Argentina s Unconventional Resources A great prospect. Oil & Money Conference London - October. 2013

Transcription

1 Argentina s Unconventional Resources A great prospect Oil & Money Conference London - October. 2013

2 Disclaimer Safe harbor statement under the US Private Securities Litigation Reform Act of This document contains statements that YPF believes constitute forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 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, 2012 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.

3 Contents YPF results Unconventional potential in Argentina Evolution of cost and productivity

4 Increased investments and activity Significant increase in investment during 2013 Significant increase in activity Millions Dollars (*) Rigs +63% % Others Downstream Upstream Workover Sep-13 (1) 73% M M 2013 Investments as in Note 2.g. of the financial statements at Q Converted to USD at period end exchange rate Sep-13

5 Increased Production Downward trend in production seen in recent years reversed; crude oil and natural gas production for July above previous two quarters. Crude oil production (kbbl/d) Natural gas production (Mm 3 /d) Q'2013 2Q'2013 Jul' Q'2013 2Q'2013 Jul'2013

6 Contents YPF results Unconventional potential in Argentina Evolution of cost and productivity

7 Argentina has the natural resources to increase production NOROESTE CHACO PARANAENSE Oil Potential (Bbbls) 4,4 Gas Potential (Tcf) 29 CUYANA NEUQUINA GOLFO SAN JORGE AUSTRAL 27 Conventional (Oil 3P + Resources) Unconventional (resources) 802 Conventional (Gas 3P + Resources) Unconventional (resources Source: Secretaria de Energia / U.S. Energy Information Administration (DOE) / Advanced Resources International (ARI), th in Unc. oil resources 2 nd in Unc. gas resources

8 Vaca Muerta World Class asset that can be massively developed Net YPF Area 12,075 km 2 Windows (1) Shale Oil and Gas Total Comparable to US plays Vaca Muerta US Best Composite Oil 77% Wet gas 5% Dry gas 18% Area 30,000 km 2 EUR EUR Bbbl TCF Approximately 100 years of current production TOC (%) 3-10 Marcellus 2-12 Dry gas Wet gas Oil Key unconventional acreage holders in America Thickness (m) Reservoir Pressure (psi) 4,500 9,500 Eagle Ford Haynesville 2,500 8,500 Chesapeake ExxonMobil YPF Chevron Apache

9 Oil: First pilot initial investment Neuquina basin Vaca Muerta 1 cluster Massive development 290 Km 2 20 km 2 First 20 km 2 - pilot Investment 1,240 Wells +100 Drilling rigs 19 (as of December 2013) Direct employees +1, drilling 300 transport 350 well services 160 stimulation million dollars

10 Contents YPF results Unconventional potential in Argentina Evolution of cost and productivity

11 Unconventional Development Trends Shale wells Qi evolution 45 Qi oil average, M 3 /d Oct-10 Ene-11 Abr-11 Ago-11 Nov-11 Feb-12 May-12 Sep-12 Dic-12 Completion costs per vertical well M USD Progress towards turning Vaca Muerta into a highly profitable shale development First Vaca Muerta reservoir simulation model (lead by YPF team together with top North America shale experts) Increased initial productions due to improved fracture methodology and management of the draw down imposed on the hydraulic fractures Renegotiated completion contracts generating savings as efficiency and economies of scale increase Decreased well cost by 10% during 2012 and completion by more than 20% Initiated multi-pad drilling H H 2013 Started pilot development targeting 130 wells in 2013, now 19 drilling rigs active in North Loma La Lata

12 Oil bbl/d Gas km³/d Production Evolution Oil (bbls/d) Gas (km3/d) Current production +13,000 boe/day

13 The partner of choice Key advantages in Argentina Long term contracts 25/35 years, 12% royalties Excellent connectivity and infrastructure 1,167 km crude oil transmission system - 1 crude oil export pipeline to Chile 14,800 km gas transmission system 5.5 BCF/d capacity - 12 international pipelines 2.5 BCF/d 10 refineries 639,000 bbl/d total capacity Promotion of Investment Decree 929/13 Investment over 1B US$ on Hydrocarbons Production gives right to export up to 20% of the hydrocarbons produced and free disposition of exports' proceeds. Improved Gas Prices 7,5 US$/Mbtu on new gas YPF Expertise Main hydrocarbon producer in Argentina (36% of Argentina total production) 93 concessions and 50 exploration blocks Excellent Economy of scale in its operations Leader in unconventional wells in Argentina 3 times all companies combined 3 rd largest unconventional acreage holder in America Fully integrated company (Uptream & Downstream) Leader in Vaca Muerta

14 Conclusions Summary A definite potential exists for Unconventionals outside of North America Approach to developing Unconventionals outside of North America is different Argentina has various sizeable Unconventional Oil & Gas plays that can be developed Vaca Muerta is a world class shale resource that has been proven MATERIAL and can be massively developed. Opportunity exists to reduce development costs through fit for purpose technology, estate of the art reservoir modeling, and logistics improvements. Both Argentina and YPF are completely open to investment and partnerships in developing Unconventionals YPF is the leader and partner of choice

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16 Project size - 35 years Total investments Billion USD Total operating costs +9.0 Billion USD Drilling activity +1,500 New wells Cumulative production +750 Million BOE Plateau production +50,000 Oil Bbls per day +3 million m 3 per day of gas

17 Unconventional opportunities Unconventional Resources CUYANA NEUQUINA GOLFO SAN JORGE AUSTRAL NOROESTE CHACO PARANAENSE Notes: K: thousand; M: million; B: billion (10 9 ) Tested & Producing 4,4 Vaca Muerta (shale oil / gas) Area 30,000 km 2 OOIP 661 Bbbl (40 Bbbl) * OGIP 1,181 TCF (117 TCF) * Lajas (tight gas) Mulichinco (tight oil / gas) D-129 (shale oil / tight oil) Other Opportunities Noroeste - Cretaceous Yacoraite (shale / tight oil & gas) Noroeste - Tarija Los Monos (shale gas) Neuquina Los Molles (shale / tight gas) Agrio (shale oil) Golfo San Jorge Neocomiano (shale oil / gas) Chaco Paranaense Devonian Permian (shale oil) Cuyana Cacheuta (shale oil) Potrerillos (tight oil) Austral Inoceramus

18 Focus on value creation and new opportunities Exploitation Oil +29% prod. rate 251 Mbbl 5,380 wells O t h e r s 8 % Secondary Prod 14 % P r i m a r y P r o d 3 2 % Shale oil 46% +23% prod. rate Gas 1.27 TCF Exploration 1,160 wells 250 wells I n f i l 33 % O t h e r s 8 % Shale gas 32% Refining & Marketing * +44% diesel oil +24% gasoline T i g h t l G a s 27 % Notes: * R&M includes Petrochemicals and Logistics / K: thousands; M: million; Bn: billion (10 9 )

19 Logistics optimization Sand Transportation Sand Train transportation will allow for Substantial reduction of sand transportation cost and time Bulk transportation instead of big bags Central Storage Optimization in silos Optimized distribution with bulks Water Sourcing & Distribution Water pipe network to minimize water truck transport River Water being pumped to the field Central fresh Water Pit storage Water pipe network for water pumping to well location

20 Performance of vertical wells for hydraulic fracturing Vertical wells, hydraulic fracture in Vaca Muerta Cumulative Oil, avg bbls/well 40,000 35,000 30, : 15 wells YPF 2012: 10 wells YPF 2013: 36wells Back Forecastt up D vs 2012: + 4,500 bbl 25,000 20,000 15,000 10,000 5, Production months