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 November, 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 SEPTEMBER 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: November 13, 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 SEPTEMBER 30, 2023

AND FOR THE NINE 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 September 30, 2023, the consolidated statements of comprehensive income for the periods of nine and three months ended September 30, 2023, of changes in equity and cash flows for the nine months ended September 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 financialstatements 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.

 

Price Waterhouse & Co. S.R.L., Bouchard 557, floor 8°, C1106ABG – Autonomous City of Buenos Aires

T: +(54.11) 4850.6000, www.pwc.com/ar

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 September 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 $ 730.5 million, none of which was claimable at that date.

 

Autonomous City of Buenos Aires, November 8, 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
CENCH		Hydrocarbons Unconventional Exploitation Concession
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
CNY		Yuan Republic of China
CSJN		Argentina’s Supreme Court of Justice
CTB		CT Barragán S.A
CTGEBA		Central Térmica Genelba
CTLL		Central Térmica Loma de la Lata
EAR		Effective Annual Rate
EISA		Energía Inversora S.A.
ENARSA		Energía Argentina S.A.
ENARGAS		National Regulatory Authority of Gas
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.
IAS		International Accounting Standards
IASB		International Accounting Standards Board
IFRS		International Financial Reporting Standards
MAT		Forward Market
MATER		Renewable Energy Forward Market

GLOSSARY OF TERMS: (Continuation)

Terms		Definitions
MLC		Foreign Exchange Market
MW		Megawatt
NYSE		New York Stock Exchange
OCP Ltd		Oleoductos de Crudos Pesados Ltd
OCP SA		Oleoductos de Crudos Pesados S.A.
PB18		Pampa Bloque 18 S.A.
PEB		Pampa Energía Bolivia S.A.
PECSA		Pampa Energía Chile S.p.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
PESOSA		Pampa Energía Soluciones S.A.
PISA		Pampa Inversiones S.A.
Refinor		Refinería del Norte S.A.
RTI		Tariff Structure Review
SACDE		Argentine Society of Construction and Strategic Development
SADI		Argentine Interconection System
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.
WEM		Wholesale Electricity Market
YPF		YPF S.A.

 

 

UNAUDITED CONSOLIDATED CONDENSED INTERIM STATEMENT OF

COMPREHENSIVE INCOME

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

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

 

			Nine months				Three months
	Note		09.30.2023		09.30.2022		09.30.2023		09.30.2022
Revenue	8		346,957		168,748		152,701		69,225
Cost of sales	9		(209,953)		(104,023)		(92,014)		(43,127)
Gross profit			137,004		64,725		60,687		26,098
Selling expenses	10.1		(13,333)		(5,719)		(5,610)		(1,998)
Administrative expenses	10.2		(33,554)		(12,389)		(13,990)		(5,063)
Exploration expenses	10.3		(1,772)		(23)		(22)		(8)
Other operating income	10.4		31,627		10,345		17,338		5,988
Other operating expenses	10.4		(18,079)		(4,209)		(10,704)		(1,577)
Impairment of property, plant and equipment, intangible assets and inventories			(324)		(4,260)		(1)		124
Impairment of financial assets			(1,490)		(672)		(553)		(153)
Share of profit from associates and joint ventures	5.1.3		14,044		13,610		5,474		6,749
Profit from sale of companies´ interest			486		-		486		-
Operating income			114,609		61,408		53,105		30,160
Financial income	10.5		1,090		597		662		147
Financial costs	10.5		(71,096)		(18,127)		(30,018)		(9,333)
Other financial results	10.5		95,794		4,108		40,333		8,278
Financial results, net			25,788		(13,422)		10,977		(908)
Profit before income tax			140,397		47,986		64,082		29,252
Income tax	10.6		(20,437)		(5,224)		(13,350)		(5,195)
Profit for the period			119,960		42,762		50,732		24,057
Other comprehensive income
Items that will not be reclassified to profit or loss
Exchange differences on translation			437,248		91,231		243,988		48,796
Items that may be reclassified to profit or loss
Exchange differences on translation			3,930		8,125		56		74
Other comprehensive income of the period			441,178		99,356		244,044		48,870
Total comprehensive income of the period			561,138		142,118		294,776		72,927

 

 

UNAUDITED CONSOLIDATED CONDENSED INTERIM

STATEMENT OF COMPREHENSIVE INCOME (Continuation)

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

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

 

			Nine months				Three months
	Note		09.30.2023		09.30.2022		09.30.2023		09.30.2022
Total income of the period attributable to:
Owners of the Company			119,708		42,448		50,611		23,979
Non-controlling interest			252		314		121		78
			119,960		42,762		50,732		24,057
Total comprehensive income of the period attributable to:
Owners of the Company			559,794		141,484		294,062		72,678
Non-controlling interest			1,344		634		714		249
			561,138		142,118		294,776		72,927
Earnings per share attributable to equity holders of the Company
Basic and diluted earnings per share	13.2		87.51		30.74

 

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 September 30, 2023, presented in comparative format.

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

 

	Note		09.30.2023		12.31.2022
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment	11.1		846,115		383,464
Intangible assets	11.2		34,072		24,364
Right-of-use assets			3,043		1,521
Deferred tax asset	11.3		1,616		6,326
Investments in associates and joint ventures	5.1.3		325,458		159,833
Financial assets at amortized cost	12.1		14,128		18,000
Financial assets at fair value through profit and loss	12.2		9,615		4,867
Other assets			158		91
Trade and other receivables	12.3		9,358		3,415
Total non-current assets			1,243,563		601,881
CURRENT ASSETS
Inventories	11.4		73,942		30,724
Financial assets at amortized cost	12.1		24,289		1,357
Financial assets at fair value through profit and loss	12.2		248,926		103,856
Derivative financial instruments			289		161
Trade and other receivables	12.3		158,061		83,328
Cash and cash equivalents	12.4		64,117		18,757
Total current assets			569,624		238,183
Total assets			1,813,187		840,064

 

 

UNAUDITED CONSOLIDATED CONDENSED INTERIM STATEMENT

OF FINANCIAL POSITION (Continuation)

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

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

 

	Note		09.30.2023		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			16,041		8,137
Voluntary reserve			500,993		171,243
Other reserves			52		(448)
Other comprehensive income			256,501		113,720
Retained earnings			161,920		84,505
Equity attributable to owners of the company			963,757		403,463
Non-controlling interest			2,398		1,157
Total equity			966,155		404,620
LIABILITIES
NON-CURRENT LIABILITIES
Provisions	11.5		54,194		26,062
Income tax and minimum notional income tax provision	11.6		40,593		31,728
Deferred tax liability	11.3		19,821		19,854
Defined benefit plans			10,060		4,908
Borrowings	12.5		451,083		237,437
Trade and other payables	12.6		13,231		3,757
Total non-current liabilities			588,982		323,746
CURRENT LIABILITIES
Provisions	11.5		1,205		779
Income tax liability	11.6		12,392		927
Tax liabilities			11,762		4,966
Defined benefit plans			915		1,021
Salaries and social security payable			9,433		5,627
Derivative financial instruments			2		318
Borrowings	12.5		123,132		48,329
Trade and other payables	12.6		99,209		49,731
Total current liabilities			258,050		111,698
Total liabilities			847,032		435,444
Total liabilities and equity			1,813,187		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 nine-month period ended September 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		(2,251)		-		-		-		-		-		(2,251)		-		(2,251)
Dividens ditribution			-		-		-		-		-		-		-		-		-		-		-		(25)		(25)
Profit for the nine-month period	-		-		-		-		-		-		-		-		-		-		42,448		42,448		314		42,762
Other comprehensive income for the nine-month period	-		-		-		-		-		-		2,048		43,125		-		42,108		11,755		99,036		320		99,356
Balance as of September 30, 2022	1,380		7,231		19,950		4		21		(2,280)		6,766		142,399		(550)		93,540		54,203		322,664		1,218		323,882
Stock compensation plans	-		-		-		-		-		-		-		-		102		-		-		102		-		102
Profit (Loss) for the complementary three-month period	-		-		-		-		-		-		-		-		-		-		22,411		22,411		(273)		22,138
Other comprehensive income for the complementary three-month period	-		-		-		-		-		-		1,371		28,844		-		20,180		7,891		58,286		212		58,498
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 nine-month period ended September 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	-		-		-		-		-		-		-		-		500		-		-		500		-		500
Dividens ditribution	-		-		-		-		-		-		-		-		-		-		-		-		(103)		(103)
Profit for the nine-month period	-		-		-		-		-		-		-		-		-		-		119,708		119,708		252		119,960
Other comprehensive income for the nine-month period	-		-		-		-		-		-		7,920		247,173		-		142,781		42,212		440,086		1,092		441,178
Balance as of September 30, 2023	1,360		7,126		19,950		4		21		(211)		16,041		500,993		52		256,501		161,920		963,757		2,398		966,155

 

 

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 nine-month period ended September 30, 2023, presented in comparative format.

