PAM Pampa Energia SA

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 6-K

 

REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

SECURITIES EXCHANGE ACT OF 1934

 

For the month of August, 2023

(Commission File No. 001-34429),

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PAMPA ENERGIA S.A.
(PAMPA ENERGY INC.)

 

Argentina

(Jurisdiction of incorporation or organization)

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Maipú 1
C1084ABA
City of Buenos Aires
Argentina

(Address of principal executive offices)

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(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F ___X___ Form 40-F ______

(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.)

Yes ______ No ___X___

(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- .)

 

  

 

This Form 6-K for Pampa Energía S.A. (“Pampa” or the “Company”) contains:

Exhibit 1: UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS AS OF JUNE 30, 2023

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: August 15, 2023

 

Pampa Energía S.A.
By:	/s/ Gustavo Mariani
	Name: Gustavo Mariani Title:   Chief Executive Officer

 

 

FORWARD-LOOKING STATEMENTS

 

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will a ctually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.

 

 

 

Free translation from the original prepared in Spanish for publication in Argentina

 

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

 

AS OF JUNE 30, 2023

AND FOR THE SIX AND THREE-MONTH PERIODS THEN ENDED

PRESENTED IN COMPARATIVE FORMAT

 

 

 REPORT ON REVIEW OF THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

 

To the Shareholders, President and Directors of

Pampa Energía S.A.

Legal address: Maipú, 1

Autonomous City of Buenos Aires

Tax Code No.: 30-52655265-9

 

Report on the consolidated condensed interim financial statements

 

Introduction

 

We have reviewed the accompanying consolidated condensed interim financial statements of Pampa Energía S.A. and its subsidiaries (hereinafter "the Group"), which comprise the consolidated statement of financial position as of June 30, 2023, the consolidated statements of comprehensive income for the periods of six and three months ended June 30, 2023, of changes in equity and cash flows for the six months ended June 30, 2023, and selected explanatory notes.

 

Board's responsibility

 

The Board of Directors of the Company is responsible for the preparation and presentation of the financial statements in accordance with International Financial Reporting Standards, adopted by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE, for its acronym in Spanish) as professional accounting standards and incorporated by the National Securities Commission (CNV, for its acronym in Spanish) to its regulations, as approved by the International Accounting Standards Board (IASB), and therefore is responsible for the preparation and presentation of the consolidated condensed interim financial statements mentioned in the first paragraph, in accordance with International Accounting Standard 34 “Interim Financial Reporting” (IAS 34). 

 

Scope of the review

 

Our responsibility is to express a conclusion on these consolidated condensed interim financial statements based on our review, which was performed in accordance with the International Standards on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the entity, adopted as a review standard in Argentina by Technical Pronouncement No. 33 of the FACPCE and approved by the International Auditing and Assurance Standards Board (IAASB). A review of consolidated condensed interim Financial Statements consists of inquiries primarily of Company staff responsible for financial and accounting matters, and applying analytical and other review procedures. This review is substantially less in scope than an audit examination conducted in accordance with international standards on auditing and consequently it does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the consolidated condensed interim Financial Statements mentioned in the first paragraph of this report have not been prepared, in all material respects, in accordance with International Accounting Standard 34.

 

Report on compliance with current regulations

 

In accordance with current regulations, we report, in connection with Pampa Energía S.A., that:

a)

the consolidated condensed interim financial statements of Pampa Energía S.A. are recorded to the “Inventory and Balance Sheet” book, and complies in what is a matter of our competence, with the provisions of the General Companies Law and in the pertinent resolutions of the National Securities Commission;

 

b)	the individual condensed interim financial statements of Pampa Energía S.A. arise from accounting records kept in their formal aspects in accordance with legal regulations;

 

c)	we have read the Summary of Activity (“Reseña Informativa”), on which, as regards those matters that are within our competence, we have no observations to make;

 

d)	as of June 30, 2023, the debt accrued by Pampa Energía S.A. in favor of the Argentine Integrated Social Security System according to the Company's accounting records and calculations amounted to $ 845.6 millions, none of which was claimable at that date.

 

Autonomous City of Buenos Aires, August 9, 2023

 

 

PRICE WATERHOUSE & CO. S.R.L.       (Partner)

Carlos Martín Barbafina

 

 

 

 

GLOSSARY OF TERMS

The following are not technical definitions, but they are helpful for the reader’s understanding of some terms used in the notes to the Unaudited Consolidated Condensed Interim Financial Statements of the Company.

Terms		Definitions
ADR		American Depositary Receipt
AFIP		Federal Administration of Public Revenue
BCRA		Argentina’s Central Bank
BNA		Banco de la Nación Argentina
BYMA		Bolsas y Mercados Argentinos
CAMMESA		Compañía Administradora del Mercado Eléctrico Mayorista S.A.
CB		Corporate Bonds
CIESA		Compañía de Inversiones de Energía S.A.
CISA		Comercializadora e Inversora S.A.
Citelec		Compañía Inversora en Transmisión Eléctrica Citelec S.A.
CNV		National Securities Commission of Argentina
CSJN		Argentina’ Supreme Court of Justice
CTB		CT Barragán S.A
EAR		Effective Annual Rate
EISA		Energía Inversora S.A.
ENRE		National Regulatory Authority of Electricity
GASA		Generación Argentina S.A.
Greenwind		Greenwind S.A.
GyP		Gas y Petróleo del Neuquén S.A.P.E.M.
HIDISA		Hidroeléctrica Diamante S.A.
HINISA		Hidroeléctrica Los Nihuiles S.A.
IASB		International Accounting Standards Board
MAT		Forward Market
MATER		Renewable Energy Forward Market
MLC		Foreign Exchange Market
MW		Megawatt
IAS		International Accounting Standards
IFRS		International Financial Reporting Standards
NYSE		New York Stock Exchange
OCP Ltd		Oleoductos de Crudos Pesados Ltd
OCP SA		Oleoductos de Crudos Pesados S.A.

 

GLOSSARY OF TERMS: (Continuation)

Terms		Definitions
PB18		Pampa Bloque 18 S.A. (former Ecuador TLC S.A.)
PEB		Pampa Energía Bolivia S.A.
PEN		Federal Executive Branch
PEPE II		Pampa Energía II Wind Farm
PEPE III		Pampa Energía III Wind Farm
PEPE IV		Pampa Energía IV Wind Farm
PEPE VI		Pampa Energía VI Wind Farm
PISA		Pampa Inversiones S.A.
Refinor		Refinería del Norte S.A.
SACDE		Argentine Society of Construction and Strategic Development
SE		Secretary of Energy
TGS		Transportadora de Gas del Sur S.A.
TGU		Transporte y Servicios de Gas en Uruguay S.A.
TJSM		Termoeléctrica José de San Martín S.A.
TMB		Termoeléctrica Manuel Belgrano S.A.
The Company / Pampa		Pampa Energía S.A.
The Group		Pampa Energía S.A. and its subsidiaries
Transba		Empresa de Transporte de Energía Eléctrica por Distribución Troncal de la Provincia de Buenos Aires Transba S.A.
Transener		Compañía de Transporte de Energía Eléctrica en Alta Tensión Transener S.A.
US$		U.S. dollar
UTE		Unión Transitoria de Empresas
VAR		Vientos de Arauco Renovables S.A.U.
YPF		YPF S.A.

 

 

UNAUDITED CONSOLIDATED CONDENSED INTERIM STATEMENT OF
COMPREHENSIVE INCOME

For the six and three-month periods ended June 30, 2023, presented in comparative format.

(In millions of Argentine Pesos (“$”))

 

			Six months				Three months
	Note		06.30.2023		06.30.2022		06.30.2023		06.30.2022
Revenue	8		194,256		99,523		110,341		55,512
Cost of sales	9		(117,939)		(60,896)		(67,401)		(34,652)
Gross profit			76,317		38,627		42,940		20,860
Selling expenses	10.1		(7,723)		(3,721)		(4,530)		(1,658)
Administrative expenses	10.2		(19,564)		(7,326)		(11,254)		(3,797)
Exploration expenses	10.3		(1,750)		(15)		(1,702)		(7)
Other operating income	10.4		14,289		4,357		9,430		3,057
Other operating expenses	10.4		(7,375)		(2,632)		(3,530)		(964)
Impairment  of property, plant and equipment, intangible assets and inventories			(323)		(4,384)		(734)		(4,375)
Impairment of financial assets			(937)		(519)		(646)		(392)
Share of profit from associates and joint ventures	5.1.3		8,570		6,861		5,370		4,179
Operating income			61,504		31,248		35,344		16,903
Financial income	10.5		428		450		235		204
Financial costs	10.5		(41,078)		(8,794)		(26,367)		(4,599)
Other financial results	10.5		55,461		(4,170)		40,818		(3,881)
Financial results, net			14,811		(12,514)		14,686		(8,276)
Profit before income tax			76,315		18,734		50,030		8,627
Income tax	10.6		(7,087)		(29)		(7,730)		(376)
Profit for the period			69,228		18,705		42,300		8,251
Other comprehensive income
Items that will not be reclassified to profit or loss
Exchange differences on translation			193,260		42,435		116,450		27,064
Items that may be reclassified to profit or loss
Exchange differences on translation			3,874		8,051		1,389		3,650
Other comprehensive income of the period			197,134		50,486		117,839		30,714
Total comprehensive income of the period			266,362		69,191		160,139		38,965

 

 

UNAUDITED CONSOLIDATED CONDENSED INTERIM

STATEMENT OF COMPREHENSIVE INCOME (Continuation)

For the six and three-month periods ended June 30, 2023, presented in comparative format.

(In millions of Argentine Pesos (“$”))

 

			Six months				Three months
	Note		06.30.2023		06.30.2022		06.30.2023		06.30.2022
Total income of the period attributable to:
Owners of the Company			69,097		18,469		42,179		8,165
Non-controlling interest			131		236		121		86
			69,228		18,705		42,300		8,251
Total comprehensive income of the period attributable to:
Owners of the Company			265,732		68,806		159,749		38,782
Non-controlling interest			630		385		390		183
			266,362		69,191		160,139		38,965
Earnings per share attributable to equity holders of the Company
Basic and diluted earnings per share	13.2		50.36		13.37

 

The accompanying notes are an integral part of these Unaudited Consolidated Condensed Interim Financial Statements.

 

UNAUDITED CONSOLIDATED CONDENSED INTERIM STATEMENT
OF FINANCIAL POSITION

As of June 30, 2023, presented in comparative format.

(In millions of Argentine Pesos (“$”))

 

	Note		06.30.2023		12.31.2022
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment	11.1		585,004		383,464
Intangible assets	11.2		25,252		24,364
Right-of-use assets			1,982		1,521
Deferred tax asset	11.3		8,491		6,326
Investments in associates and joint ventures	5.1.3		240,004		159,833
Financial assets at amortized cost	12.1		25,853		18,000
Financial assets at fair value through profit and loss	12.2		7,053		4,867
Other assets			121		91
Trade and other receivables	12.3		6,660		3,415
Total non-current assets			900,420		601,881
CURRENT ASSETS
Inventories	11.4		47,714		30,724
Financial assets at amortized cost	12.1		3,006		1,357
Financial assets at fair value through profit and loss	12.2		169,968		103,856
Derivative financial instruments			146		161
Trade and other receivables	12.3		116,646		83,328
Cash and cash equivalents	12.4		50,749		18,757
Total current assets			388,229		238,183
Held for sale assets	5.1.1		46,631		-
Total assets			1,335,280		840,064

 

 

UNAUDITED CONSOLIDATED CONDENSED INTERIM STATEMENT

OF FINANCIAL POSITION (Continuation)

As of June 30, 2023, presented in comparative format.

