YPF (YPF) Q3 2026 earnings review
YPF's shale oil pays down debt, but fuel prices trail imports
YPF now pumps most of its oil from shale, and that oil is paying off the debt the company took on to get there. Revenue rose 41% from a year ago, and last year's cash loss turned into $901 million of free cash. Chief executive Horacio Marín said shale output already runs above the year-end target, so by our math the full-year plan looks cautious.
| Profit before interest, tax and depreciation, excluding one-offs | $2,503M +84% from a year ago; −11% from last quarter |
|---|---|
| Free cash flow | $901M −$759M a year ago |
| Shale oil production | 224,000 barrels a day +32% from a year ago; 86% of all oil |
| Full-year shale oil outlook | Unchanged about 215,000 barrels a day on average |
⚖️ Verdict: 🟢 Bullish
The story got better because the balance-sheet worry from a year ago is gone: net debt is now below one year of profit before interest, and cash covers every repayment due through 2028. One caution: profit fell with the oil price this quarter, and the investment plan has spending nearly doubling in the last three months of the year, so cash will not keep building at this pace.
The question now is whether YPF can keep selling fuel at home 20% below import cost while it doubles investment. If oil falls, the company recovers the gap at the pump and cash stays strong; if oil stays high, it keeps paying the subsidy out of its own refining margin. The fourth-quarter gap between domestic prices and import parity will tell.
🐂 Bull Case
Shale Oil Already Runs Above the Year-End Target
YPF is selling its old conventional oil fields and replacing them with shale wells in Vaca Muerta, the shale formation in Neuquén. Shale now supplies 86% of the oil it pumps, and chief executive Horacio Marín said that after the pending Mendoza sale the share will be about 95%.
Output averaged 224,000 barrels a day in the quarter, and Marín said one day in late October reached 252,330 barrels. "We remain on track to reach 250,000 bpd by December," he said. By our math the full-year average target only needs about 218,000 barrels a day in the fourth quarter, so that target now looks cautious.
- Shale oil: 224,100 barrels a day, up 32% from a year ago
- Conventional oil: 36,400 barrels a day, down 47%
- Lifting cost: $7.8 a barrel, down 12% from a year ago; below $7 without the fields being sold
This matters because every barrel that moves from conventional to shale costs less to lift, so the mix lifts margins even when oil prices do not. Marín said the rig count rises to 22 by February from 18, and that "you will be very surprised the production of Vaca Muerta for YPF December 2027".
What to watch: the December output figure and the 2027 plan Marín promised for April. A December average near the 255,000 barrels he floated on the call would mean the 290,000 barrels a day he set for 2027 a year ago is also too low.
Debt Is Now Below One Year of Profit
A year ago YPF was burning cash and its net debt had reached 2.1 times annual profit before interest, tax and depreciation. Marín said then that 2.1 times was the maximum the company wanted. Two straight quarters of positive free cash flow have reversed that picture.
Free cash flow reached $901 million this quarter after $824 million in the previous one, and the ratio fell to 0.81 times, the "lowest level of net leverage achieved by YPF in more than a decade", the release said. Finance chief Pedro Kearney then issued a $1.2 billion nine-year bond at 7.85% and bought back $531 million of bonds due 2027 to 2029.
The improvement is not only oil prices, because the realised crude price fell 11% from the previous quarter and cash flow still rose. Asset sales added $175 million, and by our math cash of $3.7 billion covers every repayment due through 2028 with about $900 million to spare.
What to watch: fourth-quarter free cash flow, when the full-year investment plan implies spending near $2.4 billion by our math. A positive figure would show the balance sheet can carry the faster drilling Marín promised; a negative one would say the cash build was a pause between spending rounds.
Refineries Run Above Capacity Without Importing Fuel
YPF owns three refineries that supply more than half of Argentina's diesel and gasoline. Strategy chief Maximiliano Westen said they processed 344,000 barrels a day, 102% of nameplate capacity, even with La Plata down for maintenance in September. For a second quarter YPF imported no diesel or gasoline.
