YPF Production Down 5% in First Quarter, But Swings to Profit

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

YPF's hydrocarbons production was 5% lower year-over-year in the first quarter, mainly due to reduced natural gas output. However, shale oil production rose as the company moves forward with midstream projects for Vaca Muerta.

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Fiscal Growth, Despite Lower Output

Argentina's state-owned Yacimientos Petroliferos Fiscales Sociedad Anonima (YPF) recorded a net profit of US$409 million in first-quarter 2026, compared with a net loss of US$10 million in the same period last year. Hydrocarbon production dropped 5% year-over-year to 525,000 barrels of oil equivalent per day (boe/d).

Oil production accounted for 271,000 barrels per day (bpd) of the total volumes throughout this period. According to Industrial Info Resources data, there are 141 YPF projects across Argentina, totaling US$14.77 billion of investment. For more information, the Industrial Info Resources Global Market Intelligence (GMI) Oil & Gas Project Database offers details--including capacities, investment values and necessary equipment--in a list of project reports.

The overall decrease stemmed from a 12% decline in natural gas volumes between the first quarters of 2025 and 2026. In contrast, YPF's Vaca Muerta Shale oil production grew 39% year on year, reaching 205,000 bpd in first-quarter 2026.

YPF expects shale oil production to average 215,000 bpd and reach volumes of 250,000 bpd by December.

Potential in Vaca Muerta, Other Areas

Production growth was led by the La Angostura Sur Block, rising from 2,000 bpd in October 2024 to 55,000 bpd in first-quarter 2026, about 25% of YPF's output. Plateau production is targeted at 100,000 bpd.

Meanwhile, as shale production increased, the company's conventional oil output dropped from 123,000 bpd in first-quarter 2025 to 66,000 bpd in first-quarter 2026. YPF announced a clear plan to focus on shale production in Vaca Muerta, while divesting from or exiting conventional production zones.

In its downstream business, YPF processed 344,300 bpd of crude in the quarter, up 8.3% from the same period last year. Utilization rate hit 102%, driven by the Lujan de Cuyo Refinery's strong operations and increased crude transport.

In its midstream business, YPF continues to bet heavily on expanding hydrocarbon transport capacity. YPF has reached 62% completion of its 180,000-bpd-capacity Vaca Muerta Oil Sur Pipeline, which extends for 440 kilometers and connects Vaca Muerta to the Atlantic coast. Phase I of the project is expected to start operations by January 2027, with the possibility of raising capacity to 550,000 bpd by the second half of 2027 and further expansion over 700,000 bpd.

YPF also reported progress on midstream LNG export projects. The Southern Energy project received a final investment decision and entered the Incentive Regime for Large Investments (RIGI). Meanwhile, the Argentina LNG project, developed with Eni SpA and ADNOC, is in its earlier stages but moving ahead. Combined export capacity is 18 million tons per annum (MTPA), expandable to 24 MTPA.

"I would like to emphasize that YPF continues to lead the key infrastructure debottlenecking initiatives required to fully monetize the vast shale oil and gas resources of Vaca Muerta, one of the world's most competitive basins in terms of breakeven prices," said Horacio Marin, CEO of YPF during the quarterly call.

To support these developments, the company has set a capex between US$5.5 billion and US$5.8 billion in upstream, midstream and downstream projects for this year.

Key Takeaways

• YPF's hydrocarbon output in Q1 was 525,000 boe/d, 5% lower year on year.
• Shale production increased 39% year on year to 205,000 bpd.
• Refining utilization rate reached 102% during Q1.

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