YPF CEO resigns as oil company readies asset sales, shale focus

By Pablo Gonzalez and Carolina Millan on 8/28/2017

BUENOS AIRES (Bloomberg) -- Ricardo Darre, CEO of YPF SA, has resigned as Argentina’s largest oil producer prepares to sell at least $1 billion in assets and focus on developing the world’s second-biggest reserve of shale gas.

A six-person committee will lead the company after Darre resigned, according to a filing by YPF on Monday. Darre didn’t immediately respond to a call seeking comment. Alejandro Bianchi, a spokesman for the Energy Ministry, declined to comment by phone. EconoJournal, a local website focused on energy, reported the resignation earlier.

Darre replaced Miguel Galuccio on July 1 last year after Argentine President Mauricio Macri set out to restructure the state-run company. In his first earnings call, Darre surprised investors by reporting a loss of 753 million pesos ($50.7 million at the time) for the second quarter of 2016. Macri has begun reducing subsidies on everything from oil production to fuel subsidies for consumers, cutting into margins for YPF.

He also announced the beginning of a divestment plan to cut the company’s debt which currently stands at $8.5 billion, according to data compiled by Bloomberg. The company plans to invest $10 billion in Vaca Muerta, the world’s second-biggest deposit of natural gas trapped in shale, in the next five years.

Darre will be replaced by an executive committee of six people including CFO Daniel Gonzalez Casartelli, giving Chairman Miguel Angel Gutierrez increased powers, according to people familiar with the matter who asked not to be identified because company policy.

YPF shares gained 23% under Darre, trailing the Merval benchmark index’s return of 56%. Yields on YPF’s bonds due 2025 trade 44 basis points higher than an index of Argentina’s corporate bonds compiled by JPMorgan.

 

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