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

 

	Note		09.30.2023		09.30.2022
Cash flows from operating activities:
Profit for the period			119,960		42,762
Adjustments to reconcile net profit to cash flows from operating activities:	14.1		48,203		30,750
Changes in operating assets and liabilities	14.2		(41,515)		(22,788)
Net cash generated by operating activities			126,648		50,724
Cash flows from investing activities
Payment for property, plant and equipment acquisitions			(128,619)		(38,018)
Payment for intangibles assets			-		(3,312)
Collections for sales (Payment for) public securities and shares acquisitions, net			(2,420)		(16,874)
Recovery of mutual funds, net			4,682		1,777
Payment for the acquisition of associates			-		(2,398)
Collection for equity interests in companies sales			12,655		4,804
Collections for property, plant and equipment sales			77		55
Collections for intangible assets sales			1,626		2,377
Dividends received			2		1,730
(Payment) Collection of loans			(1,448)		1,172
Net cash used in investing activities			(113,445)		(48,687)
Cash flows from financing activities
Proceeds from borrowings	12.5		98,835		33,211
Payment of  borrowings	12.5		(30,438)		(17,453)
Payment of  borrowings interests	12.5		(51,886)		(12,642)
Payment for treasury shares acquisition			-		(2,251)
Repurchase of corporate bonds	12.5		(1,335)		(3,449)
Payments of leases			(311)		(340)
Payments of dividends			(139)		(30)
Net cash generated by (used in) financing activities			14,726		(2,954)
Increase (Decrease) in cash and cash equivalents			27,929		(917)
Cash and cash equivalents at the beginning of the year	12.4		18,757		11,283
Exchange and conversion difference generated by cash and cash equivalents			17,431		3,893
Increase (Decrease) in cash and cash equivalents			27,929		(917)
Cash and cash equivalents at the end of the period	12.4		64,117		14,259

 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM

FINANCIAL STATEMENTS

For the nine-month period ended September 30, 2023, presented in comparative format.

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

 

 

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 5,332 MW installed capacity as of September 30, 2023, which represents approximately 12% 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 10.8 million m3/day of natural gas and 5.0 thousand boe/day of oil in Argentina, during the nine-month period ended September 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 95% 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 22,171 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 partially 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 CTGEBA 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.

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.

NOTE 2: (Continuation)

2.1.2.4 "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.

 

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; and

(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.

On September 26, 2023, 66 projects were submitted for a total 7,112 MW power capacity. Pampa submitted a tender for the execution of CTGEBA II, with a 300 MW power capacity. It also tendered, through CTB, an 11 MW combined cycle expansion.

As of the issuance of these consolidated condensed interim financial statements, the projects are pending award.

2.1.3 Remuneration for sales to the spot market

Pursuant to SE Resolution No. 750/23, spot remuneration values for energy generation were updated, providing for a 23% increase over spot values approved by SE Resolution No. 826/22 as from the September 2023 economic transaction.

2.2

Oil and Gas

2.2.1 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.

NOTE 2: (Continuation)

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.

Moreover, the following export quotas for the period between October 2023 and April 2024 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.

Besides, the SE set an export quota of a total of 5.9 million m3/d for the winter period (May-September 2024) and a total of 9 million m3/d for the summer period (October-December 2024). In line with its participation in Plan GasAr, the Company was assigned a volume of 610,989 m3/d for the winter period and 606,529 m3/d for the summer period.

2.2.2 President Néstor Kirchner Gas Pipeline

In July 2023, cleaning and filling operations were conducted in the new Tratayén – Salliqueló tranche of President Néstor Kirchner gas pipeline, and transportation operations pursuant to regulatory requirements and standards started as from August 3, 2023.

President Néstor Kirchner Gas Pipeline’s Tratayén – Salliqueló tranche, crosses 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.

Furthermore, on August 25, 2023, a call for tenders was launched for the Northern gas pipeline reversion project, complementary works to President Néstor Kirchner gas pipeline consisting of the engineering and construction of the 122-km Tio Pujio – La Carlota gas pipeline, the 62-km expansion of the Northern gas pipeline and the reversion of four compression plants in the provinces of Córdoba, Santiago del Estero and Salta. As of the issuance of these consolidated condensed interim financial statements, this project has not yet been awarded.

2.2.3 Plan GasAr’s Round 5.2 – Aguaragüe Joint Operation

Pampa, jointly with all partners of the Aguaragüe Joint Operation, participated in Round 5.2 of Plan GasAr, called under SE Resolution No. 770/22, and was awarded this project. The companies making up the Joint Operation appended a single incremental activity plan with an expected natural gas production incremental volume for the Joint Operation exceeding 400,000 m3/d as from the last quarter of 2023. The Company holds a 15% stake in this Joint Operation.

On September 27, 2023, gas volumes under Plan GasAr - Round 5.2 were awarded pursuant to SE Resolution No. 799/23. The scheme provides for the sale of incremental volumes to ENARSA for the October 1, 2023-December 31, 2028 period. The agreed sales price amounts to US$ 9.8 /MMBTU between October 2023 and December 2026, and US$ 6 /MMBTU between January 2027 and December 2028.

NOTE 2: (Continuation)

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.

 

License extension request

 

On September 8, 2023, TGS submitted a request to ENARGAS to initiate a license term extension proceeding, as contemplated in Act No. 24,076, and requested the adoption of the existing performance assessment and public hearing measures so that, once all established administrative formalities and proceedings are met, a 10-year extension may be granted as from the initial term, effective on December 28, 2027, for the provision of the gas transportation service contemplating all the scopes of the license approved by Executive Order No. 2,458/92.

As of the date of issuance of these Consolidated Condensed Interim Financial Statements, TGS has not received a formal response from ENARGAS regarding this request.

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 (“RTI”) 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, and provided for the ENRE´s notification of the schedule and information requirements during the months of September and October 2023. In this sense, under a note dated October 26, 2023, the ENRE filed a first request for information, mainly associated with a description of the facilities making up the transportation system, expansions under execution, investment plans and corridors’ saturation status.

 

NOTE 2: (Continuation)

 

On October 27, 2023, Transener and Transba answered that they would comply with such request in due time and manner, but that it would be necessary for the ENRE to define: i) the complete RTI process schedule, ii) the economic, financial and regulatory criteria under which such process will be conducted; and iii) issues regarding the first management period.

 

On September 8, 2023, aiming to preserve the purchasing power of the revenues established in ENRE Resolutions No. 147/22 and 148/22, the ENRE issued Resolutions No. 660/23 and 661/23 setting the hourly remuneration values effective from August 1, 2023, which represent 20.9% and 20.84% increases over the January 2023 values for Transener and Transba, respectively. Likewise, pursuant to ENRE Resolutions No. 780/23 and 781/23, on November 1, 2023, hourly remuneration values effective from November 1, 2023 were established, which represented a 37.33% and 38.44% increase over the values effective from August 2023 for Transener and Transba, respectively.

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). Finally, on September 7, 2023, the BCRA established that the contemplated affidavits refer to transactions with covered securities settled directly or indirectly or on behalf and to the order of third parties.

NOTE 2: (Continuation)

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

2.6

Tax regulations – Main tax reforms

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

Executive Order No. 377/23, dated July 24, 2023, extends the application of the PAIS tax to the acquisition of services abroad and import transactions for certain goods, exempting goods associated with the energy sector pursuant to SE regulations. Moreover, its regulation under AFIP Resolution No. 5,393/23, dated July 25, 2023, provided for an advance payment offsettable 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 intended use. 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 collection and settlement agent.

