Argentina’s YPF SA boosted its production in second-quarter 2023, driven mainly by robust shale operations, but the company reported lower net income and its debt keeps piling up.
YPF’s total hydrocarbon production was 513,100 boe/d in the second quarter 2023, up 0.5% sequentially and up 1.9% compared to 503,700 boe/d in the second quarter 2022, the company said in its Aug. 11 earnings report.
Oil production in the second quarter rose 1% sequentially compared to first-quarter 2023 and was up 6.9% compared to second-quarter 2022, YPF said. Natural gas and NGLs production was essentially flat sequentially.
Growth in oil production was driven by higher shale production, while conventional production remained sequentially stable, driven by YPF’s strategy that continues to advance tertiary recovery techniques.
“In that sense, tertiary production recorded an expansion of 17% compared to the previous quarter and 32% against the same quarter of 2022, highlighting [the] Manantiales Behr Block, where we are currently operating nine Polymer Injection Units and its tertiary production represents around 30% of its total production, as well as Chachahuen, El Trebol and Los Perales blocks, where we continue obtaining promising results,” YPF said.
YPF’s focus on shale activity continues to deliver solid growth in the shale production, company officials said during its second quarter earnings call with analysts.
Shale oil volumes were up 28.1% and natural gas increased 10.2% in the quarter compared to the same quarter in 2022. YPF’s total shale production represented 44.9% of the company’s total consolidated production in the second quarter compared to 38.7% in second-quarter 2022.
YPF reported notable shale-related improvements in the second quarter compared to second-quarter 2022, a rise in the number of horizontal wells drilled/completed, which reached 46 drilled, 41 completed—compared to 38 drilled and 29 completed.
YPF also saw a rise in drilling speeds to 260 meters/day compared to 248 meters/day. The company’s frac speed averaged 194 stages/month compared to 204 stages/month, the company said.
Total debt still rising
Buenos Aires-based YPF also reported a net income of $380 million in the second quarter 2023, down 53.1% compared to second-quarter 2022 owing mainly to lower oil realizations and revenues and higher opex, the company said in the press release.
The state energy giant said oil prices averaged $63.40/bbl in the second quarter, down 2.5% during the same period last year. Gas prices averaged $3.90/MMbtu, relatively flat compared to the same quarter a year ago.
YPF’s total debt reached $7.8 billion at the end of June 2023, up 10% from $7.1 billion at the end of June 2022. The company has approximately $1.5 billion in cash and short-term investments, resulting in a net debt of $6.3 billion. YPF’s net leverage ratio is approximately 1.4x.
YPF will face debt maturities of $616 million in the second half of 2023, and then $1.2 billion in 2024 and $1.7 billion in 2025.
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