YPF Second Quarter 2020 Results

• Capital expenditures in property, plant and equipment for Q2 2020 were Ps 11.0 billion, 72.4% lower than Q2 2019.

• Total hydrocarbon production for Q2 2020 was 466.8 Kboed, 9.5% lower compared to Q2 2019.

• The average crude oil processed for Q2 2020 was 191.7 Kbbld, 27.1% lower than Q2 2019, while refinery processing levels were 60.0%.

• Expenses related to equipment and services shutdown (stand-by) reached Ps 4.2 billion, from Ps 0.3 billion in Q2 20219, which represents an increase of Ps 3.9 billion, or 1,258.6%.

b) Purchases

• In Q2 2020 crude oil purchases from third parties amounted to Ps 0.9 billion, which represents a decrease of Ps 11.7 billion, or 92.5%, from Ps 12.6 billion of Q2 2019;

• Biofuel (biodiesel and bioethanol)  purchases in Q2 2020 amounted to Ps  5.1 billion,  which represents a decrease of Ps 2.5 billion, or 32.5%, from Ps 7.6 billion of Q2 2019;

• Purchases  of  natural  gas  from  other  producers  for  resale  in  the  retail  distribution  segment (residential customers and small businesses) and from its marketing to large customers (power plants and industries) in Q2 2020 amounted to Ps 4.4 billion, which represents a decrease of Ps 0.9 billion, or 17.1%, from Ps 5.3 billion in Q2 2019;

•  Fuel imports in Q2 2020 amounted to Ps 3.9 billion, which represents a decrease of Ps 6.5 billion, or 62.6%, from Ps 10.4 billion in Q2 2019;

• Grain receipts in the agricultural sales segment through the form of barter, which were recorded as purchases, amounted to Ps 9.2 billion, which represents an increase of Ps 3.4 billion, or 59.0%, from Ps 5.8 billion in Q2 2019;

• In Q2 2020, a negative stock variation of Ps 5.6 billion was recorded, compared to the positive stock variation registered in Q2 2019 of Ps 5.4 billion, mainly as a result of the decrease in the replacement cost of the Company's inventories.

Selling expenses for Q2 2020 amounted to Ps 23.2 billion, an increase of 106.5% compared to Ps 11.2 billion in Q2 2019. In Q2 2020, a credit impairment charge with Distributors was recorded as of June 30, 2020,  associated  with  the  accumulated  daily  differences  according  to  Decree  No.  1053/2018,  which amounts to Ps 8.0 billion. Therefore, excluding this effect, selling expenses showed an increase of 35.6% compared  to  the  same  period  in  2019,  mainly  motivated  by  higher  charges  of  taxes,  fees  and contributions, mainly due to the increase in exports withholdings, higher charges for depreciation of fixed assets, higher personnel expenses, and higher contracts for works and other services, among others.

Administration expenses for Q2 2020 amounted to Ps 7.4 billion, an increase of 28.3% compared to Ps5.8 billion in Q2 2019. The increase was mostly due to higher personnel expenses driven mainly by wages adjustments in Q2 2019, higher charges on depreciation of fixed assets, higher IT costs on computer licenses,  many of  which  are denominated in  U.S.  dollars,  partially offset  by lower  charges related  to institutional advertising.

Exploration  expenses  for  Q2  2020  amounted  to  Ps  0.1  billion,  representing  a  decrease  of  86.7% compared to Ps 1.1 billion for Q2 2019.

During Q2 2020, the Company recognized a non-recurring charge for deterioration of property, plant and equipment of Ps 57.4 billion mainly for the CGU Gas - Neuquén Basin of Ps 49.2 billion (net effect of the tax on profits of Ps 36.9 billion) and CGU Gas - Austral Basin of Ps 8.1 billion (net effect of income tax of Ps 6.1 billion) mainly based on an expected reduction in gas prices due to the situation that this market is facing both globally and due to local dynamics. This price trend is incorporated in the projections for the coming months, all of which has an impact on investments and activity, causing the deterioration in the  value  of  the  assets  for  the  recorded  charge.  Said  charge  has  not  affected  the  Company's  cash generation.