 

PAIS tax exemption for import transactions

SE Resolutions No. 671/23, 714/23 and 824/23 regulated the PAIS tax exemption for import transactions of goods associated with the energy sector.

Thus, the following import transactions are exempted from this tax:

i)

liquid fuels, natural gas and electricity;

ii)

goods destined for the construction and start-up of President Néstor Kirchner Gas Pipeline, the reversion of the Northern Gas Pipeline and related works, and the works making up the Gas Pipeline Network Program;

iii)

goods destined for power generation works with or without foreign financing for the payment of imports;

iv)

goods for works and maintenance of renewable energy generation projects comprised in exhibits to the regulatory resolutions, including PEPE II through IV and PEPE VI wind farms;

v)

goods for works and maintenance of thermal and hydropower plants included in the lists attached to the regulatory resolutions, including the Company assets.

NOTE 3: BASIS OF PREPARATION

These Consolidated Condensed Interim Financial Statements for the nine-month period ended September 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 November 8, 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 nine-month period ended September 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 nine-month period ended September 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 nine and three-month periods ended September 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

Acquisition of an additional interest in Rincón de Aranda and divestment of interest 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 assigned, on the transaction’s closing date, 100% of its equity interest 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)

Upon meeting the conditions precedent, including, but not limited to, the assignment’s approval and the granting of a CENCH over the block in favor of the Company, the transaction was closed on August 16, 2023.

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.

On the closing date, the Company recorded profits for $ 2,485 million (or US$ 6.6 million) to reflect the fair value of the previous 55% interest held in the Rincón de Aranda block, as well as profits for $ 85 million (or US$ 0.2 million) to reflect the result of the assets swap.

 

The following table details the value of the transferred consideration and the fair value of assets acquired and liabilities assumed as of August 16, 2023:

 

	US$		$
Assignment of Greenwind's interest net of assumed liabilities (a)	(54.0)		(18,861)
Fair value of Rincón de Aranda's previous interest	(31.6)		(11,060)
Total	(85.6)		(29,921)
Property, plant and equipment (b)	57.0		19,911
Inventories (c)	0.9		315
Tax credits (d)	1.0		350
Cash and cash equivalents (e)	29.2		10,231
Deferred tax liability	(2.3)		(801)
Fair value	85.8		30,006
Profit	0.2		85

 

^(a) The following table details the Greenwind’s interest book value:

NOTE 5: (Continuation)

 

	US$		$
Property, plant and equipment	121.1		42,380
Intangible assets	29.5		10,337
Financial assets at fair value through profit and loss	10.9		3,815
Trade and other receivables	10.1		3,535
Cash and cash equivalents	16.7		5,841
Borrowings	(79.7)		(27,901)
Deferred tax liability	(48.3)		(16,905)
Income tax liability	(3.6)		(1,299)
Trade and other payables	(1.1)		(382)
Provisions	(0.8)		(280)
Tax charges	(0.8)		(280)
Assignment of Greenwind's interest net of assumed liabilities	54.0		18,861
Provisions assumed by Pampa	(4.2)		(1,431)
Book value of Greenwind´s interest	49.8		17,430

The provisions for contingencies assumed by Pampa correspond to the additional income tax which should have been assessed in Greenwind for the fiscal year 2022 without considering the tax loss carryforward update, regarding the contractual indemnity granted to Total Austral S.A. (Argentine Branch).

^(b) The well’s fair value was assessed using the “cost-based approach”, which consists of its replacement value as adjusted by its loss of value resulting from physical impairment and functional and economic obsolescence. The fair value of the mining property was assessed using the “income-based approach”, considering the development plan contemplated within the concession contract’s term.

^(c) The fair value of spare parts was assessed using the “cost-based approach”, which consists of the replacement value of each item as adjusted by its loss of value resulting from physical impairment and functional and economic obsolescence.

^(d) The contractual value of tax credits does not differ from its fair value.

^(e) Corresponding to the price adjustment paid by Total Austral S.A. (Argentine branch).

NOTE 5: (Continuation)

5.1.2

Subsidiaries information

 

						09.30.2023		12.31.2022
Company		Country		Main activity		Direct and indirect participation %		Direct and indirect participation %
Autotrol Renovable S.A.		Argentina		Generation		100.00%		100.00%
GASA		Argentina		Generation		100.00%		100.00%
Enecor S.A.		Argentina		Electricity transportation		70.00%		70.00%
Fideicomiso CIESA		Argentina		Investment		100.00%		100.00%
Greenwind (1)		Argentina		Generation		-		100.00%
HIDISA		Argentina		Generation		61.00%		61.00%
HINISA		Argentina		Generation		52.04%		52.04%
CISA		Argentina		Trader & investment		100.00%		100.00%
PEB		Bolivia		Investment		100.00%		100.00%
PB18		Ecuador		Oil		100.00%		100.00%
Energía Operaciones ENOPSA S.A.		Ecuador		Oil		100.00%		100.00%
Pampa Ecuador Inc		Nevis		Investment		100.00%		100.00%
PECSA		Chile		Trader		100.00%		-
PE Energía Ecuador LTD		Grand Cayman		Investment		100.00%		100.00%
PESOSA		Argentina		Trader		100.00%		-
EISA		Uruguay		Investment		100.00%		100.00%
PISA		Uruguay		Investment		100.00%		100.00%
TGU		Uruguay		Gas transportation		51.00%		51.00%
Petrolera San Carlos S.A.		Venezuela		Oil		100.00%		100.00%
VAR		Argentina		Generation		100.00%		100.00%
Vientos Solutions Argentina S.A.U.		Argentina		Advisory services		100.00%		100.00%
Vientos Solutions S.L.U.		Spain		Investment		-		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:

 

				Information about the issuer
		Main activity		Date		Share capital		Profit (Loss) of the period		Equity		Direct and indirect participation %
Associates
OCP Ltd		Investment		09.30.2023		35,153		479		34,433		30.06%
TGS (1)		Gas transportation		09.30.2023		753		30,706		573,574		2.361%
Joint ventures
CIESA (1)		Investment		09.30.2023		639		15,610		292,651		50.00%
Citelec (2)		Investment		09.30.2023		556		6,536		91,049		50.00%
CTB		Generation		09.30.2023		8,558		5,017		193,710		50.00%

 

⁽¹⁾ The Company holds a direct and indirect interest of 2.361% 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 September 30, 2023, the quotation of TGS's ordinary shares and ADR published on the Buenos Aires Stock Exchange and the NYSE was $ 1,674.65 and US$ 10.18, respectively, granting to Pampa (direct and indirect) ownership an approximate stake market value of $ 370,689 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 September 30, 2023, Transener’s common share price listed at the Buenos Aires Stock Exchange was $ 443.50, conferring Pampa’s indirect interest an approximate $ 51,916 million market value.

NOTE 5: (Continuation)

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

 

		09.30.2023		12.31.2022
Disclosed in non-current assets
Associates
OCP		5,506		2,679
TGS		13,797		11,805
Other		8		3
Total associates		19,311		14,487
Joint ventures
CIESA		163,769		77,043
Citelec		45,524		20,801
CTB		96,854		47,502
Total joint ventures		306,147		145,346
Total associates and joint ventures		325,458		159,833

 

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

 

		09.30.2023		09.30.2022
Associates
Refinor		-		(1,328)
OCP		143		(270)
TGS		870		864
Total associates		1,013		(734)
Joint ventures
CIESA		7,255		5,609
Citelec		3,268		570
CTB		2,508		4,939
Greenwind		-		3,226
Total joint ventures		13,031		14,344
Total associates and joint ventures		14,044		13,610

 

NOTE 5: (Continuation)

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

		09.30.2023		09.30.2022
At the beginning of the year		159,833		79,114
Dividends		-		(854)
Acquisition of equity interests		-		62
Sale of equity interests		(7,807)		-
Decrease due to obtained control		-		(2,740)
Held for sale assets		-		(1,816)
Share of profit		14,044		14,852
Impairment		-		(1,242)
Exchange differences on translation		159,388		46,868
At the end of the period		325,458		134,244

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 and YPF) 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 Operation 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 Operation 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.

On August 14, 2023, Provincial Executive Order No. 543/23 was published in Salta’s Official Gazette, ratifying the extension of the concession pursuant to the above-mentioned agreement.