(In millions of Argentine Pesos (“$”))

 

	Note		06.30.2023		12.31.2022
SHAREHOLDERS´ EQUITY
Share capital	13.1		1,360		1,380
Share capital adjustment			7,126		7,231
Share premium			19,950		19,950
Treasury shares	13.1		4		4
Treasury shares adjustment			21		21
Treasury shares cost			(211)		(2,280)
Legal reserve			11,767		8,137
Voluntary reserve			367,495		171,243
Other reserves			(278)		(448)
Other comprehensive income			181,684		113,720
Retained earnings			80,447		84,505
Equity attributable to owners of the company			669,365		403,463
Non-controlling interest			1,684		1,157
Total equity			671,049		404,620
LIABILITIES
NON-CURRENT LIABILITIES
Provisions	11.5		38,250		26,062
Income tax and minimum notional income tax provision	11.6		37,356		31,728
Deferred tax liability	11.3		17,596		19,854
Defined benefit plans			8,362		4,908
Borrowings	12.5		333,830		237,437
Trade and other payables	12.6		8,485		3,757
Total non-current liabilities			443,879		323,746
CURRENT LIABILITIES
Provisions	11.5		1,003		779
Income tax liability	11.6		4,493		927
Tax liabilities			7,398		4,966
Defined benefit plans			928		1,021
Salaries and social security payable			5,404		5,627
Derivative financial instruments			133		318
Borrowings	12.5		91,688		48,329
Trade and other payables	12.6		74,368		49,731
Total current liabilities			185,415		111,698
Liabilities associated to held for sale assets	5.1.1		34,937		-
Total liabilities			664,231		435,444
Total liabilities and equity			1,335,280		840,064

 

The accompanying notes are an integral part of these Unaudited Consolidated Condensed Interim Financial Statements.

 

UNAUDITED CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

For the six-month period ended June 30, 2023, presented in comparative format.

(In millions of Argentine Pesos (“$”))

 

 

	Attributable to owners
	Equity holders of the company												Retained earnings
	Share capital		Share capital adjustment		Share premium		Treasury shares		Treasury shares adjustment		Treasury shares cost		Legal reserve		Voluntary reserve		Other reserves		Other comprehensive income		Retained earnings		Subtotal		Non-controlling interest		Total equity
Balance as of December 31, 2021	1,382		7,245		19,950		4		21		(238)		5,203		54,528		(550)		51,432		44,454		183,431		609		184,040
Constitution of legal and voluntary reserve			-		-		-		-		-		(485)		44,939		-		-		(44,454)		-		-		-
Capital reduction			-		-		(2)		(14)		209		-		(193)		-		-		-		-		-		-
Treasury shares acquisition	(2)		(14)		-		2		14		(1,171)		-		-		-		-		-		(1,171)		-		(1,171)
Stock compensation plans	-		-		-		-		-		-		-		-		(113)		-		-		(113)		-		(113)
Dividens ditribution			-		-		-		-		-		-		-		-		-		-		-		(25)		(25)
Profit for the six-month period	-		-		-		-		-		-		-		-		-		-		18,469		18,469		236		18,705
Other comprehensive income for the six-month period	-		-		-		-		-		-		1,034		21,773		-		22,911		4,619		50,337		149		50,486
Balance as of June 30, 2022	1,380		7,231		19,950		4		21		(1,200)		5,752		121,047		(663)		74,343		23,088		250,953		969		251,922
Treasury shares acquisition	-		-		-		-		-		(1,080)		-		-		-		-		-		(1,080)		-		(1,080)
Stock compensation plans	-		-		-		-		-		-		-		-		215		-		-		215		-		215
Profit (Loss) for the complementary six-month period	-		-		-		-		-		-		-		-		-		-		46,390		46,390		(195)		46,195
Other comprehensive income for the complementary six-month period	-		-		-		-		-		-		2,385		50,196		-		39,377		15,027		106,985		383		107,368
Balance as of December 31, 2022	1,380		7,231		19,950		4		21		(2,280)		8,137		171,243		(448)		113,720		84,505		403,463		1,157		404,620

 

UNAUDITED CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (Continuation)

For the six-month period ended June 30, 2023, presented in comparative format

(In millions of Argentine Pesos (“$”))

 

	Attributable to owners
	Equity holders of the company												Retained earnings
	Share capital		Share capital adjustment		Share premium		Treasury shares		Treasury shares adjustment		Treasury shares cost		Legal reserve		Voluntary reserve		Other reserves		Other comprehensive income		Retained earnings		Subtotal		Non-controlling interest		Total equity
Balance as of December 31, 2022	1,380		7,231		19,950		4		21		(2,280)		8,137		171,243		(448)		113,720		84,505		403,463		1,157		404,620
Constitution of legal and voluntary reserve	-		-		-		-		-		-		(16)		84,521		-		-		(84,505)		-		-		-
Capital reduction	-		-		-		(20)		(105)		2,069		-		(1,944)		-		-		-		-		-		-
Treasury shares acquisition	(20)		(105)		-		20		105		-		-		-		-		-		-		-		-		-
Stock compensation plans	-		-		-		-		-		-		-		-		170		-		-		170		-		170
Dividens ditribution	-		-		-		-		-		-		-		-		-		-		-		-		(103)		(103)
Profit for the six-month period	-		-		-		-		-		-		-		-		-		-		69,097		69,097		131		69,228
Other comprehensive income for the six-month period	-		-		-		-		-		-		3,646		113,675		-		67,964		11,350		196,635		499		197,134
Balance as of June 30, 2023	1,360		7,126		19,950		4		21		(211)		11,767		367,495		(278)		181,684		80,447		669,365		1,684		671,049

 

The accompanying notes are an integral part of these Unaudited Consolidated Condensed Interim Financial Statements.

 

UNAUDITED CONSOLIDATED CONDENSED INTERIM STATEMENT OF CASH FLOWS

For the six-month period ended June 30, 2023, presented in comparative format.

(In millions of Argentine Pesos (“$”))

 

	Note		06.30.2023		06.30.2022
Cash flows from operating activities:
Profit for the period			69,228		18,705
Adjustments to reconcile net profit to cash flows from operating activities:	14.1		17,407		23,759
Changes in operating assets and liabilities	14.2		(11,120)		(17,286)
Net cash generated by operating activities			75,515		25,178
Cash flows from investing activities
Payment for property, plant and equipment acquisitions			(74,884)		(19,645)
Payment for intangibles assets			-		(3,312)
Collections for sales (Payment for) public securities and shares acquisitions, net			9,212		(6,969)
Recovery of mutual funds, net			1,094		2,125
Payment for the acquisition of associates			-		(62)
Collection for equity interests in companies sales			1,416		2,842
Collections for property, plant and equipment sales			62		20
Collections for intangible assets sales			1,626		2,060
Dividends received			-		523
(Payment) Collection of loans			(217)		1,172
Net cash used in investing activities			(61,691)		(21,246)
Cash flows from financing activities
Proceeds from borrowings	12.5		46,753		3,946
Payment of  borrowings	12.5		(3,357)		(459)
Payment of  borrowings interests	12.5		(29,710)		(6,257)
Payment for treasury shares acquisition			-		(1,171)
Repurchase of corporate bonds	12.5		(1,335)		-
Payments of leases			(75)		(281)
Payments of dividends			(139)		(30)
Net cash generated by (used in) financing activities			12,137		(4,252)
Increase (Decrease) in cash and cash equivalents			25,961		(320)
Cash and cash equivalents at the beginning of the year	12.4		18,757		11,283
Cash and cash equivalents at the end of the year of held for sale assets			(4,908)		-
Exchange and conversion difference generated by cash and cash equivalents			10,939		2,209
Increase (Decrease) in cash and cash equivalents			25,961		(320)
Cash and cash equivalents at the end of the period	12.4		50,749		13,172

 

The accompanying notes are an integral part of these Unaudited Consolidated Condensed Interim Financial Statements.

 

 

NOTE 1: GENERAL INFORMATION

General information of the Company

The Company is a fully integrated power company in Argentina, which mainly participates in the electric energy and gas value chains.

In the generation segment, the Company, directly and through its subsidiaries and joint ventures, has a 5,432 MW installed capacity as of June 30, 2023, which represents approximately 13% of Argentina’s installed capacity, and being one of the four largest independent generators in the country. Additionally, the Company is currently undergoing a process to expand its installed capacity by an additional 140 MW.

In the oil and gas segment, the Company develops an important activity in gas and oil exploration and production, with operations in 11 production areas and 4 exploratory areas reaching a production level of 9.7 million m3/day of natural gas and 5.1 thousand boe/day of oil in Argentina, during the first semester ended June 30, 2023. Its main natural gas production blocks are located in the Provinces of Neuquén and Río Negro.

In the petrochemicals segment, operations are located in Argentina, where the Company operates two high-complexity plants producing styrene, synthetic rubber and polystyrene, with a domestic market share ranging between 94% and 100%.

Finally, through the holding and others segment, the Company participates in the electricity transmission and oil and gas transportation businesses. In the electricity transmission business, the Company jointly controls Citelec, which has a controlling interest in Transener, a company engaged in the operation and maintenance of a 21,697 km high-voltage electricity transmission network in Argentina with an 86% share in the Argentine electricity transmission market. In the gas transportation business, the Company jointly controls CIESA, which has a controlling interest in TGS, a company holding a concession for the transportation of natural gas with 9,220 km of gas pipelines in the center, west and south of Argentina, and which is also engaged in the processing and sale of natural gas liquids through the Cerri Complex, located in Bahía Blanca, in the Province of Buenos Aires, in addition to shale gas transportation and conditioning at Vaca Muerta. Besides, the Company owns a 30.1% indirect interest in OCP (see Note 5.1.4), licensee company of an oil pipeline in Ecuador that has a transportation capacity of 450 thousand barrels/day. Additionally, the segment includes advisory services provided to related companies.

NOTE 2: REGULATORY FRAMEWORK

2.1

Generation

2.1.1

Sales contracts with large users within the MAT

2.1.1.1

Renewable Energy Term Market (“MATER” Regime)

On March 20, 2023, SE Resolution No. 165/23 was passed, which modified the penalty system applicable to MATER and Renovar projects, including projects awarded under the Renovar MiniRen Program, Round 3. Penalties for breaches in the committed supply of energy were incorporated into the system, to be discounted in 12 monthly and consecutive installments as from commercial commissioning, keeping the generator’s option to cancel the penalties in 48 monthly and consecutive installments with the application of a 1.7% EAR in U.S. dollars. To avoid affecting the projects’ minimum maintenance, a 20% discount cap for the monthly transaction was established for those generators opting into the 48-installment scheme. The balance following the application of this cap will be discounted in the first transaction in which the penalty is below the stated cap; if the number of installments is exceeded, the scheme will be maintained until the penalties’ full cancellation and, in case the contract term is exceeded, the payment scheme may be restructured, or the discount cap may be increased to 40% of the transaction.

2.1.1.2 Amendment to the dispatch priority system

SE Resolution No. 360/23 introduced several changes to the effective priority dispatch system. These modifications include the granting of a dispatch priority to renewable generation projects to be sold in the MATER that finance the corresponding transmission expansions and/or renewable energy generation projects with an associated demand larger than 10 MW.

Besides, it established a new referential dispatch priority system in corridors without full availability at every hour of the year. In this way, the dispatch priority will have an injection probability of 92% of the typical annual energy.

Moreover, it establishes that parcially commissioned projects regarding the committed capacity will pay the dispatch priority charge exclusively for the difference between the assigned power capacity and that commissioned, provided the accumulated commissioned capacity is at least 50% of that assigned.

Finally, projects with commissioned power capacity lower than assigned power capacity will lose dispatch priority for uncommissioned power capacity.

NOTE 2: (Continuation)

2.1.2

Supply Agreements with CAMMESA

2.1.2.1 Renovar Programs

In line with the scheme set forth by SE Resolution No. 1,260/21 and to address the issue of projects under the different Renovar rounds breaching the committed commercial commissioning dates, on April 25, 2023, the SE passed Resolution No. 284/23 to release the transportation capacity committed under different Renovar Rounds having difficulties with the projects' conclusion. The new scheme authorizes holders of these projects to terminate the Supply Agreement with CAMMESA against the payment of an amount equivalent to US$ 35,000 per MW of the project’s power capacity, the waiver of claims against the Federal Government, the SE and/or CAMMESA, an indemnity commitment to realease these authorities against claims by its shareholders or controlling, controlled and/or affiliated companies, and the waiver of granted and unused fiscal benefits. Applications should be presented to CAMMESA within 30 calendar days from the resolution’s publication; the above-stated documentation should be completed within 90 calendar days, and agreements opting into the Fund for Renewable Energy Development (Fondo para el Desarrollo de Energía Renovables, "FODER") should be terminated.