In Q2 2020, the Upstream business segment before the asset impairment charge, recorded an operating loss of Ps 16.5 billion, compared to a gain of Ps 4.2 billion in Q2 2019. Considering the asset impairment charge of Ps 57.3 billion, the operating loss for this segment in Q2 2020 was Ps 73.8 billion.

Revenues were Ps 54.1 billion for Q2 2020, a decrease of 26.9% compared to Q2 2019, primarily due to the following factors:

• Crude  oil  revenues  amounted  to  Ps  35.9  billion,  a  decrease  of  33.1%  or  Ps  17.8  billion compared  to  Ps  53.7  billion  in  Q2  2019  as  the  intersegment  price  of  oil  decreased  by approximately 24.2% measured in Argentine pesos. The average realization price for crude oil in dollars during Q2 2020 decreased by 50.8% to US$ 28.9/bbl. Crude oil volume transferred between segments decreased 9.0%;

• Natural gas revenues reached Ps 18.5 billion, 16.5% or Ps 3.6 billion lower than the Ps 22.1 billion in Q2 2019 as a result of a 7.7% decrease in the average price in pesos. The average realization price for the quarter in dollars was US$2.51/Mmbtu, 36.1% lower than in Q2 2019. Moreover, volumes sold between segments decreased by 9.1% compared to Q2 2019.

Total hydrocarbon production for Q2 2020 was 466.8 Kboed, 9.5% lower than Q2 2019. These variations were mainly affected by the mandatory lockdown measures put in place by the government authorities in response to the COVID-19 pandemic during Q2 2020, as mentioned above. Crude oil production declined 10.3%, resulting in 200.8 Kbbld, being affected mainly by the lockdown. The production of natural gas decreased 12.7% compared to the same period of  2019,  reaching  35.0 Mm3d,  driven by the natural decline of the fields due to the decrease in activity negatively affected by a context of excess supply and lower demand. In turn, NGL production increased 16.2% to 45.7 Kbbld given that Q2 2019 was primarily affected by the losses from the general power cut in Argentina in June 2019 along with the fire in the DOW Ethylene plant that limited the use of the installed capacity in MEGA for the production of Ethane that could not be delivered for refining.

Regarding the development activity, in Q2 2020, no wells operated by YPF have been put into production. Regarding the non-operated activity, 3 new wells have been put into production, two conventional wells and one shale well.

During Q2 2020, in the shale areas, YPF´s net hydrocarbon production reached 98.9 Kboed, of which 73.5%  comes from  YPF’s  operated  areas.  This  level  of  production  represents  an  increase  of  20.7% compared to Q2 2019. This production is comprised of 35.8 Kbbld of crude oil, 14.1 Kbbld of NGL and 7.8 Mm3d of natural gas. At the end of Q2 2020 there are a total of 856 active wells, of which 91 are not operated. In addition, there are 13 drilling rigs and 5 workovers on stand-by since the beginning of the lockdown period.

With respect to tight development, net production in Q2 2020 reached a total of 8.4 Mm3d of natural gas, 4.2 Kbbld of NGL and 4.2 Kbbld of crude oil, of which 85.1% comes from YPF´s operated areas.

