy 2014
6 Proved O&G reserves from conventional sources have declined
Producing Basins Oil (Million bbl) Natural Gas (TCF)
3 000 -1.6% 20 -2.1%
NOROESTE 15 2 000 Proved 10 1 000 Reserves 5 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
300 -2.5% 2,0 -3.0% CUYANA 1,5 200 Gross 1,0 100 NEUQUINA Production 0,5 - - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
9 9 9 GOLFO 12 12 12 12 12 8 8 8 11 11 11 11 8 8 7 7 SAN JORGE 9 R/P Ratio AUSTRAL (years)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Yearly average decline 2009-2014 Source: Secretary of Energy 7 In 2011, Argentina became a net energy importer Currently, it is a Government policy to revert this trend
Energy trade balance Foreign trade balance USD Billions 2014
7.8 7.8 7.2 6.9 6.9 6.2 6.5 6.5 6.5 6.7 5.4 5.0 4.9 4.7 4.6 4.3
3.9 3.9 4.2 4.9 5.2 5.6 6.1 4.1 3.5 3.8 2.0
-2.9 -2.4 -6.4 -7.1 -0.5 -0.5 -1.0 -0.8 -1.0 -1.5 -1.7 -2.8 -2.6
Energy Exports FOB -4.3 -4.5 -7.1 Energy Imports CIF
Energy Trade balance Energy Total trade -9.4 -9.3 Imbalance balance -11.4 -11.3
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: Instituto Nacional de Estadísticas y Censos (INDEC). 8 There is significant upside in the unconventional resource base and in the offshore platform
Oil Potential 4.4 (Bn bbl) Vaca Conventional Muerta (Oil 3P + Resources) Unconventional (resources)
27 4th in UNC oil resources Offshore area 1.2 million km2 Gas Potential 29 • Offshore estimated (Tcf) resources: 31Bn BOEs
Conventional (Gas 3P + Resources) Unconventional (resources) 802 2th in UNC gas resources
Source: Secretary of Energy / U.S. Energy Information Administration (DOE) / Advanced Resources International (ARI), 2013 9 The country shows vast resources of unconventional hydrocarbons
Conventional Proved Reserves
NOROESTE 1.6 P1 2.3B bbl P1 12 TCF 5.1 CHACO Oil Natural PARANAENSE Gas 3.7
CUYANA Golfo 0.5 1.7 San 0.2 1.2 3P non-risked Jorge Neuquina 3P non-risked Golfo Cuyana San 3.7 Bbbl Austral 21 TCF Neuquina Austral Jorge Noroeste
NEUQUINA Unconventional resources
Tested and in production Other Opportunities Noroeste - Cretaceous Chaco Paranaense Vaca Muerta (shale oil / gas) Yacoraite GOLFO Devonian – Permian (shale / tight oil & gas) SAN JORGE (shale oil) Area 30,000 km2 Noroeste - Tarija OOIP 661 B bbl (40 B bbl)* * Los Monos (shale gas) Cuyana AUSTRAL OGIP 1,181 TCF (117 TCF) Cacheuta (shale oil) Neuquina Potrerillos (tight oil) (tight gas) Lajas Los Molles (shale / tight gas) (tight oil / gas) Mulichinco Agrio (shale oil) Austral Inoceramus Golfo San Jorge D-129 (shale oil / tight oil) Neocomiano (shale oil / gas) 10 Argentina is the only unconventional producer of significance outside US
Shale wells already drilled put Argentina in second place in Unconventional activity
Unconventional activity
+550*
Unconventional wells
Source: “An Industry in Transition”, IHS Energy, Abril 2014. * As of December 2015. from which 475 are YPF’s. Source: Ministry of Energy and Mining of Argentina 11 Argentina has an extensive infrastructure to process and transport conventional and unconventional O&G resources
Oil Natural Gas
1,167 km of oil pipelines 14,800 km of gas pipeline, (154 M m3/d)
1 export oil pipeline 12 international pipelines (70 M m3/d) 115,000 bbl/d Midstream from Argentina to: • Chile • Uruguay (45 M m3/d) (5,6 M m3/d) • Brazil • Bolivia (2,8 M m3/d) (30,0 M m3/d)
10 refineries 16 NGL plants 639,000 bbl/d total capacity 143 M m3/d processing capacity Over 5,000 retail pumps 2 LNG import terminals (Bahía Blanca y Escobar)
Downstream 34 M m3/d regasification capacity 129,000 km distribution network 1 UGS - WGC: 150 M m3
12 Agenda
1 Country Overview
2 Company Overview
13 Robust production base plus upside potential
Oil Natural Base Base 20% gas 15%