2.1.2.2 Remuneration for combined cycles

SE Resolution No. 59/23 dated February 7, 2023 established an opt-in system under which combined cycles’ owners could execute an availability and efficiency optimization agreement with CAMMESA. The agreement contemplates an availability commitment for 85% of the net power capacity for a maximum term of 5 years and sets a US$ 2,000/MW-month remuneration for the available power capacity and the dollarization of the energy price based on the fuel used (US$ 3.5/MWh for natural gas and US$ 6.1/MWh for fuel oil and gas oil). Besides, it provides for a 35% and 15% reduction in the remuneration collectible for guaranteed power capacity for generators with availability commitments in the spot market for the summer-winter and autumn-spring periods, respectively.

The Company executed agreements with CAMMESA for its CTLL and Genelba power plants’ combined cycles. On the other side, CTB executed an agreement with CAMMESA for its open cycle’s gas turbines units. In all cases, agreements are effective from March 1, 2023 to February 29, 2028.

NOTE 2: (Continuation)

2.1.2.3 RenMDI Call

Pursuant to SE Resolution No. 609/23, projects submitted under the RenMDI call for tenders were awarded. Under line 1, destined for the substitution of forced generation, 514 MW of power capacity were awarded, distributed among 46 projects, for an average price of US$ 73.1/MWh. Under line 2, destined for the diversification of the energy matrix, 52 projects were awarded for a total 119.57 MW power capacity and an average price of US$ 145.8/MWh. Pampa has not participated in this call.

2.2

Oil and Gas

Natural gas exports

On April 19, 2023, the SE notified the Company of the extension of the Neuquina basin’s natural gas export quota for the next winter period, consisting of: (i) an extraordinary and priority quota of 2 million m3/d for the months of May and June 2023, assignable pro rata among the “July Flat Gas Commitment” awardees, and (ii) a firm winter export quota under Plan GasAr for a 3 million m3/d volume for the months of July, August and September 2023.

In this sense, the Company was assigned an additional volume of 872,727 m3/, totaling a 2,181,818 m3/d export quota for the months of May and June. The volume assigned for the months of July, August and September was 857,449 m3/d. Regarding the minimum price for export permits, it will remain at US$ 7.73/MMBTU.

Besides, the following summer export quotas were assigned: 9 million m3/d for the Neuquina Basin and 2 million m3/d for the Austral Basin. The minimum price will result from calculating the simple average Brent oil prices in the first fifteen days of the month prior to delivery, multiplied by 7%. The Company was assigned a 1,452,878 m3/d volume.

2.3

Gas Transportation

TGS’s Tariff situation

On March 16, 2023, TGS’s Board of Directors approved a proposed addendum to the renegotiation transitionary agreement (the “2023 RTT”) sent by ENARGAS. On April 27, 2023, ENARGAS issued Resolution No. 186/23 publishing the new effective tariff schemes. The 2023 RTT was later ratified by PEN Executive Order No. 250/23 dated April 29, 2023.

 

The 2023 RTT includes, effective from April 29, 2023, a 95% transitionary tariff increase on the natural gas transportation tariff and the access and use charge. While it is in force, TGS may not distribute dividends or directly or indirectly early cancel financial and commercial debts taken on with shareholders, acquire other companies or grant loans, except for loans benefiting users or granted to contractors not covered by the previously indicated cases. If TGS deems it appropriate to act otherwise, it should require the corresponding authorization.

NOTE 2: (Continuation)

2.4

Transmission

Transener and Transba’s tariff situation

On April 20, 2023, under ENRE Resolution No. 364/23, the ENRE launched the comprehensive tariff review process for electricity transmission companies pursuant to Act No. 24,065 and Act No. 27,541, setting a 30-day term to draw up the guidelines and schedule for its development.

 

On May 29, 2023, ENRE Resolution No. 421/23 approved the transmission tariff review program for the year 2023 and the first quarter of 2024, providing for the ENRE´s notification of the schedule and information requirements during the months of September and October 2023.

2.5

Regulations on access to the MLC

The main updates introduced by the BCRA on MLC inflow and outflow regulations which were disclosed in the Consolidated Financial Statements as of December 31, 2022, are summarized below.

On April 20, 2023, for the provision of certain services, the BCRA prior authorization was incorporated as requirement to access the MLC before 60 calendar days as from approval of the Argentine Republic’s Imports and Foreign Service Payments System (“SIRASE”)’s affidavit. This requirement is not applicable in the following cases: (i) payments through a swap and/or arbitrage against a foreign-currency domestic account; (ii) access simultaneously with the settlement of a new foreign financial indebtedness for which the principal matures after the stated term; and (iii) access with funds originated in the financing of service imports granted by a domestic financial entity with a commercial credit line abroad when the total principal of the financing matures after the stated term. On May 11, 2023, the BCRA established that financial entities should verify that the corresponding SIRA affidavit with an "approved" (salida) status has been assigned a term of 0 calendar days to access the MLC before granting access to pay imports of goods with a pending customs entry record (advance and sight payments) and payments of commercial debts without a customs entry record (in accordance with the exceptions set by the regulation).

As regards transactions with stock market assets, the term during which transactions may not be conducted is extended to 180 calendar days for securities issued under foreign law and maintained at 90 days for securities issued under Argentine law, to be submitted in the affidavits to access the MLC. On May 11, 2023, the BCRA broadened the scope of the affidavits for deliveries made as from May 12, 2023 to include legal entities that are part of the same economic group as the affiant (that is, companies sharing a control relationship under the "Large credit risk exposures" regulations).

More information on Argentina’s foreign exchange regulations can be found at the BCRA’s website: www.bcra.gov.ar.

NOTE 3: BASIS OF PREPARATION

These Consolidated Condensed Interim Financial Statements for the six-month period ended June 30, 2023 have been prepared pursuant to the provisions of IAS 34, “Interim Financial Information”, are expressed in million pesos and were approved for their issuance by the Company’s Board of Directors on August 9, 2023.

The information included in the Consolidated Condensed Interim Financial Statements is recorded in US dollars, which is the Company’s functional currency and, in accordance with CNV requirements, is presented in pesos, the legal currency in Argentina.

This consolidated condensed interim financial information had been prepared under the historical cost convention, modified by the measurement of financial assets at fair value through profit or loss and they should be read together with the Consolidated Financial Statements as of December 31, 2022, which have been prepared under IFRS.

These Consolidated Condensed Interim Financial Statements for the six-month period ended June 30, 2023 have not been audited. The Company’s management estimates they include all the necessary adjustments to state fairly the results of operations for the period. The results for the six-month period ended June 30, 2023, does not necessarily reflect in proportion the Company’s results for the complete year.

The accounting policies have been consistently applied to all entities within the Group.

Comparative information

The information as of December 31, 2022, and for the six and three-month periods ended June 30, 2022, disclosed for comparative purposes, arises from the Consolidated Financial Statements as of those dates.

Additionally, certain non-significant reclassifications have been made to those Consolidated Financial Statements´ figures to keep the consistency in the presentation with the figures of the current period.

NOTE 4: ACCOUNTING POLICIES

The accounting policies applied in these Consolidated Condensed Interim Financial Statements are consistent with those used in the Consolidated Financial Statements for the last fiscal year, which ended on December 31, 2022.

New accounting standards, amendments and interpretations issued by the IASB effective as of December 31, 2023 and adopted by the Company

The Company has applied the following standards and / or amendments for the first time as of January 1, 2023:

-

IFRS 17 - “Insurance Contracts” (issued in May 2017 and modified in June 2020 and December 2021).

-

IAS 1 - “Presentation of financial statements” (amended in February 2021).

-

IAS 8 - “Accounting Policies” (amended in February 2021).

-

IAS 12 - “Income Tax” (amended in May 2021).

The application of the detailed standards and amendments did not have any impact on the results of the operations or the financial position of the Company.

NOTE 5: GROUP STRUCTURE

5.1

Interest in subsidiaries, associates and joint ventures

5.1.1

Assets and liabilities available for sale – Agreement for the acquisition of an additional interest in Rincón de Aranda and divestment of stake in Greenwind

On June 23, 2023, the Company executed an agreement with Total Austral S.A. (Argentine branch) to acquire the additional 45% interest in the Rincón de Aranda area, reaching a 100% interest in the block. As part of the agreement, Pampa will assign 100% of its equity stake in Greenwind, which only asset is the Mario Cebreiro Wind Farm.

Rincón de Aranda is a 240 km2 exploration block located in the oil window of the Vaca Muerta formation, in the Province of Neuquén. It currently has a shut-in production well and an uncompleted well, both drilled in 2019; although the block is not currently in production, its proximity to important productive blocks in the Vaca Muerta formation makes it highly promising from a technical standpoint.

NOTE 5: (Continuation)

The closing of the transaction is subject to the fulfillment of certain conditions precedent, including, but not limited to, the assignment's approval and the granting of an Unconventional Hydrocarbons Exploitation Concession ("CENCH") over the block in favor of the Company.

On July 26, 2023, the Company entered into a Memorandum of Understanding with the Province of Neuquén agreeing on the CENCH's granting terms. Pursuant to Executive Order No. 1,435/23 dated July 31, 2023, the Province of Neuquén approved the above-mentioned Memorandum of Understanding, the assignment of Total Austral S.A. (Argentine branch)'s interest to the Company and granted the CENCH to the Company. The assignment of rights over the area and the CENCH will become effective at transaction closing.

On the other side, Mario Cebreiro Wind Farm, inaugurated in 2018 with a 100 MW capacity and located in Bahía Blanca, Province of Buenos Aires, was the Company's first wind power project, which was awarded under the Renovar 1 program. It is worth highlighting that, despite the wind farm's assignment, the Company remains committed to renewable energy, which is essential to keep its position as a leading provider of efficient energy and has started the construction of PEPE VI (see Note 18).

Lastly, with the acquisition of the additional interest in Rincón de Aranda, the Company diversifies its presence in the energy sector with a shale oil block having great production potential and reinforces its commitment to the development of unconventional reserves in Vaca Muerta.

Within the described framework and in accordance with IFRS 5, Greenwind's assets and liabilities have been classified as held for sale as of June 30, 2023.

 

NOTE 5: (Continuation)

 

As of June 30, 2023, held for sale assets and liabilities are as follows:

 

ACTIVO
ACTIVO NO CORRIENTE
Property, plant and equipment	31,083
Intangible assets	7,582
Other receivables	4
Total non-current assets	38,669
CURRENT ASSETS
Financial assets at fair value through profit and loss	1,668
Trade and other receivables	1,386
Cash and cash equivalents	4,908
Total current assets	7,962
Held for sale assets	46,631
LIABILITIES
NON-CURRENT LIABILITIES
Provisions	241
Income tax provision	1,473
Deferred tax liability	12,234
Borrowings	16,004
Total non-current liabilities	29,952
CURRENT LIABILITIES
Income tax provision	554
Borrowings	4,276
Trade payables	155
Total current liabilities	4,985
Liabilities associated to held for sale assets	34,937

 

NOTE 5: (Continuation)

5.1.2

Subsidiaries information

						30.06.2023		31.12.2022
Sociedad		País de domicilio		Actividad principal		% de participación directo e indirecto		% de participación directo e indirecto
Autotrol Renovable S.A.		Argentina		Generadora		100.00%		100.00%
GASA		Argentina		Generadora		100.00%		100.00%
Enecor S.A.		Argentina		Transporte de electricidad		70.00%		70.00%
Fideicomiso CIESA		Argentina		Inversora		100.00%		100.00%
Greenwind (1)		Argentina		Generadora		100.00%		100.00%
HIDISA		Argentina		Generadora		61.00%		61.00%
HINISA		Argentina		Generadora		52.04%		52.04%
CISA		Argentina		Comercializadora e inversora		100.00%		100.00%
PEB		Bolivia		Inversora		100.00%		100.00%
PB18		Ecuador		Petrolera		100.00%		100.00%
Energía Operaciones ENOPSA S.A.		Ecuador		Petrolera		100.00%		100.00%
Pampa Ecuador Inc		Nevis		Inversora		100.00%		100.00%
PE Energía Ecuador LTD		Gran Cayman		Inversora		100.00%		100.00%
EISA		Uruguay		Inversora		100.00%		100.00%
PISA		Uruguay		Inversora		100.00%		100.00%
TGU		Uruguay		Transporte de gas		51.00%		51.00%
Petrolera San Carlos S.A.		Venezuela		Petrolera		100.00%		100.00%
VAR		Argentina		Generadora		100.00%		100.00%
Vientos Solutions Argentina S.A.U.		Argentina		Servicios de asesoramiento		100.00%		100.00%
Vientos Solutions S.L.U.		España		Inversora		100.00%		100.00%

 

(1) See Note 5.1.1.

