Key Highlights from Pampa Energía S.A.’s Q3 2025 Earnings Call
During the recent earnings call for Pampa Energía S.A. (PAM), the company provided a detailed overview of its performance in the third quarter of 2025, highlighting strong results across several key areas. The CEO, Gustavo Mariani, emphasized the standout performance at Rincón de Aranda, where the production ramp-up significantly contributed to EBITDA. Oil now makes up 34% of E&P EBITDA and 18% of total E&P. He noted that “Winter demand pushed us to a new all-time high in production, almost 18 million cubic meters per day of gas delivered smoothly without any disturbance and disruptions.”
Mariani also highlighted the company’s confidence in its fundamentals, referencing the recent share buyback of 1.5% of capital at $59 per ADR, with the stock now trading near $90.
Financial Performance Overview
The CFO, Adolfo Zuberbuhler, reported that adjusted EBITDA amounted to $322 million, a 16% year-on-year increase. He also highlighted the “183% year-on-year” surge in CapEx to $332 million, primarily focused on Rincón de Aranda. Zuberbuhler detailed that “Oil and Gas adjusted EBITDA was $171 million in Q3,” representing a 40% year-on-year rise, driven by Rincón de Aranda, increased exports, and higher industrial demand.
The company outlined a target to exit 2025 producing 20,000 barrels of oil equivalent per day from Rincón de Aranda, with plans to reach 28,000 barrels per day in H2 2026 and 45,000 barrels per day by 2027 as new processing and pipeline capacity comes online.
Outlook and Projections
Zuberbuhler stated, “Our best expectation for the fourth quarter of 2025 is between 18,000 and 19,000 barrels per day,” with the main driver being Rincón de Aranda’s continued ramp-up. Lifting cost per barrel is expected to decrease further as output grows, with oil lifting costs projected to fall from $10 to around $9.1-$9.2 per barrel, and overall lifting cost to around $6.2 per barrel equivalent in 2026.
In the Power Generation segment, Zuberbuhler said, “We basically expect that the EBITDA of the segment will improve by at least 15% next year due to these resolutions,” referring to the new regulatory framework. However, he cautioned that outcomes would depend on competitive dynamics in the B2B market and further regulatory details.
CapEx for 2026 is forecasted to be “around $1 billion to $1.1 billion,” with financing supported by a strong cash position and stable debt profile.
Financial Results Summary
Adjusted EBITDA reached $322 million for the quarter, up 16% year-on-year, mainly attributed to Rincón de Aranda, shale oil growth, and higher B2B sales. Oil and Gas adjusted EBITDA was $171 million, reflecting a 40% increase year-on-year. CapEx surged 183% year-on-year to $332 million, with $174 million invested in Rincón de Aranda.
Total production averaged nearly 100,000 barrels of oil equivalent per day, a 14% increase year-on-year, and rose 18% quarter-on-quarter. Crude oil prices averaged $61 per barrel, down 15% year-on-year, partially mitigated by hedging. Free cash flow at Rincón de Aranda was reported at $6 million in Q3, with cash and equivalents at $881 million at quarter-end. Net debt stood at $874 million, corresponding to a 1.3x net leverage ratio.
The company extended its average debt maturity to 5.6 years and maintained a strong cash position of approximately $920 million post-quarter.
Q&A Session Highlights
During the Q&A session, several questions were raised regarding future oil production, lifting cost evolution, gas market outlook, EBITDA improvement in Power Generation, free cash flow, and D&C cost reductions. Zuberbuhler provided detailed responses, emphasizing the company’s expectations for reduced lifting costs and improved EBITDA in the Power Generation segment.
Sentiment Analysis
Analysts focused on production guidance, cost optimization, and regulatory impacts, with a constructive but probing tone, especially regarding lifting costs and CapEx sustainability. Management maintained a confident tone in both prepared remarks and Q&A, providing precise figures and forward-looking statements, frequently emphasizing ongoing improvements and prudent financial management.
Quarter-over-Quarter Comparison
Guidance for oil production was raised, with management now expecting 18,000-19,000 barrels per day in Q4 2025, compared to prior expectations of 15,000-20,000 barrels per day by year-end. Lifting cost outlook improved, with further reductions anticipated. CapEx plans remain elevated but stable, mirroring the prior quarter’s guidance, but management now points to a more balanced free cash flow outlook for 2026 as oil production scales.
Risks and Concerns
Management cited ongoing regulatory uncertainty in power generation, with several details yet to be published by the Secretary of Energy, which could affect the timing and magnitude of B2B contract migration. Exposure to macroeconomic volatility in Argentina remains a factor, as does dependency on export demand, particularly in Chile. Deferred income tax was flagged as a variable risk, fluctuating with the gap between devaluation and inflation, making predictability difficult.
Despite high CapEx and net debt, management stressed a “very comfortable financial position” and ongoing cost optimization.
Final Takeaway
Pampa Energía reinforced its commitment to a rapid production ramp-up at Rincón de Aranda, targeting 20,000 barrels per day by the end of 2025 and 45,000 barrels per day by 2027, while maintaining prudent leverage and a robust cash position. Management anticipates further cost reductions, EBITDA growth in power generation, and continued operational efficiency gains, positioning the company to capitalize on evolving regulatory frameworks and market opportunities in both oil and gas and power segments.