Refining and marketing earned $25.6 for every barrel processed, against $7.1 a year ago, because the cost of making products fell faster than prices. Cost of sales dropped to 58% of revenue from 71% by our math, as YPF paid a discount to Brent for Medanito crude after an unusual premium in the second quarter.
What to watch: fourth-quarter throughput, which Westen said will "gradually normalize" because more maintenance is scheduled. A margin that holds near $25 a barrel on lower volume would show the gain came from costs rather than from running flat out.
🐻 Bear Case
Pump Prices Now Sit 20% Below Import Cost
YPF sets fuel prices under what it calls a buffer: it holds pump prices below the cost of imported fuel when oil jumps, and recovers the gap later when oil falls. The release says the policy protects demand and that refining spreads widened. The numbers show the gap doubled in one quarter.
Domestic net fuel prices fell 6% from the previous quarter to $865 per cubic metre while import parity rose to $1,086, so the discount widened to 20% from 9% by our math. Westen said "YPF resumed temporarily absorbing part of the impact to support domestic demand" after only a 1% rise at the pump in September.
- Gap to import parity: 20%, from 9% last quarter and 10% a year ago
- Domestic fuel volume: down 4% from last quarter, with diesel weakest
- Fuel market share: 58%, from 59% last quarter
Marín said demand has turned elastic outside Buenos Aires, so "there is no room to increase in Argentina because the demand cannot afford more incremental". Recovery therefore depends on international prices falling, which Marín said nobody can forecast. This quarter's downstream gain came from cheaper crude, not from the pump, because the Medanito discount returned.
What to watch: the fourth-quarter gap between domestic prices and import parity. A gap still near 20% with Brent unchanged would mean YPF is funding the subsidy from its own refining margin for a second quarter.
Fourth-Quarter Investment Nearly Doubles by Our Math
Marín kept the full-year investment target at $5.8–6.2 billion. YPF has spent $3.6 billion in nine months, so the middle of the range leaves about $2.4 billion for the fourth quarter, 86% more than this quarter by our math. "We expect upstream investment to increase in Q4," Marín said, to feed VMOS, the new oil export pipeline.
Other bills arrive at the same time. YPF paid $430 million in October for the 25% of YPF Luz it did not own, financed with a $400 million Itaú loan. The Argentina LNG project reaches its final investment decision on November 26, and YPF holds 36% of a plan that spends $29 billion by 2031.
What to watch: fourth-quarter free cash flow and net debt. A cash outflow would not break the case, but it would show the 0.81 times ratio was a low point rather than the new normal.
Profit Still Moves One for One With the Oil Price
A year ago executives did not answer a question on hedging, and nothing in this quarter suggests YPF hedges. The realised crude price fell 11% from the previous quarter to $81.4 a barrel, and adjusted EBITDA fell 11% to $2.5 billion, so the two moved together.
Upstream profit dropped 9%, and the swing in inventory values cost $271 million against the second quarter, the release said. Asked about the fourth-quarter discount to Brent, Marín answered: "Discount of Brent, I have no idea." He added that freight costs are ten times their normal level because of the conflict.
What to watch: the realised crude price next quarter against Brent. A discount wider than this quarter's would show that the export route, not only the oil price, has become the variable.
Most Asset-Sale Cash Still Waits for Regulators
YPF has agreed to sell the Mendoza conventional fields for $405 million and its 70% of Metrogas, the Buenos Aires gas distributor, for $780 million. It has collected about $118 million, a tenth, and the rest depends on a provincial approval and on the regulator ENRE.
The filing says earlier delays were "due to the complexity of the negotiations", and that closing remains highly probable in 2026. Until then the Mendoza fields keep about 16,000 barrels a day of high-cost oil inside YPF's numbers, and Metrogas stays consolidated.
What to watch: closing dates. Receipt of the remaining $1.07 billion before year-end would offset most of the fourth-quarter investment step-up by our math, while a slip into 2027 would not.
👓 Other Themes
YPF Luz Becomes Fully Owned
YPF bought the 25% of YPF Luz it did not own from GE Vernova for $430 million in October, so the power generator will be consolidated from the fourth quarter. YPF Luz runs 3.8 gigawatts of thermal and renewable plants, bills in dollars and expects about $500 million of adjusted EBITDA this year. Marín said the aim is "to be delivering data centers" with power, not to build them.