NOTE 5: (Continuation)

The Company has a 15% interest in the block.

Acquisition of additional interest and grant of CENCH at 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, on the transaction’s closing date, the Company assigned 100% of its equity interest in Greenwind, which only asset is the Mario Cebreiro Wind Farm (see Note 5.1.1).

On July 26, 2023, the Company entered into a Memorandum of Understanding with the Province of Neuquén agreeing on the CENCH granting terms. Later, pursuant to Executive Order No. 1,435/23, the Province of Neuquén approved the above-mentioned Memorandum of Understanding and the assignment of Total Austral S.A. (Argentine branch)’s interest to the Company, and granted the CENCH in favor of the Company. The assignment of rights over the block and the CENCH are effective as from August 16, 2023, the transaction’s closing date.

The Company had a 55% interest in the block; therefore, after the closing of the transaction, it reached a 100% interest in Rincón de Aranda.

The Company plans to start a pilot program involving the completion of 1 previously drilled well, as well as the drilling and completion of 2 pads consisting of 8 wells, and the construction and adaptation of the surface facilities, with an estimated US$161 million investment.

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.

NOTE 6: (Continuation)

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 (until divestment 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, PECSA y PESOSA.

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 nine-month period ended September 30, 2023		Generation		Oil and gas		Petrochemicals		Holding and others		Eliminations		Consolidated		Consolidated
Revenue - local market		507		326		273		11		-		1,117		285,892
Revenue - foreign market		-		137		116		-		-		253		61,065
Intersegment revenue		-		85		-		-		(85)		-		-
Cost of sales		(275)		(319)		(341)		-		85		(850)		(209,953)
Gross profit		232		229		48		11		-		520		137,004
Selling expenses		(1)		(38)		(12)		-		-		(51)		(13,333)
Administrative expenses		(38)		(56)		(5)		(34)		-		(133)		(33,554)
Exploration expenses		-		(7)		-		-		-		(7)		(1,772)
Other operating income		50		64		-		1		-		115		31,627
Other operating expenses		(24)		(26)		(2)		(16)		-		(68)		(18,079)
(Impairment) Impairment recovery of intangible assets and inventories		-		-		(3)		2		-		(1)		(324)
Impairment of financial assets		-		-		-		(4)		-		(4)		(1,490)
Share of profit from associates and joint ventures		9		-		-		33		-		42		14,044
Profit from sale of companies´ interest		-		-		-		1		-		1		486
Operating income		228		166		26		(6)		-		414		114,609
Financial income		2		2		-		5		(5)		4		1,090
Financial costs		(92)		(157)		(2)		(37)		5		(283)		(71,096)
Other financial results		221		7		7		157		-		392		95,794
Financial results, net		131		(148)		5		125		-		113		25,788
Profit before income tax		359		18		31		119		-		527		140,397
Income tax		(48)		(2)		(5)		(14)		-		(69)		(20,437)
Profit of the period		311		16		26		105		-		458		119,960
Depreciation and amortization		74		125		4		-		-		203		51,111

 

NOTE 7: (Continuation)

 

		in million of US$												in million of $
Consolidated profit and loss information for the nine-month period ended September 30, 2023		Generation		Oil and gas		Petrochemicals		Holding and others		Eliminations		Consolidated		Consolidated
Total profit of the year attributable to:
Owners of the company		310		16		26		105		-		457		119,708
Non-controlling interest		1		-		-		-		-		1		252
Consolidated financial position information as of September 30, 2023
Assets		2,771		1,524		158		876		(148)		5,181		1,813,187
Liabilities		858		1,353		146		211		(148)		2,420		847,032
Net book values of property, plant and equipment		1,301		1,058		25		34		-		2,418		846,115
Additional consolidated information as of September 30, 2023
Increases in property, plant and equipment and right-of-use assets		192		385		4		3		-		584		151,294

 

NOTE 7: (Continuation)

 

		in million of US$												in million of $
Consolidated profit and loss information for the nine-month period ended September 30, 2022		Generation		Oil and gas		Petrochemicals		Holding and others		Eliminations		Consolidated		Consolidated
Revenue - local market		500		290		308		16		-		1,114		136,862
Revenue - foreign market		-		112		155		-		-		267		31,886
Intersegment revenue		-		89		-		-		(89)		-		-
Cost of sales		(278)		(264)		(405)		-		88		(859)		(104,023)
Gross profit		222		227		58		16		(1)		522		64,725
Selling expenses		(2)		(33)		(12)		-		-		(47)		(5,719)
Administrative expenses		(29)		(44)		(4)		(24)		-		(101)		(12,389)
Exploration expenses		-		-		-		-		-		-		(23)
Other operating income		18		55		-		6		-		79		10,345
Other operating expenses		(3)		(22)		(2)		(6)		-		(33)		(4,209)
Impairment of property, plant and equipment, intangible assets and inventories		-		(29)		-		(5)		-		(34)		(4,260)
Impairment of financial assets		-		(1)		-		(4)		-		(5)		(672)
Share of profit from associates and joint ventures		67		-		-		33		-		100		13,610
Operating income		273		153		40		16		(1)		481		61,408
Financial income		1		2		-		8		(5)		6		597
Financial costs		(47)		(83)		(2)		(21)		5		(148)		(18,127)
Other financial results		(11)		(19)		5		58		-		33		4,108
Financial results, net		(57)		(100)		3		45		-		(109)		(13,422)
Profit before income tax		216		53		43		61		(1)		372		47,986
Income tax		(15)		-		(5)		(6)		-		(26)		(5,224)
Profit (Loss) of the period		201		53		38		55		(1)		346		42,762
Depreciation and amortization		61		95		4		-		-		160		19,204

 

NOTE 7: (Continuation)

 

		in million of US$												in million of $
Consolidated profit and loss information for the nine-month period ended September 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		198		53		38		55		(1)		343		42,448
Non-controlling interest		3		-		-		-		-		3		314
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 September 30, 2022
Increases in property, plant and equipment, intangibles assets and right-of-use assets		99		209		5		33		-		346		42,409

 

NOTE 8: REVENUE

 

		09.30.2023		09.30.2022
Energy sales in spot market		37,961		19,239
Energy sales by supply contracts		71,078		31,831
Fuel supply		17,409		9,368
Other sales		395		399
Generation sales subtotal		126,843		60,837
Gas sales		95,137		36,049
Oil sales		23,179		12,309
Other sales		1,858		919
Oil and gas sales subtotal		120,174		49,277
Products from catalytic reforming sales		43,089		24,357
Styrene sales		14,451		8,990
Synthetic rubber sales		14,705		10,232
Polystyrene sales		24,512		12,866
Other sales		428		267
Petrochemicals sales subtotal		97,185		56,712
Technical assistance and administration services sales		2,658		1,884
Other sales		97		38
Holding and others subtotal		2,755		1,922
Total revenue		346,957		168,748

 

NOTE 9: COST OF SALES

 

		09.30.2023		09.30.2022
Inventories at the beginning of the year		30,724		15,888
Plus: Charges of the period
Purchases of inventories, energy and gas		84,858		47,236
Salaries and social security charges		16,006		7,253
Employees benefits		3,156		1,324
Defined benefit plans		1,723		480
Works contracts, fees and compensation for services		21,271		8,495
Property, plant and equipment depreciation		48,697		18,261
Intangible assets amortization		950		88
Right-of-use assets amortization		140		350
Energy transportation		1,925		799
Transportation and freights		4,198		1,512
Consumption of materials		3,997		2,520
Penalties		411		102
Maintenance		8,236		5,694
Canons and royalties		19,727		8,421
Environmental control		841		412
Rental and insurance		4,410		2,494
Surveillance and security		905		348
Taxes, rates and contributions		1,315		451
Other		582		257
Total charges of the period		223,348		106,497
Exchange differences on translation		29,823		6,440
Less: Inventories at the end of the period		(73,942)		(24,802)
Total cost of sales		209,953		104,023

 

NOTE 10: OTHER ITEMS OF THE STATEMENT OF COMPREHENSIVE INCOME

10.1 Selling expenses

 

			09.30.2023		09.30.2022
Salaries and social security charges			934		404
Employees benefits			104		43
Fees and compensation for services			748		375
Property, plant and equipment depreciation			5		3
Taxes, rates and contributions			2,871		1,308
Transportation and freights			8,506		3,469
Other			165		117
Total selling expenses			13,333		5,719