NOTE 5: (Continuation)

5.1.3

Associates and joint ventures information

The following table presents the main activity and the financial information used for valuation and percentages of participation in associates and joint ventures:

 

				Información sobre el emisor
		Actividad principal		Fecha		Capital social		Resultado del período		Patrimonio		% de participación directo e indirecto
Asociadas
OCP Ltd		Inversora		06.30.2023		25,786		364		25,163		30.06%
TGS (1)		Trasporte de gas		06.30.2023		753		19,252		421,909		2.612%
Negocios conjuntos
CIESA (1)		Inversora		06.30.2023		639		9,794		215,281		50.00%
Citelec (2)		Inversora		06.30.2023		556		4,171		66,857		50.00%
CTB		Generadora		06.30.2023		8,558		2,313		140,199		50.00%

 

(1)	The Company holds a direct and indirect interest of 2.612% in TGS and 50% in CIESA, a company that holds a 51% interest in the share capital of TGS. Therefore, additionally the Company has an indirect participation of 25.50% in TGS.

As of June 30, 2023, the quotation of TGS's ordinary shares and ADR published on the Buenos Aires Stock Exchange and the NYSE was $ 1,414.60 and US$ 13.78, respectively, granting to Pampa (direct and indirect) ownership an approximate stake market value of $ 315,943 million.

(2)

The Company holds a 50% interest in Citelec, a company that holds a 52.65% interest in Transener’s capital stock; therefore, the Company has a 26.33% indirect interest in Transener. As of June 30, 2023, Transener’s common share price listed at the Buenos Aires Stock Exchange was $ 346 conferring Pampa’s indirect interest an approximate $ 40,4503 million market value.

NOTE 5: (Continuation)

The detail of the balances of investments in associates and joint ventures is as follows:

 

		06.30.2023		12.31.2022
Disclosed in non-current assets
Associates
OCP		4,010		2,679
TGS		11,746		11,805
Other		6		3
Total associates		15,762		14,487
Joint ventures
CIESA		120,714		77,043
Citelec		33,428		20,801
CTB		70,100		47,502
Total joint ventures		224,242		145,346
Total associates and joint ventures		240,004		159,833

 

The following table shows the breakdown of the result from investments in associates and joint ventures:

 

		06.30.2023		06.30.2022
Associates
Refinor		-		(1,328)
OCP		109		(157)
TGS		594		561
Total associates		703		(924)
Joint ventures
CIESA		4,625		3,672
Citelec		2,086		419
CTB		1,156		3,657
Greenwind		-		37
Total joint ventures		7,867		7,785
Total associates and joint ventures		8,570		6,861

 

NOTE 5: (Continuation)

The evolution of investments in associates and joint ventures is as follows:

		06.30.2023		06.30.2022
At the beginning of the year		159,833		79,114
Dividends		-		(854)
Acquisition of equity interests		-		62
Sale of equity interests		(5,875)		-
Held for sale assets		-		(1,544)
Share of profit		8,570		8,103
Impairment		-		(1,242)
Exchange differences on translation		77,476		25,528
At the end of the period		240,004		109,167

5.1.4

Investment in OCP

On May 4, 2023, the Company, through its subsidiary PEB, entered into a purchase agreement with Repsol OCP de Ecuador S.A. to acquire 2,979,606,613 additional shares, representing 29.66% of the share capital, of OCP Ltd, which in turn holds the whole share capital and voting rights of OCP SA, for a price of US$ 15 million, adjusted by subtracting the dividends collected by Repsol OCP de Ecuador S.A. between January 1, 2023 and the transaction closing date. The completion of the transaction is subject to the customary precedent conditions, including the applicable governmental approvals.

5.1.5

Investment in CTB

Closing to combined cycle project

On February 22, 2023, CTB stared operations under the supply agreement with CAMMESA. On April 26, 2023, CTB was commissioned to operate with gas oil.

Issuance of CB

The resolutive condition of the guarantees granted by CTB’s co-controlling shareholders (Pampa Energía S.A. and YPF S.A.) in favor of holders of outstanding Classes 1, 2, 4, 6, 7 and 8 CB issued by CTB to secure the timely and proper payment of any owed amount, including principal and interest services, was fulfilled with the combined cycle’s commissioning on February 22, 2023. Consequently, these guarantees are terminated, ineffective and unenforceable.

On April 3, 2023, CTB issued Class 9 CB for a total amount of US$ 50 million at an annual fixed interest rate of 0% and maturing on April 3, 2026. Class 9 CB were subscribed and paid in cash and in-kind through the delivery of Class 1 CB, consequently, Class 1 CB with a face value of US$ 2.2 million were partially canceled. The remaining outstanding face value of Class 1 CB, amounting to US$ 30 million, was redeemed in full in May 2023.

NOTE 5: (Continuation)

As of the date of issuance of these Consolidated Condensed Interim Financial Statements, CTB is in compliance with all the covenants under its debt agreements.

5.2

Oil and gas participations

Continuity plan in the Parva Negra Este block

On December 14, 2022, the Company, ExxonMobil Exploration Argentina S.R.L. and GyP submitted to the Provincial Enforcement Authority a proposal for a contractual continuity plan which included: (i) the granting of a Lot under Evaluation for the April-2022 through April-2025 period, (ii) a 50% reduction of the block’s surface, to a total surface of 143 km2, (iii) the assignment of ExxonMobil Exploration Argentina S.R.L.’s 42.50% interest to the Company, and (iv) the commitment to drill and complete 1 horizontal well targeting Vaca Muerta before September 2024.

As of the issuance of these Consolidated Condensed Interim Financial Statements, the parties have executed an addendum to the Joint Venture agreement under the stated terms, and the Provincial Executive Order approving it is pending issuance.

Anticlinal Campamento termination agreement

On January 19, 2023, the Company accepted Oilstone Energía S.A.’s offer to terminate its rights and obligations under the investment agreement, the Joint Venture and the operating agreement of the block, effective from January 1, 2023.

Estación Fernández Oro termination agreement

On March 14, 2023, the Company accepted YPF S.A.’s proposal to terminate, effective as from January 1, 2023, all the Company’s rights and obligations in the investment agreement, the Joint Venture and the operating agreement for the Estación Fernández Oro block’s exploitation concession.

Las Tacanas Norte Exploration Permit Termination

On January 4, 2023, the Las Tacanas Norte block exploration period terminated, and the Company’s rights and obligations over the area expired.

Aguaragüe Concession Extension

On February 3, 2023, an agreement for a 10-year extension of the concession was signed with the enforcement authority. The agreement includes investment commitments for the execution of 1 well, 2 workovers and 2D seismic reprocessing.

As of the issuance of these Consolidated Condensed Interim Financial Statements, the Provincial Executive Order ratifying this agreement is pending publication.

NOTE 5: (Continuation)

Agreement for the acquisition of an additional interest in Rincón de Aranda

On June 23, 2023, the Company executed an agreement with Total Austral S.A. (Argentine branch) to acquire the additional 45% interest in the Rincón de Aranda area. As part of the agreement, the Company will assign 100% of its equity stake in Greenwind, which only asset is the Mario Cebreiro Wind Farm (see Note 5.1.1).

The Company has a 55% participation in the block; therefore, after the closing of the transaction, it will reach a 100% participation in Rincón de Aranda.

Relinquishment of Río Atuel

On July 10, 2023, the Company and Petrolera El Trébol (operating entity) informed the Ministry of Economy and Energy of the Province of Mendoza of their decision to fully relinquish the block classified as a lot under evaluation pursuant to section 81.(b) of Act No. 17,319.

As a result, the Company has written off exploration wells for $ 1,702 million (US$ 6.6 million).

 

NOTE 6: RISKS

6.1 Critical accounting estimates and judgments

The preparation of these Consolidated Condensed Interim Financial Statements requires the Company’s Management to make future estimates and assessments, to apply critical judgment and to establish assumptions affecting the application of accounting policies and the amounts of disclosed assets and liabilities, and income and expenses.

Those estimates and judgments are evaluated on a continuous basis and are based on past experiences and other reasonable factors under the existing circumstances. Actual future results might differ from the estimates and evaluations made at the date of preparation of these Consolidated Condensed Interim Financial Statements.

In the preparation of these Consolidated Condensed Interim Financial Statements, management judgements on applying the Company’s accounting policies and sources of information used for the respective estimates are the same as those applied in the Consolidated Financial Statements for the year ended December 31, 2022.

6.2 Financial risk management

The Company’s activities are subject to several financial risks: market risk (including the exchange rate risk, the interest rate risk and price risk), credit risk and liquidity risk.

No significant changes have arisen in risk management policies since last year.

NOTE 7: SEGMENT INFORMATION

The Company is a fully integrated power company in Argentina, which participates in the electricity and oil and gas value chains.

Through its own activities, subsidiaries and share holdings in joint ventures and associates, and based on the business nature, customer portfolio and risks involved, the following business segments have been identified:

Electricity Generation, principally consisting of the Company’s direct and indirect interests in HINISA, HIDISA, Greenwind (see Note 5.1.1), VAR, CTB, TMB, TJSM and through its own electricity generation activities through thermal plants Güemes, Piedra Buena, Piquirenda, Loma de la Lata, Genelba, Ecoenergía, Pilar, I. White, the Pichi Picún Leufú hydroelectric complex and PEPE II, PEPE III and PEPE IV wind farms. It is worth highlighting that the results of the segment’s operations reflect the effects of the consolidation with Greenwind and VAR as from August 12, 2022, and December 16, 2022, respectively.

Oil and Gas, principally consisting of the Company’s interests in oil and gas areas and through its direct and indirect interest in CISA.

Petrochemicals, comprising of the Company’s own styrenics operations and the catalytic reformer plant operations conducted in local plants.

Holding and Other Business, principally consisting of interests in joint businesses CITELEC and CIESA and their respective subsidiaries, which hold the concession over the high voltage electricity transmission nationwide and over gas transportation in the south of the country, respectively, interests in the associate OCP, holding activities and other financial investment transactions.

The Company manages its operating segment based on its individual net result in U.S. dollars.

NOTE 7: (Continuation)

 

		in million of US$												in million of $
Consolidated profit and loss information for the six-month period ended June 30, 2023		Generation		Oil and gas		Petrochemicals		Holding and others		Eliminations		Consolidated		Consolidated
Revenue - local market		344		175		181		8		-		708		154,309
Revenue - foreign market		-		111		76		-		-		187		39,947
Intersegment revenue		-		55		-		-		(55)		-		-
Cost of sales		(181)		(198)		(231)		-		55		(555)		(117,939)
Gross profit		163		143		26		8		-		340		76,317
Selling expenses		(1)		(25)		(8)		-		-		(34)		(7,723)
Administrative expenses		(26)		(38)		(3)		(22)		-		(89)		(19,564)
Exploration expenses		-		(7)		-		-		-		(7)		(1,750)
Other operating income		35		25		-		1		-		61		14,289
Other operating expenses		(14)		(13)		(1)		(7)		-		(35)		(7,375)
(Impairment) Impairment recovery of intangible assets and inventories		-		-		(3)		2		-		(1)		(323)
Impairment of financial assets		-		-		-		(3)		-		(3)		(937)
Share of profit from associates and joint ventures		5		-		-		29		-		34		8,570
Operating income		162		85		11		8		-		266		61,504
Financial income		1		1		-		3		(3)		2		428
Financial costs		(66)		(97)		(1)		(27)		3		(188)		(41,078)
Other financial results		124		25		3		102		-		254		55,461
Financial results, net		59		(71)		2		78		-		68		14,811
Profit before income tax		221		14		13		86		-		334		76,315
Income tax		(21)		-		(2)		(6)		-		(29)		(7,087)
Profit (Loss) of the period		200		14		11		80		-		305		69,228
Depreciation and amortization		50		73		3		-		-		126		26,881

 

NOTE 7: (Continuation)

