Argentine Oil Company YPF Reports Third-Quarter Loss

YPF Swings to Loss

Argentine national oil company YPF reported a loss in the third quarter due to lower local fuel prices and increased operating costs. The company announced on Wednesday that the result fell significantly behind analyst expectations.

Financial Performance

The net loss for the period totaled $137 million, a stark contrast to the $693 million profit in the prior-year third quarter. This figure also missed the analyst forecast for a net profit of around $175 million.

Revenue and Operating Costs

YPF disclosed that revenue fell approximately 16% to $4.5 billion during the July-to-September period, largely attributable to a drop in local fuel prices in dollars. Operating costs also grew by 11% year-on-year.

Market Impact

YPF shares closed down 1% following the announcement of the third-quarter results. This came as a blow to the state-run producer, especially with the steady uptick in production from western Argentina’s massive Vaca Muerta shale formation.

Production and Expansion Plans

Despite the loss, YPF reported a 3% increase in total oil and gas production in the third quarter, with crude output up 5.4%. The company also highlighted the upcoming full operationalization of its north Vaca Muerta pipeline, a development that is expected to kick off early next year.

Legal Dispute and Government Response

In September, a U.S. judge ruled that Argentina must pay about $16 billion to minority shareholders of YPF arising from the government’s 2012 seizure of a majority stake in the company. The government of Argentina, currently facing dire financial straits, has pledged an immediate appeal.

Conclusion

YPF’s third-quarter loss reflects the challenging landscape for oil companies amid fluctuating fuel prices and escalating operating costs. The company is also navigating legal disputes and government interventions, adding to the complexities of its financial performance.