10.2 Administrative expenses

 

			09.30.2023		09.30.2022
Salaries and social security charges			10,848		4,493
Employees benefits			1,797		666
Defined benefit plans			3,739		839
Fees and compensation for services			5,606		2,742
Compensation agreements			6,545		1,578
Directors' and Sindycs' fees			1,325		567
Property, plant and equipment depreciation			1,319		502
Consumption of materials			46		30
Maintenance			505		184
Transport and per diem			502		134
Rental and insurance			124		47
Surveillance and security			163		82
Taxes, rates and contributions			350		197
Communications			181		139
Other			504		189
Total administrative expenses			33,554		12,389

 

10.3 Exploration expenses

 

			09.30.2023		09.30.2022
Geological and geophysical expenses			70		23
Derecognition of unproductive wells			1,702		-
Total exploration expenses			1,772		23

 

NOTE 10: (Continuation)

10.4 Other operating income and expenses

 

	Note		09.30.2023		09.30.2022
Other operating income
Insurance recovery			415		55
Services provided to third parties			165		107
Results for property, plant and equipment sale and derecognition			187		137
Result from intangible assets sale			-		252
Contingencies recovery			107		12
Tax charges recovery			51		23
Dividends received			2		-
Commercial interests			12,009		2,653
Contractual indemnity			1,360		-
Argentine Natural Gas Production Promotion Plan			14,059		6,794
Fair value of consortiums' previous interest	5.1.1		2,485		-
Other			787		312
Total other operating income			31,627		10,345
Other operating expenses
Provision for contingencies			(1,012)		(205)
Provision for environmental remediation			(793)		-
Results for property, plant and equipment sale and derecognition			(19)		-
Tax credits´ impairment			(8)		(12)
Tax on bank transactions			(3,120)		(1,234)
PAIS import tax			(973)		-
Donations and contributions			(497)		(221)
Institutional promotion			(1,023)		(335)
Costs of concessions agreements completion			(1,396)		-
Contractual penalty			(1,360)		-
Readjustment of investment plan			-		(1,011)
Royalties of Argentine Natural Gas Production Promotion Plan			(1,977)		(982)
Ecuador's transactional agreement			(1,510)		-
Impairment of other receivables			(1,613)		-
Other contractual expenses			(1,510)		-
Other			(1,268)		(209)
Total other operating expenses			(18,079)		(4,209)

 

NOTE 10: (Continuation)

10.5 Financial results

 

		09.30.2023		09.30.2022
Financial income
Financial interest		527		110
Other interest		563		487
Total financial income		1,090		597
Financial costs
Financial interests (1)		(59,227)		(14,547)
Commercial interests		(164)		(57)
Fiscal interests		(9,446)		(2,659)
Other interests		(714)		(370)
Bank and other financial expenses		(1,545)		(494)
Total financial costs		(71,096)		(18,127)
Other financial results
Foreign currency exchange difference, net		19,289		4,710
Changes in the fair value of financial instruments		78,884		1,969
Result from present value measurement		(2,347)		(1,215)
Result from exchange of corporate bonds		-		(1,941)
Result from repurchase of corporate bonds		72		672
Other financial results		(104)		(87)
Total other financial results		95,794		4,108
Total financial results, net		25,788		(13,422)

 

⁽¹⁾ Net of $ 2,892 million and $ 791 million capitalized in property, plant and equipment for the nine-month periods ended September 30, 2023 and 2022, respectively.

NOTE 10: (Continuation)

10.6 Income tax

 

The breakdown of income tax charge is:

 

			09.30.2023		09.30.2022
Current tax			13,264		25,899
Deferred tax			6,723		(18,559)
Difference between previous fiscal year income tax provision and the income tax statement			450		(2,116)
Total income tax -  Loss			20,437		5,224

 

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

 

			09.30.2023		09.30.2022
Profit before income tax			140,397		47,986
Current income tax rate			35%		35%
Income tax at the statutary tax rate			49,139		16,795
Share of profit from companies			(4,916)		(4,759)
Non-taxable results			(3,459)		(463)
Effects of exchange differences and other results associated with the valuation of the currency, net			84,410		22,455
Effects of valuation of property, plant and equipment, intangible assets and financial assets			(182,671)		(52,802)
Difference between previous fiscal year income tax provision and deferred tax and the income tax statement			775		(2,366)
Effect for tax inflation adjustment			71,033		25,215
Non-deductible cost			5,856		1,157
Other			270		(8)
Total income tax -  Loss			20,437		5,224

 

NOTE 11: NON-FINANCIAL ASSETS AND LIABILITIES

11.1

Property, plant and equipment

 

			Original values
Type of good			At the beginning		Increases (1)		Increases for incorporation		Transfers		Decreases (2)		Impairment		Traslation effect
																	At the end
Lands			2,333		-		-		-		-		-		2,275		4,608
Buildings			25,253		-		-		484		(832)		-		25,036		49,941
Equipment and machinery			339,671		179		-		36,301		(46,876)		-		354,052		683,327
Wells			175,771		3,769		-		67,982		(4,515)		-		185,110		428,117
Mining property			32,077		7,201		-		4,800		-		-		31,748		75,826
Vehicles			1,365		429		-		138		(44)		-		1,691		3,579
Furniture and fixtures and software equipment			10,635		274		-		264		(53)		-		10,585		21,705
Communication equipments			223		-		-		-		-		-		217		440
Materials, spare parts and tools			6,304		13,442		-		(14,037)		-		-		8,819		14,528
Petrochemical industrial complex			5,158		2		-		737		-		-		5,284		11,181
Civil works			557		-		-		3,896		(429)		-		5,060		9,084
Work in progress			44,316		98,904		-		(80,846)		(42)		-		43,178		105,510
Advances to suppliers			7,718		26,685		-		(19,719)		(2)		-		20,752		35,434
Other goods			78		-		-		-		-		-		75		153
Total at 09.30.2023			651,459		150,885		-		-		(52,793)		-		693,882		1,443,433
Total at 09.30.2022			311,688		39,074		17,193		-		(200)		(12,469)		142,286		497,572

 

⁽¹⁾ Includes $ 2,892 million and $791 million of financial costs capitalized in property, plant and equipment for the nine-month periods ended September 30, 2023 and 2022, respectively.

(2)

Includes decrease for assignment of Greenwind’s interest, see Note 5.1.1.

NOTE 11: (Continuation)

 

			Depreciation												Net book values
Type of good			At the beginning		Decreases (1)		For the period		Impairment		Traslation effect		At the end		At the end		At 12.31.2022
Lands			-		-		-		-		-		-		4,608		2,333
Buildings			(13,342)		89		(1,412)		-		(13,660)		(28,325)		21,616		11,911
Equipment and machinery			(113,166)		5,662		(23,639)		-		(127,402)		(258,545)		424,782		226,505
Wells			(104,372)		1,928		(21,317)		-		(107,680)		(231,441)		196,676		71,399
Mining property			(23,809)		-		(1,328)		-		(23,745)		(48,882)		26,944		8,268
Vehicles			(865)		35		(243)		-		(909)		(1,982)		1,597		500
Furniture and fixtures and software equipment			(9,137)		19		(885)		-		(9,240)		(19,243)		2,462		1,498
Communication equipments			(174)		-		(21)		-		(185)		(380)		60		49
Materials, spare parts and tools			(257)		-		(34)		-		(263)		(554)		13,974		6,047
Petrochemical industrial complex			(2,664)		-		(875)		-		(2,991)		(6,530)		4,651		2,494
Civil works			(135)		73		(265)		-		(960)		(1,287)		7,797		422
Work in progress			-		-		-		-		-		-		105,510		44,316
Advances to suppliers			-		-		-		-		-		-		35,434		7,718
Other goods			(74)		-		(2)		-		(73)		(149)		4		4
Total at 09.30.2023			(267,995)		7,806		(50,021)		-		(287,108)		(597,318)		846,115
Total at 09.30.2022			(141,298)		39		(18,766)		8,787		(64,012)		(215,250)		282,322
Total at 12.31.2022																	383,464

 

(1)

Includes decrease for assignment of Greenwind’s interest, see Note 5.1.1.

