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October 25, 2014
Friday, May 9, 2014

YPF’s natural gas output up 18.5 percent

Legal and Technical Secretary Carlos Zannini (left) and Economy Minister Axel Kicillof (centre) sign the deal with Repsol’s officials at the Economy Ministry yesterday.
Company reports oil output rises 6.8% on the year, profit totals 2.79B pesos

YPF’s production soared in the first quarter, with a rise in 18.5 percent in natural gas output and a 6.8 percent increase in oil production — results that were reported on the same day as the government and Repsol finalized the compensation deal with an exchange of bonds per share at the Economy Ministry.

YPF reported profits of 2.79 billion pesos in the first three months of the year, a figure that far exceeded analyst expectations and more than doubled the figure seen in the same period last year.

President Cristina Fernández de Kirchner pushed for the expropriation of a majority stake of YPF in 2012, citing years of declining output.

Analysts quickly explained that part of the reason for the soaring profits had to do with the sharp devaluation of the peso in January as well as the purchase of assets by YPF.

Still, the sharp rise in production is certainly good news for the country in the run-up to winter months, when there is normally a shortage of natural gas supply that forces supply cuts to industry. Considering one of the main arguments Fernández de Kirchner used to expropriate YPF was years of declining output under the leadership of Spain’s Repsol, the latest numbers appeared to be at least a slight vindication of the strategy.

YPF’s total production rose 10.7 percent in the first three months of the year, compared to the same period in 2013, rising to 529,700 barrels of oil equivalent. Specifically, oil production rose 6.8 percent to 241,600 barrels per day while natural gas output soared 18.5 percent to 37.2 million cubic metres per day.

Those results were largely the result of increased activity as YPF’s investments in exploration and production rose 135.4 percent to 8.6 million pesos.

The investment does not take into account the purchase of US company Apache’s assets in Argentina as well as the 38.5 percent stake in the Puesto Hernández block from Petrobras, for a total of 6.5 billion pesos.

Although shale oil and gas continues to win headlines across the world, YPF’s rise in output came as a result of conventional fields.

“YPF’s productive activity was centred in recovering the yields in the main areas through efficiency in production of the conventional fields,” the company said yesterday. “In unconventionals, YPF is moving forward in developing the Vaca Muerta formation with the drilling of more than 50 wells in the first quarter and an average of quarterly production of 18,600 barrels per day.”

YPF currently has 69 active drilling rigs, representing a 176 percent growth from the same quarter of 2012.

The company’s total revenue during hte first quarter rose 64.6 percent to 30.7 billion pesos, a 65 percent increase from the same period last year.

The growth in YPF was not just in exploration and production but also in retail sales. YPF’s net fuel sales rose 62 percent last year compared to the first quarter of 2013 in part due to the higher prices, which have risen as much as 30 percent this year.

Herald staff

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