Operating costs (excluding exploration expenses) for Q2 2020 totaled Ps 78.3 billion, a 14.3% increase compared to Q2 2019, of which we highlight the following:

• Depreciation  of  property,  plant  and  equipment  amounted  to  Ps  32.1  billion  in  Q2  2020 compared to Ps 27.9 billion in Q2 2019, representing an increase of Ps 4.2 billion, or 15.2%, mainly due to the appreciation of the assets considering their valuation in U.S. dollars, which is the functional currency of the Company;

• Lifting costs for Q2 2020 amounted to Ps 27.0 billion, an increase of Ps 1.9 billion or 7.4% compared to Ps 25.1 billion in Q2 2019. In turn, the increase in the unit indicator, measured in Argentine pesos, was 18.7%, below the general increase in prices of the economy affected by less activity as a result of the decrease in fuel demand and by consequent adjustments in the production level, in addition to the security protocols established in each operation;

• Royalties  and  other  production related costs in  Q2 2020 amounted to Ps  7.2  billion,  which represents a decrease of Ps 3.2 billion, or 30.5%, compared to Ps 10.4 billion in Q2 2019. Of this decrease, Ps 2.2  billion,  or  29.0% was related to royalties in connection with  crude oil production, and Ps 1.0 billion, or 34.3% was related to royalties for natural gas production, in both cases due to lower production and to lower wellhead values of these products measured in Argentine pesos;

• Transportation costs related to production (trucks, pipelines and polyducts in deposit) for Q2 2020 amounted to Ps 3.1 billion, an increase of Ps 1.0 billion, or 50.9%, compared to Ps 2.1 billion for Q2 2019 due to higher tariffs measured in Argentine pesos;

Exploration expenses for Q2 2020 amounted to Ps 0.1 billion, a decrease of 87.1% compared to Ps 1.0 billion for Q2 2019, mainly due to lower negative results from unproductive exploratory drilling during the quarter in a differential amount of Ps 0.4 billion.

During Q2 2020, the Company recognized a non-recurring charge for deterioration of property, plant and equipment of Ps 57.3 billion mainly for the CGU Gas - Neuquén Basin of Ps 49.2 billion (net effect of the tax on profits of Ps 36.9 billion) and CGU Gas - Austral Basin of Ps 8.1 billion (net effect of income tax of Ps 6.1 billion) mainly based on an expected reduction in gas prices due to the situation that this market is  facing  both  globally  and  locally,  due  to  specific  dynamics  mentioned  above.  This  price  trend  is incorporated in the projections for the coming months, all of which impacts on investments and activity, causing the deterioration in the value of the assets for the recorded charge. Said charge has not affected the Company's cash generation.

Other operating results, net, for Q2 2020 represented a gain of Ps 7.9 billion, compared to Q2 2019. This variation is mainly explained by the sale of 11% of YPF's stake in the Bandurria Sur area to Bandurria Sur Investments S.A. (BSI), a company whose share package is composed 50% by Shell Argentina S.A. and 50% by Equinor Argentina S.A., for Ps 4.4 billion. Additionally, in Q2 2020, a result is included in relation to an insurance for the uncontrolled-wells incident occurred in the areas of Bandurria Sur and Loma La Lata, which amounts to Ps 2.7 billion, and as of date is pending collection.

Unit operating cash costs in U.S. dollars decreased 23.6% to US$ 15.5/boe in Q2 2020 from US$ 20.3/boe in Q2 2019, including taxes of US$ 2.9/boe and US$ 5.8/boe, respectively. In turn, the average lifting cost for YPF in Q2 2020 was US$ 9.4/boe, 23.9% lower than Q2 2019.

Capex

Capital  expenditures  for  the  Upstream  business  segment  for  Q2  2020  were  Ps  7.0  billion,  a  78.0% decrease  compared  to  Q2  2019.  Of  these  capital  expenditures,  47.5%  were  invested  in  drilling  and workover activities, 51.2% in facilities and the remaining 1.3% in exploration and other activities in the Upstream business segment.

Investment  activity  throughout  Q2  2020  was  affected  by  the  lockdown  decree  enacted  by  the  national government  due to the COVID-19  pandemic.  As  a consequence,  at  the  end  of  March,  the drilling  and workover equipment and engineering works were halted, entering only minor charges.

In Q2 2020 there was no exploration activity due to DNU 297/2020 establishing the preventive and mandatory lockdown and social distancing measures.