YPF profit climbs, output increases

By PABLO GONZALEZ on 8/5/2015

BUENOS AIRES, Argentina (Bloomberg) -- YPF SA, Argentina’s state-run oil producer, posted second-quarter earnings that exceeded expectations as it increased output and sold crude at a premium to international prices.

Net income rose to 2.3 billion pesos from 1.5 billion pesos a year earlier, Buenos Aires-based YPF said in a statement Wednesday. Per-share profit of 5.86 pesos, excluding some items, beat the 5.36-peso average of five analysts’ estimates compiled by Bloomberg.

While major oil companies from Exxon Mobil Corp. to Chevron Corp. hunker down for a prolonged market rout, YPF has kept up spending as it increases crude and natural gas output. The producer that was nationalized in 2012 is benefiting from a government-set price that’s higher than Brent, the international benchmark.

While Brent crude trades close to $50/bbl after falling by more than half in a year, Argentina has set the price of Medanito light oil at $83.90 and Escalante heavy at $74 since December.

Still, the drop in oil prices is hurting the company’s earnings in those areas where it doesn’t benefit from the higher local crude price, such as aviation fuel or refined products for the petrochemical industry.

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