 

NOTE 11: (Continuation)

11.2 Intangible assets

 

		Original values
Type of good		At the beginning		Increase		Increases for incorporation		Decrease (1)		Impairment recovery  (Impairment)(2)		Traslation effect
														At the end
Concession agreements		444		-		-		-		-		433		877
Goodwill		6,131		-		-		-		-		5,980		12,111
Intangible identified in acquisitions of companies		17,835		-		-		(10,987)		-		17,414		24,262
Digital assets		1,172		-		-		(1,626)		411		43		-
Total at 09.30.2023		25,582		-		-		(12,613)		411		23,870		37,250
Total at 09.30.2022		4,530		3,312		4,169		(2,128)		(571)		2,639		11,951
		Amortization
Type of good		At the beginning		For the period		Decrease (1)		Traslation effect
										At the end
Concession agreements		(418)		(15)		-		(415)		(848)
Intangible identified in acquisitions of companies		(800)		(935)		650		(1,245)		(2,330)
Total at 09.30.2023		(1,218)		(950)		650		(1,660)		(3,178)
Total at 09.30.2022		(574)		(88)		-		(261)		(923)
		Net book values
Type of good		At the end		At 12.31.2022
Concession agreements		29		26
Goodwill		12,111		6,131
Intangible identified in acquisitions of companies		21,932		17,035
Digital assets		-		1,172
Total at 09.30.2023		34,072
Total at 09.30.2022		11,028
Total at 12.31.2022				24,364

 

(1)

Includes decrease for assignment of Greenwind’s interest, see Note 5.1.1.

(2)

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 September 30, 2023. As of September 30, 2022, the recoverability of the digital assets was affected by their market value at closing, resulting in the recording of impairment losses for $ 571 million (US$ 5 million).

NOTE 11: (Continuation)

11.3 Deferred tax assets and liabilities

 

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

 

		09.30.2023		12.31.2022
Tax loss carryforwards		15,342		3,294
Property, plant and equipment		50,839		26,765
Intangible assets		1		2
Trade and other receivables		630		592
Provisions		22,452		10,472
Salaries and social security payable		309		134
Defined benefit plans		2,961		1,356
Trade and other payables		174		40
Other		417		195
Deferred tax asset		93,125		42,850
Property, plant and equipment		(11,280)		(14,021)
Intangible assets		(11,890)		(6,209)
Investments in companies		(1,332)		(1,332)
Inventories		(10,368)		(3,281)
Financial assets at fair value through profit and loss		(3,410)		(2,718)
Trade and other receivables		(6,243)		(3,928)
Tax liabilities		(322)		(322)
Tax inflation adjustment		(66,485)		(24,567)
Deferred tax liability		(111,330)		(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:

 

		09.30.2023		12.31.2022
Deferred tax asset, net		1,616		6,326
Deferred tax liability, net		(19,821)		(19,854)

 

NOTE 11: (Continuation)

11.4 Inventories

 

		09.30.2023		12.31.2022
Current
Materials and spare parts		47,519		18,489
Advances to suppliers		5,096		1,458
In process and finished products		21,327		10,777
Total (1)		73,942		30,724

 

 

⁽¹⁾ It includes impairment loss as a result of the performed recoverability assessment for$ 735 million (US$ 3 million), $ 7 million (US$ 0,1 million) and $ 463 million (US$ 2 million) as of September 30, 2023 and 2022 and December 31, 2022.

 

11.5 Provisions

 

		09.30.2023		12.31.2022
Non-Current
Contingencies		40,105		19,031
Asset retirement obligation and wind turbines decommisioning		7,615		4,453
Environmental remediation		5,078		2,578
Other provisions		1,396		-
Total non-current		54,194		26,062
Current
Contingencies		-		16
Asset retirement obligation and wind turbines decommisioning		683		400
Environmental remediation		510		357
Other provisions		12		6
Total current		1,205		779

 

NOTE 11: (Continuation)

 

The evolution of provisions is shown below:

 

		09.30.2023
		Contingencies		Asset retirement obligation and wind turbines decommisioning		Environmental remediation
At the beginning of the year		19,047		4,853		2,935
Increases		2,900		573		183
Decreases		(94)		-		(157)
Exchange differences on translation		18,359		4,133		2,747
Decrease por subsidiaries sales		-		(280)		-
Reversal of unused amounts		(107)		(981)		(120)
At the end of the period		40,105		8,298		5,588
		09.30.2022
		Contingencies		Asset retirement obligation and decommisioning  of wind turbines		Environmental remediation
At the beginning of the year		10,887		2,217		1,805
Increases		421		206		41
Increases for incorporation		-		177		-
Decreases		(60)		(11)		(80)
Exchange differences on translation		4,515		1,027		750
Reversal of unused amounts		(12)		(154)		(11)
At the end of the period		15,751		3,462		2,505

 

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

 

		09.30.2023		12.31.2022
Non-current
Income tax, net of witholdings		36,743		28,568
Minimum notional income tax		3,850		3,160
Total non-current		40,593		31,728
Current
Income tax, net of witholdings and advances		12,392		927
Total current		12,392		927

 

NOTE 12: FINANCIAL ASSETS AND LIABILITIES

12.1 Financial assets at amortized cost

			09.30.2023		12.31.2022
Non-current
Term deposit			14,128		17,823
Notes receivable			-		177
Total non-current			14,128		18,000
Current
Term deposit			21,135		-
Notes receivable			3,154		1,357
Total current			24,289		1,357

 

NOTE 12: (Continuation)

12.2

Financial assets at fair value through profit and loss

 

			09.30.2023		12.31.2022
Non-current
Shares			9,615		4,867
Total non-current			9,615		4,867
Current
Government securities			170,579		36,281
Corporate bonds			30,027		33,600
Shares			44,408		28,422
Mutual funds			3,912		5,553
Total current			248,926		103,856

 

12.3

Trade and other receivables

 

	Note		09.30.2023		12.31.2022
Non-Current
Other			24		12
Trade receivables			24		12
Non-Current
Related parties	16		4,482		3,098
Advances to suppliers			1,502		-
Tax credits			353		285
Prepaid expenses			63		14
Contractual indemnity credit			1,423		-
Other			1,511		6
Other receivables			9,334		3,403
Total non-current			9,358		3,415

 

NOTE 12: (Continuation)

 

	Note		09.30.2023		12.31.2022
Current
Receivables from MAT sales			6,221		3,689
CAMMESA			46,433		29,315
Receivables from oil and gas sales			58,796		9,788
Receivables from petrochemicals sales			15,816		10,931
Related parties	16		1,247		848
Other			474		496
Impairment of financial assets			(1,352)		(1,039)
Trade receivables, net			127,635		54,028
Current
Related parties	16		3,630		1,183
Tax credits			2,464		2,555
Receivables for complementary activities			-		57
Prepaid expenses			2,715		2,525
Guarantee deposits			3,369		4,870
Expenses to be recovered			3,595		2,611
Receivables for acquisition of subsidiary			-		1,182
Receivables for sale of subsidiary and associates			1,421		719
Receivables for financial instruments sale			4		150
Argentine Natural Gas Production Promotion Plan			10,380		5,721
Receivables for arbitration award			-		6,621
Contractual indemnity credit			761		-
Other			2,099		1,144
Impairment of other receivables			(12)		(38)
Other receivables, net			30,426		29,300
Total current			158,061		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:

 

			09.30.2023		09.30.2022
At the beginning of the year			1,039		963
Impairment			297		100
Reversal of unused amounts			(151)		(50)
Exchange differences on translation			167		38
At the end of the period			1,352		1,051

 

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

 

			09.30.2023		09.30.2022
At the beginning of the year			38		12
Impairment			7		40
Reversal of unused amounts			(46)		(3)
Exchange differences on translation			13		2
At the end of the period			12		51

 

12.4

Cash and cash equivalents

 

			09.30.2023		12.31.2022
Cash			70		28
Banks			26,834		1,958
Mutual funds			37,213		16,771
Total			64,117		18,757

 

NOTE 12: (Continuation)

 

12.5

Borrowings

 

			09.30.2023		12.31.2022
Non-Current
Financial borrowings			1,930		19,088
Corporate bonds			449,153		218,349
Total non-current			451,083		237,437
Current
Bank overdrafts			36,770		10,514
Financial borrowings			20,886		8,970
Corporate bonds			65,476		28,845
Total current			123,132		48,329
Total			574,215		285,766

As of September 30, 2023, and December 31, 2022 the fair value of the Company’s CB amount approximately to $ 496,322 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 nine-month periods ended September 30, 2023 and 2022 is disclosed below.

