Pampa Energia (NYSE:PAM) executives highlighted record production, higher fourth-quarter profitability, and a major ramp-up at the Rincón de Aranda shale oil project during the company’s fourth-quarter 2025 results call. Management also discussed the effects of recent wholesale power market changes in Argentina, an expanded capital spending plan, and ongoing efforts to increase vertical integration between its upstream gas business and thermal power generation.
2025 milestones and record investment
Investor relations opened the call by noting 2025 marked the company’s 20th anniversary. Management said that over two decades Pampa grew into a meaningful producer, accounting for 9% of Argentina’s total natural gas production and reaching a record daily output of 104,000 barrels of oil equivalent (boe) during winter 2025.
On the power side, management said Pampa consolidated a 15% share of Argentina’s net electricity output and achieved a 94% thermal availability rate in 2025.
At a consolidated level, EBITDA grew 8% year-over-year and surpassed $1 billion, which management attributed primarily to power, gas, and Rincón de Aranda. Capital expenditures reached a record $1.4 billion in 2025, with roughly half allocated to Rincón de Aranda, described as the largest single project development investment in the company’s history.
Fourth-quarter results: EBITDA up on power and shale oil ramp
For the fourth quarter, Pampa reported adjusted EBITDA of $230 million, a 26% increase year-over-year. Management said power generation was the largest contributor, citing new wholesale electricity market guidelines implemented in November that enabled more decentralized operations, improved price signals, and allowed Pampa to capture efficiencies and synergies with its gas production business.
Rincón de Aranda was the second key driver, accounting for 23% of quarterly EBITDA, supported by 10 active pads at the time of the call. Quarter-over-quarter EBITDA declined due to gas seasonality, partly offset by Rincón de Aranda and steady contributions from utility holdings TGS and Transener, executives said.
CapEx in the quarter rose 81% year-over-year to $371 million, including $249 million invested in Rincón de Aranda.
Oil and gas: higher EBITDA, changing mix, and reserve growth
The oil and gas segment posted adjusted EBITDA of $77 million in Q4, more than double the prior year, driven by Rincón de Aranda, increased gas exports, and industrial demand, partially offset by higher transport and treatment costs. Compared to Q3, EBITDA declined on seasonal gas dynamics.
Lifting costs averaged $8 per boe, slightly below last year due to higher crude output and stronger gas demand, offset by increasing gas treatment costs and the lease of temporary facilities at Rincón de Aranda. Gas lifting costs were flat year-over-year at $1.2 per million BTU in Q4 (management said the 2025 average was $1), while oil lifting costs declined sharply to below $11 per barrel from $36 in the prior-year quarter. Management attributed the oil cost improvement to Rincón de Aranda’s ramp-up and the divestment of mature conventional blocks, noting that in Q4 2024 the project was still effectively greenfield and involved trucking and testing expenses.
Total production averaged more than 81,000 boe/d in Q4, up 32% year-over-year, led by Rincón de Aranda and Sierra Chata, and partially offset by declines at El Mangrullo and non-operated blocks as well as the divestment of El Tordillo. Production fell 18% quarter-over-quarter due to seasonality. The production mix continued to shift, with oil rising to 22% of total output, driven by Rincón de Aranda.
Crude oil prices averaged nearly $61 per barrel in Q4, 10% lower than the prior year due to weaker Brent pricing. Management said that without hedging at Rincón de Aranda, realized price would have been $53 per barrel.
Executives also provided a reserves update, saying total proven reserves rose 20% to 296 million boe, driven by increased activity in Sierra Chata and Rincón de Aranda. Shale reserves increased 55% year-over-year to 204 million barrels, with shale oil representing 19% of total reserves. The reserve replacement ratio was 3.2x, extending average reserve life to 10.2 years. Management added that proven reserves have increased 118% since 2019, with the largest expansion coming from shale since 2023, when Pampa began actively developing the Vaca Muerta formation.
Rincón de Aranda: 2026 ramp targets and cost assumptions
Management said the Rincón de Aranda ramp remains on track. In Q4, the project reached its first target of 20,000 barrels per day after tying in two new pads, with average quarterly production of 17.1 thousand barrels per day, up 19% quarter-over-quarter. At the time of the call, 10 pads were online, including three in testing, with additional pads in various stages of connection and fracking.