Primary +100 9% +500 Shale Primary Projects Shale P1 Projects 51% 11% 57% Tight gas 15% Secondary P3 10%
Infill Tertiary (EOR) 1% 2% Enhancement Heavy oil Infill 1% 2% Enhancement Compression 3% 1% 2%
Only 20% of the portfolio of resources are proven reserves (which mainly supports the production plan 2013-2017) which, however, provide 90+% of current production 14 More CAPEX, more activity, more Hidrocarbon´s production
Oil Production (M Bbl/ day) Wells
-5%p.a. +4% p.a. +13%p.a. +11%p.a. 244 238 227 230 244 222 987 744 683 786 554 516
2009 2010 2011 2012 2013 2014
2009 2010 2011 2012 2013 2014 CAPEX (billions USD)
3 4,9 Gas Production (M / day) Upstream 4,3
-9%p.a. +5% p.a. 2,0 2,5 0,8 1,3 44 41 40 36 36 36 2009 2010 2011 2012 2013 2014
Downstream 0,9 0,8 0,9 0,2 0,5 0,8
2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014
Source: YPF Past strategy trend 15 Unconventional Development in the Vaca Muerta Formation
Vaca Muerta Estimated • Total: 30,000 km2 4 ongoing projects • YPF: 12,000 km2 aprox. development of the 4 projects in 3% of Vaca Capex (Million USD) Muerta
Number of wells Capex (Million USD)
Rigs
Number of wells
4 ongoing projects: ~ 500 km2
YPF operator 16 Unconventional Development in Loma Campana (Shale Oil)
2013 - Pilot 2014 Activity
Investment (M USD) Investment (M USD)
Number of wells Number of wells to drill
Rigs Complete Development
Number of Producing Wells Direct and indirect employment Oil Production Plateau
Loma Campana (b/d) 290 km2 – 71,468 acres Neuquen Basin Gas Production Plateau Vaca Muerta (M m3/d) 17 17 Development of two unconventional natural gas pilots in El Orejano and Rincón del Mangrullo El Orejano Pilot Plan Number Area Investment of Wells 2 45km (11,090 acres) 188 M USD 16 Dow, initial investment Drilling Rigs
120 M USD 2
Rincón del Mangrullo Pilot Plan Number Investment (*) of Wells Area 183km2(45,000 acres) 233 M USD 42 Loma Campana Pampa, initial investment Neuquen Basin Vaca Muerta 151.5 M USD (*) 1st phase: 81,5 million USD Pampa - 81,5 million USD YPF. 2nd Phase: 70 million USD Pampa 18 The development of unconventional production increases while unit costs and cycle times are reduced
Shale Oil/Gas Development (Boe/d) Vertical Well Cost (USD millions)
Location + Equipment 50 000 USD 12 11.0 50,000 Boe 10.2 Completion Drilling USD 10 40 000
Shale Gas 8.1
USD 8 7.4
Shale Oil well
/
30 000 well
/
st
st well
USD 6 /
4.5
3.1
well st
20 000 194 /
st
4.8 USD 4 5
10 000 USD 2
0 USD 0
2011 2012 2013 2014 YTD
01-2013 02-2013 03-2013 04-2013 05-2013 06-2013 07-2013 08-2013 09-2013 10-2013 11-2013 12-2013 01-2014 02-2014 03-2014 04-2014 05-2014 06-2014 07-2014 08-2014 09-2014 10-2014 11-2014 12-2014 01-2015 02-2015
+475 Wells in production in 2015 Current Production 50,000 boe/día This production is equivalent to 19% of YPF production in Neuquen Basin
Gross production from concessions (LoCa, Band ,LaCh, Bañ, ElOr; PYga) 19 Resource Play Comparison. Relative Play Area & Thickness
Play Vaca Muerta Eagle Ford Bakken Barnett Haynesville Marcellus
Oil & Liquid Oil & Liquid Fluids Oil Gas Gas Gas Neuquén´ Vaca Muerta Rich Gas Rich Gas is both very thick and
Area (ac) ~7,500,000 ~ 3,000,000 ~13,000,000 ~4,200,000 ~ 6,000,000 ~6,200,000 laterally extensive
Thickness (ft) ~1,000 ~130 ~150 ~300 ~250 ~200 Vaca Muerta
Marcellus Total Area: 7,500 M acres YPF net Area: 2,975 M acres Bakken Barnett YPF is the 3rd unconventional acreage Haynesville Eagle Ford holder in America Oil Chesapeake ExxonMobil Dry Gas Proportional area YPF & thickness of target Chevron Liquids Plays Humid Gas Gas Plays Neuquén Apache (Vaca Muerta)
Source: Chevron Report. “Vaca Muerta unconventional plays review” 20 OUR ENERGY
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