 

		in million of US$												in million of $
Consolidated profit and loss information for the six-month period ended June 30, 2023		Generation		Oil and gas		Petrochemicals		Holding and others		Eliminations		Consolidated		Consolidated
Total profit (loos) of the year attributable to:
Owners of the company		200		14		11		80		-		305		69,097
Non-controlling interest		-		-		-		-		-		-		131
Consolidated financial position information as of June 30, 2023
Assets		2,803		1,390		161		992		(145)		5,201		1,335,280
Liabilities		1,057		1,304		147		224		(144)		2,588		664,231
Net book values of property, plant and equipment		1,278		941		25		35		-		2,279		585,004
Additional consolidated information as of June 30, 2023
Increases in property, plant and equipment		146		217		3		3		-		369		79,714

 

NOTE 7: (Continuation)

 

		in million of US$												in million of $
Consolidated profit and loss information for the six-month period ended June 30, 2022		Generation		Oil and gas		Petrochemicals		Holding and others		Eliminations		Consolidated		Consolidated
Revenue - local market		331		161		184		12		-		688		78,708
Revenue - foreign market		-		86		100		-		-		186		20,815
Intersegment revenue		-		55		-		-		(55)		-		-
Cost of sales		(184)		(160)		(250)		-		54		(540)		(60,896)
Gross profit		147		142		34		12		(1)		334		38,627
Selling expenses		(1)		(24)		(8)		-		-		(33)		(3,721)
Administrative expenses		(19)		(28)		(2)		(14)		-		(63)		(7,326)
Exploration expenses		-		-		-		-		-		-		(15)
Other operating income		7		24		-		5		-		36		4,357
Other operating expenses		(2)		(16)		(1)		(4)		-		(23)		(2,632)
Impairment of property, plant and equipment, intangible assets and inventories		-		(29)		-		(6)		-		(35)		(4,384)
Impairment of financial assets		-		(1)		-		(3)		-		(4)		(519)
Share of profit from associates and joint ventures		34		-		-		23		-		57		6,861
Operating income		166		68		23		13		(1)		269		31,248
Financial income		1		1		-		6		(3)		5		450
Financial costs		(27)		(43)		(1)		(10)		3		(78)		(8,794)
Other financial results		(42)		(5)		-		12		-		(35)		(4,170)
Financial results, net		(68)		(47)		(1)		8		-		(108)		(12,514)
Profit before income tax		98		21		22		21		(1)		161		18,734
Income tax		(17)		27		(3)		(1)		-		6		(29)
Profit (Loss) of the period		81		48		19		20		(1)		167		18,705
Depreciation and amortization		43		61		2		-		-		106		11,910

 

NOTE 7: (Continuation)

 

		in million of US$												in million of $
Consolidated profit and loss information for the six-month period ended June 30, 2022		Generation		Oil and gas		Petrochemicals		Holding and others		Eliminations		Consolidated		Consolidated
Total profit (loss) of the period attributable to:
Owners of the company		79		48		19		20		(1)		165		18,469
Non-controlling interest		2		-		-		-		-		2		236
Consolidated financial position information as of December 31, 2022
Assets		2,464		1,234		177		1,029		(162)		4,742		840,064
Liabilities		979		1,248		147		245		(161)		2,458		435,444
Net book values of property, plant and equipment		1,299		807		24		34		-		2,164		383,464
Additional consolidated information as of June 30, 2022
Increases in property, plant and equipment and intangibles assets		30		148		2		31		-		211		24,002

 

NOTE 8: REVENUE

 

		06.30.2023		06.30.2022
Energy sales in Spot Market		22,091		12,287
Energy sales by supply contracts		42,750		19,416
Fuel supply		9,715		5,569
Other sales		157		351
Generation sales subtotal		74,713		37,623
Gas sales		47,145		20,324
Oil sales		14,428		7,151
Other sales		1,037		690
Oil and gas sales subtotal		62,610		28,165
Products from catalytic reforming sales		25,404		12,920
Styrene sales		7,656		5,236
Synthetic rubber sales		8,191		5,880
Polystyrene sales		13,749		8,078
Other sales		245		196
Petrochemicals sales subtotal		55,245		32,310
Technical assistance and administration services sales		1,630		1,404
Other sales		58		21
Holding and others subtotal		1,688		1,425
Total revenue		194,256		99,523

NOTE 9: COST OF SALES

 

		06.30.2023		06.30.2022
Inventories at the beginning of the year		30,724		15,888
Plus: Charges of the period
Purchases of inventories, energy and gas		46,426		27,918
Salaries and social security charges		9,218		4,415
Employees benefits		1,742		802
Defined benefit plans		1,149		320
Works contracts, fees and compensation for services		12,023		4,487
Property, plant and equipment depreciation		25,419		11,256
Intangible assets amortization		636		26
Right-of-use assets amortization		79		325
Energy transportation		1,075		421
Transportation and freights		1,893		895
Consumption of materials		2,354		1,578
Penalties		121		20
Maintenance		4,628		3,750
Canons and royalties		10,268		4,798
Environmental control		524		243
Rental and insurance		2,860		1,737
Surveillance and security		549		202
Taxes, rates and contributions		852		260
Other		394		174
Total charges of the period		122,210		63,627
Exchange differences on translation		12,719		2,971
Less: Inventories at the end of the period		(47,714)		(21,590)
Total cost of sales		117,939		60,896

 

NOTE 10: OTHER ITEMS OF THE STATEMENT OF COMPREHENSIVE INCOME

10.1 Selling expenses

 

			06.30.2023		06.30.2022
Salaries and social security charges			532		247
Employees benefits			56		23
Fees and compensation for services			396		223
Property, plant and equipment depreciation			3		2
Taxes, rates and contributions			1,460		700
Transportation and freights			5,154		2,453
Other			122		73
Total selling expenses			7,723		3,721

 

10.2 Administrative expenses

 

			06.30.2023		06.30.2022
Salaries and social security charges			6,376		2,777
Employees benefits			984		361
Defined benefit plans			2,493		560
Fees and compensation for services			3,302		1,865
Compensation agreements			3,573		547
Directors' and Sindycs' fees			749		344
Property, plant and equipment depreciation			744		301
Consumption of materials			27		14
Maintenance			258		122
Transport and per diem			241		70
Rental and insurance			70		25
Surveillance and security			124		50
Taxes, rates and contributions			212		127
Communications			109		66
Other			302		97
Total administrative expenses			19,564		7,326

 

10.3 Exploration expenses

 

			06.30.2023		06.30.2022
Geological and geophysical expenses			48		15
Derecognition of unproductive wells			1,702		-
Total exploration expenses			1,750		15

 

NOTE 10: (Continuation)

10.4 Other operating income and expenses

 

		06.30.2023		06.30.2022
Other operating income
Insurance recovery		4		15
Services provided to third parties		75		88
Results for property, plant and equipment sale and derecognition		75		23
Result from intangible assets sale		-		252
Contingencies recovery		15		10
Tax charges recovery		12		23
Commercial interests		7,948		895
Contractual indemnity		1,360		-
Argentine Natural Gas Production Promotion Plan		4,349		2,849
Other		451		202
Total other operating income		14,289		4,357
Other operating expenses
Provision for contingencies		(522)		(131)
Provision for environmental remediation		(345)		-
Results for property, plant and equipment sale and derecognition		(19)		-
Tax credits´ impairment		(8)		(11)
Tax on bank transactions		(1,737)		(666)
Donations and contributions		(271)		(137)
Institutional promotion		(239)		(167)
Costs of concessions agreements completion		(1,036)		-
Contractual penalty		(1,360)		-
Readjustment of investment plan		-		(1,011)
Royalties of Argentine Natural Gas Production Promotion Plan		(637)		(412)
Other		(1,201)		(97)
Total other operating expenses		(7,375)		(2,632)

 

NOTE 10: (Continuation)

10.5 Financial results

 

		06.30.2023		06.30.2022
Financial income
Financial interest		177		37
Other interest		251		413
Total financial income		428		450
Financial costs
Financial interests (1)		(33,667)		(6,955)
Commercial interests		(83)		(33)
Fiscal interests		(6,055)		(1,339)
Other interests		(405)		(170)
Bank and other financial expenses		(868)		(297)
Total financial costs		(41,078)		(8,794)
Other financial results
Foreign currency exchange difference, net		14,057		1,353
Changes in the fair value of financial instruments		42,429		(4,762)
Result from present value measurement		(1,030)		(767)
Result from repurchase of corporate bonds		72		-
Other financial results		(67)		6
Total other financial results		55,461		(4,170)
Total financial results, net		14,811		(12,514)

 

⁽¹⁾ Net of $ 1,570 million and $ 123 million capitalized in property, plant and equipment for the six-month periods ended June 30, 2023 and 2022, respectively.

NOTE 10: (Continuation)

10.6 Income tax

 

The breakdown of income tax charge is:

 

			06.30.2023		06.30.2022
Current tax			5,302		16,091
Deferred tax			1,336		(13,948)
Difference between previous fiscal year income tax provision and the income tax statement			449		(2,114)
Total income tax -  Income			7,087		29

 

Below is a reconciliation between income tax expense and the amount resulting from application of the tax rate on the profit before taxes:

 

			06.30.2023		06.30.2022
Profit before income tax			76,315		18,734
Current income tax rate			35%		35%
Income tax at the statutary tax rate			26,710		6,557
Share of profit from companies			(3,000)		(2,333)
Non-taxable results			(1,917)		(103)
Effects of exchange differences and other results associated with the valuation of the currency, net			36,309		8,752
Effects of valuation of property, plant and equipment, intangible assets and financial assets			(85,437)		(27,350)
Difference between previous fiscal year income tax provision and deferred tax and the income tax statement			775		(2,366)
Effect for tax inflation adjustment			31,654		16,455
Non-deductible cost			1,943		412
Other			50		5
Total income tax -  Income			7,087		29

 

NOTE 11: NON-FINANCIAL ASSETS ANF LIABILITIES

11.1

Property, plant and equipment

 

			Original values
Type of good			At the beginning		Increases (1)		Transfers		Decreases		Held for sales assets		Impairment		Traslation effect
																	At the end
Lands			2,333		-		-		-		-		-		1,047		3,380
Buildings			25,253		-		390		-		(598)		-		11,518		36,563
Equipment and machinery			339,671		108		29,219		(129)		(33,368)		-		158,849		494,350
Wells			175,771		52		26,002		(4,515)		-		-		82,309		279,619
Mining property			32,077		-		-		-		-		-		14,401		46,478
Vehicles			1,365		403		119		(29)		-		-		742		2,600
Furniture and fixtures and software equipment			10,635		125		199		(2)		(37)		-		4,842		15,762
Communication equipments			223		-		-		-		-		-		99		322
Materials, spare parts and tools			6,304		8,616		(7,544)		-		-		-		3,962		11,338
Petrochemical industrial complex			5,158		-		293		-		-		-		2,383		7,834
Civil works			557		-		3,896		-		(301)		-		2,330		6,482
Work in progress			44,316		47,222		(47,069)		-		(29)		-		19,259		63,699
Advances to suppliers			7,718		23,188		(5,505)		(2)		-		-		8,522		33,921
Other goods			78		-		-		-		-		-		34		112
Total at 06.30.2023			651,459		79,714		-		(4,677)		(34,333)		-		310,297		1,002,460
Total at 06.30.2022			311,688		20,690		-		(23)		-		(12,469)		70,362		390,248

 

⁽¹⁾ Includes $ 1,570 million and $123 million of financial costs capitalized in property, plant and equipment for the six-month periods ended June 30, 2023 and 2022, respectively.