 

			09.30.2023		09.30.2022
At the beginning of the year			285,766		147,795
Proceeds from borrowings			98,835		33,211
Payment of borrowings			(30,438)		(17,453)
Accrued interest			59,222		14,544
Payment of interests			(51,886)		(12,642)
Repurchase of corporate bonds			(1,335)		(3,449)
Result from exchange of corporate bonds			-		1,941
Result from repurchase of corporate bonds			(72)		(672)
Increases for incorporation			-		11,984
Foreign currency exchange difference			(53,105)		(5,545)
Decrease por subsidiaries sales			(27,901)		-
Borrowing costs capitalized in property, plant and equipment			2,892		791
Exchange differences on translation			292,237		67,016
At the end of the period			574,215		237,521

 

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.

 

NOTE 12: (Continuation)

 

On July 18, 2023, Pampa repaid at maturity the full outstanding amount of Class 8 CB (first Green Bond) for $2,283 million.

 

On September 8, 2023, the Company issued Class 18 CB for US$ 72.1 million, accruing interest at a fixed 5% rate and maturing on September 8, 2025.

 

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 September 30, 2023, the Company took out short-term bank loans with local financial entities for $ 2,000 million and import financing for CNY 12 million. Additionally, Pampa canceled import financing, net, for US$ 3.1 million. Post-closing, the Company took out import financing for US$ 9 million and CNY 25.5 million. Additionally, the Company took out pre-export financing, net, in the amount of US$ 19.0 million.

 

12.5.4 FINNVERA Credit Facility

 

Due to the discontinuity of the Libor benchmark interest rate as from July 2023, on September 5, 2023 Pampa and CACIB (Credit Agricole Corporate & Investment Bank) executed an amendment to the credit facility replacing the Libor rate with Term SOFR, which will be the new variable rate for debt services after November 2023. In this same line, the interest rate hedge agreement associated with the credit facility was also amended.

 

NOTE 12: (Continuation)

12.6

Trade and other payables

 

	Note		09.30.2023		12.31.2022
Non-Current
Customer guarantees			8		4
Trade payables			8		4
Compensation agreements			7,958		1,769
Finance leases liability			3,617		1,789
Contractual penalty debt			1,423		-
Other			225		195
Other payables			13,223		3,753
Total non-current			13,231		3,757
Current
Suppliers			81,000		35,109
Customer advances			1,777		644
Related parties	16		7,965		2,506
Trade payables			90,742		38,259
Compensation agreements			3,057		2,085
Liability for acquisition of companies			4,022		8,144
Finance leases liability			685		319
Investment plan readjustment liability			-		807
Contractual penalty debt			571
Other			132		117
Other payables			8,467		11,472
Total current			99,209		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 September 30, 2023 and December 31, 2022:

 

As of September 30, 2023		Level 1		Level 2		Level 3		Total
Assets
Financial assets at fair value through profit and losss
Government securities		170,579		-		-		170,579
Corporate bonds		30,027		-		-		30,027
Mutual funds		3,912		-		-		3,912
Shares		44,408		-		9,615		54,023
Cash and cash equivalents
Mutual funds		37,213		-		-		37,213
Derivative financial instruments		-		289		-		289
Other receivables
Guarantee deposits on derivative financial instruments		1,727		-		-		1,727
Total assets		287,866		289		9,615		297,770
Liabilities
Derivative financial instruments		-		2		-		2
Total liabilities		-		2		-		2
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 September 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:

 

		09.30.2023
		Share capital		Share capital adjustment
At the beginning of the year		5,117		26,760
Variation of the period		6,169		32,280
At the end of the period		11,286		59,040
		12.31.2022
		Share capital		Share capital adjustment
At the beginning of the year		2,392		12,503
Variation of the year		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 September 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.

 

		09.30.2023		09.30.2022
Earning for continuing operations attributable to equity holders of the Company		119,708		42,448
Weighted average amount of outstanding shares		1,368		1,381
Basic and diluted earnings per share		87.51		30.74

 

NOTE 14: STATEMENT OF CASH FLOWS’ COMPLEMENTARY INFORMATION

14.1

Adjustments to reconcilie net profit to cash flows from operating activities

 

 

	Note		09.30.2023		09.30.2022
Income tax	10.6		20,437		5,224
Accrued interest			56,745		14,392
Depreciations and amortizations	9, 10.1 and 10.2		51,111		19,204
Share of profit of joint ventures and associates	5.1.3		(14,044)		(13,610)
Profit from sale of companies´ interest			(486)
Results for property, plant and equipment sale and derecognition	10.4		(168)		(137)
Result for intangible assets sale	10.4		-		(252)
Impairment of property, plant and equipment, intangible assets and inventories			324		4,260
Impairment of financial assets			1,490		672
Result from measurement at present value	10.5		2,347		1,215
Changes in the fair value of financial instruments			(65,940)		(867)
Exchange differences, net			(20,750)		(4,710)
Result from repurchase of corporate bonds	10.5		(72)		(672)
Result from exchange of corporate bonds	10.5		-		1,941
Readjustment of investment plan	10.4		-		1,011
Costs of concessions agreements completion	10.4		1,396		-
Contractual indemnity	10.4		(1,360)		-
Contractual penalty	10.4		1,360		-
Recovery of tax charges	10.4		(43)		(11)
Provision for contingecies, net	-		895		193
Provision for environmental remediation	10.4		793		-
Fair value of consortiums' previous interest	10.4		(2,485)		-
Impairment of other receivables	10.4		1,613		-
Ecuador's transactional agreement	10.4		1,510		-
Earned dividends	10.4		(2)		-
Accrual of defined benefit plans	9 and 10.2		5,462		1,319
Compensation agreements	10.2		6,545		1,578
Derecognition of unproductive wells	10.3		1,702		-
Other			(177)		-
Adjustments to reconcile net profit to cash flows from operating activities			48,203		30,750

 

 

NOTE 14: (Continuation)

14.2

Changes in operating assets and liabilities

 

			09.30.2023		09.30.2022
Increase in trade receivables and other receivables			(32,535)		(23,810)
Increase in inventories			(14,130)		(2,481)
(Decrease) Increase in trade payables and other payables			(3,762)		709
Increase in salaries and social security payables			3,731		1,135
Decrease in defined benefit plans			(416)		(262)
Increase in tax liabilities			6,388		2,424
Increase (Decrease) in provisions			62		(258)
Income tax payment			(14)		(357)
(Payments) Collections for derivative financial instruments, net			(839)		112
Changes in operating assets and liabilities			(41,515)		(22,788)

 

14.3

Significant non-cash transactions

 

			09.30.2023		09.30.2022
Acquisition of property, plant and equipment through an increase in trade payables			(21,098)		(5,519)
Borrowing costs capitalized in property, plant and equipment			(2,892)		(791)
Increase of property, plant and equipment through exchange of assets			(8,684)		-
Decrease in asset retirement obligation and wind turbines decommision through property, plant and equipment			(768)		-
Increase in right-of-use assets through an increase in other liabilities			(409)		(23)

NOTE 15: CONTINGENT LIABILITIES AND ASSETS

The main changes for the nine-month period ended September 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.

 

-

In the proceeding brought by Martinez Lidia and three other plaintiffs seeking financial compensation for alleged environmental affectation damages caused by living next to the Puerto General San Martin petrochemical plant (Rosario-Santa Fe), the Court issued an order to furnish additional evidence. Consequently, the proceeding was consolidated with another proceeding filed by other neighbors of the Santa Fe Plant against the Company, which is in the evidentiary stage.

 

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 nine-month period ended September 30, 2023 regarding contingent assets disclosed in the Consolidated Financial Statements as of December 31, 2022 are detailed below:

 

NOTE 15: (Continuation)

 

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, on August 23, 2023, the Arbitration Court issued a Partial Award, court costs being payable by the defendant, declaring that High Luck has breached the above-mentioned Contract, but that this fact does not entitle the Company to exercise the reversal option stipulated therein. A new arbitration stage is currently underway pursuant to the schedule established by the Arbitration Court.