For 2025, Rincón de Aranda contributed $126 million of EBITDA. Management said infrastructure buildout is progressing in parallel with field development, and that an additional temporary processing facility would be installed “next month” to support a target of 28,000 barrels per day by mid-2026. Management described that milestone as a step toward a final production target of 45,000 barrels per day expected in 2027.
In Q&A, executives outlined 2026 operational targets for the field, stating oil production was around 19,000 barrels per day at the time and targeted to reach 25,000 barrels per day by late March/early April, then ramp to 27,000–28,000 barrels per day by mid-year. They said the ramp from 28,000 to 45,000 barrels per day is expected to take about five to six months rather than occurring “sharply.”
On drilling activity, management said:
- At Rincón de Aranda, the company drilled 20 wells and plans to drill 20 wells and complete 35 in 2026.
- At Sierra Chata, it plans to drill and complete eight wells each in 2026.
Executives also discussed costs and type curve parameters in broad terms, saying lifting costs were expected to be around $10 per barrel in 2026 until the project has its CPF in place, and gas lifting costs would be “a little bit less than $1 per million BTU.” When asked about well performance and cost, management said it does not provide detailed guidance, but referenced an estimated EUR of around 1.1 million barrels and an all-in cost of approximately $15 million per well, including connection to the gathering pipeline.
Power market changes, self-procurement, and capital structure
The power generation segment posted EBITDA of $111 million in Q4, up 28% year-over-year, driven mainly by stronger spot prices under the new market guidelines, partially offset by reduced dispatch at the Genelba combined-cycle plant due to scheduled maintenance. Availability declined to 91% due to maintenance at Loma de la Lata and an ongoing outage at “Isa” beginning in January, though management said Pampa’s thermal availability continues to outpace the national grid.
Executives said they have been active signing private contracts since the new framework began, noting more than 100 contracts totaling around 70 MW, and citing pricing “in the mid-fifties” for energy under one-year arrangements. They also discussed how the framework incentivizes contracting through capacity charges, stating that industries pay a higher capacity charge than what generators collect, helping encourage bilateral contracting.
Management said Resolution 425/2025 had delivered an estimated 10% to 15% uplift in power generation EBITDA compared with 2025 levels, and that the new framework also supports upstream gas volumes through self-procurement for thermal plants. The company said self-procurement began formally in December at Esquinela and Loma de la Lata, increased to 41% on average in January 2026, and management expects around 40% of 2026 production to supply its own power generation.
On cash flow, management said that despite higher Rincón de Aranda CapEx, Q4 free cash flow at the parent level showed a limited $20 million outflow, helped by strong EBITDA and working-capital inflows. Cash and cash equivalents totaled $1.1 billion at quarter end, $210 million higher than the September close.
Management also highlighted balance sheet actions, including a $450 million international bond maturing in 2037 with a 20-year tenor, which executives described as the first such issuance by an Argentine corporate in over a decade. Proceeds, along with 2034 notes issued in May, were used to redeem several outstanding international bonds and some local dollar bonds. Gross debt was nearly $1.9 billion at year end, down 9% versus December 2024, while net debt was $801 million. Net leverage ended the year at 1.1x, and the average debt life was almost eight years.
Looking ahead, management outlined a 2026 investment plan that included $770 million for Rincón de Aranda to reach plateau production, roughly $400 million for maintenance across operations, and around $600 million for TGS revenue initiative projects. In Q&A, executives also referenced a board-approved budget of about $1.1 billion of CapEx, with roughly $1 billion in E&P and less than $100 million in power generation, including about $80 million of maintenance spending for thermal plants. They said they are not planning dividends in 2026, and the base case is to fund CapEx using the company’s cash position rather than new debt issuance.
About Pampa Energia (NYSE:PAM)
Pampa Energía SA is Argentina’s largest independent energy company, with integrated operations spanning electricity generation, transmission, distribution and oil and gas activities. The company holds a diversified portfolio of thermal and hydroelectric power plants, along with growing investments in renewable energy projects, serving both domestic and regional markets.
In its electricity business, Pampa Energía develops and operates plants that supply energy to Argentina’s power grid.
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