NOTE 11: (Continuation)

 

			Depreciation														Net book values
Type of good			At the beginning		Decreases		Held for sales assets		For the period		Impairment		Traslation effect		At the end		At the end		At 12.31.2022
Lands			-		-		-		-		-		-		-		3,380		2,333
Buildings			(13,342)		-		50		(811)		-		(6,181)		(20,284)		16,279		11,911
Equipment and machinery			(113,166)		122		3,151		(13,264)		-		(56,942)		(180,099)		314,251		226,505
Wells			(104,372)		1,928		-		(10,031)		-		(48,117)		(160,592)		119,027		71,399
Mining property			(23,809)		-		-		(704)		-		(10,835)		(35,348)		11,130		8,268
Vehicles			(865)		21		-		(130)		-		(403)		(1,377)		1,223		500
Furniture and fixtures and software equipment			(9,137)		1		10		(503)		-		(4,174)		(13,803)		1,959		1,498
Communication equipments			(174)		-		-		(12)		-		(86)		(272)		50		49
Materials, spare parts and tools			(257)		-		-		(19)		-		(119)		(395)		10,943		6,047
Petrochemical industrial complex			(2,664)		-		-		(536)		-		(1,307)		(4,507)		3,327		2,494
Civil works			(135)		-		39		(155)		-		(421)		(672)		5,810		422
Work in progress			-		-		-		-		-		-		-		63,699		44,316
Advances to suppliers			-		-		-		-		-		-		-		33,921		7,718
Other goods			(74)		-		-		(1)		-		(32)		(107)		5		4
Total at 06.30.2023			(267,995)		2,072		3,250		(26,166)		-		(128,617)		(417,456)		585,004
Total at 06.30.2022			(141,298)		18		-		(11,559)		8,787		(32,255)		(176,307)		213,941
Total at 12.31.2022																			383,464

 

NOTE 11: (Continuation)

11.2 Intangible assets

		Original values
Type of good		At the beginning		Increase		Decrease		Held for sales assets		Impairment recovery  (Impairment)(1)		Traslation effect
														At the end
Concession agreements		444		-		-		-		-		199		643
Goodwill		6,131		-		-		-		-		2,753		8,884
Intangible identified in acquisitions of companies		17,835		-		-		(8,054)		-		8,016		17,797
Digital assets		1,172		-		(1,626)		-		411		43		-
Total at 06.30.2023		25,582		-		(1,626)		(8,054)		411		11,011		27,324
Total at 06.30.2022		4,530		3,312		(1,808)		-		(695)		1,120		6,459

  

 

		Amortization
Type of good		At the beginning		For the period		Held for sales assets		Traslation effect
										At the end
Concession agreements		(418)		(9)		-		(190)		(617)
Intangible identified in acquisitions of companies		(800)		(627)		472		(500)		(1,455)
Total at 06.30.2023		(1,218)		(636)		472		(690)		(2,072)
Total at 06.30.2022		(574)		(26)		-		(127)		(727)

 

		Net book values
Type of good		At the end		At 12.31.2022
Concession agreements		26		26
Goodwill		8,884		6,131
Intangible identified in acquisitions of companies		16,342		17,035
Digital assets		-		1,172
Total at 06.30.2023		25,252
Total at 06.30.2022		5,732
Total at 12.31.2022				24,364

 

 

(1)

The sale of the digital assets at market price resulted in the recognition of an impairment recovery for $ 411 million (US$ 2 million) as of June 30, 2023. As of June 30, 2022, the recoverability of the digital assets was affected by their market value at closing, resulting in the recording of impairment losses for $ 695 million (US$ 6 million).

NOTE 11: (Continuation)

11.3 Deferred tax assets and liabilities

 

The composition of the deferred tax assets and liabilities is as follows:

 

		06.30.2023		12.31.2022
Tax loss carryforwards		12,147		3,294
Property, plant and equipment		32,912		26,765
Intangible assets		2		2
Trade and other receivables		613		592
Provisions		16,329		10,472
Salaries and social security payable		193		134
Defined benefit plans		2,371		1,356
Trade and other payables		49		40
Other		293		195
Deferred tax asset		64,909		42,850
Property, plant and equipment		(8,124)		(14,021)
Intangible assets		(8,803)		(6,209)
Investments in companies		(1,332)		(1,332)
Inventories		(6,092)		(3,281)
Financial assets at fair value through profit and loss		(5,377)		(2,718)
Trade and other receivables		(3,757)		(3,928)
Tax liabilities		(322)		(322)
Tax inflation adjustment		(40,207)		(24,567)
Deferred tax liability		(74,014)		(56,378)

Deferred tax assets and liabilities are offset only when there is a legally enforceable right to offset tax assets and liabilities; and when deferred income tax charges are associated with the same fiscal authority. Therefore, they are disclosed in the consolidated condensed interim statement of financial position:

 

		06.30.2023		12.31.2022
Deferred tax asset, net		8,491		6,326
Deferred tax liability, net		(17,596)		(19,854)

 

NOTE 11: (Continuation)

11.4 Inventories

 

			06.30.2023		12.31.2022
Current
Materials and spare parts			31,030		18,489
Advances to suppliers			821		1,458
In process and finished products			15,863		10,777
Total (1)			47,714		30,724

 

⁽¹⁾ It includes impairment loss as a result of the performed recoverability assessment for$ 734 million (US$ 3 million), $ 7 million (US$ 0,1 million) and $ 463 million (US$ 2 million) as of June 30, 2023 and 2022 and December 31, 2022.

 

11.5 Provisions

 

		06.30.2023		12.31.2022
Non-Current
Contingencies		28,070		19,031
Asset retirement obligation and wind turbines decommisioning		5,437		4,453
Environmental remediation		3,707		2,578
Other provisions		1,036		-
Total non-current		38,250		26,062
Current
Contingencies		22		16
Asset retirement obligation and wind turbines decommisioning		518		400
Environmental remediation		453		357
Other provisions		10		6
Total current		1,003		779

 

NOTE 11: (Continuation)

 

The evolution of provisions is shown below:

 

		06.30.2023
		Contingencies		Asset retirement obligation and wind turbines decommisioning		Environmental remediation
At the beginning of the year		19,047		4,853		2,935
Increases		762		383		161
Decreases		(75)		-		(77)
Exchange differences on translation		8,373		1,926		1,271
Liabilities associated to held for sale assets		-		(241)		-
Reversal of unused amounts		(15)		(966)		(130)
At the end of the period		28,092		5,955		4,160
		06.30.2022
		Contingencies		Asset retirement obligation and decommisioning  of wind turbines		Environmental remediation
At the beginning of the year		10,887		2,217		1,805
Increases		262		126		31
Decreases		(34)		(5)		(65)
Exchange differences on translation		2,255		500		381
Reversal of unused amounts		(9)		-		-
At the end of the period		13,361		2,838		2,152

 

11.5.1 Provision for lawsuits and contingencies

Regarding the international arbitration claim filed by the Company against Petrobras International Braspetro B.V. on account of fraudulent representations and omissions associated with certain export transactions under the share purchase agreement executed on May 13, 2016 whereby the Company acquired 67.2% of Petrobras Argentina S.A.'s capital stock, the arbitration award is pending issuance by the Arbitration Court.

NOTE 11: (Continuation)

11.6 Income tax and minimum notional income tax provision

 

		06.30.2023		12.31.2022
Non-current
Income tax, net of witholdings		33,632		28,568
Minimum notional income tax		3,724		3,160
Total non-current		37,356		31,728
Current
Income tax, net of witholdings and advances		4,493		927
Total current		4,493		927

 

NOTE 12: FINANCIAL ASSETS AND LIABILITIES

12.1

Financial assets at amortized cost

 

			06.30.2023		12.31.2022
Non-current
Term deposit			25,853		17,823
Notes receivable			-		177
Total non-current			25,853		18,000
Current
Notes receivable			3,006		1,357
Total current			3,006		1,357

 

NOTE 12: (Continuation)

 

12.2

Financial assets at fair value through profit and loss

 

			06.30.2023		12.31.2022
Non-current
Shares			7,053		4,867
Total non-current			7,053		4,867
Current
Government securities			109,631		36,281
Corporate bonds			20,011		33,600
Shares			33,828		28,422
Mutual funds			6,498		5,553
Total current			169,968		103,856

 

12.3

Trade and other receivables

 

	Note		06.30.2023		12.31.2022
Non-Current
Other			18		12
Trade receivables			18		12
Non-Current
Related parties	16		3,696		3,098
Advances to suppliers			1,102		-
Tax credits			654		285
Prepaid expenses			32		14
Contractual indemnity credit			1,148		-
Other			10		6
Other receivables			6,642		3,403
Total non-current			6,660		3,415

 

NOTE 12: (Continuation)

 

	Note		06.30.2023		12.31.2022
Current
Receivables from MAT sales			5,422		3,689
CAMMESA			41,271		29,315
Receivables from oil and gas sales			26,744		9,788
Receivables from petrochemicals sales			12,286		10,931
Related parties	16		1,026		848
Other			411		496
Impairment of financial assets			(1,343)		(1,039)
Trade receivables, net			85,817		54,028
Current
Related parties	16		1,771		1,183
Tax credits			2,678		2,555
Receivables for complementary activities			248		57
Prepaid expenses			3,294		2,525
Guarantee deposits			5,249		4,870
Expenses to be recovered			2,981		2,611
Receivables for acquisition of subsidiary			1,709		1,182
Receivables for sale of subsidiary and associates			1,042		719
Receivables for financial instruments sale			1,034		150
Argentine Natural Gas Production Promotion Plan			4,292		5,721
Advances to suppliers			3,363		-
Receivables for arbitration award			1,211		6,621
Contractual indemnity credit			453		-
Other			1,531		1,144
Impairment of other receivables			(27)		(38)
Other receivables, net			30,829		29,300
Total current			116,646		83,328

 

Due to the short-term nature of trade and other receivables, its book value is not considered to differ from its fair value. For non-current trade and other receivables, fair values do not significantly differ from book values.

NOTE 12: (Continuation)

 

The movements in the impairment of financial assets are as follows:

 

			06.30.2023		06.30.2022
At the beginning of the year			1,039		963
Impairment			228		115
Reversal of unused amounts			(6)		(50)
Exchange differences on translation			82		17
At the end of the period			1,343		1,045

 

The movements in the impairment of other receivables are as follows:

 

			06.30.2023		06.30.2022
At the beginning of the year			38		12
Impairment			6		5
Reversal of unused amounts			(24)		-
Exchange differences on translation			7		(1)
At the end of the period			27		16

 

12.4

Cash and cash equivalents

 

			06.30.2023		12.31.2022
Cash			52		28
Banks			4,152		1,958
Mutual funds			46,545		16,771
Total			50,746		18,757

 

NOTE 12: (Continuation)

 

12.5

Borrowings

 

			06.30.2023		12.31.2022
Non-Current
Financial borrowings			6,247		19,088
Corporate bonds			327,583		218,349
Total non-current			333,830		237,437
Current
Bank overdrafts			35,612		10,514
Financial borrowings			10,054		8,970
Corporate bonds			46,022		28,845
Total current			91,688		48,329
Total			425,518		285,766

As of June 30, 2023, and December 31, 2022 the fair value of the Company’s CB amount approximately to $ 402,370 million and $ 240,194 million, respectively. Such values were calculated on the basis of the determined market price of the Company’s CB at the end of each period (fair value level 1).

The carrying amounts of short-term borrowings approximate their fair value due to their short-term maturity.

The long-term borrowings were measured at amortized cost, which does not differ significantly from its fair value.

As of the issuance of these Consolidated Condensed Interim Financial Statements, the Company is in compliance with the covenants provided for in its loan’s contracts.

NOTE 12: (Continuation)

The evolution of the consolidated loans over the six-month periods ended June 30, 2023 and 2022 is disclosed below.

 

			06.30.2023		06.30.2022
At the beginning of the year			285,766		147,795
Proceeds from borrowings			46,753		3,946
Payment of borrowings			(3,357)		(459)
Accrued interest			33,664		6,952
Payment of interests			(29,710)		(6,257)
Repurchase of corporate bonds			(1,335)		-
Result from repurchase of corporate bonds			(72)		-
Foreign currency exchange difference			(25,345)		(878)
Liabilities associated to held for sale assets			(20,280)		-
Borrowing costs capitalized in property, plant and equipment			1,570		123
Exchange differences on translation			137,864		32,570
At the end of the period			425,518		183,792

 

12.5.1 Issuance of CB

On January 11, 2023, the Company issued Class 15 CB for $ 10,379 million accruing interest at a variable BADLAR rate plus an annual 2% spread and maturing on July 11, 2024. Subsequently, on March 6, 2023, the Company reopened Class 13 and Class 15 CB for US$ 48.2 million and $ 7,885 million, respectively.