LNG Decision Set for November 26
Argentina LNG, the gas-export project YPF leads with 36% while Eni and XRG hold 32% each, is due for a final investment decision on November 26. It targets 12 million tons a year from two floating vessels, $29 billion of spending by 2031, and US EXIM has offered up to $6 billion of financing, non-binding. No revenue arrives before 2030.
💲 Other KPIs
Gas output fell 5% from a year ago because YPF is selling conventional and tight gas fields. Shale gas rose 3% to 27.1 million cubic metres a day and is now 74% of the total, from 68% a year ago. Gas earned $4.4 per million BTU in the winter peak, so segment revenue rose despite lower volume.
Up from $73 million in December. YPF booked $1.3 billion of current tax in nine months, while the consolidated cash-flow statement records $44 million paid; the standalone cash bridge shows $225 million paid in the quarter. Either way a large instalment is still due, and it will weigh on fourth-quarter cash.
Up from 7.0% last quarter and 6.7% a year ago, because the new $1.2 billion bond pays 7.85% and replaced cheaper short-term paper. Total debt rose 1% to $10.25 billion, so the lower leverage ratio comes from cash on hand, not from repaying principal. Kearney is redeeming local bonds early to trim the cost.
Up 19% since December against revenue up 30% over nine months, so customers are paying at the usual pace. One exception: Aerolíneas Argentinas, the state airline, owes $118 million for jet fuel, up from $33 million in December.
🔮 Guidance
Unchanged. The plan still says 215,000 barrels a day for the year. By our math that leaves about 218,000 for the fourth quarter, below the 224,000 of this quarter and the 243,000 of September. The target is a floor the year has already reached; it no longer describes the pace.
Unchanged. Marín said on the call that the December average could reach about 255,000 barrels a day, and that output already passed 250,000 on single days in late October. The target implies 12% more than this quarter's average, driven by new wells at La Angostura Sur and the north-hub blocks.
Unchanged. Nine-month spending is $3.6 billion, so the middle of the range leaves about $2.4 billion for the fourth quarter by our math, 86% above this quarter. Marín said the rise goes to shale wells and to VMOS before first oil. Even the bottom of the range implies 70% more than this quarter.
New in these materials. Construction finished in October and the project entered commissioning at 85% overall progress. Marín said pipes fill in January and exports start in March. YPF holds 30% of VMOS, and its own export volume depends on the 2027 budget that the board has not yet approved.
Later. A year ago Marín targeted the first half of 2026; the date is now November 26. The spending plan grew with it, to $29 billion by 2031 from about $20 billion, and the partner set changed to Eni and XRG at 32% each. US EXIM's $6 billion proposal is non-binding; Marín expects it finalised by mid-2027.
New. Westen said throughput will gradually normalize by year-end as more maintenance takes place, after running at 102% of capacity this quarter. Lower volume means fewer barrels to spread fixed costs over, so the per-barrel margin will show whether this quarter's $25.6 was structural.
❓ Key Questions
What is the 2027 investment plan and rig count?
Marín said the board has not approved the 2027 budget and promised the answer in April. With 22 rigs by February and VMOS exports from March, the spending number decides whether free cash flow stays positive.
When do the Mendoza and Metrogas sales close?
About $1.07 billion of the $1.19 billion agreed is still outstanding and depends on a province and the regulator ENRE. The timing decides whether fourth-quarter cash is covered.
How much fuel subsidy has YPF accumulated under the buffer?
Marín said two executives calculate daily how much the company finances consumers, but no figure was given. The amount sets how long domestic prices stay below parity once oil falls.
What crude discount and freight cost does YPF now realise on exports?
Marín said freight is ten times normal and gave no view on the Brent discount. Exports were 32,200 barrels a day, down 16%; the realised price gap matters more once VMOS adds volume.
How will YPF fund its 36% of the LNG upstream spend?
Project debt covers 60–70% of the $24 billion infrastructure, but the $5 billion upstream programme and the equity share sit with the partners. The split between YPF's balance sheet and the project was not stated.