0001292814-23-004672.txt : 20231115 0001292814-23-004672.hdr.sgml : 20231115 20231115162052 ACCESSION NUMBER: 0001292814-23-004672 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20230930 FILED AS OF DATE: 20231115 DATE AS OF CHANGE: 20231115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Pampa Energy Inc. CENTRAL INDEX KEY: 0001469395 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 000000000 STATE OF INCORPORATION: C1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34429 FILM NUMBER: 231410864 BUSINESS ADDRESS: STREET 1: MAIPU 1 CITY: CITY OF BUENOS AIRES STATE: C1 ZIP: C1084ABA BUSINESS PHONE: 54-11-4809-9500 MAIL ADDRESS: STREET 1: MAIPU 1 CITY: CITY OF BUENOS AIRES STATE: C1 ZIP: C1084ABA 6-K 1 pamfs3q23_6k.htm 6-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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),

 

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

 

Argentina

(Jurisdiction of incorporation or organization)

 

Maipú 1
C1084ABA
City of Buenos Aires
Argentina

(Address of principal executive offices)

 

(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.

 

 

 EX-99.1 2 ex99-1.htm EX-99.1

 

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

 

 

 
 

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

 

 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

 
 

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

 

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

 

 

 

 

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

 

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

 
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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.
 
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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

 

 
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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.

 
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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

 

 
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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.

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

 

 

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

 
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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.

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

 

 

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.

 

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

 

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.

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 2: REGULATORY FRAMEWORK

2.1Generation
2.1.1Sales contracts with large users within the MAT
2.1.1.1Renewable 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.

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 2: (Continuation)

2.1.2Supply 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.

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

2.2Oil 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.

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 2: (Continuation)

2.3Gas 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.

2.4Transmission

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.

 

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

2.5Regulations 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.

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 2: (Continuation)

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

2.6Tax 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.
 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

5.1Interest in subsidiaries, associates and joint ventures
5.1.1Acquisition 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.

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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:

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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).

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 5: (Continuation)

5.1.2Subsidiaries 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.

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 5: (Continuation)

5.1.3Associates 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.

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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
5.1.4Investment 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.

5.1.5Investment 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.

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

5.2Oil 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.

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

 
35 

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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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)

 

 
36 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 11: NON-FINANCIAL ASSETS AND LIABILITIES

11.1Property, 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.
 
39 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

 

 
40 

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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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).
 
41 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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)

 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

 

 
44 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 12: (Continuation)

12.2Financial 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

 

12.3Trade 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

 

 
46 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

 
47 

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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

12.4Cash 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

 

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 12: (Continuation)

 

12.5Borrowings

 

      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.

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

 

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 12: (Continuation)

12.6Trade 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.

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 12: (Continuation)

12.7Fair 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

 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

13.1Share 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

 

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 13: (Continuation)

13.2Earning 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

 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 14: STATEMENT OF CASH FLOWS’ COMPLEMENTARY INFORMATION

14.1Adjustments 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

 

 

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

NOTE 14: (Continuation)

14.2Changes 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)

 

14.3Significant 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.

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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:

 

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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

 

 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.
 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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$), Euros (EUR), Yuans R. China (CNY), Chilean pesos (CLP) and Uruguayan pesos (U$).
 
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NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

 
62 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

 
63 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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).
 
64 

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

 

NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Continuation)

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

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

 

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.

 

 

 
65 

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