On May 4, 2023, the Company issued Class 16 CB for US$ 55.7 million accruing interest at a fixed Badlar rate 4.99%, maturing on November 4, 2025, and Class 17 CB for $ 5,980 million accruing interest at a variable BADLAR rate plus an annual 2% spread and maturing on May 4, 2024. Class 17 CB are the second green bond issued by Pampa, which reflects the commitment to finance projects with a positive impact on the environment and to diversify the country’s energy generation matrix. The issue of Class 17 CB was recognised by Fix Ratings, an affiliate of Fitch Ratings, with the rating of Green Bond (BV1), the best possible grade, since it is aligned with the four main components of ICMA’s (International Capital Market Association) Green Bond Principles (GBP). It was issued in observance of the “Guidelines for the Issuance of Social, Green and Sustainable Bonds in Argentina” of the CNV Rules and the provisions of BYMA’s Social, Green and Sustainable Guide and the BYMA Rules, and also makes up BYMA’s Social, Green and Sustainable Bonds Panel. The Company will allocate the issue’s proceeds form Class 17 CB to finance the expansion of PEPE VI wind farm.

 

After the closing of the reporting period, Pampa repaid at maturity the full outstanding amount of Class 8 CB (first Green Bond) for $2,283 million.

 

NOTE 12: (Continuation)

 

12.5.2 Redemption of Series T CB

 

On May 5, 2023, the Company announced the redemption of all Series T CB maturing on July 21, 2023, which outstanding balance amounted to US$ 92.9 million.

 

The redemption took place on June 8, 2023 at a redemption price equal to 100% of the outstanding capital amount, plus accrued and unpaid interest as of the redemption date, and plus additional amounts under the Series T CB's trust agreement.

12.5.3 Financial loans

 

During the period ended June 30, 2023, the Company took out short-term bank loans with local financial entities for $ 36,168 million and canceled financing for US$ 9.1 million and import financing, net, for US$ 4.6 million. After the closing of the reporting period, the Company paid import financing, net of borrowings, for US$ 1.6 million and took out short-term bank loans for $ 2,000 million.

NOTE 12: (Continuation)

 

12.6

Trade and other payables

 

	Note		06.30.2023		12.31.2022
Non-Current
Customer guarantees			6		4
Trade payables			6		4
Compensation agreements			4,705		1,769
Finance leases liability			2,413		1,789
Contractual penalty debt			1,148		-
Other			213		195
Other payables			8,479		3,753
Total non-current			8,485		3,757
Current
Suppliers			59,705		35,109
Customer advances			1,092		644
Related parties	16		4,365		2,506
Trade payables			65,162		38,259
Compensation agreements			1,463		2,085
Liability for acquisition of companies			5,900		8,144
Finance leases liability			453		319
Investment plan readjustment liability			727		807
Contractual penalty debt			420
Other			243		117
Other payables			9,206		11,472
Total current			74,368		49,731

 

Due to the short-term nature of trade and other payables, its book value is not considered to differ from its fair value. For most other non-current liabilities, fair values do not significantly differ from book values.

NOTE 12: (Continuation)

12.7

Fair value of financial instruments

The following table shows the Company’s financial assets and liabilities measured at fair value as of June 30, 2023 and December 31, 2022:

 

As of June 30, 2023		Level 1		Level 2		Level 3		Total
Assets
Financial assets at fair value through profit and losss
Government securities		109,631		-		-		109,631
Corporate bonds		20,011		-		-		20,011
Mutual funds		6,498		-		-		6,498
Shares		33,828		-		7,053		40,881
Cash and cash equivalents
Mutual funds		46,545		-		-		46,545
Derivative financial instruments		-		146		-		146
Other receivables
Guarantee deposits on derivative financial instruments		4,249		-		-		4,249
Total assets		220,762		146		7,053		227,961
Liabilities
Derivative financial instruments		-		133		-		133
Total liabilities		-		133		-		133

 

As of December 31, 2022		Level 1		Level 2		Level 3		Total
Assets
Financial assets at fair value through  profit and losss
Government securities		36,281		-		-		36,281
Corporate bonds		33,600		-		-		33,600
Mutual funds		5,553		-		-		5,553
Shares		28,422		-		4,867		33,289
Cash and cash equivalents
Mutual funds		16,771		-		-		16,771
Derivative financial instruments		-		161		-		161
Other receivables
Guarantee deposits on derivative financial instruments		3,823		-		-		3,823
Total assets		124,450		161		4,867		129,478
Liabilities
Derivative financial instruments		-		318		-		318
Total liabilities		-		318		-		318

 

NOTE 12: (Continuation)

The techniques used for the measurement of assets and liabilities at fair value through profit and loss, classified as Level 2 and 3, are detailed below:

-

Derivative Financial Instruments: calculated from variations between market prices at the closing date of the period, and the amount at the time of the contract.

-

Shares: it was determined using the income-based approach through the “Indirect Cash Flow” method, that is, the net present value of expected future cash flows, mainly through the collection of dividends taking into consideration the 4.04% and 4.55% equity interest, direct and indirect, in TJSM and TMB, respectively.

NOTE 13: EQUITY COMPONENTS

13.1

Share Capital

On April 26, 2023, the General Ordinary and Extraordinary Shareholders' Meeting resolved to reduce the Company's capital stock through the cancellation of 20 million shares. This reduction was registered with the Public Registry on June 28, 2023.

As of June 30, 2023, the capital stock amounts to $ 1,364 million, including $ 4 million of treasury shares.

The Company is reached by CNV General Resolution No. 941/22, as it has previously adopted a specific accounting policy regarding the foreign-currency translation of financial statements. To comply with the provisions established by this resolution, the breakdown of the translation differences originated in share capital and capital adjustment accounts are detailed below:

 

		06.30.2023
		Share capital		Share capital adjustment
At the beginning of the year		5,117		26,760
Variation of the period		2,799		14,649
At the end of the period		7,916		41,409
		12.31.2022
		Share capital		Share capital adjustment
At the beginning of the year		2,392		12,503
Variation of the period		2,725		14,257
At the end of the year		5,117		26,760

 

NOTE 13: (Continuation)

13.2

Earning per share

Basic earnings per share are calculated by dividing the result attributable to the Company’s equity holders by the weighted average of outstanding common shares during the year. Diluted earnings per share are calculated by adjusting the weighted average of outstanding common shares to reflect the conversion of all dilutive potential common shares.

Potential common shares will be deemed dilutive only when their conversion into common shares may reduce the earnings per share or increase losses per share of the continuing business. Potential common shares will be deemed anti-dilutive when their conversion into common shares may result in an increase in the earnings per share or a decrease in the losses per share of the continuing operations.

The calculation of diluted earnings per share does not entail a conversion, the exercise or another issuance of shares which may have an anti-dilutive effect on the losses per share, and where the option exercise price is higher than the average price of ordinary shares during the period, no dilutive effect is recorded, being the diluted earning per share equal to the basic. As of June 30, 2023 and 2022, the Company does not hold any significant potential dilutive shares, therefore there are no differences with the basic earnings per share.

 

		06.30.2023		06.30.2022
Earning for continuing operations attributable to equity holders of the Company		69,097		18,469
Weighted average amount of outstanding shares		1,372		1,381
Basic and diluted earnings per share from continued operations		50.36		13.37

 

NOTE 14: STATEMENT OF CASH FLOWS’ COMPLEMENTARY INFORMATION

14.1

Adjustments to reconcilie net profit to cash flows from operating activities

 

	Note		06.30.2023		06.30.2022
Income tax	10.6		7,087		29
Accrued interest			31,957		7,128
Depreciations and amortizations	9, 10.1 and 10.2		26,881		11,910
Share of profit of joint ventures and associates	5.1.3		(8,570)		(6,861)
Results for property, plant and equipment sale and derecognition	10.4		(56)		(23)
Result for intangible assets sale	10.4		-		(252)
Impairment  of property, plant and equipment, intangible assets and inventories			323		4,384
Impairment of financial assets			937		519
Result from measurement at present value	10.5		1,030		767
Changes in the fair value of financial instruments			(37,712)		4,964
Exchange differences, net			(14,827)		(1,353)
Result from repurchase of corporate bonds	10.5		(72)		-
Readjustment of investment plan	10.4		-		1,011
Costs of concessions agreements completion	10.4		1,036		-
Contractual indemnity	10.4		(1,360)		-
Contractual penalty	10.4		1,360		-
Recovery of tax charges	10.4		(4)		(12)
Provision for contingecies, net	10.4		498		121
Provision for environmental remediation	10.4		345		-
Accrual of defined benefit plans	9 and 10.2		3,642		880
Compensation agreements	10.2		3,573		547
Derecognition of unproductive wells	10.3		1,702		-
Other			(363)		-
Adjustments to reconcile net profit to cash flows from operating activities			17,407		23,759

 

NOTE 14: (Continuation)

14.2

Changes in operating assets and liabilities

 

			06.30.2023		06.30.2022
Increase in trade receivables and other receivables			(4,187)		(18,856)
Increase in inventories			(5,005)		(2,738)
Increase in trade payables and other payables			(1,678)		3,605
Decrease in salaries and social security payables			(291)		(470)
Decrease in defined benefit plans			(280)		(201)
Increase in tax liabilities			2,026		1,731
Decrease in provisions			(917)		(193)
Income tax payment			(14)		(327)
(Payments) Collections for derivative financial instruments, net			(774)		163
Changes in operating assets and liabilities			(11,120)		(17,286)

 

14.3

Significant non-cash transactions

 

			06.30.2023		06.30.2022
Acquisition of property, plant and equipment through an increase in trade payables			(16,276)		(6,176)
Borrowing costs capitalized in property, plant and equipment			(1,570)		(123)
Receivables for acquisition of subsidiary			1,182		-
Dividends pending collection			-		533
Decrease in asset retirement obligation through property, plant and equipment			(885)		-
Compensation of compensation plans through a decrease in other receivables			(148)		-

 

NOTE 15: CONTINGENT LIABILITIES AND ASSETS

The main changes for the six-month period ended June 30, 2023 regarding contingent liabilities disclosed in the Consolidated Financial Statements as of December 31, 2022 are detailed below:

 

15.1

Labor claim - Compensation Fund

With reference to one of the claims on an alleged plan underfunding due to the elimination of the Company's earnings-based contributions, the Supreme Court of Justice of the Autonomous City of Buenos Aires asked the Chamber of Commercial Appeals to refer back the proceedings, and it later ordered the hearing of the unconstitutionality appeal filed by the Company which had been previously dismissed by said Chamber. In view of the Chamber's dismissal, the file was referred to the CSJN, which will settle the dispute over jurisdiction.

NOTE 15: (Continuation)

15.2

Environmental claims

 

-

In the proceeding where Fundación SurfRider Argentina has requested the performance of preliminary proceedings due to alleged indications of environmental damage in the City of Mar del Plata, the partial agreement reached between the plaintiff and a co-defendant was ratified, and the proposal submitted by other two co-defendants is in the trial stage. On the other side, the Company has requested to be severed from the proceeding as it did not own any service station during the claim period, and the Court resolved to take this request into consideration.

 

-

In the proceeding brought by a neighbor of the Province of Salta owning a lot where a joint venture made up of the plaintiffs (the Company and other companies) conducted hydrocarbon activities, the Province of Salta became a co-defendant instead of a third party.

 

-

In the Court file where owners of a lot in the town of Garín, Province of Buenos Aires, seek the performance of preliminary proceedings for alleged indications of damage to the environment in their place of residence, the constructive abandonment of the lawsuit put forward by the Company and the dismissal of the claim by the plaintiff are pending resolution.

 

-

With reference to the complaint brought before the CSJN by Beatriz Mendoza and 16 other plaintiffs on alleged damages resulting from alleged environmental damage, the Company's pecuniary liability would be associated with just two of its assets adjacent to the Matanza-Riachuelo River Basin (one of which is no longer under its operation). Regarding the remaining assets along this basin previously operated by the Company, it has sufficient indemnity granted by the sites' assignee company.

 

15.3 Civil and Commercial Claims

 

Regarding the proceeding brought by "Consumidores Financieros Asociación Civil Para Su Defensa" seeking compensation for the depreciation of Petrobras Brasil's share quotation value as a result of the "lava jato operation" and the so-called "Petrolao", the Chamber of Appeals in Commercial Matters rendered judgment dismissing the federal extraordinary appeal brought by this association. Against this decision, the association filed a petition in error, which is under analysis by the CSJN.