 

NOTA 16: RELATED PARTIES´ BALANCES AND TRANSACTIONS

16.1 Balances with related parties

 

As of September 30, 2023		Trade receivables		Other receivables				Trade  payables
		Current		Non Current		Current		Current
Associates and joint ventures
CTB		64		-		-		-
TGS		1,129		4,482		2,218		3,137
Transener		10		-		41		7
Other related parties
SACDE		44		-		1,174		4,802
Other		-		-		197		19
		1,247		4,482		3,630		7,965
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 nine-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		409		167		-		-		-		-		-		-
Greenwind		-		47		-		-		-		-		-		-
Refinor		-		1,212		-		(991)		-		-		-		-
TGS		8,460		4,762		(9,865)		(4,911)		-		-		-		-
Transener		-		-		(27)		(37)		-		-		76		15
Other related parties
Fundación		-		-		-		-		-		-		(414)	-	(186)
SACDE		-		-		(13,993)		(8,282)		-		-		54		12
Salaverri, Dellatorre, Burgio & Wetzler		-		-		-		-		(298)	-	(69)		-		-
Other		-		-		(35)		(3)		-	-	-		-		-
		8,869		6,188		(23,920)		(14,224)		(298)		(69)		(284)		(159)

 

(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 $ 9.927 million and $ 6.020 million and infrastructure works contracted to SACDE charged in property, plant and equipment por $ 13.993 million y $ 8.201 million, of which $ 3.310 million and $ 1.649 million, correspond to fees and general expenses calculated on the costs incurred by SACDE and/or Pampa to carry the works out for the nine-month periods ended September 30, 2023 and 2022, respectively.

(3)

Disclosed within administrative expenses.

(4)

Corresponds mainly to donations expenses and operating leases income.

 

 

Operations for the nine-month period		Financial income (1)				Financial expenses (2)				Dividends received				Distributed dividends
		2023		2022		2023		2022		2023		2022		2023		2022
Associates and joint ventures
OCP		-		-		-		-		-		854		-		-
TGS		308		193		-		-		-		-		-		-
Transener		1		-		-		-		-		-		-		-
Other related parties
EMESA		-		-		-		-		-		-		(139)		(25)
TJSM		-		-		-		-		2		-		-		-
Diversos		-		-		(13)		(9)		-		-		-		-
		309		193		(13)		(9)		2		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 09.30.2023		Total 12.31.2022
ASSETS
NON-CURRENT ASSETS
Financial assets at amortized cost	US$		40.4		349.95		14,128		18,000
Other receivables	US$		25.5		349.95		8,911		3,099
Total non-current assets							23,039		21,099
CURRENT ASSETS
Financial assets at fair value through profit and loss	US$		394.4		349.95		138,020		83,477
	U$		-		-		-		1
Financial assets at amortized cost	US$		69.4		349.95		24,289		1,357
Derivative financial instruments	US$		0.8		349.95		285		149
Trade and other receivables	US$		165.2		349.95		57,797		38,960
	CLP		422.8		0.39		165		-
Cash and cash equivalents	US$		108.0		349.95		37,804		13,602
	CLP		1.6		0.39		1		-
	EUR		-		-		-		1
Total current assets							258,361		137,547
Total assets							281,400		158,646
LIABILITIES
NON-CURRENT LIABILITIES
Provisions	US$		138.9		349.95		48,607		25,492
Borrowings	US$		1,287.3		349.95		450,503		215,786
	CNY		12.1		47.95		580		-
Other payables	US$		37.2		349.95		13,010		3,572
Total non-current liabilities							512,700		244,850
CURRENT LIABILITIES
Provisions	US$		3.4		349.95		1,193		741
Tax liabilities	US$		0.01		349.95		4		6
	CLP		3.20		0.39		1		-
Salaries and social security payable	US$		0.03		349.95		10		16
Derivative financial instruments	US$		-		349.95		-		318
Borrowings	US$		77.0		349.95		26,953		31,180
Trade and other payables	US$		187.6		349.95		65,653		35,461
	EUR		3.5		370.10		1,294		548
	CNY		0.5		47.95		24		-
	SEK		4.8		32.04		155		-
	U$		0.08		9.08		1		-
Total current liabilities							95,288		68,270
Total liabilities							607,988		313,120
Net Position Liability							(326,588)		(154,474)

 

(1)

Information presented to comply with CNV Rules.

(2)

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

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 September 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$ 83 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. 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 19: (Continuation)

 

Recently, SE Resolution No. 815/23 granted an additional extension of the Alicurá, El Chocón, Arroyito and Cerros Colorados Hydroelectric Power Plants’ concessions for 100 calendar days as from the expiration of the 60-day term provided by SE Resolution No. 574/23.

 

NOTA 20: INCIDENT AT CENTRAL TÉRMICA LOMA DE LA LATA (CTLL)

 

On July 20, 2023, an incident occurred at CTLL's TG05, 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.

 

NOTE 21: 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:

-

Azara 1245 – C.A.B.A.

-

Don Pedro de Mendoza 2163 –C.A.B.A.

-

Amancio Alcorta 2482 C.A.B.A.

-

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 22: SUBSEQUENT EVENTS

 

Export Increase Program

 

On October 3, 2023, SE Resolution No. 808/23 temporarily included the products sold by the Company, among other exports, under the Export Increase Program created by PEN Executive Order No. 576/22.

 

For exports settled October 2 through 20, 2023 with an effective export date up to November 30, 2023, this program provides that at least 75% of the export values must be entered into the country in foreign currency, and the remaining 25% may be settled in pesos through the purchase of marketable securities. As of the issuance of these Consolidated Condensed Interim Financial Statements, the Company has opted into this program.

 

Additionally, on October 23, 2023, Executive Order No. 549/23 entered into effect, which allows exporters to settle at least 70% of the export’s countervalue at the official exchange rate and the remaining 30% at the marketable securities swap rate, for the collection of exports settled until November 17, 2023.

 

Remuneration for sales to the spot market

 

Pursuant to SE Resolution No. 869/23 dated October 30, 2023, spot remuneration values for energy generation were updated, providing for a 28% increase on spot values approved by SE Resolution No. 750/23 as from the November 2023 economic transaction.

 

Penalty offsetting mechanism under Renovar contract

 

SE Resolution No. 883/23 approved a mechanism for supply agreements under the Renovar programs that allows offsetting penalties with investments in new renewal power generation capacity. This possibility is contemplated for delay, deficiency and national component penalties.

 

The system provides as follows:

 

-

Project awardees requesting the offsetting will have a 36-month term (during which the collection of the imposed penalties will be suspended) to install new renewable power capacity. If the investment commitment has not been fulfilled once this term expires, an additional 10% interest will be charged on the amount of the penalties effective at the time the offsetting request was submitted and during the collection suspension term. Partial commissionings are allowed for a minimum of 60% of the total power capacity to be installed.

-

The percentage of penalties to be offset will be determined by the project’s awardee.

-

The geographical location and/or the new power capacity technology may not necessarily match those of the facility for which the penalty was imposed.

-

Reference values for new investments will be those under Renovar - Round 3 (1,400,000 US$/MW and 850,000 US$/MW in the case of wind and solar projects, respectively).

NOTE 22: (Continuation)

 

-

The project’s new power capacity may be remunerated under 3 alternatives:

1.

100% of the new generation at US$ 20/MWh for 60 months; or

2.

20% of the new generation at US$ 20/MWh for 120 months, and the remaining 80%: (i) sold in the MATER, (ii) destined for self-consumption; (iii) used to offset future penalties, or (iv) sold in the spot market; or

3.

20% of the new generation at US$ 20/MWh for 180 months; and the remaining 80%: (i) sold in the MATER, (ii) destined for self-consumption; (iii) used to offset future penalties, or (iv) sold in the spot market.

-

Jointly with the request for compensation, a waiver and/or dismissal (as applicable) to file any claim or action against the Federal Government, the SE and CAMMESA must be submitted.

-

The term for filing the offsetting request will be 20 business days as from November 1, 2023, in the case of projects with penalties as of that date, or as from the notification of the new penalties thereafter.

 

 

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