 

The main updates for the six-month period ended June 30, 2023 regarding contingent assets disclosed in the Consolidated Financial Statements as of December 31, 2022 are detailed below:

 

15.4 Civil and Commercial Claims

 

Regarding the arbitration proceeding brought by the Company against High Luck Group Limited - Argentine branch as a result of certain breaches to the Participation Assignment Agreement and the Joint Operation Agreement for the Chirete Block entered into on April 1, 2015, the passing of the award and the hearing of new causes of action are still pending.

 

NOTA 16: RELATED PARTIES´ BALANCES AND TRANSACTIONS

16.1 Balances with related parties

 

As of June 30, 2023		Trade receivables		Other receivables				Trade  payables
		Current		Non Current		Current		Current
Associates and joint ventures
CTB		3		-		-		-
TGS		971		3,696		1,595		2,063
Transener		4		-		19		3
Other		-		-		-		14
Other related parties
SACDE		48		-		12		2,285
Other		-		-		145		-
		1,026		3,696		1,771		4,365

 

 

As of December 31, 2022		Trade receivables		Other receivables				Trade  payables
		Current		Non Current		Current		Current
Associates and joint ventures
CTB		34		-		-		-
TGS		806		3,098		1,059		1,206
Transener		4		-		12		1
Other		-		-		-		2
Other related parties
SACDE		4		-		12		1,297
Other		-		-		100		-
		848		3,098		1,183		2,506

 

NOTE 16: (Continuation)

16.2 Operations with related parties

 

Operations for the six-month period		Sales of goods and services (1)				Purchases of goods and services (2)				Fees for services (3)				Other operating income (expenses), net (4)
		2023		2022		2023		2022		2023		2022		2023		2022
Associates and joint ventures
CTB		236		104		-		-		-		-		-		-
Greenwind		-		40		-		-		-		-		-		-
Refinor		-		702		-		(903)		-		-		-		-
TGS		5,223		2,954		(5,064)		(2,889)		-		-		-		-
Transener		-		-		(13)		(21)		-		-		43		-
Other related parties
Fundación		-		-		-		-		-		-		(223)		(102)
SACDE		-		-		(5,820)		(5,257)		-		-		28		8
Salaverri, Dellatorre, Burgio & Wetzler		-		-		-		-		(74)		(32)		-		-
Other		-		-		(16)		-		-		-		-		-
		5,459		3,800		(10,913)		(9,070)		(74)		(32)		(152)		(94)

 

(1)

Corresponds mainly to advisory services provided in relation with technical assistance and sales of gas.

(2)

Correspond to natural gas transportation services, purchases of refined products and other services imputed to cost of sales for $ 5,093 million and $ 3.910 million and infrastructure works contracted to SACDE imputed to property, plant and equipment for $ 5,820 million and $ 5,176 million, of which $ 3,372 million and $ 1,930 million correspond to fees and general expenses calculated on the costs incurred by SACDE and/or Pampa to carry the works out for the six-month period ended June 30, 2023 and 2022, respectively.

(3)

Disclosed within administrative expenses.

(4)

Corresponds mainly to donations expenses and operating leases income.

 

Operations for the six-month period		Financial income (1)				Financial expenses (2)				Dividends received				Payment of dividends
		2023		2022		2023		2022		2023		2022		2023		2022
Associates and joint ventures
OCP		-		-		-		-		-		854		-		-
TGS		188		124		-		-		-		-		-		-
Other related parties
EMESA		-		-		-		-		-		-		(139)		(25)
Other		-		-		(6)		(6)		-		-		-		-
		188		124		(6)		(6)		-		854		(139)		(25)

 

(1)

Corresponds mainly to financial leases and accrued interest on loans granted.

(2)

Corresponds to interest and commissions on loans received.

 

NOTE 17: ASSETS AND LIABILITIES IN CURRENCIES OTHER THAN PESOS ⁽¹⁾

 

	Type		Amount in currencies other than pesos		Exchange rate (2)		Total 06.30.2023		Total 12.31.2022
ASSETS
NON-CURRENT ASSETS
Financial assets at amortized cost	US$		100.7		256.70		25,853		18,000
Other receivables	US$		23.2		256.70		5,950		3,099
Total non-current assets							31,803		21,099
CURRENT ASSETS
Financial assets at fair value through profit and loss	US$		544.8		256.70		139,854		83,477
	U$		-		-		-		1
Financial assets at amortized cost	US$		11.7		256.70		3,006		1,357
Derivative financial instruments	US$		0.6		256.70		146		149
Trade and other receivables	US$		210.0		256.70		53,915		38,960
Cash and cash equivalents	US$		86.7		256.70		22,261		13,602
	EUR		-		-		-		1
Total current assets							219,182		137,547
Assets classified as held for sale	US$		11.9		256.70		3,045		-
Total assets							254,030		158,646
LIABILITIES
NON-CURRENT LIABILITIES
Provisions	US$		142.6		256.70		36,595		25,492
Borrowings	US$		1,229.3		256.70		315,568		215,786
Other payables	US$		32.3		256.70		8,286		3,572
Total non-current liabilities							360,449		244,850
CURRENT LIABILITIES
Provisions	US$		3.9		256.70		993		741
Tax liabilities	US$		0.04		256.70		11		6
Salaries and social security payable	US$		0.1		256.70		25		16
Derivative financial instruments	US$		0.51		256.70		131		318
Borrowings	US$		63.0		256.70		16,167		31,180
Trade and other payables	US$		198.7		256.70		51,004		35,461
	EUR		3.8		280.59		1,072		548
	CNY		12.0		35.39		423		-
	U$		0.12		6.86		1		-
Total current liabilities							69,827		68,270
Liabilities associated to assets classified as held for sale	US$		80.1		256.70		20,569		-
Total liabilities							450,845		313,120
Net Position Liability							(196,815)		(154,474)

 

(1)

Information presented to comply with CNV Rules.

(2)

Exchange rate in force on June 30, 2023 according to the BNA for U.S. dollars (US$), Euros (EUR), Yuans R. China (CNY) and Uruguayan pesos (U$).

NOTA 18: INVESTMENT COMMITMENTS

New generation projects

PEPE IV

In early 2022, works started for the expansion of PEPE III, inaugurated in 2019, which production is targeted at the large users’ segment.

The project mainly consisted of the (staged) mounting and installation of 18 additional wind turbines with an 81 MW capacity. The expansion's commissioning started on December 29, 2022, with the first 4 wind turbines, and ended on June 17, 2023, with the project's last 3 wind turbines.

After completing the expansion works, PEPE III and PEPE IV jointly have 32 wind turbines with a 134.2 MW installed capacity.

PEPE VI

In February 2023, the Company started constructing Pampa Energía VI Wind Farm in Bahía Blanca, Province of Buenos Aires. The project will enable the installation of a 300 MW power capacity, in 3 stages, with an estimated US$ 500 million investment.

Stage 1 comprises the mounting and installation of 21 Vestas wind turbines, with their internal medium-voltage cable network, roads, a substation and a 500 KV line allowing for a 94.5 MW capacity addition, with an investment for US$ 186 million, expected to be operative during the third quarter of 2024.

Stage 2 comprises the mounting and installation of 10 Vestas wind turbines allowing for a 45 MW capacity addition, with an investment for US$ 89 million, expected to be operative during the fourth quarter of 2024.

The energy produced by this wind park allows for reduced carbon emissions and will be sold through the MATER to supply large companies in the country in compliance with the Renewable Energy Law.

NOTE 19: TERMINATION OF HYDROELECTRIC CONCESSIONS

 

SE Resolution No. 486/23 modified the terms for the Concessioned Hydroelectric Exploitations Team (ETAHC) to submit reports on the status of hydroelectric concessions. In the case of HINISA and HIDISA, the ETAHC's deadline to submit the reports will be December 1, 2023 and April 19, 2024, respectively.

 

Later, SE Resolution No. 574/23 resolved to implement the provisions of the concession agreements, providing that the current Alicurá, El Chocón Arroyito, Cerros Colorados and Piedra del Águila's concessionaires should continue in charge of their operation and maintenance upon the termination of the concession for a 60-day term (extendable for other 60 days). ENARSA was appointed as observer, with broad powers during the transition term and the provinces of Neuquén and Río Negro were invited to appoint a representative to act jointly with the representative to be appointed by the National Ministry of Economy ("MECON") to assist ENARSA during that period.

 

NOTE 20: DOCUMENTATION SAFEKEEPING

On August 14, 2014, the CNV issued General Resolution No. 629/14, which introduced modifications to the provisions applicable to the keeping and conservation of corporate and accounting books and commercial documentation. To such effect, the Company have sent non-sensitive work papers and information corresponding to the periods not covered by the statute of limitations for their keeping in the AdeA - Administración de Archivos S.A.’s data warehouse located at Ruta 36, km 34.5, Florencio Varela, Provincia de Buenos Aires and in the Iron Mountain Argentina S.A.’s data warehouses located at the following addresses:

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Azara 1245 – C.A.B.A.

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Don Pedro de Mendoza 2163 –C.A.B.A.

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Amancio Alcorta 2482 C.A.B.A.

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San Miguel de Tucumán 601, Carlos Spegazzini, Municipality of Ezeiza, Province of Buenos Aires.

A list of the documentation delivered for storage, as well as the documentation provided for in Article 5.a.3) Section I, Chapter V, Title II of the PROVISIONS (2013 regulatory provisions and amending rules), is available at the Company headquarters.

NOTE 21: SUBSEQUENT EVENTS

 

Incident at Central Térmica Loma de la Lata (CTLL)

On July 20, 2023, an incident occurred at CTLL's GT05, resulting in damage to the unit's turbine. As a result of the incident, the power generation capacity was reduced by approximately 105 MW.

 

The Company and General Electric, the turbine's manufacturer, are evaluating the necessary works to repair the failure.

 

Moreover, the Company is making all necessary filings before the insurance companies to minimize economic losses resulting from the breach of the associated availability commitments.

 

Tax for an Inclusive and Caring Argentina (Impuesto Para una Argentina Inclusiva y Solidaria, "PAIS") for import and foreign service procurement transactions

PEN Executive Order No. 377/23, dated July 24, 2023, extends the application of the PAIS tax to import transactions for certain goods, exempting goods associated with power generation —which scope has not been regulated— and the procurement of foreign services. Moreover, its regulation under AFIP Resolution No. 5,393/23, dated July 25, 2023, provided for an advance payment to be set off against the PAIS tax equivalent to 95% of the total final tax payable for certain goods and merchandise. This advance payment should be paid by the importer when declaring the import's destination. The PAIS tax's remaining 5% balance should be paid when accessing the MLC to make the payment abroad, where the intervening bank will act as a collection and settlement agent.

 

"TerCONF" call for tenders

On July 27, 2023, SE Resolution No. 621/23 launched the "TerCONF" call for the execution of reliable thermal generation supply agreements with CAMMESA allowing to incorporate new thermal supply and ensure the WEM's reliability and sustainability through: (i) supply to the SADI, and (ii) the substitution and modernization of Tierra del Fuego's power generation grid.

NOTE 21: (Continuation)

 

Regarding thermal generation for SADI's reliability and supply:

(i)

The call will consider any generation or co-generation technology, including associated transmission and/or fuels infrastructure works, to add reliable power capacity by installing new equipment or equipment with less than 15,000 hours of verified use;

(ii)

Between 2,250 MW and 3,000 MW are expected to be awarded;

(iii)

Agreements will not provide for fuel management responsibility, and a variable operation and maintenance remuneration is established based on the energy per fuel type;

(iv)

The agreement's price will contemplate the payment of the hired power capacity in US$/MW-month and the payment of the supplied energy;

(v)

Projects should identify the point of delivery and the technical connection agreement with the transmission company;

(vi)

A supply maintenance guarantee and a payment scheme from the project's award to the contract execution date are established as a type of performance bond; and

(vii)

The deadline for submitting tenders is August 31, 2023.

 

Commencement of operations at Néstor Kirchner Gas Pipeline

 

On July 9, 2023, operations started at Néstor Kirchner Gas Pipeline's Tratayén - Salliqueló tranche, crossing the provinces of Neuquén, Río Negro, La Pampa and Buenos Aires, with a 573 km extension and an initial transportation capacity of 11 million m3/day of gas produced at the Vaca Muerta field.

 

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